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Blogs | September 21, 2015
3 minute read

COA rules insurer of commercial transportation vehicle may be liable for claims arising from injuries sustained in accident involving an uninsured vehicle sharing common ownership

In the consolidated appeal of Titan Insurance Company v American Country Insurance Company, No. 319342, and Bronson Methodist Hospital v Titan Insurance Company, No. 321598, the Court of Appeals held that under MCL 500.3114 of Michigan’s No-Fault Act, when a commercial transportation company fails to insure a motor vehicle and the driver of the vehicle is also uninsured, responsibility for accident claims involving the uninsured vehicle fall to no-fault insurers who insure other vehicles owned by the same company.

In Docket No. 319342, Stanley Hughes was injured while operating an uninsured vehicle for Safe Arrival Transportation. Hughes did not have a personal no-fault insurance policy. Titan Insurance was assigned to handle the claim through the Assigned Claims Facility. Titan thereafter filed suit against American Country Insurance, claiming that because American Country insured other vehicles for Safe Arrival, it was responsible for the claims. Both parties sought summary disposition, and the trial court granted American Country’s motion and denied Titan’s motion. Titan appealed.

Similarly, in Docket No. 321598, George Slack was injured in an accident while operating an uninsured vehicle for Bronco Express Company, a taxi service. Slack did not have a personal no-fault policy. After Slack was treated at Bronson Methodist Hospital, Bronson sought reimbursement from Titan as, again, Titan had been assigned through the Assigned Claims Facility. Titan denied the claim, stating that American Country was responsible because it insured other vehicles for Bronco Express. The lower court concluded that American Country was responsible for the claim, and American Country appealed.

The Court of Appeals noted that while generally under MCL 500.3114(1), an individual injured in a motor vehicle accident must seek benefits from his own insurer, exceptions to this general rule can be found subsections (2), (3) and (5). If none of these exceptions apply, the priority of insurers is established under MCL 500.3114 (4), which requires the injured party to look first to (a) the insurer of the owner or registrant of the vehicle occupied and then to (b) insurer of the operator of the occupied vehicle.  In this case, the court found that (4)(a) applied to extend liability to the insurer of the vehicle’s owner.  Because in both cases the transportation companies involved owned other vehicles carrying insurance, the insurers of those other vehicles would be first in priority and therefore liable for these claims.  Accordingly, the Court of Appeals concluded that because American Country insured other vehicles for both Safe Arrival and Bronco Express, it was liable for both claims and reversed the trial courts holding in Docket No. 319342 and affirmed the holding of Docket No. 321598.

Judge Gleicher concurred in the decision, but noted that because two plausible and equally valid interpretations of the statute existed, the case merited renewed consideration by the Michigan Supreme Court.