Wakefield Leasing Corp. v. Transamerica Ins. Co. of Michigan

• Decision Date: 29 August 1995
• Docket Number: Docket Nos. 162911,162924 and 165938
• Citation: 539 N.W.2d 542,213 Mich.App. 123
• Parties: WAKEFIELD LEASING CORPORATION, d/b/a Port City Cab and Kalamazoo Yellow Cab, Plaintiff-Appellant, v. TRANSAMERICA INSURANCE COMPANY OF MICHIGAN, Defendant/Third-Party Plaintiff-Appellee, v. Donald MURAOKA and Vickie Muraoka, Third-Party Defendants-Appellants. WAKEFIELD LEASING CORPORATION, d/b/a Port City Cab and Kalamazoo Yellow Cab, Plaintiff-Appellee Cross-Appellant, v. MICHIGAN MUTUAL INSURANCE COMPANY, Defendant/Third-Party Plaintiff-Appellant, v. Donald MURAOKA and Vickie Muraoka, Third-Party Defendants-Appellees/Cross-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 542

539 N.W.2d 542

213 Mich.App. 123

WAKEFIELD LEASING CORPORATION, d/b/a Port City Cab and Kalamazoo Yellow Cab, Plaintiff-Appellant, v. TRANSAMERICA INSURANCE COMPANY OF MICHIGAN, Defendant/Third-Party Plaintiff-Appellee, v. Donald MURAOKA and Vickie Muraoka, Third-Party

Defendants-Appellants.

WAKEFIELD LEASING CORPORATION, d/b/a Port City Cab and Kalamazoo Yellow Cab, Plaintiff-Appellee Cross-Appellant, v. MICHIGAN MUTUAL INSURANCE COMPANY, Defendant/Third-Party Plaintiff-Appellant, v. Donald MURAOKA and Vickie Muraoka, Third-Party

Defendants-Appellees/Cross-Appellees.

Docket Nos. 162911, 162924 and 165938.

Court of Appeals of Michigan.

Submitted Jan. 12, 1995, at Grand Rapids.

Decided Aug. 29, 1995, at 9:25 a.m.

Released for Publication Nov. 17, 1995.

Birkhold & Associates, P.C. by Mark C. Charter, Kalamazoo, for Wakefield Leasing Corporation.

Dilley, Dewey, Damon & Condon, P.C. by Jonathan S. Damon, Grand Rapids, for Transamerica Insurance Company.

Foster, Swift, Collins & Smith, P.C. by Scott L. Mandel and William F. Pettit, Lansing, for Michigan Mutual Insurance Company.

Plaszczak & Bauhof, P.C. by James F. Bauhof, Kalamazoo, for Donald and Vickie Muraoka.

Before MACKENZIE, P.J., and GRIFFIN and NEFF, JJ.

GRIFFIN, Judge.

These consolidated appeals involve two actions for declaratory judgment regarding liability coverage for a personal injury claim asserted by Donald and Vickie Muraoka against Wakefield Leasing Corporation, doing business as Port City Cab and Kalamazoo Yellow Cab (Wakefield). Donald Muraoka seeks damages for personal injury and Vickie Muraoka seeks damages for loss of consortium arising out of an assault and battery committed upon Donald Muraoka by a passenger in Muraoka's taxicab. Muraoka alleges the status of a subcontractor at the time he was leasing a taxicab from Wakefield.

In the underlying complaint for personal injuries against Wakefield, the Muraokas assert the following theories of liability: (1) failure to warn of other delivery robberies that were known or should have been known by Wakefield, (2) failure to properly train its employees, agents, or assigns to warn subcontractor drivers such as Donald Muraoka of the dangers of driving a taxicab, (3) failure to instruct its employees or agents to notify the police department when subcontracting drivers are sent into an area known for its high crime rate, and (4) failure "to provide a safe motor vehicle to be used as a taxicab, in that there was no protection in the way of a screen or shield between the front and rear seats to prevent persons in the rear of the vehicle from robbing or assaulting the driver."

In this appeal, we express no opinion regarding the merits of the underlying personal injury action. We review only the order of the lower court holding Wakefield's automobile liability insurance carrier, defendant Michigan Mutual Insurance Company, solely responsible for providing a defense. On cross appeal, Wakefield contends that the lower court erred in failing to order both indemnification and defense. Although the personal injury action had not been tried, Wakefield argues that the lower court erred in limiting its ruling to a duty to defend.

With regard to the cross claim, we hold that the lower court correctly reserved its ruling regarding the duty to indemnify on the ground that the issue was premature. With regard to the principal appeal, we hold that the duty to defend the underlying tort action is the sole responsibility of the general liability carrier, defendant Transamerica Insurance Company. Accordingly, we reverse and remand for entry of judgment in favor of defendant Michigan Mutual and against defendant Transamerica.

I

At the outset, we dispense with three of the claims in the personal injury complaint that clearly fall within the scope of the general commercial liability policy and not the automobile liability policy. The allegations of failure to warn of other robberies in the area; failure to properly train employees, agents, or assigns to warn drivers; and failure to instruct employees or agents to notify the police department when drivers are sent into areas with high crime rates are clearly claims that do not arise out of the ownership, operation, or use of a motor vehicle. These claims pertain directly to the general operation of a taxicab business; they are unrelated to the operation, maintenance, or use of a motor vehicle itself. Accordingly, defendant Transamerica must provide a defense because these claims are clearly within its coverage.

II

The main issue is whether the allegation of Wakefield's liability for failing to install a partition in the taxicab also triggers a duty to defend under defendant Michigan Mutual's automobile liability policy. We hold that it does not.

In this appeal, both Wakefield and Transamerica argue that the causality standard for residual liability insurance is different from the causality standard for no-fault personal protection or property protection insurance. We disagree and have rejected this argument in Century Mutual Ins. Co. v. League General Ins. Co., 213 Mich.App. 114, 541 N.W.2d 272 (1995). See also A & G Associates, Inc., v. Michigan Mutual Ins. Co., 110 Mich.App. 293, 312 N.W.2d 235 (1981).

In Century Mutual, we applied the Thornton ¹/Kanga...