Which No Fault Insurer Must Pay Injured Person?
Multiple suits were filed seeking a determination of the priority of insurers under Michigan’s no-fault act. A Michigan Court was asked to resolve the dispute in Waleed Youhanna, and Mendelson Orthopedics, PC and Omega Rehab Services, LLC v. Auto Club Insurance Association and Hudson Insurance Company, and Amerisure Insurance Company, Silver Pine Imaging, LLC v. Auto Club Insurance Association, and Hudson Insurance Company, and Amerisure Insurance Company, No. 342436, No. 342736, State of Michigan Court of Appeals (April 30, 2019).
In 2015, plaintiff Waleed Youhanna purchased a commercial tractor-trailer and registered the truck in his name and the name of his business, Wally Transportation, Inc. (Wally). Wally purchased from Hudson a policy of no-fault insurance known as a “bobtail” policy. “Bobtailing” is trucking vernacular for driving a tractor without an attached trailer. The purpose of a “bobtail” policy generally is to provide insurance coverage when the tractor is being operated without a trailer.
On September 1, 2015, Wally leased the tractor-trailer to Safe Transport, LLC (Safe Transport), and thereafter plaintiff drove the tractor-trailer to deliver loads for Safe Transport. Safe Transport had purchased a policy of no-fault insurance issued by Amerisure. The Amerisure policy listed four tractor-trailers as “covered autos” under the policy, but did not include the tractor-trailer leased to Safe Transport by Wally. On September 14, 2015, plaintiff agreed to transport a load in the tractor-trailer for Safe Transport from Livonia to Louisiana. Early the next morning, while driving the tractor-trailer through Tennessee, plaintiff was injured in an accident that occurred when another tractor-trailer hit the back of his vehicle.
Plaintiff sued Auto Club Insurance Association (Auto Club), from whom plaintiff had purchased a policy of no-fault insurance covering his personal vehicle, seeking payment of personal protection insurance (PIP) benefits for his injuries arising from the collision. Plaintiff’s medical providers, intervened.
The three insurers moved for summary disposition. The trial court granted summary disposition to Auto Club and Amerisure.
Hudson contends that the trial court erred in granting Amerisure summary disposition. Hudson argues that the trial court incorrectly determined that plaintiff’s tractor-trailer was not covered by the Amerisure policy at the time of plaintiff’s accident, and that Amerisure therefore was not liable for payment of plaintiff’s PIP benefits.
PRIORITY UNDER THE NO-FAULT ACT
The purpose of the Michigan no-fault act is to ensure compensation of persons injured in motor vehicle accidents. The sections of the act governing priority determine the party against whom a person injured in a motor vehicle accident may claim benefits. To determine the priority of insurers liable for PIP benefits under the no-fault act in this case, the court looked to the statute.
The question before the court, after review of the statute, was who is the insurer of the furnished vehicle. Hudson argued that because Amerisure issued a policy of no-fault insurance to Safe Transport, Amerisure is the insurer of the vehicle from whom plaintiff is entitled to receive PIP benefits under the statute as an employee suffering accidental bodily injury while an occupant of a vehicle owned by Safe Transport.
Safe Transport never notified Amerisure that it wanted to add plaintiff’s tractor-trailer as a covered vehicle under the Amerisure policy. The Amerisure policy specifies that an automobile that was acquired after the policy went into effect will be covered under that policy “only if” two conditions are met, one condition being that Safe Transport notify Amerisure to add the newly acquired vehicle to the policy. The tractor-trailer in this case was an after-acquired vehicle. The effect the policy and statutory provisions is the same — coverage will not occur in the absence of notice.
The court rejected Hudson’s argument that the after acquired vehicle provision of the Amerisure policy is ambiguous because it is equally susceptible of meaning either that coverage was automatically extended for the newly acquired vehicle during the 30-day notice period, or that coverage was not provided unless Safe Transport notified Amerisure within 30 days to add the vehicle to the policy .
Contrary to the allegations of Hudson, the Amerisure policy provides that an automobile that is acquired after the policy becomes effective may be covered under that insurance policy “only if certain conditions are met.” Because the court perceived only one meaning of this language it declined to find it ambiguous and affirmed the trial court’s conclusion that since it received no notice there was no coverage.
Insurance companies who may insure particular risks should avoid suing each other. Insurers are professional litigators and professional adjusters who resolve disputes over insurance policy coverages and risks of loss. Settlement is usually more efficient than litigation and is always less expensive than litigation. Hudson litigated only to find it owed everything while the other insurers were found to owe nothing. The costs of litigation and appellate practice probably exceeded the amount of PIP benefits in dispute.
© 2019 – Barry Zalma
This article, and all of the blog posts on this site, digest and summarize cases published by courts of the various states and the United States. The court decisions have been modified from the actual language of the court decisions, were condensed for ease of reading, and convey the opinions of the author regarding each case.
Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 50 years in the insurance business. He is available at http://www.zalma.com and firstname.lastname@example.org.
Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.
Over the last 51 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.
“Arson-For-Profit Fire at the Cowboy Bar & Grill”
A true crime novel based on the experience of the author, Barry Zalma, who for more than 51 years has acted for insurers who were faced with arson-for-profit, one of the most dangerous insurance fraud schemes. The book explains how an insurance claims adjuster, working with a fire cause and origin expert, a forensic accountant and insurance coverage lawyer, were able to defeat an arson-for-profit scheme and obtain a judgment requiring the perpetrator to take nothing and repay the insurer all of its expenses in defeating the claim.