DORIS PERNELL V ALLSTATE INS CO
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STATE OF MICHIGAN
COURT OF APPEALS
DORIS PERNELL,
UNPUBLISHED
December 2, 2008
Plaintiff-Appellant,
v
No. 279825
Wayne Circuit Court
LC No. 05-519094-NF
ALLSTATE INSURANCE COMPANY,
Defendant-Appellee,
and
QBE INSURANCE CORPORATION and IPA
INSURANCE PROGRAM ADMINISTRATORS,
L.L.C.,
Defendants.
DORIS PERNELL,
Plaintiff-Appellee,
v
No. 279837
Wayne Circuit Court
LC No. 05-519094-NF
ALLSTATE INSURANCE COMPANY,
Defendant-Appellant,
and
QBE INSURANCE CORPORATION and IPA
INSURANCE PROGRAM ADMINISTRATORS,
L.L.C.,
Defendants.
Before: Zahra, P.J., and Cavanagh and Meter, JJ.
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ZAHRA, P.J. (concurring in part and dissenting in part).
While I concur in the conclusions reached in sections I and III of the majority opinion, I
respectfully dissent from the conclusion reached section in II of that opinion. Specifically, I
conclude the lower court properly denied plaintiff an award of attorney’s fees under MCL
500.3148(1). I would affirm the judgment of the lower court.
A reasonable attorney’s fee is recoverable under the no-fault act when it is established
that an insurer was overdue in the payment of personal or property protection insurance benefits.
MCL 500.3148(1). By the plain terms of the statute authorizing these fees, “[t]he attorney’s fee
shall be a charge against the insurer in addition to the benefits recovered, if the court finds that
the insurer unreasonably refused to pay the claim. . . .” Id.
Here, the majority concludes that the benefits to which plaintiff is entitled are payable
under the QBE policy of insurance—not the Allstate policy of insurance. Significantly,
plaintiff’s counsel conceded during oral argument that if this Court concludes that QBE is the
insurer from which plaintiff is entitled to no-fault insurance benefits, plaintiff would not be
entitled to attorney’s fees from Allstate. Notwithstanding this concession, the majority
concludes that Allstate should nonetheless pay attorney fees to plaintiff under MCL 500.3148(1)
because Allstate was involved in a priority dispute with QBE and “a priority dispute among
insurers will not excuse a delay in making timely payment.” The majority has, in my opinion,
mischaracterized the present case as one involving a priority dispute.
A priority dispute exists where there are two or more insurance policies under which
insurance proceeds are arguably payable. Insurance proceeds are arguably payable where there
exists some bona fide factual uncertainty to the claim, the resolution of which dictates which of
the competing policies of insurance is payable to the insured. A priority dispute is not created
merely because an insured claims a right to insurance coverage. Here, the majority embraces the
general rule expressed in MCL 500.3114(1) that an accident victim must look first to his or her
own insurer, or that of a spouse or resident relative for personal or property protection benefits,
to conclude that a priority dispute existed between Allstate and QBE. Significantly, however, as
observed by the majority, MCL 500.3114(1) expressly exempts from this general rule claims
made by a “person suffering accidental bodily injury while an operator or a passenger of a motor
vehicle operated in the business of transporting passengers.” MCL 500.3114(2). In such cases,
the injured person “shall receive the personal protection insurance benefits to which the person is
entitled from the insurer of the motor vehicle. . . .” Id. Also exempted from the general rule are
claims made by “[a]n employee . . . who suffers accidental bodily injury while an occupant of a
motor vehicle owned or registered by the employer . . . .” MCL 500.3114(3). Under these
circumstances, the injured employee “shall receive personal protection insurance benefits to
which the employee is entitled from the insurer of the furnished vehicle.” Id.
As observed by the majority, the car plaintiff was operating was used in the course of her
employment of transporting passengers for hire. There was no factual dispute in this regard.
Thus, by the plain terms of MCL 500.3114(2) and (3), plaintiff should have looked to “the
insurer of the vehicle,” MCL 500.3114(2), or the “insurer of the furnished vehicle” for her
insurance benefits. Under MCL 500.3114(2) and (3), QBE is the insurer who is obligated to
provide plaintiff the insurance benefits to which she is entitled. Given the undisputed facts
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presented in this case, MCL 500.3114(1) does not support a good faith basis to assert a claim for
insurance benefits against Allstate.1
For these reasons, I conclude Allstate was not unreasonable when it refused to pay the
claim made by plaintiff. Therefore, an award of attorney’s fees under MCL 500.3148(1) is not
warranted. I would affirm the lower court’s denial of attorney’s fees pursuant to MCL
500.3148(1).
/s/ Brian K. Zahra
1
This conclusion is buttressed by the fact that the Allstate policy under which plaintiff stakes her
claim specifically excludes from coverage “bodily injury to any person while occupying a motor
vehicle while being used to carry persons or property for a charge . . . .”
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