Westfield Companies v. US, 1:92-CV-778.

• Decision Date: 17 September 1993
• Docket Number: No. 1:92-CV-778.,1:92-CV-778.
• Citation: 858 F. Supp. 658
• Parties: WESTFIELD COMPANIES and Frankenmuth Mutual Insurance Co., Subrogee of Jim & Susan Mabee, d/b/a The Clothing Company, Plaintiffs, v. The UNITED STATES of America, Defendant.
• Court: U.S. District Court — Western District of Michigan

858 F. Supp. 658

WESTFIELD COMPANIES and Frankenmuth Mutual Insurance Co., Subrogee of Jim & Susan Mabee, d/b/a The Clothing Company, Plaintiffs, v. The UNITED STATES of America, Defendant.

No. 1:92-CV-778.

United States District Court, W.D. Michigan, Southern Division.

September 17, 1993.

Robert W. Grzech, DuBois, Westerman & Cooper, PC, Gaylord, MI, for plaintiffs.

John A. Wilson, Asst. U.S. Atty., Michael H. Dettmer, U.S. Atty., Grand Rapids, MI, for defendant.

OPINION GRANTING DEFENDANT'S MOTION TO DISMISS

HILLMAN, Senior District Judge.

Before the court is defendant's motion to dismiss pursuant to Fed.R.Civ.P. 12(c) for lack of subject matter jurisdiction.

FACTS

On or about December 9, 1990, a convoy of the United States Army Reserve 182nd Transport Company was passing through Charlevoix, Michigan, on its way from Traverse City, Michigan, to Fort McCoy, Wisconsin. The company was in the process of deploying to Saudi Arabia as part of Operation Desert Shield/ Desert Storm. In the convoy was a five-ton truck, bearing registration number X-107 USAR, driven by Sgt. Ramon Castillo. It was towing behind it a second inoperable five-ton truck, bearing registration number X-104.

The brakes on X-107 USAR suddenly failed. The truck and tow headed downhill toward the intersection of Mason and Bridge Street. The towed vehicle broke loose, crashing into a retail clothing store owned and operated by Jim and Susan Mabee, d/b/a The Clothing Company. The building sustained considerable damage.

The Clothing Company was insured under two separate business owners' protection policies issued by Westfield Companies and Frankenmuth Mutual Insurance Company. As subrogees of The Clothing Company, the two insurance companies assert that they have paid the sum of $134,265.87 to repair the building and reimburse the Mabee's. They now seek damages for the subrogated losses, claiming that the collision occurred as a result of defendant's negligence in failing to maintain control of the vehicles, failing to take reasonable action to avoid striking the building, and failing to operate the vehicles in a safe and prudent manner. They seek judgment against defendants in the amount of $76,002.00 for Westfield Companies, and $58,263.87 for Frankenmuth Mutual Insurance Company. They bring this action against the United States as subrogees pursuant to 28 U.S.C. § 2671, et seq., of the Federal Tort Claims Act ("FTCA") and its jurisdictional counterpart, 28 U.S.C. § 1346(b).

DISCUSSION

It is well established that "the United States may not be sued without its consent and that the existence of consent is a prerequisite for jurisdiction." United States v. Mitchell, 463 U.S. 206, 212, 103 S.Ct. 2961, 2965, 77 L.Ed.2d 580 (1983). See also Affiliated Ute Citizens of the State of Utah v. United States, 406 U.S. 128, 92 S.Ct. 1456, 31 L.Ed.2d 741 (1972). An absolute prerequisite to maintaining an action against the United States is a specific waiver of sovereign immunity. 28 U.S.C. § 1346(b) grants the federal district courts jurisdiction to hear claims

... for ... personal injury ... caused by the negligent or wrongful act or omission of any employee of the Government ... under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred.

28 U.S.C. § 2674 also sets forth the limited waiver of immunity in pertinent part as follows: "The United States shall be liable ... in the same manner and to the same extent as a private individual under like circumstances. ..."

Therefore, to determine whether a tort action can be brought against the United States, the law of the state in which the act occurred is determinative. See Frazier v. United States, 412 F.2d 22, 23 (6th Cir.1969). It is undisputed that the law to be applied in this case is that of Michigan, since the accident and alleged negligence occurred in Michigan. The liability of the United States is to be determined as it would be for an individual defendant under the same circumstances.

I.

At issue is the application of the Michigan No-Fault Automobile Insurance Act ("the No-Fault Act"), which became law on October 1, 1973. Plaintiffs initially contend that the No-Fault Act does not apply to the United States.

The Michigan No-Fault Act frequently has been applied to the United States in automobile-related accidents. See e.g. Yeary v. United States, 754 F.Supp. 546 (E.D.Mich. 1991); McAdoo v. United States, 607 F.Supp. 788 (E.D.Mich.1984); Zotos v. United States, 654 F.Supp. 36 (E.D.Mich.1986). In Caruana v. United States, an unpublished 1985 opinion by the late Honorable Philip Pratt of the United States District Court for the Eastern District of Michigan (Civil No. 81-71396, attached to the government's June 15, 1993, brief), the United States Postal Service was sued under the Federal Tort Claims Act for damages arising from an auto-related accident. Under the FTCA, the court was required to apply the applicable state law. The court applied the Michigan No-Fault Act, stating the following:

Plaintiff's counsel argues that "the Michigan No-Fault Act has nothing to do with this cause," but does not state what law or legal standard would govern the damage question in the present case. Counsel relies on U.S. v. Ferguson, 727 F.2d 555 (6th Cir.1984), for the proposition that Michigan's No-Fault Act does not apply to an accident in Michigan involving a Michigan motorist and a postal service vehicle.

A careful reading of the Ferguson case discredits the argument advanced by plaintiff's counsel. In Ferguson, the Sixth Circuit faced a situation unlike the one now before the court. In that case, the federal government brought a negligence action against a Michigan driver in federal court. The issue was:

does Michigan's `No-Fault' Automobile Insurance Act ... bar the United States from bringing a negligence action in federal court to recover damages to a government-owned vehicle caused by a collision in Michigan with a Michigan-registered motor vehicle?

In answering this question in the negative, the court emphasized that Ferguson involved the federal government's interest in preventing destruction of its property — not a question "which is primarily one of state interest or exclusively for determination by state law ..." 727 F.2d at 557. It was also noted that the issue was not the "fair and efficient recovery of accident damages by a Michigan resident, but whether ... the Government may obtain recovery for damage to its property." Id.

This language makes clear that the Sixth Circuit's opinion in Ferguson is not applicable to the present case. Plaintiff's assertion that Michigan's No-Fault Act is inapplicable to its damage suit against the government arising from a Michigan accident is unsupported.

Caruana, at page 2, n. 1.

Plaintiffs additionally contend that the Michigan No-Fault Act does not apply to defendant United States because the No-Fault Act specifically provides that "the owner or registrant of a motor vehicle required to be registered in this state shall maintain security for payment of benefits." Plaintiffs argue that since the Michigan State Legislature has exempted from registration "any vehicle owned by the government of the United States" under the Michigan Motor Vehicle Act, M.C.L. § 257.216(f), the Michigan No-Fault Act is therefore inapplicable to the United States.

This court disagrees. In Zotos v. United States, 654 F.Supp. 36, 38 (E.D.Mich.1986), the court rejected as a restrictive statutory construction the argument that an exemption of registration of government vehicles implied that the Michigan No-Fault Act was not intended to cover the United States. See Zotos, (citing Lee v. Detroit Automobile Inter-Ins. Exchange, 412 Mich. 505, 315 N.W.2d 413 (1982)). The Michigan Supreme Court in Lee rejected plaintiffs' assertion that registration of a "motor vehicle" is mandatory in order for the No-Fault Act to be applicable.

This court finds Michigan's No-Fault Act to be applicable to the United States of America.

II.

Arguing the alternative, plaintiffs next contend that if the No-Fault Act does apply, the United States should be treated as an uninsured entity under section 500.3101 of the Act. The government responds that while the federal government does not purchase automobile insurance as an individual would, it has enacted 28 U.S.C. § 2679(b), which states that the United States will step into the shoes of and defend federal government employees operating motor vehicles who are acting within the scope of their employment. As the government stated in its brief, "full faith and credit of the United States and its Treasury stand behind government employees who operate motor vehicles. To treat the United States as an uninsured individual is simply absurd."

This court agrees that the government should not be treated as an uninsured entity, but should be treated as a self-insured entity for purposes of Michigan's No-Fault Act. Because the government is not required to register its vehicles in Michigan, it is not required to obtain personal protection insurance, property insurance, and residual liability insurance pursuant to M.C.L. § 500.3101(1). Instead, the government falls under M.C.L. § 500.3101(4), which states:

Security required by subsection (1) may be provided by any other method approved by the secretary of state as affording security equivalent to that afforded by a policy of insurance, if proof of the security is filed and continuously maintained with the secretary of state throughout the period the motor vehicle is driven or moved upon a highway. The person filing the security has all the obligations and rights of an insurer under this chapter. When the context permits, "insurer" as used in this chapter, includes any person filing the security as provided in this section.

M.C.L. § 500.3101(4).

This court finds that 28 U.S.C. § 2679 serves as ...