PER CURIAM.
In this no-fault insurance dispute, GEICO Indemnity Company appeals as of right an order granting summary disposition in favor of Farmers Insurance Exchange. We reverse and remand for entry of an order granting summary disposition in favor of GEICO.
Yolanda Yvette Nichols was operating a 1993 Chevrolet Lumina on August 23, 2014, when she struck a pedestrian, Beth Bracy. Having sustained severe injuries in the accident, Bracy filed an application for personal protection insurance (PIP) benefits with the Michigan Assigned Claims Plan (MACP), indicating that she owned no vehicles, had no automobile insurance, and lived alone at the time of the accident. The MACP assigned Bracy's claim to Farmers. After Bracy filed suit against Yolanda and Farmers, she discovered that GEICO may have been responsible for payment of her PIP benefits on the basis of a no-fault policy it issued to Yolanda's son, Marcus Nichols. The GEICO policy afforded coverage to several vehicles, including the Lumina involved in the accident, and Yolanda was identified in the policy as an additional driver. Bracy subsequently amended her complaint to add GEICO as a defendant.
During her deposition, Yolanda testified that she was the sole owner of the Lumina and that Marcus "put me on the insurance with him" because she did not have stable, permanent housing at the time she purchased the vehicle. It also became apparent during the deposition that Yolanda did not reside with Marcus.
Following these revelations, Farmers and GEICO filed competing motions for summary disposition, each denying liability for Bracy's PIP benefits as the insurer of highest priority under the no-fault act, MCL 500.3101 et seq. Farmers maintained that PIP benefits were only payable through an assigned claim if there was no other applicable insurance and, with respect to nonoccupants of a motor vehicle who do not have a no-fault policy in their households, MCL 500.3115 provides that PIP benefits are first payable by insurers of owners or registrants of the motor vehicles involved in the accident. Thus, according to Farmers, because the Lumina that struck Bracy was owned by Yolanda and insured by GEICO, GEICO was responsible for Bracy's PIP benefits. GEICO, on the other hand, argued that Bracy had to turn to the MACP for PIP benefits because Marcus made material misrepresentations when he added Yolanda's Lumina to his GEICO policy, thereby rendering the policy void. GEICO alternatively asserted that it had no liability for Bracy's PIP benefits because Yolanda, the owner of the vehicle, did not have a no-fault insurance policy in place at the time of the accident and Marcus lacked an insurable interest in the Lumina. Based upon the trial court's comments during the hearing on the dispositive motions, we infer that the trial court found GEICO's proofs inadequate to establish fraud warranting rescission of the subject policy. The trial court did not address GEICO's alternative arguments and, instead, granted summary disposition in favor of Farmers. In its order, the trial court also directed GEICO to take over the handling of Bracy's claim and to reimburse Farmers for amounts it paid to Bracy, as well as interest and adjusting costs.
We review a trial court's ruling on a summary disposition motion de novo. Batts v Titan Ins Co, 322 Mich.App. 278, 284; 911 N.W.2d 486 (2017). "A motion brought under MCR 2.116(C)(10) tests the factual support of a plaintiff's claim and should be granted if, after consideration of the evidence submitted by the parties in the light most favorable to the nonmoving party, no genuine issue regarding any material fact exists." Id. "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." West v Gen Motors Corp, 469 Mich. 177, 183; 665 N.W.2d 468 (2003). "When deciding a motion for summary disposition under this rule, a court must consider the pleadings, affidavits, depositions, admissions, and other documentary evidence then filed in the action or submitted by the parties . . . ." Bialick v Megan Mary, Inc, 286 Mich.App. 359, 362; 780 N.W.2d 599 (2009).
An uninsured pedestrian—that is, a pedestrian who is not covered under a no-fault policy of his or her own or a policy issued to a spouse or resident relative, see MCL 500.3114(1)—who suffers accidental bodily injury must seek PIP benefits from insurers in the following order of priority:
Where no such insurer exists or the insurer cannot be ascertained, the uninsured pedestrian may seek PIP benefits through the MACP. Spencer v Citizens Ins Co, 239 Mich.App. 291, 301-302; 608 N.W.2d 113 (2000). Because an assigned claim is only available when no other insurance is applicable to the injury, the servicing insurer delegated by the MACP is considered the insurer of last priority. Id. at 301. Furthermore, if an insurer of higher priority is later identified, the servicing insurer "`is entitled to reimbursement from the defaulting insurers to the extent of their financial liability.'" Williams v Enjoi Transp Solutions, 307 Mich.App. 182, 186; 858 N.W.2d 530 (2014), quoting MCL 500.3172(1).
Among other claims of error, GEICO continues to argue on appeal that it has no liability for Bracy's PIP benefits because Marcus lacked an insurable interest in the Lumina.
The undisputed evidence in this case demonstrated that Yolanda was the sole owner and registrant of the Lumina, as well as the person operating the Lumina at the time of the accident. As such, even if we determined that Marcus had an insurable interest in the Lumina, GEICO would not be the highest priority insurer unless it is also considered Yolanda's insurer under the policy procured by Marcus.
In Amerisure Ins Co, 274 Mich App at 435-436, this Court considered a priority dispute arising under MCL 500.3114(4), which governs the priority of insurers with respect to a claim brought by an occupant of a motor vehicle when the claimant has no personal or household insurance available under MCL 500.3114(1). Like the statute concerning a claim brought by an uninsured nonoccupant, MCL 500.3114(4) places the "insurer of the owner or registrant of the vehicle occupied," as the insurer of highest priority, followed by the "insurer of the operator of the vehicle occupied." Compare MCL 500.3114(4) (listing the insurers of the owner, registrant, or operator of the vehicle occupied) and MCL 500.3115(1) (listing the insurers of the owner, registrant, or operator of the vehicles involved). Bernard Coleman was operating a Plymouth Spirit when he was involved in an accident; Bernard's wife, Tonya Coleman, and his nephew, Reginald Coleman, were passengers and Reginald was injured. Amerisure Ins Co, 274 Mich App at 433-434. The Spirit was owned and registered by Tonya's mother, who failed to insure the vehicle. Id. at 433. However, Tonya had a no-fault insurance policy issued by Titan Insurance Company covering another vehicle. Id. at 434. Because Reginald had no insurance of his own and Tonya's mother failed to insure the Plymouth Spirit, Reginald sought PIP benefits from Titan. Id. at 434. On appeal from the trial court's order granting summary disposition in favor of the assigned insurer, this Court considered whether Titan was the insurer of Bernard, i.e., the operator of the vehicle Reginald was occupying at the time of the accident. Id. at 435-436.
Because the no-fault act does not define the term "insurer," this Court considered the following dictionary definition: "`[o]ne who agrees, by contract, to assume the risk of another's loss and to compensate for that loss.'" Id. at 435, quoting Black's Law Dictionary (7th ed) (alteration in original). Given the plain meaning of "insurer" implicated by this definition, this Court turned to the Titan policy to determine whether it agreed by contract to insure Bernard and concluded as follows:
Thus, under Amerisure Ins Co, whether a person is an "insured" or, conversely, whether an insurance carrier is the insurer of someone other than the named insured, is not determined by identifying the person who procured the policy or paid the premiums. Instead, whether a no-fault insurance carrier is the insurer of someone other than the named insured depends on the language of the insurance policy. Dobbelaere v Auto-Owners Ins Co, 275 Mich.App. 527, 532-533; 740 N.W.2d 503 (2007) (construing comparable statutory language regarding priority under MCL 500.3114(4)).
In this case, the declaration page of the GEICO policy identified Marcus as the named insured and Yolanda as an additional driver. Section 2 of the GEICO policy pertains to Michigan no-fault insurance, and Part 1 concerns PIP coverage. Although the term "insured" is defined elsewhere in the policy, the provisions concerning PIP coverage do not define the term. Instead, Part 1 discusses coverage limits, exclusions, and conditions with reference to an "eligible injured person," and appears to afford coverage to injured persons in a manner generally consistent with the no-fault act. When the no-fault endorsement of an insurance contract fails to define who is an "insured," and nothing in the plain language of the policy's declarations or general verbiage suggests an intent by the contracting parties to make others contractual insureds, this Court has refused to declare the named insured's family members as contractual insureds under the policy. Id. at 534. But cf. Clevenger v Allstate Ins Co, 443 Mich. 646, 652-653; 505 N.W.2d 553 (1993) (holding that policyholder's wife was an insured under policy defining "named insured" to include "`the individual named in the declarations, and his spouse if a resident of the same household'"). This is true even when the potential insured person is identified as an additional driver in the policy declarations. Dobbelaere, 275 Mich App at 534 n 3 (stating that such a designation is "insufficient to support that these individuals were contractually intended to be insureds under the policy for purposes of no-fault benefit coverage"). Given the absence of any indication in the policy language that Marcus and GEICO intended for Yolanda to be an insured, we conclude that GEICO is not Yolanda's insurer for purposes of determining priority for payment of Bracy's PIP benefits under MCL 500.3115(1).
Furthermore, even if we determined that GEICO was Yolanda's insurer for purposes of MCL 500.3115(1), we agree with GEICO's contention that Marcus lacked an insurable interest in the Lumina. This Court has previously held that the named insured "must have an `insurable interest' to support the existence of a valid automobile liability insurance policy." Smith v Allstate Ins Co, 230 Mich.App. 434, 439-440; 584 N.W.2d 355 (1998). This requirement stems from public policy designed to prevent "the use of insurance as a form of wagering" and discourage "the creation of socially undesirable interests . . . ." Id. at 438. The nature of the required insurable interest, however, has often been in dispute. For instance, in Clevenger, 443 Mich at 648, Douglas Preece purchased a vehicle from his aunt, JoAnn Williams. Preece paid Williams the purchase price and Williams gave Preece the signed certificate of title. Id. Williams's license plate remained on the vehicle and her registration certificate and proof of insurance remained in the glove compartment when Preece drove away with the intention of securing his own registration and license the next business day. Id. Preece was later involved in an accident, and the injured occupant of the other vehicle filed a third-party tort claim against Preece and Williams for residual liability. Id. at 649. Williams's no-fault insurer argued, inter alia, that it was not obligated to indemnify Williams because she no longer held the title to the vehicle and, therefore, had no insurable interest in it. Id. at 656. After considering the no-fault act's mandate that the owner or registrant of a vehicle registered in this state maintain security for payment of specified benefits, as well as other duties regarding registration set forth in the Michigan Vehicle Code, MCL 257.1 et seq., the Supreme Court concluded as follows:
By contrast, in Smith, 230 Mich App at 435, when Charles Hinton sold his vehicle to Bruce Walsh, Hinton removed his license plate, registration, and certificate of insurance from the car before giving Walsh possession. Walsh was involved in an accident several hours later. Id. This Court distinguished Smith from Clevenger because there was no evidence that Hinton voluntarily remained the insuring registrant of the vehicle. Id. at 440-441. Given Hinton's removal of his license plate, registration, and insurance from the vehicle at the time of a bona fide sale, Hinton effectively "destroyed [his] status as owner and as registrant." Id. at 441. Consequently, this Court held that Hinton's liability insurance policy was void at the time of the accident for want of an insurable interest. Id.
Later, in Universal Underwriters Group v Allstate Ins Co, 246 Mich.App. 713; 635 N.W.2d 52 (2001), this Court considered the insurable interest requirement in the context of claimant who had yet to acquire legal title to the vehicle before she was injured. In that case, Cherry Broadway was in the market to purchase a vehicle and had begun negotiations to purchase a Buick LaSabre. Id. at 715. Broadway was permitted to drive the LaSabre while her financing was being processed, and she provided the dealership with a certificate of no-fault insurance issued by Allstate covering the LaSabre. Id. at 715-716. Broadway was injured in an accident before the purchase could be completed, and the sale was never finalized. Id. at 717. Allstate sought to avoid liability for Broadway's PIP benefits on the basis that the insurance binder it issued was conditioned upon Broadway's purchase of the vehicle and was not in effect at the time of the accident because Broadway did not have an insurable interest in the vehicle at that time. Id. at 719. This Court observed that while Clevenger and Smith focused on the insured's status as an owner or registrant, those cases involved residual liability insurance and neither case required the insured to be an owner or registrant in order to have an insurable interest sufficient to support PIP coverage. Id. at 725, 728. However, earlier caselaw had found that policies affording PIP coverage remained in effect after the insured transferred ownership of the insured vehicles because PIP benefits are not conditioned upon the ownership of an automobile and do not require the involvement of an insured vehicle. Id. at 725-729, citing Madar v League Gen Ins Co, 152 Mich.App. 734; 394 N.W.2d 90 (1986) (finding that the decedent's interest in his own health and well-being was sufficient to support entitlement to PIP benefits "regardless of whether a covered vehicle is involved"), and Cason v Auto Owners Ins Co, 181 Mich.App. 600, 609; 450 N.W.2d 6 (1989) ("The prior transfer of ownership in the motor vehicle named in the insurance policy does not terminate the personal protection insurance coverage of the policy."). The Court reasoned:
In other words, Broadway had an adequate insurable interest for the purpose of securing PIP insurance. Id. at 730.
The precedent established by these cases makes clear that the adequacy of the insured's interest in the insured vehicle involves a fact-specific inquiry and may vary based upon the nature of the insurance benefits at issue. However, it is notable that in each instance the individual who procured the subject insurance had a recognizable interest in the insured vehicle at the time insurance policy was issued. See Clevenger, 443 Mich at 648, 653 (named insured owned and registered the vehicle when policy was issued); Universal Underwriters Group, 246 Mich App at 730 (named insured was contracting for purchase of vehicle and assumed liability by agreement); Smith, 230 Mich App at 435 (owner and registrant); Cason, 181 Mich App at 603 (same); Madar, 152 Mich App at 736 (owner). Accordingly, this Court has also explained that "the genesis and development of the `insurable interest' requirement shows that public policy forbids the issuance of an insurance policy where the insured lacks an insurable interest." Morrison v Secura Ins, 286 Mich.App. 569, 573; 781 N.W.2d 151 (2009). "`[F]undamental principles of insurance' require the insured to `have an insurable interest before he can insure: a policy issued when there is no such interest is void, and it is immaterial that it is taken in good faith and with full knowledge.'" Id. at 572, quoting Agricultural Ins Co v Montague, 38 Mich. 548, 551 (1878) (emphasis added). See also Corwin v DaimlerChrysler Ins Co, 296 Mich.App. 242, 258; 819 N.W.2d 68 (2012) ("A policy is void when there is not an insurable interest.").
Here, GEICO offered undisputed evidence showing that Yolanda was the sole titled owner and registrant of the Lumina when Marcus added it to his GEICO insurance policy in 2013. There is no evidence that Marcus had use of the vehicle in a manner that might have afforded him the status of an owner under MCL 500.3101(3)(l). Nor did he undertake a contractual obligation to obtain insurance or have any intention of acquiring the vehicle as was the case in Universal Underwriters Group, 246 Mich App at 730. In addition, Marcus had his own insurance and was not a member of Yolanda's household who could potentially turn to her insurance as resident relative under MCL 500.3114(1), so his interest in protecting his own health and well-being could not form the basis of an insurable interest in the Lumina. There is simply no evidence that Marcus had a recognized insurable interest, and Farmers has offered no argument as to what type of alternative interest Marcus may have had that would support the issuance of an insurance policy covering the Lumina. Because Marcus had no insurable interest, the policy was void with respect to the Lumina, Morrison, 286 Mich App at 572; Corwin, 296 Mich App at 258, 260, and the trial court erred by granting summary disposition in favor of Farmers because GEICO did not issue a valid policy from which Bracy could receive PIP benefits under MCL 500.3115(1).
In sum, we hold that the trial court erred by granting summary disposition in favor of Farmers because GEICO was not the insurer of the owner, registrant, or operator of the Lumina and, therefore, had no obligation to pay Bracy's PIP benefits under MCL 500.3115(1). Even if we were to conclude otherwise, we would still find error requiring reversal because Marcus lacked an insurable interest in the vehicle, rendering the policy void. Given our resolution of these issues, we need not address GEICO's remaining claims of error.
Reversed and remanded for entry of an order granting summary disposition in favor of GEICO. We do not retain jurisdiction.
BOONSTRA, J. (dissenting).
I respectfully dissent, not because I necessarily disagree with all or any of the majority's legal reasoning, but rather because I believe that we are putting the cart before the horse and reaching conclusions that might or might not prove to be supported were the legal process to run its course—as it has not yet in this case—in the usual and proper manner. It is sometimes tempting for appellate courts to cut to the chase and to decide all issues with finality even when they have not yet been fleshed out in the trial court. I believe that this is one of those cases, and that this Court should resist that temptation. While we may believe that all of the material facts in this case are undisputed, in my view this is a circumstance in which prudence would dictate that the trial court make that assessment first. See, e.g., Rambin v Allstate Ins Co; 495 Mich. 316, 334-337; 852 N.W.2d 34 (2014) (concluding that the Court of Appeals made improper factual findings and erred by concluding that the material facts presented to the trial court were undisputed).
First, I am constrained to point out that the trial court did not articulate a comprehensible rationale for ruling as it did in denying defendant/cross-defendant-appellant GEICO Indemnity Company's (GEICO) motion for summary disposition and in granting defendant/cross-plaintiff-appellee Farmers Insurance Exchange's (Farmers) motion for summary disposition. I will not repeat in full what the trial court stated on the record as a basis for its ruling, but I found it seriously wanting in both clarity and detail. The trial court's statement left us with little basis on which we could properly evaluate its reasoning on appeal.
I believe the majority recognizes this, inasmuch as the majority was itself left to "infer that the trial court found GEICO's proofs inadequate to establish fraud warranting rescission of the subject policy." But the trial court did not say that it had found such inadequacy, or why it did, other than the general statements that I have noted and found insufficient.
That said, the majority—while reversing the trial court's ruling—does not do so on the basis of the ruling itself. Rather, the majority evaluates anew whether (1) GEICO was the insurer of the owner, registrant, or operator of the 1993 Chevrolet Lumina that struck plaintiff, and whether, therefore, GEICO had an obligation to pay plaintiff's personal protection insurance (PIP) benefits under MCL 500.3115(1), and (2) whether Marcus Nichols (Marcus)
I note, for example, that the PIP provisions of the Policy appear to provide for benefits to a pedestrian (such as plaintiff) who is struck by an "insured auto."
As noted, the Policy does reflect that a specific premium was charged for PIP coverage in relation to the Lumina. Additionally, a $186.60 six-month premium was charged for Bodily Injury Liability coverage in relation to the Lumina. The "Bodily Injury Liability" section of the Policy appears to provide coverage where an "Insured" becomes legally obligated to pay because of bodily injury to a person. "Insured" is defined in the Bodily Injury Liability section as "a person or organization described under PERSONS INSURED." The "PERSONS INSURED" provision of the Bodily Injury Liability section provides coverage to certain categories of persons "as
At this juncture of this case, I am not comfortable assessing—nor do I believe it to be my proper role to assess— in the first instance whether, under the facts and circumstances of this case, "the
With regard to the majority's alternative determination that Marcus did not have an "insurable interest" insured by the Policy, the majority acknowledges that the issue "involves a fact-specific inquiry and may vary based upon the nature of the insurance benefits at issue," and that the "nature of the required insurable interest . . . has often been in dispute." Again, I would not resolve that "fact-specific inquiry" in this case without the trial court doing so first.
Moreover, I note that this Court in Morrison v Secura Ins, 286 Mich.App. 569, 572-573; 781 N.W.2d 151 (2009), declined to decide whether, at the time of an auto accident, a named insured had an insurable interest with respect to a policy that insured, in part, a vehicle of which her daughter was the only driver and which was at that time titled in her daughter's name. The Court stated that "an `insurable interest' need not be in the nature of ownership, but rather can be any kind of benefit from the thing so insured or any kind of loss that would be suffered by its damage or destruction." Morrison, 286 Mich App at 572-573, citing Crossman v Am Ins Co, 198 Mich. 304, 308-311; 164 N.W.2d 428 (1917).
In light of the fact-specific nature of the inquiry in question, I would decline to decide in the first instance whether, in the circumstances of this case, Marcus had an insurable interest insured by a policy that in part insured a vehicle that was owned and operated by his mother, but instead would await the trial court's initial determination of that issue.
It may be that the majority has reached the correct outcome in this case. But I believe that it shortcuts the required analysis and, equally as significantly, shortcuts the proper procedure. I would therefore reverse and remand this case to the trial court for further proceedings.