Rohlman v. Hawkeye-Security Insurance

502 N.W.2d 310, 442 Mich. 520

Opinions

Brickley, J.

In this case the plaintiff victim was struck by a hit-and-run driver in an out-of-state automobile accident while attending to a two-wheel trailer that had become detached from the vehicle he had just exited. The case presents a number of issues, not all of which are sufficiently developed for decision by this Court.

Essentially, plaintiff’s recovery of personal injury protection no-fault benefits and uninsured motorist benefits is dependent on an interpretation of the term "occupant” as it appears in the no-fault statute, MCL 500.3101 et seq.; MSA 24.13101 et seq., and "occupying” as it is defined in the insurance policy issued by the defendant.¹ This is required because pip benefits are mandated by the statute, but uninsured motorist coverage is not.

We conclude that the term occupant in the no-fault statute is to be construed as we indicated in Royal Globe Ins Co v Frankenmuth Mutual Ins Co, 419 Mich 565; 357 NW2d 652 (1984), and that under that literal interpretation, the plaintiff in this case was not an occupant of the automobile at the time of the accident for purposes of awarding pip benefits.

Because there is evidence that the plaintiff was in physical contact with the trailer at the time of the accident, that issue, along with a peripheral issue whether the trailer was a covered vehicle for purposes of the uninsured motorist insurance, present a closer question that can only be resolved with fuller development on remand.

i

On August 5, 1985, the plaintiff, Frederick Rohlman, was a passenger in a minivan owned by Vicki Stevens, who is not a relative, registered in Michigan, and insured by defendant HawkeyeSecurity Insurance Company. Ms. Stevens was driving the van through Ohio, pulling a small two-wheeled trailer that became unhitched, apparently after crossing some railroad tracks. The trailer overturned and came to rest in the center lane of the highway.

Ms. Stevens turned the van around and parked behind the trailer, and the plaintiff then got out of the van and walked ten to twenty feet toward the trailer intending to turn it over on its wheels. After approximately two minutes had passed, while the plaintiff was attempting to right the trailer, an unidentified vehicle struck the trailer and the plaintiff, injuring him severely.

The plaintiff, having no insurance of his own, sought to recover personal injury protection and uninsured motorist benefits from the defendant insurer, but was denied coverage. Plaintiff filed this declaratory action against Hawkeye on October 21, 1986, and Hawkeye moved for a summary disposition pursuant to MCR 2.116(C)(8) and (10), arguing that the plaintiff was not related to the insured, and that he was not an occupant of either the insured vehicle or the trailer. The trial court denied the motion and, by broadly interpreting the term "occupant,” held that the plaintiff was an occupant of the insured van and awarded pip and uninsured motorist benefits.²

The Court of Appeals affirmed, distinguishing the two key cases in this area, Nickerson v Citizens Mutual Ins Co, 393 Mich 324; 224 NW2d 896 (1975), and Royal Globe, supra. The Court stated that "the former construed the term 'occupying’ as used in a private insurance contract, while the latter construed the term 'occupant’ as used in the no-fault act. . . . [L]anguage in an insurance policy is to be strictly construed against the insurer. Since policy language is at issue in the instant case, we are bound to follow the holding in Nickerson.” 190 Mich App 540, 547, 550; 476 NW2d 461 (1991).

ii

In addition to the general issue of the definition of occupant, because of the involvement of the van and the trailer, and because the insurance policy provided uninsured motorist benefits as well as pip benefits, this case presents a number of more complicated issues that neither the trial court nor the Court of Appeals addressed. Pip benefits are mandated by statute under the no-fault act, MCL 500.3105; MSA 24.13105, and, therefore, the statute is the "rule book” for deciding the issues involved in questions regarding awarding those benefits.³ On the other hand, the insurance policy itself, which is the contract between the insurer and the insured, controls the interpretation of its own provisions providing benefits not required by statute.⁴ Therefore, because uninsured motorist benefits are not required by statute, interpretation of the policy dictates under what circumstances those benefits will be awarded.

That being the case, and in light of our conclusion related to the occupancy of the van, a complete analysis of these facts requires consideration of pip benefits with respect to the van and the trailer, and then of uninsured motorist benefits also with respect to the van and the trailer. The trial court and the Court of Appeals failed to reach the trailer issue or the uninsured motorist benefits issue, presumably because both courts found the plaintiff to be an occupant of the van at least for purposes of pip benefits.

a. pip benefits: the van

The defendant argues at length that § 3111 of the no-fault act applies to the current situation because it concerns accidents occurring out of state:

Personal protection insurance benefits are payable for accidental bodily injury suffered in an accident occurring out of this state, if the accident occurs within the United States, its territories and possessions or in Canada, and the person whose injury is the basis of the claim was at the time of the accident a named insured under a personal protection insurance policy, his spouse, a relative of either domiciled in the same household or an occupant of a vehicle involved in the accident whose owner or registrant was insured under a personal protection insurance policy or has provided security approved by the secretary of state under, subsection (4) of section 3101. [MCL 500.3111; MSA 24.13111. Emphasis added.]

Neither the Court of Appeals nor the trial court discussed this section in resolving the present case. The plaintiff’s brief, without explanation, simply states: "The Court of Appeals was correct in not discussing MCL 500.3111 [MSA 24.13111]. It was not applicable to this lawsuit.” We cannot agree.

The basic facts of this case are not in dispute, and it is clear the accident occurred in Ohio. Therefore, § 3111 directly applies, placing its inter pretation at issue.⁵ A careful reading of § 3111 demonstrates that, in order to recover the plaintiff must establish a number of criteria, only two of which are at issue. The plaintiff must show that he is 1) an occupant 2) of a vehicle involved in the accident.⁶ A negative answer to either question would dispose of the issue; however, because the definition of occupant has been the source of many disputes and has caused as many courts to agonize over what that definition should be, we are determined to resolve the confusion.⁷

In Nickerson, supra, a pre-no-fault case, the plaintiff was a passenger in an insured automobile operated in Davison, Michigan. The car became disabled, and the occupants, while waiting for assistance, were standing outside of the vehicle. An uninsured vehicle struck the disabled vehicle from behind, pushing it into the plaintiff and causing serious injury. Id. at 326. The terms of the disabled vehicle’s insurance policy provided the plaintiff with uninsured motorist benefits only if he was "occupying the insured automobile.” Id. at 328. In interpreting the policy’s definition of "occupying”: "in or upon or entering into or alighting from,” this Court held that the plaintiff, because he was "occupying” the insured vehicle immediately before the accident and because his subsequent injury arose out of its use or repair, was entitled to uninsured motorist protection. Id. at 328, 331-332.

While Nickerson was based on pre-no-fault law, the occupant issue was raised again in the context of the no-fault act in Royal Globe, supra. In that case, the driver stopped in the driveway while his spouse got out of the vehicle and proceeded to walk through the garage to enter the house. When the driver began backing the vehicle into the garage it accidentally accelerated, striking the driver’s spouse. The dispute was between two insurance companies to determine which was responsible for paying no-fault benefits. Resolution of the case turned on whether the injured party was an occupant of the vehicle involved in the accident as that term is used in the no-fault act. Royal Globe at 567-569.

In holding that Nickerson did not control the Royal Globe decision, this Court distinguished Nickerson in a number of ways — the most significant of which was the simple fact that Nickerson was a pre-no-fault act case and, thus, only required an interpretation of the insurance policy.⁸ Id. at 572-573. We stated:

It is a familiar and fundamental rule of construction of a private automobile insurance policy that the court’s first duty is to determine, from the language used, the apparent intention of the contracting parties, and then to construe doubtful or ambiguous terms favorably to the insured and against the insurer as the contract drafter. The language of a statute, on the other hand, is required to be construed by assigning to the words used their primary and generally understood meaning consistent with the apparent intention of the Legislature in enacting the law. [Id. at 573. Citations omitted.]

Furthermore, we opined that "if this Court had not found Nickerson to be an occupant of the Parvin vehicle, Nickerson would have had no recovery for his injuries under the insurance policy since the vehicle which caused his injuries was uninsured.” Id. at 574.

In deciding to follow Nickerson in this case, the Court of Appeals failed to acknowledge the significance of the adoption of the no-fault act, which was passed in the time between the Nickerson and Royal Globe decisions. It also overlooked that by the terms of the no-fault act, essentially all accidents are now covered by personal injury protection benefits or the assigned claims plan. Therefore, the repeal of the uninsured motorist statute and passage of the no-fault act largely eliminated the motivating factors underlying the Nickerson decision.⁹ See Bradley v Mid-Century Ins Co, 409 Mich 1, 52-54; 294 NW2d 141 (1980) (Justice Levin writing for the Court), and Lankford v Citizens Ins Co, 171 Mich App 413, 420; 431 NW2d 59 (1988).

Furthermore, we determined in Royal Globe that the purposes of the no-fault act would be better served "by the certainty and predictability that a literal construction of the word 'occupant’ will yield, when it is assigned its primary and generally understood meaning.” Id. at 575. Therefore, we reaffirm our decision in Royal Globe that our task is to interpret the statute and not the policy. Where insurance policy coverage is directed by the no-fault act and the language in the policy is intended to be consistent with that act, the language should be interpreted in a consistent fashion, which can only be accomplished by interpreting the statute, rather than individual policies.¹⁰

The question is whether, for purposes of pip benefits, the plaintiff was an occupant of the van, as that term is used in § 3111, when the accident occurred.

At the time of the accident the plaintiff was attempting to right the overturned and disconnected trailer some ten to twenty feet away from the van from which he had departed. As we said in Royal Globe, "Whatever her status was after she left the motor vehicle in the street and walked some 60 feet to the rear of the garage where the Pontiac struck her, [she] was 'not an occupant’ of the vehicle when she was injured.” Id. at 576.

Although the no-fault act does not define the terms occupant or occupying, other sections of the act provide guidance in determining its meaning. Subsection 3106(l)(c) of the act states in part:

Accidental bodily injury does not arise out of the ownership, operation, maintenance, or use of a parked vehicle as a motor vehicle unless . . . the injury was sustained by a person while occupying, entering into, or alighting from the vehicle. [Emphasis added.]

The Legislature expressly recognized that "entering into” and "alighting from” are acts separate from "occupying” a vehicle. See Royal Globe, supra at 574, n 5. Section 3111 does not include "entering into” or "alighting from” the vehicle as acts that would trigger personal protection benefits for an out-of-state accident.

By giving the term occupant its primary and generally understood meaning coupled with the above statutory reference, we conclude that the plaintiff was not an occupant of the van because he was not physically inside the van when the accident occurred. We find this interpretation consistent with our Royal Globe decision and the intent of the no-fault act.¹¹

b. pip benefits: the trailer

While the parties mainly base their respective claims on the question whether the plaintiff was an occupant of the van, the plaintiff, albeit briefly, also contends that he was an occupant of the trailer and that the trailer was a "covered vehicle” under the Hawkeye policy covering the van. The trial court and the Court of Appeals did not find it necessary to make a determination whether the plaintiff was an occupant of the trailer because they concluded that he was an occupant of the van.

As far as pip benefits are concerned, the analysis of whether plaintiff was an occupant of the trailer is similar to that discussed above with respect to the van. We acknowledge that occupying the trailer is a closer question than occupying the van. However, in addition to the fact that the lower courts did not address this issue, the record is inadequate for its resolution.¹²

In the trial court, Hawkeye argued that the plaintiff should seek recovery from the insurer of the trailer, acia. MCL 500.3114(4)(a); MSA 24.13114(4)(a). The trial court held that the trailer was a "covered auto” under Hawkeye’s policy for purposes of priority, while also holding that the plaintiff was an occupant of the van. A careful reading of the statute and policy show that this holding was reached without a complete analysis. As we stated above, the statute controls the awarding of pip benefits, while the insurance policy controls the uninsured motorist benefits. And, just as it is necessary to determine whether plaintiff was an occupant of the van or trailer for purposes of pip, as well as for uninsured motorist benefits, it is also necessary to provide the same type of analysis regarding the question of "covered vehicle.”¹³

C. UNINSURED MOTORIST BENEFITS

The trial court also awarded uninsured motorist benefits. Any claim for these benefits must be based on the policy, which requires that the injury have occurred by accident and have been sustained by a "covered person.”¹⁴ To be considered a "covered person” the injured party must be the insured, a family member of the insured, or any other person occupying the covered auto. These questions must be asked with respect to the van and the trailer, and, because we are dealing with uninsured motorist benefits, the policy definitions control.

1. THE VAN

As far as the van is concerned, it is obvious that it is a covered auto under the policy; however, because the Court of Appeals did not address this issue, we are left without the benefit of its analysis, and therefore we refrain from deciding the issue at this time.

2. THE TRAILER

With respect to the trailer, Hawkeye concedes that it is a covered auto under the policy with respect to uninsured motorist benefits.¹⁵ What is at issue, and what was not discussed by the courts below, is whether the plaintiff was occupying the trailer as the term is defined in the insurance policy. Some of the same concerns that arise here were discussed above, regarding the applicability of the statutory definition of occupant to the trailer for purposes of pip benefits.¹⁶

hi

Accordingly, the judgment of the Court of Appeals is reversed, and the matter is remanded to that Court for further proceedings consistent with this opinion. Specifically, the Court of Appeals is ordered to consider:

1) For purposes of pip benefits, whether Rohlman was an occupant of the trailer and, if so, whether the trailer was a covered vehicle;

2) For purposes of uninsured motorist benefits, whether Rohlman was occupying either the van or the trailer, as it is defined in the Hawkeye policy.

Boyle, Riley, Griffin, and Mallett, JJ., concurred with Brickley, J.

Footnotes

1

While the statute uses the term "occupant” and the insurance policy uses the term "occupying,” we do not perceive any intended difference in meaning on the basis of different forms of the word.

2

In determining the question of occupancy, the trial court relied on this Court’s decision in Nickerson v Citizens Mutual Ins Co, 393 Mich 324; 224 NW2d 896 (1975).

3

The policy and the statutes relating thereto must be read and construed together as though the statutes were a part of the contract, for it is to be presumed that the parties contracted with the intention of executing a policy satisfying the statutory requirements, and intended to make the contract to carry out its purpose.

A policy of insurance must be construed to satisfy the provisions of the law by which it was required, particularly when the policy specifies that it was issued to conform to the statutory requirement; and where an insurance policy has been issued in pursuance of the requirement of a statute which forbids the operation of a motor vehicle until good and sufficient security has been given, the court should construe this statute and the policy together in the light of the legislative purpose. [12A Couch, Insurance, 2d (rev ed), §45:694, pp 331-332.]

The definition[s] in an automobile liability insurance policy required by statute, of the motor vehicles covered by it, [are] to be construed with reference to statutes with which it was intended to comply .... [id., § 45:695, p 333.]

We think the same would hold true for no-fault policies.

4

A compulsory insurance statute is only concerned with the injured or harmed third persons, and therefore is not concerned with any matters which do not affect liability to such persons. Accordingly, collateral agreements between the insured and the insurer which do not alter the coverage or remedies provided by statute are valid. [Id., § 45:703, p 339.]

5

The plaintiff argues that §§ 3105 and 3106 apply in this situation and not § 3111. We do not agree. The Legislature has enacted a specific section of the no-fault act that applies to accidents occurring out of state, and it seems evident that this section ought to take priority over other sections that may arguably apply in a collateral manner to the facts of this case.

6

The plaintiff was not the named insured, nor was he the spouse of, or related to, the named insured. Thus, the only way the plaintiff can recover under §3111 is to establish himself as "an occupant of a vehicle involved in the accident . . . .”

Section 3111 also requires that the vehicle involved in the accident be insured under a personal protection insurance policy or other approved security. In this case, the van was insured by defendant Hawkeye, and the trailer was insured by defendant Automobile Club of Michigan (acia).

7

Because of our resolution of the occupant issue it is unnecessary to decide whether the van was a vehicle involved in the accident under § 3111.

8

While the act does not define "occupant” as used in § 3111, the policies in question in Nickerson and Royal Globe both had definitions of the term materially indistinguishable from the definition given in the Hawkeye policy in the instant case, which is: "in, upon, getting in, on, out or off.”

9

In this case it is true that the plaintiff is also without insurance of his own; however, the result is unique and would only apply in very isolated instances. The plaintiff was out of state when the accident occurred. If the accident occurred in-state he would have been covered by the assigned claims plan of the no-fault act. MCL 500.3172(1); MSA 24.13172(1). Also, the case takes on added importance because, while the factual situation is fairly unique and isolated, the Court of Appeals interpretation of occupant would extend to other provisions of the no-fault act. Affording solicitude to an insured in a private-party contract setting is far different from interpreting a statutory provision that would have ramifications throughout the no-fault act.

10

In this case, as in Royal Globe, we have a situation in which the policy language provides a definition of occupant different from, and possibly broader than; the no-fault act. However, the issue was not argued by the litigants in Royal Globe, nor has it been presented by the parties in this case. In arguing that the policy definition of occupying controls, the plaintiff merely asks us to limit our Royal Globe decision to priority disputes between insurance companies and to apply Nickerson in those fact-sensitive cases where the plaintiff otherwise would not be entitled to a recovery as proposed by the dissenting opinion.

We emphasize that under the facts of this case and according to the arguments presented by the parties, the statute controls, and we do not deal with the question whether the policy can and, if so, did provide coverage broader than that required by the no-fault act. Although we reserve the issue for a case in which the issue is properly before us, we note the following from Couch, n 3 supra, § 45:697, p 334.

A compulsory insurance statute in effect declares a minimum standard which must be observed, and a policy cannot be written with a more restrictive coverage.

The statute is manifestly superior to and controls the policy, and its provisions supersede any conflicting provisions of the policy.

However,

[although an insurer may not by its contract restrict its coverage to less than that required by statute, it may contract for a broader coverage than the statutory liability, as, for instance, with respect to territory, amount, circumstances of operation, etc., and in such case recovery is measured solely by the policy. The fact that the coverage of the policy may be broader than that required by statute is immaterial, for the contract of the parties may be enforced as written. [Id., § 45:699, p 336.]

11

The dissent would hold that plaintiff was an occupant of and was occupying the van. Justice Levin states that he "would adopt the same approach [reading the policy definition of occupant into the no-fault act] in construing the term 'occupant’ as used in § 3111.” Post at 543.

Interestingly, in Heard v State Farm Mutual Automobile Ins Co, 414 Mich 139; 324 NW2d 1 (1982), Justice Levin used the same type of analysis to hold that a person who was pumping gasoline at a self-service gas station was not an occupant of his vehicle when it was struck by another vehicle. Mr. Heard had not purchased no-fault insurance, and, as a result, he would not have been entitled to pip benefits under the no-fault act if his vehicle was involved in an accident while he was occupying it. Justice Levin held that "[b]ecause Heard’s uninsured vehicle was not involved in the accident and he was a pedestrian and not a motorist or occupant of a motor vehicle (or, if one prefers, he was more like a pedestrian than a motorist or occupant), he is as much entitled — under the terms and policies of the no-fault act — to recover from the insurer of the vehicle that struck him as is a pedestrian . . . .” Id. at 146 (parenthetical in the original).

12

The record is sparse regarding whether the trailer had the capacity to be occupied. Plaintiff was never in, nor was he attempting to get into, the trailer. Nobody was riding in the trailer, and presumably it was filled with drums, sound and lighting equipment, and dance costumes. Furthermore, the witnesses were inconsistent with respect to the dimensions of the trailer — testimony revealed it was four feet wide, five to eight feet long, and two and one-half to five feet tall.

Additionally, the record is inconsistent with respect to exactly where the plaintiff was when the accident occurred. The medical records state: "This is a twenty-eight year old white male was [sic] brought in by rescue squad. The patient states that he was walking when a car crossed the mid-line. The patient tried to jump out of the way but was hit in the left leg.” The plaintiff also told his treating physician that "he was a pedestrian struck by a car.” Although the trial court found differently, we note the inconsistencies.

13

As far as pip benefits are concerned, § 3111 controls, and it requires that the vehicle involved in the accident be covered by a personal protection insurance policy. See n 6 and accompanying text. It is evident that the van was a vehicle covered under Hawkeye’s policy. For the trailer, however, the issue is more complex. The statute defines "[mjotor vehicle” as "a vehicle, including a trailer, operated or designed for operation upon a public highway by power other than muscular power which has more than 2 wheels.” MCL 500.3101(2)(e); MSA 24.13101(2)(e).

However, the insurance policy contains a different definition of "covered auto.” Hawkeye contends that the statute controls for purposes of pip benefits; however, it does not contest the applicability of the policy definition for purposes of 'uninsured motorist benefits, which makes the trailer a covered auto for those benefits. The plaintiff argues that the policy definition controls exclusively. The Court of Appeals did not have to deal with this issue because it ended its analysis with the van. We think the parties are entitled to have this issue resolved. (A fact that must be noted when resolving this issue is that acia insured the trailer.)

14

It is not contested that the injury occurred by accident, and therefore that question, as it pertains to the following analysis, will not be discussed.

15

See n 13.

16

See n 12 and accompanying text.