AMERISURE MUTUAL INSUR CO V AMERICAN COUNTRY INSUR CO
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STATE OF MICHIGAN
COURT OF APPEALS
AMERISURE MUTUAL INSURANCE
COMPANY,
UNPUBLISHED
September 23, 2004
Plaintiff-CounterdefendantAppellee,
No. 245228
Oakland Circuit Court
LC No. 01-032434-CK
v
AMERICAN COUNTRY INSURANCE
COMPANY,
Defendant-CounterplaintiffAppellant.
Before: Murphy, P.J., and O’Connell and Gage, JJ.
PER CURIAM.
In this action involving a claim and counterclaim for declaratory relief, defendant appeals
as of right an order granting summary disposition in favor of plaintiff pursuant to MCR
2.116(C)(10) and requiring defendant to provide insurance coverage on a co-primary basis with
plaintiff for injuries sustained by a passenger who fell out of a motor vehicle. We reverse and
remand for entry of an order granting summary disposition in favor of defendant.
On June 23, 2000, Michael Furtah was one of several passengers in a vehicle variously
described as a “limobus,” a “coach,” a “motor bus,” or a modified “1996 Ford passenger van.”
Because the use of the vehicle implicated the provisions of the Motor Bus Transportation Act
(MBTA), MCL 474.101 et seq., we shall refer to the vehicle as a motor bus. Furtah fell out of
the motor bus and sustained injuries that gave rise to an underlying personal injury suit.
The registered owner of the motor bus was TVP, Inc., but, through an arrangement with
Diamond Touch Limousine Service, Inc., the vehicle was placed into the service of transporting
passengers for hire by Diamond Touch with TVP receiving a percentage of the income generated
by the service. The motor bus was insured by plaintiff through a policy issued to TVP. Plaintiff
accepted premiums for insuring the motor bus, which by description was specifically listed in the
policy as a covered auto. The coverage included the mandatory no-fault personal injury
protection (PIP) benefits, as well as tort liability coverage in the amount of $500,000.
Defendant insured Diamond Touch through a policy that provided for $1,000,000 in tort
liability coverage. The liability coverage applied not only to vehicles owned by Diamond Touch
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and particularly listed in the policy, but also to leased, hired, rented, or borrowed vehicles used
and operated by Diamond Touch in the business and not specifically listed in the policy. The
policy also provided that, as to any covered vehicles owned by Diamond Touch, the coverage
was primary, and with respect to covered vehicles not owned by Diamond Touch, the coverage
was excess over any other collectible insurance. The motor bus involved in the accident was not
particularly listed by description in the policy. In addition to the $1,000,000 in liability coverage
under its policy with defendant, Diamond Touch also had tort liability protection in the amount
of $4,000,000 from American Alternative Insurance Company (AAIC).
In regard to PIP benefits, defendant contends that, because the motor bus at issue was not
listed in the policy, there was no specific PIP coverage for the vehicle under the terms of the
policy. However, the insurance policy provisions would still extend PIP benefits or coverage
because defendant was the insurer of the operator of the subject vehicle, i.e., Diamond Touch.1
Defendant maintains that under MCL 500.31142 and other provisions of the insurance policy, it
“would become highest in priority for payment of PIP benefits only if TVP, Inc., as the owner of
the auto involved, did not provide coverage for that vehicle.” As plaintiff was in fact the insurer
of the vehicle and insured the owner of the vehicle, as reflected by its policy with TVP, plaintiff
was the sole primary insurer under the policies and statute. Plaintiff essentially concedes that,
looking solely to the insurance policies, its coverage is primary and defendant’s coverage is
secondary.
1
We note the mandatory nature of PIP benefits as reflected by this Court in Cruz v State Farm
Mut Automobile Ins Co, 241 Mich App 159, 164; 614 NW2d 689 (2000), aff’d 466 Mich 588;
648 NW2d 591 (2002), wherein the panel stated:
The no-fault act mandates that insurers “pay benefits for accidental bodily
injury arising out of the ownership, operation, maintenance or use of a motor
vehicle as a motor vehicle.” MCL 500.3105(1). Because personal protection
insurance benefits are mandated by the no-fault statute, the statute is the “rulebook” for deciding the issues involved in questions regarding awarding those
benefits. [Citations omitted.]
2
MCL 500.3114(2) provides that “[a] person suffering accidental bodily injury while an
operator or a passenger of a motor vehicle operated in the business of transporting passengers
shall receive the personal protection insurance benefits to which the person is entitled from the
insurer of the motor vehicle.” MCL 500.3114(4) provides:
Except as provided in subsections (1) to (3), a person suffering accidental
bodily injury arising from a motor vehicle accident while an occupant of a motor
vehicle shall claim personal protection insurance benefits from insurers in the
following order of priority:
(a) The insurer of the owner or registrant of the vehicle occupied.
(b) The insurer of the operator of the vehicle occupied.
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Plaintiff’s argument below and on appeal is that the insurance coverage provided by
defendant did not comply with the MBTA. Additionally, according to plaintiff, the certificate of
insurance issued and filed by defendant on behalf of Diamond Touch, done so in order to obtain
the necessary certificate of authority for Diamond Touch to operate its business, effectively
modified defendant’s policy such that it created co-primary insurance obligations on the part of
both parties. We find it unnecessary to determine the nature of any particular obligation
defendant has under MCL 474.109(2) of the MBTA because, assuming defendant has an
obligation to comply with the statute, it was satisfied and the policy issued was consistent with
the MBTA requirements. Moreover, we find it unnecessary to determine if the certificate of
insurance filed with the Michigan Department of Transportation (MDOT) operated to negate or
modify the provisions of defendant’s insurance policy because the policy was consistent with the
certificate of insurance.
“This Court reviews the grant or denial of summary disposition de novo to determine if
the moving party is entitled to judgment as a matter of law.” Maiden v Rozwood, 461 Mich 109,
118; 597 NW2d 817 (1999). “A motion under MCR 2.116(C)(10) tests the factual sufficiency of
the complaint. In evaluating a motion for summary disposition brought under this subsection, a
trial court considers affidavits, pleadings, depositions, admissions, and other evidence submitted
by the parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the motion.”
Id. at 120. The reviewing court should consider “the substantively admissible evidence actually
proffered in opposition to the motion.” Id. at 121. Also reviewed de novo as questions of law
are the proper application and interpretation of the no-fault act, Farmers Ins Exchange v AAA of
Michigan, 256 Mich App 691, 694-695; 671 NW2d 89 (2003), and the proper application and
interpretation of contract language. Klapp v United Ins Group Agency, Inc, 468 Mich 459, 463;
663 NW2d 447, (2003).
The goal of statutory interpretation is to determine and give effect to the intent of the
Legislature, with the presumption that unambiguous language should be enforced as written.
Gladych v New Family Homes, Inc, 468 Mich 594, 597; 664 NW2d 705 (2003). This Court is
obligated, where reasonably possible, to construe contracts that are potentially in conflict with a
statute in harmony with the statute. Cruz v State Farm Mut Automobile Ins Co, 466 Mich 588,
599; 648 NW2d 591 (2002). If at all possible, we construe a contract “in a manner that renders it
compatible with the existing public policy as reflected in the no-fault act.” Id.
As a motor carrier of passengers, defendant’s insured, Diamond Touch, was
unambiguously forbidden to “operate upon a public highway without first having obtained from
the department a certificate of authority.” MCL 474.105. Among other requirements to acquire
a certificate of authority, MCL 474.109(2) imposes the following:
(2) An applicant shall acquire the following insurance coverage of
liability for acts of omissions of the applicant as a motor carrier of passengers:
(a) Bodily injury and property damage liability insurance with a minimum
combined single limit of $5,000,000.00 for all persons injured or for property
damage.
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(b) Personal protection insurance and property protection insurance as
required by sections 3101 to 3179 of the insurance code of 1956, Act No. 218 of
the Public Acts of 1956, being sections 500.3101 to 500.3179 of the Michigan
Compiled Laws. A motor common carrier of passengers shall maintain the
insurance described in this subsection as a condition of maintaining a certificate
of authority issued under this act.
Under the clear statutory scheme, defendant’s insured, Diamond Touch, was obligated to
acquire liability insurance with a minimum coverage of $5,000,000 and PIP insurance.
As required by the MBTA, defendant filed a certificate of insurance with MDOT.3 The
certificate of insurance contained the following language:
This is to certify that the American Country Insurance Company
(hereinafter called Company) at 222 N. LaSalle St., Chicago, IL 60601 has issued
to Diamond Touch Limousine, Inc. at 28474 Utica Rd., Roseville, MI 48066 the
policy of insurance to provide under Terms and Coverages described as follows.
Check as applicable:
7 This insurance is to provide personal and property protection insurance
as required by Section 500.3101 of the Michigan Compiled Laws (Michigan NoFault).
7 This insurance is to provide liability insurance that is primary and the
company shall not be liable for amounts in excess of $1,000,000 for each
accident.
This insurance is to provide liability insurance that is excess and the
company shall not be liable for amounts in excess of $_________ for each
accident in excess of the underlying limit of $________ for each accident.
Policy No. LCA0801145 effective from 9-16-99 to 9-16-00 12:01 a.m.,
standard time at the address of the insured as stated in said policy.
The receipt of this certificate by the department certifies that a policy or
policies of Public Liability (or Automobile Bodily Injury and Property Damage
Liability) insurance has been issued by the Company identified on the face of this
form to provide the coverage for the protection of the public required under
Section 9 of Act No. 432 of the Public Acts of 1982, being Section 474.109 of the
Michigan Compiled Laws with respect to the operation, maintenance, or use of
any vehicle for which the intrastate motor carrier of passengers authority is
3
“A certificate of insurance meeting the requirements of section 9(2) of the act [MCL
474.109(2)] shall accompany the application.” 1985 AACS, R 474.103(6).
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required or has been issued by the Department of Transportation of the State of
Michigan, regardless of whether or not such motor vehicles are specifically
described in the policy or policies or not. Whenever requested by the Michigan
Department of Transportation of the State of Michigan, the Company agrees to
furnish said department a duplicate original of said policy and all endorsements
thereon. . . . [Certificate of Insurance, 9/23/99.]
Diamond Touch had also submitted another certificate of insurance that was mostly
identical, except that it certified that AAIC provided $4,000,000 of excess liability insurance
under the third checkbox; the first two checkboxes were blank.
As noted earlier in this opinion, defendant supplied Diamond Touch with PIP coverage
under the insurance policy. Even though the coverage might have been secondary to plaintiff’s
policy under the circumstances of this case, there was in fact coverage, and had there not been
primary coverage supplied by plaintiff through its policy with TVP, the PIP coverage afforded
by defendant’s policy would have protected Furtah.
In other words, the protection the
Legislature sought for persons injured while riding as passengers in a motor bus was satisfied by
the insurance policy issued by defendant to Diamond Touch. The policy meets the criteria of
MCL 474.109(2)(b) and is consistent with the certificate of insurance filed with MDOT.
With respect to tort liability coverage, the $1,000,000 policy issued by defendant, when
considered with the $4,000,000 liability coverage issued by AAIC, satisfied the requirements of
MCL 474.109(2)(a). Defendant’s policy is also consistent with the certificate of insurance
issued by defendant in regard to liability insurance. While the certificate of insurance makes
reference to liability insurance “that is primary,” we agree with defendant’s contention that the
reference merely distinguishes defendant’s policy from the AAIC policy. Defendant’s policy
was primary and the AAIC policy was secondary for purposes of the $5,000,000 liability
coverage requirement of MCL 474.109(2)(a). The “primary” language contained in the
certificate of insurance pertains to allowing the two insurers, defendant and AAIC, to aggregate
the financial security limits required by the MBTA. See Harco Nat’l Ins Co v Bobac Trucking,
Inc, 107 F3d 733, 736 (CA 9, 1997). But this did not mean that defendant’s liability coverage
was automatically primary or co-primary to other existing coverage that was not reflected in a
certificate of insurance filed with the MDOT to acquire a certificate of authority necessary to
operate a motor bus. Had plaintiff’s primary policy not existed, recovery was then available
under defendant’s policy. Once again, the protection the Legislature sought for persons injured
while riding as passengers in a motor bus was satisfied by the insurance policies issued by
defendant and AAIC to Diamond Touch.4 Nothing in the certificate of insurance or MCL
474.109(2) dictates the priority of coverage between the insurance reflected in the certificate and
any other insurance potentially applicable to the same loss.
4
We also note that the priority of coverage in regard to the respective liability coverages appears
now to be moot. The parties acknowledge that the underlying personal injury action was
resolved for the total sum of $3,005,000 with both parties paying their policy limits.
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Reversed and remanded for entry of an order granting summary disposition in favor
defendant. We do not retain jurisdiction.
/s/ William B. Murphy
/s/ Peter D. O’Connell
/s/ Hilda R. Gage
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