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BlogsPublications | November 18, 2016
2 minute read

PIP benefits are available to injured parties in lawful possession of another’s vehicle, whose owner knew such injured party’s use of the vehicle would be unlawful

Personal insurance protection (PIP) benefits under the Michigan No-Fault Act, MCL 500.3101 et. seq., may be recovered by a party injured in a motor vehicle accident, who had the owner’s permission to take the vehicle even though the owner knew that such party’s use of the vehicle would be unlawful.

In Estate of Monaco v Home-Owners Insurance Company No. 329214, the decedent, a 15-year old sustained severe injuries when she lost control of a vehicle that she was driving and crashed into a roadside ditch. That individual possessed a graduated license, which under MCL 257.310e(4) required the licensee to be “accompanied either by a licensed parent or legal guardian or, with the permission of the parent or legal guardian, a licensed driver 21 years of age or older.” The decedent’s personal representative, and parent, brought this action to recover PIP benefits. The decedent’s parents alleged that they gave the decedent permission to take the vehicle on numerous occasions, despite knowledge that solo operation by the decedent was unlawful.

On appeal from the denial of its motion for summary disposition and directed verdict the defendant claimed the parents’ grant of permission for the decedent to take the vehicle amounted to an unlawful taking because the decedent’s ultimate use of the vehicle would be unlawful under the Michigan Vehicle Code, MCL 257.1 et. seq. Further, because decedent’s use of the vehicle was unlawful, the decedent’s taking of the vehicle was also unlawful, thereby precluding beneficial coverage of PIP benefits under MCL 500.3113(a).

The Court of Appeals, relying on Spectrum Health Hosps v Farm Bureau Mut Ins Co of Mich, 492 Mich 503, 516-517; 821 NW2d 117 (2012), distinguished between unlawful taking and unlawful use of a motor vehicle under MCL 500.3113(a) when reaching their decision. Ultimately, the Court of Appeals determined the parents’ grant of permission for the decedent to take, or possess and control the vehicle, differed from the parents’ knowing and unauthorized use, or placing into service, of the vehicle. While the plaintiff’s granting permission for the decedent to use the vehicle might have subjected her to prosecution under MCL 257.326, it does not turn an otherwise authorized or permitted taking into an unlawful taking.

DISCLAIMER:  Warner represented Home-Owners Insurance Company in this matter.