Woman Wins Appeal in Ruling on Joint Vehicle Ownership | Call Lee Free

I'll Be Right There

Request Free Consultation

Macomb County Woman Wins Case in Court of Appeals on No-Fault Insurance Claim

Wayne College Student Wins No-Fault Insurance Appeal

The Michigan Court of Appeals this week ruled on a case involving Michigan car insurance, the Michigan no-fault law, and a parents interaction with their child’s car insurance.

In Henderson v. King (docket no. 334105, unpublished, 11/28/2017), a 19 year-old Wayne State University college student was involved in a car accident in Macomb County. At the time of the accident, her parents were divorced and she split time living with both her father and mother. The plaintiff was the sole owner of a 2004 Dodge Stratus and the car was registered in her name. However, her father insured the vehicle with defendant USAA Insurance. The plaintiff was listed as an operator of the Status on her father’s policy.

Following the accident, Ms. Henderson turned to USAA Insurance to pay her Michigan no-fault PIP benefits. For a time, USAA paid her claim. Eventually, USAA asked a judge to dismiss the plaintiff’s claim against it, claiming plaintiff was domiciled with her mother at the time of the accident and another insurance carrier, Esurance, should be paying the claim.

Esurance responded to USAA’s motion by filing its own motion asking the judge to dismiss the entirety of plaintiff’s claim against both insurance carriers, claiming the plaintiff was an uninsured owner of the Dodge Stratus, and therefore ineligible for PIP benefits under MCL 500.3113(b).

Under Michigan law, a person injured in a car accident is entitled to receive no-fault benefits. These benefits include the payment of lost wages, payment of medical expenses as well as other benefits. One of the few exceptions is when an individual is injured in a car accident involving their own uninsured vehicle. In that situation, the injured person cannot claim no-fault benefits under MCL 500.3113(b).

In this case, Esurance argued that although the vehicle was insured through the plaintiff’s father’s USAA policy, plaintiff’s father had no ownership interest in the vehicle and therefore the USAA policy did not satisfy the requirement to maintain insurance under MCL 500.3101(1). Thus, when a vehicle owner fails to maintain insurance coverage in their name, the owner is eligible for PIP benefits.

The trial judge in Macomb County agreed with Esurance’s argument and completely dismissed the plaintiff’s claim for no-fault benefits. However, the Michigan Court of Appeals reversed and allowed Ms. Henderson to proceed with her case for no-fault benefits against USAA Insurance.

One Insurance Policy Covers All Drivers When a Vehicle is Jointly Owned

In doing so, the Court of Appeals analyzed prior Michigan case law, which has held that not every owner of a vehicle needs to obtain auto insurance. For example, if you share ownership of a car with your brother, but only your brother carries insurance on the car, you can still obtain no-fault benefits even though you did not purchase your own car insurance and are not included on your brother’s policy. Michigan law does not require “each and every owner” to maintain insurance on a vehicle. Iqbal v. Bristol West Ins. Group, 278 Mich App 31; 748 NW2d 574 (2008).

The Court then went on to explain that the Iqbal case held that at least one of the owners of the vehicle must maintain insurance. However, in this case, Ms. Henderson was the sole owner of the Dodge Stratus and she did not maintain any insurance on the car at the time of her accident. Therefore, no owner of the vehicle maintained insurance. Based on this reasoning, the Court was inclined to dismiss her case. But the Court found there was a question of fact as to whether Ms. Henderson maintained the requisite insurance under the terms of her father’s USAA policy.

Insurance policies are creatures of contract. Therefore, the terms of the insurance contract are central when analyzing when and what benefits claimants are entitled to receiving. In this case, Ms. Henderson was listed as an operator on her father’s USAA policy and there was a question of fact as to whether she was a “covered person” based on her status as her father’s “family member”, as defined in the USAA policy. If a jury found she did in fact reside with her father at the time of the car accident, then it is possible the jury will deem her a “family member” as defined by the USAA policy. If she is a family member, then she is can be deemed a “covered person” and entitled to the same benefits of the policy as her father, including Michigan no-fault benefits.

Because a trial judge cannot dismiss a case if there is a genuine issue of material fact, the Court of Appeals ruled the trial judge was incorrect in dismissing Ms. Henderson’s case in the first place, thus allowing her to bring her case to a jury.

This case is important because it allows individuals involved to bring proper claims for Michigan no-fault benefits even if you are the sole owner of a car and fail to purchase car insurance, so long as you met the requisite terms of another person’s insurance policy for the vehicle.