Priesman v. Meridian Mutual Insurance

490 N.W.2d 314, 441 Mich. 60

• Court: Michigan Supreme Court
• Decided: September 22, 1992
• Docket: 89357, (Calendar No. 2)
• Status: Published

Opinions

Levin, J.

The question presented is whether an underage, unlicensed driver injured while driving his mother’s automobile without her knowledge or consent may recover medical benefits from the no-fault insurer of her automobile. We agree with the Court of Appeals that he is entitled to recover no-fault medical benefits, and affirm.

I

Renee Priesman owned an automobile insured by Meridian Mutual Insurance Company. Her son, Corey Warfield, who was fourteen years old, took the automobile without her permission during the nighttime while she was sleeping. Corey picked up friends, was involved in an automobile accident, and one of his friends was killed.¹

Corey sustained serious and severe bodily injuries, necessitating medical treatment at a hospital. Meridian paid billings by the hospital until six months after the accident, when it informed Pries-man that it would not continue to pay because Corey had taken her vehicle without permission.

The circuit judge granted Meridian’s motion for summary disposition with regard to Priesman on the ground that she lacked standing, granted a motion to amend the complaint to name Corey as a plaintiff, and granted Meridian’s motion to dismiss with respect to Corey because the vehicle had been unlawfully taken. The Court of Appeals reversed.²

Meridian contended in the circuit court and the Court of Appeals that Corey was not entitled to no-fault medical benefits because an exception in the no-fault act provides that a person is not entitled to no-fault benefits if, at the time of the accident, he is using a vehicle that he had "taken unlawfully.”³ Meridian contended that Corey’s taking of his mother’s vehicle was "unlawful” because the Penal Code provides that it is a misdemeanor to take or use a vehicle "without authority.”⁴

The Court of Appeals, observing that Corey had not been charged or convicted, stated that the question was whether the "mere fact of taking without permission by an underage driver who is the son of the owner and who lives in the owner’s household is 'unlawful’ under the no-fault act.”⁵ The Court observed that the term "unlawful” is not defined in the no-fault act, and said that, under § 3114⁶ of the Insurance Code, Corey was entitled to no-fault benefits because he was a relative of his mother domiciled in her household. The Court concluded that Corey did not lose that "entitlement by virtue of using his mother’s car without her permission,” and that his use was not "unlawful under the no-fault act”: "We cannot say that the Legislature intended that § 3113(a) of the act would apply under the circumstances of this case.”⁷

ii

The no-fault automobile liability act⁸ provides that a no-fault insurer is required to pay medical benefits, without limitation in amount or duration,⁹ and other no-fault benefits¹⁰ to any person who suffers accidental bodily injury arising out of the operation of a motor vehicle, without regard to fault.¹¹

All persons,

—those who own vehicles and those who do not;

—those who insure a vehicle they own, and those who do not insure a vehicle that they own, unless a person who does not insure is injured while driving that uninsured vehicle;

—the spouse and a relative domiciled in the same household of an owner of a vehicle without regard to whether the owner has insured the vehicle; _

—passengers, pedestrians, sidewalk gawkers, persons walking, sitting, or lying down in a parking lot or a field, and also those who become involved in a vehicular accident while in a structure

are entitled to recover full medical benefits without regard to fault and without regard to whether they or a family member has paid for no-fault coverage, under Michigan’s most comprehensive no-fault act.¹²

It is in that context — full medical benefits, unlimited in amount for every person, including even a person who does not insure a vehicle he owns (except when driving that vehicle) and the spouse and relatives domiciled in the household of the owner of an uninsured vehicle even when driving or riding as a passenger in that uninsured vehicle —that we assess the correctness of Meridian’s contention that the Legislature did not intend that Corey recover medical benefits because, when he was fourteen years old, he took his mother’s insured vehicle in the middle of the night, while she was sleeping, without her permission.

iii

The Uniform Motor Vehicle Accident Reparations Act, a model act considered by the Legislature when the no-fault act was adopted, excepts from coverage a "converter” — a person who steals —unless covered under a no-fault policy issued to the converter or a spouse or other relative in the same household.¹³_

Meridian contends that the Legislature, in substituting "unlawfully” for the umvara language excepting uninsured converters from no-fault coverage, intended to except from no-fault coverage not only those who convert, but also joyriders like Corey, who was not a "converter” because he did not intend to steal and, thus, would not have been excepted under the umvara even if his mother was not insured.

While this is, indeed, arguable, the argument does not consider that there may be other explanations for the failure to adopt the umvara language.

The umvara exception permits, as Meridian acknowledges, a thief to recover no-fault benefits while driving the stolen vehicle if he is covered by insurance he purchased or by insurance purchased by his spouse or relative in the same household. The Legislature, in rejecting the language of the umvara exception, apparently decided to except from no-fault coverage a thief driving a stolen vehicle even if he or a spouse or relative had contributed to the no-fault pool of money.

The legislative purpose, in rejecting the umvara language, was thus to except from no-fault coverage thieves while driving stolen vehicles even if they or a spouse or relative had purchased no-fault insurance, and not necessarily to except joyriders from coverage. At the same time, the Legislature simplified the complex verbiage of the no-fault exception,¹⁴ and thereby avoided litigation concerning what constitutes "conversion,” a term of art in criminal and personal property law. That, in substituting "taken unlawfully” for "converts,” the Legislature did not intend any substantial difference in scope or meaning from the prototypical umvara concept excepting thieves from no-fault coverage, appears to be the view of Judge Keeton and Professor Widiss, who read the Michigan provision as excepting a person injured in an automobile that he has "stolen.”¹⁵

Legislators generally are also parents and sometimes grandparents. Some may have had experience with children, grandchildren, nephews, nieces, and children of friends who have used a family vehicle without permission. Some may have themselves driven a family vehicle without permission.

We are not persuaded that legislators, sitting at a drafting session, concluded that the evil against which the umvara exception was aimed was not adequate because it did not cover teenagers who "joyride” in their parents’ automobiles, especially automobiles covered by no-fault insurance, in the context that countless persons would be entitled, under the legislation they were drafting, to no-fault benefits without regard to whether they are obliged to purchase no-fault insurance or, if obliged to insure, do in fact do so.¹⁶

It appears that in the twenty years since no-fault automobile insurance legislation was first enacted, no appellate court has decided that a person like Corey is not entitled to medical benefit^_

Affirmed.

Cavanagh, C.J., and Mallett, J., concurred with Levin, J. Boyle, J., concurred in the result only.

1 Corey’s mother was insured for public liability for $100,000, in excess of the amount required by the no-fault act. MCL 500.3131; MSA 24.13131. It appears that Meridian settled the claim of the personal representative of the person who was killed.

The civil liability act provides:

The owner shall not be liable, however, unless the motor vehicle is being driven with his or her express or implied consent or knowledge. It shall be presumed that the motor vehicle is being driven with the knowledge and consent of the owner if it is driven at the time of the injury by his or her father, mother, brother, sister, son, daughter, or other immediate member of the family. [MCL 257.401(1); MSA 9.2101(1).]

2 185 Mich App 123; 460 NW2d 244 (1990).

3 A person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident any of the following circumstances existed:

(a) The person was using a motor vehicle or motorcycle which he or she had taken unlawfully, unless the person reasonably believed that he or she was entitled to take and use the vehicle.

(b) The person was the owner or registrant of a motor vehicle or motorcycle involved in the accident with respect to which the security required by section 3101 or 3103 was not in effect.

(c) The person was not a resident of this state, was an occupant of a motor vehicle or motorcycle not registered in this state, and was not insured by an insurer which has filed a certification in compliance with section 3163. [MCL 500.3113; MSA 24.13113. Emphasis added.]

4 Any person who takes or uses without authority any motor vehicle without intent to steal the same, or who shall be a party to such unauthorized taking or using, shall upon conviction thereof be guilty of a misdemeanor .... [MCL 750.414; MSA 28.646.]

5 185 Mich App 126.

We agree with the signers of the dissenting opinion that “unlawfulness” does not depend on conviction of a crime, as set forth in the cases cited by the majority, Fafinski v Reliance Ins Co, 65 NY2d 990; 494 NYS2d 92; 484 NE2d 121 (1985), and Gross v Allstate Ins Co, 173 AD2d 772; 570 NYS2d 640 (1991).

6 MCL 500.3114; MSA 24.13114. See n 12.

⁷

8 MCL 500.3101; MSA 24.13101.

9 MCL 500.3107; MSA 24.13107.

10 No-fault benefits are described in the statute as "personal protection insurance benefits,” and include, in addition to medical benefits, benefits for "work loss,” consisting of loss of income from work (MCL 500.3107; MSA 24.13107), and "survivor’s loss,” consisting of loss of "tangible things of economic value” that dependents of the deceased would have received for support. MCL 500.3108; MSA 24.13108.

11 MCL 500.3105, 500.3112; MSA 24.13105, 24.13112.

12 The benefits are payable by the injured person’s no-fault insurer if he owns a vehicle and has insured the vehicle, or by the no-fault insurer of his spouse or of a relative with whom he is domiciled. MCL 500.3114; MSA 24.13114. There are exceptions for injuries suffered by a person while an operator or a passenger in a vehicle operated in the business of transporting passengers, or where the accident is suffered while an occupant of a vehicle owned or registered by an employer. Id.

If neither the injured person nor a spouse or relative with whom he is domiciled has insured a vehicle, medical benefits are payable (excepting only if the injured person was driving an uninsured vehicle that he owns) by insurers of owners, registrants, or operators of other motor vehicles involved in the accident (MCL 500.3115; MSA 24.13115) or through the assigned claims plan if no policy of no-fault insurance is applicable to the injury, or if no policy of no-fault insurance applicable to the injury can be identified, or if the no-fault insurance applicable to the injury cannot be ascertained because of a dispute between two or more no-fault insurers, or if the only identifiable no-fault insurance applicable to the injury is, because of financial inability of one or more insurers, inadequate to provide benefits up to the maximum proscribed. MCL 500.3172; MSA 24.13172.

While § 3114 provides that a personal protection insurance policy "applies” to accidental bodily injury to a relative domiciled in the same household as the insured, §§ 3114, 3115, and 3172 are concerned primarily with identifying the no-fault insurer who "pays” the benefits. Other sections of the act, including § 3112, create the entitlement to no-fault benefits.

13 § 21 [Converted Motor Vehicles].

Except as provided for assigned claims (Section 18[a][2]), a person who converts a motor vehicle is disqualified from basic or added reparation benefits, including benefits otherwise due him as a survivor, from any source other than an insurance contract under which the converter is a basic or added reparation insured, for injuries arising from maintenance or use of the converted vehicle. If the converter dies from the injuries, his survivors are not entitled to basic or added reparation benefits from any source other than an insurance contract under which the converter is a basic reparation insured. For the purpose of this Section, a person is not a converter if he uses the motor vehicle in the good faith belief that he is legally entitled to do so. [14 ULA 87-88.]

§ 1 [Definitions].

"Basic reparation insured” means:

(i) a person identified by name as an insured in a contract of basic reparation insurance complying with this Act (Section 7[d]); and

(ii) while residing in the same household with a named insured, the following persons not identified by name as an insured in any other contract of basic reparation insurance complying with this Act: a spouse or other relative of a named insured; and a minor in the custody of a named insured or of a relative residing in the same household with a named insured. A person resides in the same household if he usually makes his home in the same family unit, even though he temporarily lives elsewhere. [14 ULA 42.]

14 See n 13.

15 In describing the Michigan statute, they write:

Exclusions from pip coverage apply to the owner of a vehicle who does not purchase the mandatory coverage and who is injured in his own vehicle; a person injured in an automobile that he has stolen; and a non-resident who does not have coverage that has been certified by his insurer. [Keeton & Widiss, Insurance Law, § 410, p 422. Emphasis added.]

16 Over fifteen percent of the motor vehicles that are licensed are not insured. See Best’s Insurance Management Reports, Uninsured Motorist Results by State, Property/Casualty Release No. 5, February 26, 1990.