06& 30 · 13 hours ago · iii. law and analysis ..... 4 a. the plain, unambiguous language of...

STATE OF MICHIGAN IN THE SUPREME COURT

WALTER SAKOWSKI, as Conservator for MAEGAN TURNER (Jessica Jacobs), Plaintiff, and RIVERVIEW MACOMB HOME & ATTENDANT CARE, LLC, Intervening Plaintiff, v FARMERS INSURANCE EXCHANGE, Defendant/Cross-Plaintiff/Cross-Defendant-Appellee, and ENTERPRISE LEASING CORPORATION OF DETROIT, LLC, and EAN HOLDINGS, LLC, Defendants/Cross-Defendants-Appellants, and TAMERA HARPER, Defendant/Cross-Defendant, and GARY DUANE RUPP, as Personal Representative for the ESTATE OF JASON PUCKETT, Defendant/Cross-Plaintiff/Cross-Defendant, v PATSY VILLNEFF, Cross-Defendant. _____________________________________________________________________ JONTE EVERSON, Plaintiff, v FARMERS INSURANCE EXCHANGE, Defendant/Third-Party Plaintiff-Appellee, and ENTERPRISE LEASING COMPANY, Third Party Defendant-Appellant. _____________________________________________________________________

AMICUS CURIAE BRIEF ON BEHALF OF PV HOLDING CORP. & AVIS BUDGET GROUP INC

MSC No. 159660 COA No. 339324 Lower Ct. No. 16-002031-NF (Wayne County)

CONSOLIDATED WITH MSC No. 159661 COA No. 339815 Lower Ct. No. 16-000359-NF (Washtenaw County)

AMICUS CURIAE BRIEF ON BEHALF OF PV HOLDING CORP. & AVIS BUDGET GROUP INC

Respectfully submitted, WARD, ANDERSON, PORRITT, BRYANT, LORD & ZACHARY /s/ Nicolette S. Zachary NICOLETTE S. ZACHARY (P49522) Atty for Amici Curiae PV Holding Corp. & Avis Budget Group, Inc. 4190 Telegraph Road, Suite 2300 Bloomfield Hills, MI 48302 248-593-1440; 248-593-7920 fax [email protected]

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TABLE OF CONTENTS TABLE OF AUTHORITIES .............................................................................................. iii

STATEMENT OF QUESTION PRESENTED .................................................................. v

STATEMENT OF INTEREST OF AMICI CURIAE ..........................................................vi

STATEMENT OF FACTS ................................................................................................ 1

ARGUMENT .................................................................................................................... 1

UNDER MCL 500.3102, CONSISTENT WITH PARKS, NON-RESIDENT SELF-INSURED OWNERS AND REGISTRANTS OF FOREIGN MOTOR VEHICLES WHICH ARE NOT REGISTERED OR REQUIRED TO BE REGISTERED IN THIS STATE ARE NOT REQUIRED TO PROVIDE THE SECURITY FOR PAYMENT OF PERSONAL INJURY PROTECTION INSURANCE FOR THE FOREIGN VEHICLE INVOLVED IN THE ACCIDENT, AND THE PRIORITY PROVISIONS OF THE NO-FAULT ACT DO NOT APPLY IN SUCH CASES. ................................. 1

I. The Well Settled Rules of Statutory Construction Support A Reversal Of The Court Of Appeals Decision. ................................................................... 1

II. The Well Settled Law Regarding The Proper Analysis of Insurance Coverage Supports Reversal of the Court of Appeals Decision. .................. 3

III. Law and Analysis .......................................................................................... 4

A. The Plain, Unambiguous Language Of MCL 500.3102(1), Which Represents The Michigan Legislature’s Public Policy Decision To Enact A Clearly Defined Rule Of Law Regarding The Obligations Of Non-Resident Owners/Registrants Of Motor Vehicles To Register Their Out Of State Vehicles In Michigan And/Or Obtain The Security Required Under The Michigan No-Fault Act, MCL 500.3101 Et Seq, Applies to Self-Insurers Based on Parks, And As Such, The Court of Appeals Erred In Disregarding Its Provisions. ...................................... 4

B. Foreign/Out Of State Companies Like Enterprise, PV Holding, And ABG, Are Nonresidents Of Michigan As A Matter Of Law. ................. 10

C. If The Court Of Appeals’ Erroneous Decision In This Case Is Upheld, Self-Insured Non-Resident Owners/Registrants Of Out Of State Vehicles Not Required To Be Registered In Michigan Will Be Improperly Required To Provide No-Fault Coverage For A Risk They Did Not Assume When They Applied For Self-Insured Status With The State Of Michigan, Which Is Contrary To Law And Public Policy. ........................................................................................................... 14

RELIEF REQUESTED .................................................................................................. 18

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TABLE OF AUTHORITIES Cases

Altman v Meridian Twp, 439 Mich 623, 635; 487 NW2d 155 (1992) ............................... 2

Canadian Universal Ins Co v Hartford Ins Co, 184 Mich App 546; 458 NW2d 657 (1990) .............................................................................................................................. ix, 17

Cosby v Pool, 36 Mich App 571; 194 NW2d 142 (1971) ........................................... ix, 17

Cottrill v Michigan Hospital Service, 359 Mich 472; 102 NW2d 179 (1960) ............... ix, 17

Covington v Insterstate System, 88 Mich App 492; 277 NW2d 4 (1979) ........... 6, 7, 8, 11

Devillers v ACIA, 473 Mich 562; 702 NW2d 539 (2005) ........................................... vii, 15

Dye v Esurance Prop & Cas Ins Co, 504 Mich 167, 192-193; 934 NW2d 674 (2019) ..... 8

Empire Iron Mining Partnership v Orhanen, 455 Mich 410, 427; 565 NW2d 844 (1997) . 2

Farrington v Total Petroleum, Inc, 442 Mich 20, 212; 501 NW2d 76 (1993) .................... 1

Heniser v Frankenmuth Mut Ins Co, 449 Mich 155, 172-173; 534 NW2d 502 (1995) . 3, 5

Higgins v Hampshire Prod, 319 Mich 674, 689; 30 NW2d 390 (1048) .......................... 11

House Speaker v State Administrative Bd, 441 Mich 547, 567; 495 NW2d 539 (1993) .. 2

In re MCI Telecommunications Complaint, 460 Mich 396, 411; 596 NW2d 164 (1999) . 1, 2, 4

Johnson & Johnson v Picard, 282 F 2d 386 (6th Cir 1960) ............................................ 11

Lee v DAIIE, 412 Mich 505; 315 NW2d 413 (1982) ........................................................ 8

Lewis v DAIIE, 426 Mich 93; 393 NW2d 167 (1986) ................................................ vii, 15

Lorencz v Ford Motor Co, 439 Mich 370, 376; 483 NW2d 844 (1992) ............................ 2

Marshall v R M Owen & Co, 171 Mich 232; 137 NW 204 (1912) .................................. 11

Matich v Modern Research Corp, 430 Mich 1 (1988) ................................................ ix, 17

McCormick v Carrier, 487 Mich 180; 795 NW2d 517 (2010) .................................... vii, 15

MEEMIC Ins Co v Michigan Millers Mut Ins, 313 Mich App 94; 880 NW2d 327 (2015), appeal denied, 499 Mich 935 (2016) ....................................................................... 3, 4

Murco, Inc v Dep't of Treasury, 144 Mich App 777, 782; 376 NW2d 188 (1985) ............. 2

Orloff v Morehead Mfg Co, 273 Mich 62; 262 NW 736 (1935) ...................................... 11

Parks v DAIIE, 426 Mich 191; 393 NW2d 833 (1986) ......................................... 5, 6, 7, 8

Republic Motor Truck Co v Buda Co, 212 Mich App 55, 62; 179 NW 474 (1920) ......... 11

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Travelers Ins v U-Haul of Michigan, Inc, 235 Mich App 273, 279; 597 NW2d 235 (1999) ................................................................................................................................ 2, 4

Westchester Fire Ins Co v Ring Bros Heating Co, 491 F 2d 711 (WD Mich 1974) .... ix, 17

Woloszyk v Clinton Charter Twp, 214 Mich App 291; 542 NW2d 363 (1995) ............. 2, 4

Statutes

MCL 257.243 ...................................................................................................... vii, 14, 15

MCL 257.303 ................................................................................................................. 12

MCL 257.51a ................................................................................................................. 12

MCL 500.3101 ............................................................................... vi, vii, 5, 6, 7, 8, 14, 15

MCL 500.3101(1) .......................................................................................... 1, 6, 8, 9, 10

MCL 500.3101(4) ............................................................................................................ 5

MCL 500.3101, et seq. .................................................................................................... 3

MCL 500.3102 ................................................................ vi, vii, x, 5, 6, 7, 8, 11, 14, 15, 17

MCL 500.3102(1) ...................................................................... vi, 1, 5, 6, 8, 9, 10, 11, 14

MCL 500.3107c ......................................................................................................... ix, 16

MCL 500.3114 ............................................................................................................. 7, 8

MCL 500.3114(3) .............................................................................................. vi, 4, 7, 14

MCL 500.3114(4) .................................................................................................... 4, 7, 9

MCL 500.3114(5) ...................................................................................................... vi, 14

MCL 500.3135 .......................................................................................................... vii, 15

MCL 500.3145 .......................................................................................................... vii, 15

MCL 8.3a ......................................................................................................................... 2

Other Authorities

DFIS Insurance Bulletin 2019-15-INS ....................................................................... ix, 16

Op Atty Gen 2007, No. 7210, 2007 WL 4561516 .......................................................... 12

Treatises

2 Mich Civ Jur Automobiles and Motor Vehicles § 265 ............................................... 3, 5

6 Mich. Civ. Jur. Corporations § 4 ................................................................................. 11

8 Fletcher Cyc. Corp. § 4035 ........................................................................................ 11

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STATEMENT OF QUESTION PRESENTED

WHETHER NON-RESIDENT OWNERS AND REGISTRANTS (INCLUDING BUT NOT LIMITED TO SELF-INSUREDS) OF MOTOR VEHICLES WHICH HAVE NOT BEEN OPERATED IN THIS STATE FOR MORE THAN 30 DAYS IN THE APPLICABLE CALENDAR YEAR AND THEREFORE ARE NOT REQUIRED TO BE REGISTERED OR INSURED IN THIS STATE ARE NEVERTHELESS SUBJECT TO THE PRIORITY PROVISIONS OF FORMER MCL 500.3114(4)(A) AS “THE INSURER OF THE OWNER OR REGISTRANT OF THE VEHICLE OCCUPIED.”

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STATEMENT OF INTEREST OF AMICI CURIAE PV Holding Corp. (PV Holding) and Avis Budget Group, Inc. (ABG) support the

position of ENTERPRISE LEASING CORPORATION OF DETROIT, LLC and EAN

HOLDINGS, LLC (collectively Enterprise) with respect to the issue on which this Court

has granted leave to appeal.1 Like Enterprise, PV Holding and ABG are businesses

engaged in the renting and leasing of motor vehicles and are self-insured in Michigan.

PV Holding and ABG have an interest in the outcome and resolution of this matter

for the reason that the Court’s decision will affect the outcome of pending litigation,

including two pending appeals, and the ongoing determination as to the obligation or lack

thereof to provide Michigan No-Fault PIP coverage in connection with Michigan accidents

involving non-resident rental vehicles which have not been operated in this state for more

than 30 days in any calendar year. See MCL 500.3102(1). The outcome of this appeal

not only affects pending litigation but may have an impact on future claims and litigation

matters even under the amended No-Fault Act as there are still some circumstances

where the insurer of owners/registrants of motor vehicles may still be responsible for

payment of No-Fault benefits. See MCL 500.3114(3) and MCL 500.3114(5).

The Court of Appeals decision in the instant case improperly disregards well

settled rules of statutory construction and fails to enforce the clear, unambiguous

provisions of MCL 500.3101 and MCL 500.3102, which establish that Enterprise did not

have any obligation to provide coverage for payment of No-Fault benefits for the subject

accident. If the Court of Appeals decision is upheld, MCL 500.3102 will be rendered

1 PV Holding Corp and Avis Budget have standing to file this Amicus Curiae brief pursuant to the Court’s Order granting leave dated May 1, 2020. See 5-1-2020 MSC Order, Ex. A, PV Holding/ABG PV Holding/ABG Amicus Appx. p 1-3.

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nugatory and meaningless, which was clearly not the intent of the Michigan Legislature

when it enacted section 3102. While this case falls under the pre-amendment provisions

of the No-Fault Act, it is important to note that despite the numerous amendments to the

No-Fault Act passed on June 11, 2019, the material provisions under MCL 500.3101 and

MCL 500.3102 remain unchanged.

The requirement to maintain security for payment of no-fault benefits is tied to

whether the vehicle is registered or required to be registered in Michigan. MCL 500.3101.

Moreover, a nonresident owner or registrant of a motor vehicle not registered in this state

is not required to maintain security for payment of no-fault benefits unless the vehicle is

operated in Michigan for an aggregate of more than 30 days in any calendar year. MCL

500.3102. The Legislature did not amend this provision to exclude its application to self-

insureds, which it could have done.2 Moreover, the Michigan Motor Vehicle Code permits

a nonresident owner to operate or permit its vehicle to be operated without being

registered in Michigan as long as it has a valid registration. MCL 257.243. An

owner/registrant’s obligation to maintain Michigan No-Fault insurance coverage is not

triggered until the vehicle has been operated in this state for an aggregate of more than

30 days in any calendar year.

In making the determination to apply for and maintain self-insured status, self-

insurers such as rental car companies like PV Holding, ABG, and Enterprise evaluate the

risk they will assume by doing so, just as other insurers do when considering what

2 The Legislature chose to codify the definitions from McCormick v Carrier, 487 Mich 180; 795 NW2d 517 (2010), into the amended provisions of MCL 500.3135, and it also chose to incorporate the previously rejected judicial tolling of the no-fault statute of limitations and one year back rule (see Lewis v DAIIE, 426 Mich 93; 393 NW2d 167 (1986) overruled by Devillers v ACIA, 473 Mich 562; 702 NW2d 539 (2005), into the amended provisions of MCL 500.3145. Consequently, it is telling that the Legislature chose not to amend MCL 500.3102 to exclude self-insureds from applying its provisions or to eliminate it completely.

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coverages to offer in their insurance policies. The Michigan application for self-insurance

requires, among other things, that: a self-insurer agree to comply with Michigan law,

provide the number of vehicles registered in Michigan, and pay the Assigned Claims Plan

assessment for all vehicles registered in Michigan. See Michigan Application for Self-

Insurance, Ex. B, PV Holding/ABG Amicus Appx. p. 4-8.

Rental car companies like PV Holding and ABG own fleets of vehicles registered

throughout the United States, Canada, Puerto Rico, and the Virgin Islands, including the

state of Michigan. See 2017 Self-Insurance Application, Ex. C, PV Holding/ABG Amicus

Appx. p. 9-12. For example, the 2017 Michigan application for self-insurance filed by

ABG & PV Holding (which covers the date of loss in at least one of pending appeals

against them) indicates that there were 11,813 of its fleet of rental vehicles registered in

the State of Michigan for which they paid an assessment to the State of Michigan for the

Assigned Claims Plan. See Ex. C, PV Holding/ABG Amicus Appx. p. 9-12. During that

time, the PV Holding & ABG fleet of vehicles throughout the United States, Canada,

Puerto Rico, and the Virgin Islands numbered approximately 391,966 rental vehicles, only

a small portion of which might enter the state of Michigan on a transient basis.

It should also be noted that although self-insureds pay an assigned claims

assessment, they do not pay into or receive the benefit of the Michigan Catastrophic

Claims Association (MCCA) fund, so in cases where self-insurers such as rental car

companies are obligated to provide No-Fault PIP coverage, they have unlimited liability

for medical/allowable expenses. Post No-Fault reform (after 6-11-2019), self-insured

owners of motor vehicles still have potential PIP liability in motorcycle vs. motor vehicle

accidents and for employer furnished vehicles, but according DFIS Insurance Bulletin

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2019-15-INS, self-insurers cannot take advantage of the new provisions for opting for a

cap on medical/allowable expenses under PIP because they do not issue insurance

policies.3 See DFIS Bulletin 2019-15-INS, Ex. D, PV Holding/ABG Amicus Appx. p. 13-

15. If self-insured rental car companies are subject to no-fault PIP liability for out of state

vehicles that have not been operated in the state for more than 30 days, they will be

subject to increased unknown exposure for unlimited medical allowable expenses on their

entire fleet of vehicles regardless of whether those vehicles are registered or required to

be registered in Michigan, which is a risk they did not assume when applying for a

Michigan certificate of self-insurance.

An insurer or self-insurer should not be required to pay for a risk it did not assume.

See Cottrill v Michigan Hospital Service, 359 Mich 472; 102 NW2d 179 (1960); Matich v

Modern Research Corp, 430 Mich 1 (1988); Westchester Fire Ins Co v Ring Bros Heating

Co, 491 F 2d 711 (WD Mich 1974); Cosby v Pool, 36 Mich App 571; 194 NW2d 142

(1971); Canadian Universal Ins Co v Hartford Ins Co, 184 Mich App 546; 458 NW2d 657

(1990). If the Court of Appeals decision in this case is upheld, self-insured rental car

companies will be required to pay No-Fault benefits for nonresident out of state vehicles

where such risk was not assumed, treating nonresident self-insureds differently than other

non-resident owners/registrants of out of state vehicles.

The Michigan Legislature made a public policy decision to draw a bright line

requiring non-residents to maintain security for No-Fault insurance only where an out of

3 2019-15-INS states in pertinent part that MCL 500.3107c, the newly added section regarding choice of options for No-Fault PIP coverage “refers to an ‘applicant or named insured’ neither of which applies to an entity holding a certificate of no fault self-insurance or to a municipal self-insurance pool.” The bulletin further states, “In addition, the PIP choice level apply to ‘an insurance policy.’ Self-insurers and municipal group self-insurance pools do not issue ‘insurance policies,’ and thus the PIP choice options are not available to these entities.” See 2019-15-INS, Ex. D, PV Holding/ABG PV Holding/ABG Amicus Appx. p. 13-15.

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state vehicle has been operated in this state for an aggregate of more than 30 days in

any calendar year, which provides clear guidance to all owners and registrants, enabling

them to know their legal obligations and the risk they may be assuming in the case of self-

insured owners/registrants. MCL 500.3102 should be and is required to be applied to the

facts at issue in this case and to similar cases pending against PV Holding and ABG.

For the foregoing reasons, as more fully explained in this Brief, PV Holding and

ABG urge this Court to grant the relief sought by Enterprise.

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STATEMENT OF FACTS4

Amici Curiae PV Holding and ABG concur with and incorporate the Statement of

Facts set forth by Enterprise in its Brief on Appeal and do not restate them here as it

would be unnecessarily duplicative.

ARGUMENT

UNDER MCL 500.3102, CONSISTENT WITH PARKS, NON-RESIDENT SELF-INSURED OWNERS AND REGISTRANTS OF FOREIGN MOTOR VEHICLES WHICH ARE NOT REGISTERED OR REQUIRED TO BE REGISTERED IN THIS STATE ARE NOT REQUIRED TO PROVIDE THE SECURITY FOR PAYMENT OF PERSONAL INJURY PROTECTION INSURANCE FOR THE FOREIGN VEHICLE INVOLVED IN THE ACCIDENT, AND THE PRIORITY PROVISIONS OF THE NO-FAULT ACT DO NOT APPLY IN SUCH CASES.

The question before the Court in this case concerns the statutory construction and

application of the clear and unambiguous language of MCL 500.3101(1) and MCL

500.3102(1), which provides that non-resident owners/registrants of vehicles registered

in other states are not required to maintain security for Michigan No-Fault coverage until

the out of state vehicle has been operated in Michigan for an aggregate of more than 30

days in any calendar year.

I. The Well Settled Rules of Statutory Construction Support A Reversal Of The Court Of Appeals Decision.

“The primary goal of statutory interpretation is to give effect to the intent of the

Legislature.” In re MCI Telecommunications Complaint, 460 Mich 396, 411; 596 NW2d

164 (1999) citing Farrington v Total Petroleum, Inc, 442 Mich 20, 212; 501 NW2d 76

(1993). The first step in making such a determination is to review the language of the

4 Pursuant to MCR 7.312(H)(4), PV Holding and Avis Budget Group, Inc, through its counsel, represent that no party or counsel for a party: (a) authored this brief in whole or in part; or (b) made any monetary contribution intended to fund the preparation or submission of this amicus curiae brief.

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statute itself. Id. citing House Speaker v State Administrative Bd, 441 Mich 547, 567; 495

NW2d 539 (1993). “All words and phrases shall be construed and understood according

to the common and approved usage of the language; but technical words and phrases,

and such as may have acquired a peculiar and appropriate meaning in the law, shall be

construed and understood according to such peculiar and appropriate meaning.” See

MCL 8.3a. A resort to dictionary definitions may be appropriate to achieve this result.

Murco, Inc v Dep't of Treasury, 144 Mich App 777, 782; 376 NW2d 188 (1985). If a statute

is unambiguous on its face, the Legislature is presumed to have intended the meaning

express, and judicial construction is neither required nor permissible. In re MCI

Telecommunications Complaint , supra, citing Lorencz v Ford Motor Co, 439 Mich 370,

376; 483 NW2d 844 (1992). Where a statute is unambiguous on its face, it must be

enforced as written. In re MCI Telecommunications Complaint , supra.

Where there is a group of statutes or statutory scheme relating to the same subject

matter, they should be read, construed, and applied together to distill the Legislature’s

intent. Id. citing Empire Iron Mining Partnership v Orhanen, 455 Mich 410, 427; 565 NW2d

844 (1997); Travelers Ins v U-Haul of Michigan, Inc, 235 Mich App 273, 279; 597 NW2d

235 (1999). Every word of a statute should be read so as to be given meaning, and courts

should avoid a construction that would render any part of the statute surplusage or

nugatory. In re MCI Telecommunications Complaint, supra. citing Altman v Meridian Twp,

439 Mich 623, 635; 487 NW2d 155 (1992). Statutes should be construed so as to avoid

absurd results. Woloszyk v Clinton Charter Twp, 214 Mich App 291; 542 NW2d 363

(1995). If related statutes can be construed together so that they do not conflict, that

construction should control. Travelers, supra. at 280.

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Likewise, when construing the No-Fault Act, courts should be careful to interpret

the words used in the statute in light of their ordinary meaning and their context within the

statute and read the various provisions harmoniously to give effect to the statute as a

whole. MCL 500.3101, et seq. MEEMIC Ins Co v Michigan Millers Mut Ins, 313 Mich App

94; 880 NW2d 327 (2015), appeal denied, 499 Mich 935 (2016). See 2 Mich Civ Jur

Automobiles and Motor Vehicles § 265.

II. The Well Settled Law Regarding The Proper Analysis of Insurance Coverage Supports Reversal of the Court of Appeals Decision.

In addition to application of the rules of statutory construction, there is a proper

order and method to analyzing insurance coverage under the No-Fault Act, which is

similar to analysis of coverage under an insurance policy. The proper method of analyzing

coverage under an insurance policy is explained in Heniser v Frankenmuth Mut Ins Co,

449 Mich 155, 172-173; 534 NW2d 502 (1995), which provides in pertinent part:

To determine whether an insured is entitled to insurance benefits, we employ a two-part analysis. “First, we determine if the policy provides coverage to the insured. If it does, we then ascertain whether that coverage is negated by an exclusion.” Buczkowski v Allstate Ins Co, 447 Mich 669, 682; 526 NW2d 589 (1994). It is the insured's burden to establish that his claim falls within the terms of the policy. Arco Industries Corp. v American Motorists Ins Co, 448 Mich 395; 531 NW2d 168 (1995). Harvey Oil Co v Federated Mut Ins Co, 837 F Supp 242, 244 (WD Mich, 1993).... Policy exclusions are based on the presumption that the insured already has established that the policy covers the property in question. The question then becomes whether this particular loss is excluded from coverage for some reason. In this case, the policy did not apply, and destruction of the building, regardless of the cause, would not have been covered. (Emphasis added.) Heniser, supra at 172-173.

If the insurance policy does not provide coverage to the insured, there is no need

to examine any policy exclusions or exceptions to exclusions, and the analysis does not

proceed further. Id. at 172-173.

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Likewise, when analyzing coverage for a claim under the No-Fault Act, the first

step is to determine whether coverage exists. If coverage does not exist, the analysis

ends there and cannot proceed further. In the absence of any No-Fault coverage

obligation, the priority provisions under the No-Fault Act do not apply, and the issue of

priority is irrelevant and immaterial. because an insurer which does not have a coverage

obligation does not fall within the order of priority.

III. Law and Analysis

A. The Plain, Unambiguous Language Of MCL 500.3102(1), Which Represents The Michigan Legislature’s Public Policy Decision To Enact A Clearly Defined Rule Of Law Regarding The Obligations Of Non-Resident Owners/Registrants Of Motor Vehicles To Register Their Out Of State Vehicles In Michigan And/Or Obtain The Security Required Under The Michigan No-Fault Act, MCL 500.3101 Et Seq, Applies to Self-Insurers Based on Parks, And As Such, The Court of Appeals Erred In Disregarding Its Provisions.

The Court of Appeals, as well as Farmers and the MAIPF, improperly characterize

this case as an issue of priority and therefore attempt to distinguish the Parks decision

based on it involving the priority provision under MCL 500.3114(3) rather than MCL

500.3114(4)5. However, such a distinction is irrelevant because the primary issue in this

case is whether any coverage obligation exists at all for the subject out of state rental

vehicle and not which insurer has priority.

As explained earlier in this brief, the first step in analyzing a claim under the No-

Fault Act is the same as analyzing an insurer’s obligation under an insurance policy i.e.

whether coverage exists. See In re MCI Telecommunications Complaint, supra; Travelers

Ins v U-Haul of Michigan, Inc , supra; Woloszyk, supra; MEEMIC Ins Co v Michigan Millers

5 Unless otherwise specified, references to MCL 500.3114(4) are to the version in effect prior to the No-Fault reform enacted on June 11, 2019.

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Mut Ins, supra; 2 Mich Civ Jur Automobiles and Motor Vehicles § 265. See also Heniser,

supra. If there is no coverage obligation, the analysis cannot proceed further and

does not reach the issue of priority because a no-fault insurer which does not have

any obligation to provide coverage does not fall within the order of priority.

In the instant case, the coverage analysis begins and ends with MCL 500.3101

and MCL 500.3102, which provide clear and unambiguous guidance to nonresident

owners/registrants as to when they are required to maintain security for no-fault coverage

for out of state registered vehicles. The Parks v DAIIE, 426 Mich 191; 393 NW2d 833

(1986), decision properly applies the MCL 500.3102(1) to self-insurers. A self-insurer has

all of the obligations and rights of an insurer under the provision of the No-Fault Act. See

MCL 500.3101(4)6

Under MCL 500.3101, an owner or registrant of a motor vehicle is only required to

maintain the required security for payment of No-Fault insurance coverage for vehicles

registered or required to be registered in the state of Michigan. A nonresident owner of

an out of state vehicle which has not been operated in Michigan for an aggregate of more

than 30 days in any calendar year is not required to maintain the required security for

payment of No-Fault benefits pursuant to MCL 500.3101. See MCL 500.3102(1).

Notably, in Parks, supra, the Michigan Supreme Court held that “an out-of-state

vehicle not required to be registered in Michigan and not operated in this state for more

than thirty days is not subject to the security provisions or §3114(3) [the priority

provisions] of the no-fault act…” Id. at 196. Moreover, the Court held that a self-insurer

of such out of state vehicle is not required to provide no-fault coverage for such out of

6 Under the amended No-Fault Act, this section is listed under MCL 500.3101(5).

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state registered vehicle involved in an accident in Michigan. Id. In making this

determination, the Parks Court properly began its analysis with the first two sections of

the No-Fault Act, MCL 500.3101 and MCL 500.3102, to determine whether the motor

vehicle was subject to the security provisions of the Act. The Court correctly determined

that the security provisions of MCL 500.3101(1) apply only to owners of vehicles

registered or required to be registered in Michigan and that MCL 500.3102(1) applies to

vehicles owned by nonresidents, which are not registered in this state. The Court further

properly held that under MCL 500.3102(1), security must only be maintained for a

nonresident vehicle if it has been operated in Michigan for more than 30 days in a

calendar year. The semi-trailer at issue in the Parks case, which was self-insured by the

owner, was exempt from State registration under an interstate compact with Tennessee,

and it had not been operated in Michigan for more than 30 days. Therefore, the semi-

trailer was not subject to the security requirements under the Michigan No-Fault Act, and

the self-insured owner did not have any obligation to provide No-Fault PIP coverage for

the accident.

The Parks Court could have ended its analysis once it determined that no coverage

obligation existed. However, it nevertheless went on to examine the priority provisions to

address the defendant insurer’s arguments and properly concluded that the priority

provisions of the No-Fault Act do not apply to out of state registered motor vehicles owned

by self-insured non-residents, which have not been operated in Michigan for more than

30 days in a calendar year.

The Parks case relies in part on the prior Court of Appeals decision in Covington

v Insterstate System, 88 Mich App 492; 277 NW2d 4 (1979), which involved a commercial

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truck registered in another state and exempt from the registration requirements under the

interstate compact. Again, the owner was self-insured, and it was undisputed that the

truck had not been operated in Michigan for more than 30 days in any calendar year at

the time of the accident. The Covington Court also properly analyzed the issue by looking

first to MCL 500.3101 and MCL 500.3102 to determine whether the truck was required to

be registered in Michigan and whether it was subject to the security provisions of the No-

Fault Act. Finding that the truck was not required to be registered in Michigan and was

not subject to the security provisions of the Act, the Covington Court properly did not

reach the issue of priority under MCL 500.3114. Since coverage did not apply to the

nonresident truck, the self-insured owner did not have any obligation to provide no-fault

PIP coverage for the subject accident. Covington, supra.

See also Heichel v GEICO Indemn Co, unpublished per curiam opinion of the

Court of Appeals (Docket Nos. 323818 & 324045, 3/1/2016), (The Court of Appeals relied

on the established precedent in Parks and Covington to hold that under MCL 500.3102,

the out of state rental vehicle, which had not been operated in Michigan for more than 30

days was not subject to the security requirements of the No-Fault Act and that as such,

Enterprise, the self-insured owner of the vehicle, did not have any obligation to provide

No-Fault coverage for the vehicle.), Ex. E, PV Holding/ABG Amicus Appx. p. 16-19.

Farmers and MAIPF, as well as the Court of Appeals, seek to distinguish the

holdings in Covington and Parks solely because the priority provision that would have

been at issue in those cases if coverage existed was MCL 500.3114(3) pertaining to

insurers of employer furnished vehicles rather than subsection MCL 500.3114(4)

pertaining to insurers of owners and registrants of the motor vehicle occupied. However,

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the analysis applied by the Covington and Parks Courts did not rely on any distinction

between subsections (3) and (4) of MCL 500.3114. Rather, both Courts engaged in the

correct order of analysis and based their respective holdings on MCL 500.3101(1) and

MCL 500.3102(1) under which the self-insured owner of the non-resident vehicle did not

have any obligation to provide coverage for the vehicle, which was not subject to the

security provisions of the No-Fault Act. Once it was determined that there was no

coverage obligation, there was no valid basis for disregarding MCL 500.3101 and MCL

500.3102 to apply the priority of coverage provisions under MCL 500.3114.

Both Farmers and MAIPF cite to Lee v DAIIE, 412 Mich 505; 315 NW2d 413

(1982), for the general proposition that the No-Fault Act insures people and not motor

vehicles against loss. However, that general proposition is not an absolute rule and does

not dictate the disposition of the instant appeal. See Dye v Esurance Prop & Cas Ins Co,

504 Mich 167, 192-193; 934 NW2d 674 (2019).

In Lee, supra, the ultimate question was whether the plaintiff, who was driving a

government vehicle not subject to Michigan registration requirements and therefore

uninsured, was nevertheless entitled to recover No-Fault benefits from his personal

insurer. The Lee Court properly held that the plaintiff could seek No-Fault PIP benefits

from his personal insurer because the plaintiff in Lee was not the owner of the government

vehicle and therefore was not excluded from recovering benefits as an uninsured

motorist. The Lee Court was not asked to address the application of MCL 500.3101 and

500.3102 to self-insured non-resident owners of out-of-state vehicles which are not

required to be registered in this state and therefore are not subject to the security

provisions of the Act.

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In the instant matter, the dispute is not whether the injured person is eligible to

recover No-Fault benefits. Rather, the issue is whether Enterprise or other self-insured

owners of out-of-state registered motor vehicles have any No-Fault coverage obligation

when the vehicle involved in the accident has not been operated in Michigan for more

than 30 days in any calendar year prior to the accident. The Lee case is irrelevant on this

issue.

The Michigan Legislature made a public policy determination that for a vehicle to

be subject to the security requirement of the No-Fault Act, it must be registered or required

to be registered in Michigan and operated for an aggregate of more than 30 days in any

calendar year. This policy determination by the Michigan Legislature was not amended

or eliminated with the enactment of No-Fault reform on June 11, 2019. Therefore, it

logically follows that the Legislature intends that the unambiguous provisions of MCL

500.3102(1) regarding non-resident out-of-state vehicles be enforced and given effect. A

no-fault insurer has no obligation to provide no-fault PIP coverage where the subject

vehicle is not required to be registered in Michigan and is not subject to the security

requirements of the Act.

The Court of Appeals in the instant case improperly disregarded the provisions of

MCL 500.3102(1) and the proper order of analysis of coverage under the No-Fault Act

when it held that the priority provision under pre-amendment MCL 500.3114(4) obligates

Enterprise to provide coverage for the subject accident as the insurer of the owner of the

vehicle. Under MCL 500.3101(1) and MCL 500.3102(1), the rental vehicle was not subject

to the requirements of the No-Fault Act, and as such, the self-insured owner, Enterprise,

has no coverage obligation and is simply not within the order of priority.

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There is some suggestion in the briefs that Enterprise may not have established

conclusively that the subject rental vehicle was not operated in the state of Michigan for

more than 30 days in any calendar year. The affidavit and unit history of the vehicle

submitted by Enterprise both expressly state that the rental vehicle was not operated in

Michigan for more than 30 days, and there is no evidence in the record to the contrary.

However, even if the evidence in the record is found to be insufficient, which it is not, it

would not be a basis to change the established rule of law on this issue Regardless of

whether this Court find the evidence compels a conclusion as a matter of law that the

rental vehicle was not operated in Michigan for more than 30 days, the Court of Appeals’

decision to disregard the binding precedent in Parks, supra, Covington, supra, and the

clear, unambiguous language of MCL 500.3101(1) and MCL 500.3102(1) should not be

allowed to stand.

B. Foreign/Out Of State Companies Like Enterprise, PV Holding, And ABG, Are Nonresidents Of Michigan As A Matter Of Law.

Farmers and the MAIPF argue without any material legal support that Enterprise,

and by extension all rental car companies, should be deemed Michigan residents merely

based on their respective business activities in the state of Michigan. This argument is

beyond the scope of Order granting leave to appeal. However, even if the issue was

properly before this Court, it lacks merit. Rental car companies like Enterprise as well as

Amici Curiae PV Holding and ABG operate throughout the United States, North America,

and in numerous countries around the world. Therefore, the fact that they may operate

throughout Michigan is not significant in the larger scheme of their business activities and

corporate existence.

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In Covington, supra, which addressed the same nonresident vehicle statutory

provision at issue in the instant case, the Court stated in a footnote that for purposes of

MCL 500.3102, the term nonresident includes residents of Michigan and domestic

corporations who have vehicles registered in other states because a contrary holding

could result in a situation where nonresidents would be subject to the requirements of the

No-Fault Act while theirs counterparts who are residents of this state would be excluded.

Covington, supra at 494. Under the Covington rationale, the argument offered by Farmers

and MAIPF that Enterprise is a resident of Michigan is immaterial, irrelevant, and would

not support their position in this case.

In any event, foreign/out of state companies like Enterprise, PV Holding, and ABG

are not residents of the state of Michigan for purposes of the No-Fault Act and more

specifically, application of MCL 500.3102. Under Michigan law, a corporation may either

be a resident or nonresident of a state. Marshall v R M Owen & Co, 171 Mich 232; 137

NW 204 (1912). A corporation is a resident of the place where it has its principal offices

and the place where it was created i.e. incorporated. Higgins v Hampshire Prod, 319 Mich

674, 689; 30 NW2d 390 (1048); Johnson & Johnson v Picard, 282 F 2d 386 (6th Cir 1960);

Orloff v Morehead Mfg Co, 273 Mich 62; 262 NW 736 (1935); Republic Motor Truck Co v

Buda Co, 212 Mich App 55, 62; 179 NW 474 (1920). See also 6 Mich. Civ. Jur.

Corporations § 4. The fact that a foreign corporation created by one state is permitted by

another state to do business within its borders does not make it a resident of the state

where it is doing business. See 8 Fletcher Cyc. Corp. § 4035, Residence or nonresidence

for purposes of venue in state courts. See also 6 Mich Civ Jur Corporations § 4.

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There is simply no precedent to deem foreign/out of state corporations like

Enterprise, PV Holding, and ABG residents of Michigan for purposes of the No-Fault Act,

which contains no such provision. The MAIPF cites to a Motor Vehicle Code definition of

“resident” without including the actual citation, which is MCL 257.51a. For purposes of the

Motor Vehicle Code only, it states:

“Resident” means every person who resides in this state and establishes that he or she is legally present in the United States. This definition applies to the provisions of this act only. MCL 257.51a.

As can be seen, the aforesaid definition does not define what it means to “reside

in this state.” Taking the language of the whole statute together, it excludes people who

are not lawfully present in the United States from qualifying as a resident of Michigan.

This is consistent with Op Atty Gen 2007, No. 7210, 2007 WL 4561516, which provides

that a person who is not a lawful resident of the United States cannot be a resident of

Michigan for purposes of obtaining a driver license under MCL 257.303.

MCL 257.51a does not reference foreign corporations and does not provide that a

corporation may be deemed a resident of Michigan merely by virtue of the extent of its

operations/business activities in Michigan. Even if this circular definition of “resident”

applied to the application of the provisions of the No-Fault Act, which it does not, foreign

corporations who merely have a business presence in Michigan would still be

nonresidents. To expand the definition of resident to deem foreign corporations who

happen to do business in Michigan to be residents would have far-reaching implications

well beyond the issues in this case with respect to rental car companies, including

infringing on the sovereignty of other states. Rental companies incorporated in another

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state with their principal place of business located in another state are nonresidents of

Michigan for purposes of the Michigan No-Fault Act.

PV Holding and ABG are incorporated in Delaware. PV Holding and ABG have

their principal place of business, i.e. headquarters, in Parsippany, NJ. EAN Holdings and

Enterprise are also incorporated in Delaware, and upon information and belief, have their

principal place of business in St. Louis, Missouri. These rental companies are

nonresidents for purposes of the Michigan No-Fault Act. The suggestion that rental car

companies should be deemed residents of Michigan for purposes of the No-Fault Act is

not supported by any provision of the Act or any statutory or common law in Michigan.

Moreover, as noted, while PV Holding & ABG may engage in business activities

throughout Michigan, they also operate their business throughout the United States,

Canada, and numerous other countries around the world. As note, in 2017, PV Holding

& ABG had 11,813 vehicles registered in Michigan, but had a fleet throughout North

America of approximately 391,966 (which does not include vast number of fleet rental

vehicles in other countries around the world). These figures also do not include other

rental operations of these companies. PV Holding & ABG’s operations in Michigan do not

dominate their business activities and, in fact, constitute only a small portion of their

business operations worldwide. PV Holding & ABG, like Enterprise & EAN, are non-

residents for purposes of the Michigan No-Fault Act.

Under Michigan law, a nonresident owner of an out of state motor vehicle is

permitted to allow the vehicle to be operated in Michigan without obtaining a Michigan

registration as long as the vehicle is lawfully registered from another state (or country).

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MCL 257.243. However, after 30 days, the nonresident owner must obtain and maintain

no-fault insurance for the vehicle. MCL 500.3102(1).

C. If The Court Of Appeals’ Erroneous Decision In This Case Is Upheld, Self-Insured Non-Resident Owners/Registrants Of Out Of State Vehicles Not Required To Be Registered In Michigan Will Be Improperly Required To Provide No-Fault Coverage For A Risk They Did Not Assume When They Applied For Self-Insured Status With The State Of Michigan, Which Is Contrary To Law And Public Policy.

As previously noted, PV Holding and ABG have an interest in the outcome and

resolution of this matter for the reason that the Court’s decision will affect the outcome of

pending litigation, including two pending appeals, and may impact future claims and

litigation under the amended No-Fault as there are still some circumstances where the

insurer of owners/registrants of motor vehicles may still be responsible for payment of

No-Fault benefits. See MCL 500.3114(3) and MCL 500.3114(5). It will also impact the

ongoing determination as to the obligation or lack thereof to provide Michigan No-Fault

PIP coverage in connection with Michigan accidents involving non-resident rental vehicles

which have not been operated in this state for more than 30 days in any calendar year

(see MCL 500.3102) as well as the decision of an owner to apply for or continue to

maintain self-insurance in Michigan.

The Court of Appeals decision in the instant case disregards well settled rules of

statutory construction and fails to enforce the clear, unambiguous provisions of MCL

500.3101 and MCL 500.3102, which establish that Enterprise did not have any obligation

to provide coverage for payment of No-Fault benefits for the subject accident. If the Court

of Appeals decision is upheld, MCL 500.3102 will be rendered nugatory and meaningless,

which was clearly not the intent of the Michigan Legislature when it enacted the provision

as part of the No-Fault scheme. While this case falls under the pre-amendment provisions

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of the No-Fault Act, it is important to note that despite the numerous amendments to the

No-Fault Act passed on June 11, 2019, the material provisions under MCL 500.3101 and

MCL 500.3102 remain unchanged. The requirement to maintain security for payment of

no-fault benefits is tied to whether the vehicle is registered or required to be registered in

Michigan. MCL 500.3101. Moreover, a nonresident owner or registrant of a motor vehicle

not registered in this state is not required to maintain security for payment of no-fault

benefits unless the vehicle is operated in Michigan for an aggregate of more than 30 days

in any calendar year. MCL 500.3102. The Legislature did not amend this provision to

exclude its application to self-insureds, which it could have done.7 Moreover, the Michigan

Motor Vehicle Code permits a nonresident owner to operate or permit its vehicle to be

operated without being registered in Michigan as long as it has a valid registration. MCL

257.243. An owner/registrant’s obligation to maintain Michigan No-Fault insurance

coverage is not triggered until the vehicle has been operated in this state for an aggregate

of more than 30 days in any calendar year.

In making the determination to apply for and maintain self-insured status, self-

insurers such as rental car companies like PV Holding, ABG, and Enterprise evaluate the

risk they will assume by doing so, just as other insurers do when considering what

coverages to offer in their insurance policies. The Michigan application for self-insurance

requires, among other things, that: a self-insurer agree to comply with Michigan law,

provide the number of vehicles registered in Michigan, and pay the Assigned Claims Plan

7 The Legislature chose to codify the definitions from McCormick, supra, into the amended provisions of MCL 500.3135, and it also chose to incorporate the previously rejected judicial tolling of the no-fault statute of limitations and one year back rule (see Lewis, supra overruled by Devillers, supra, into the amended provisions of MCL 500.3145. Consequently, it is telling that the Legislature chose not to amend MCL 500.3102 to exclude self-insureds from applying its provisions or to eliminate it completely.

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assessment for all vehicles registered in Michigan. See Michigan Application for Self-

Insurance, Ex. B, PV Holding/ABG Amicus Appx. p. 4-8.

Rental car companies like PV Holding and ABG own fleets of vehicles registered

throughout the United States, Canada, Puerto Rico, and the Virgin Islands, including the

state of Michigan. See 2017 Self-Insurance Application, Ex. C, PV Holding/ABG Amicus

Appx. p. 9-12. For example, the 2017 Michigan application for self-insurance filed by

ABG & PV Holding (which covers the date of loss in at least one of pending appeals

against them) indicates that there were 11,813 of its fleet of rental vehicles registered in

the State of Michigan for which they paid an assessment to the State of Michigan for the

Assigned Claims Plan. See Ex. C, PV Holding/ABG Amicus Appx. p. 9-12. During that

time, the PV Holding & ABG fleet of vehicles throughout the United States, Canada,

Puerto Rico, and the Virgin Islands numbered approximately 391,966 rental vehicles, only

a small portion of which might enter the state of Michigan on a transient basis.

Although self-insurers pay an assigned claims assessment, they do not pay into or

receive the benefit of the MCCA fund, so in cases where self-insurers such as rental car

companies are obligated to provide No-Fault PIP coverage, they have unlimited liability

for medical/allowable expenses. Post No-Fault reform (after 6-11-2019), self-insured

owners of motor vehicles still have potential PIP liability in motorcycle vs. motor vehicle

accidents and for employer furnished vehicles, but according to DFIS Insurance Bulletin

2019-15-INS, self-insurers cannot take advantage of the new provisions for opting for a

cap on medical/allowable expenses under PIP because they do not issue insurance

policies.8 See DFIS Bulletin 2019-15-INS, Ex. D, PV Holding/ABG Amicus Appx. p. 13-

8 2019-15-INS states in pertinent part that MCL 500.3107c, the newly added section regarding choice of options for No-Fault PIP coverage “refers to an ‘applicant or named insured’ neither of which applies to an

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15. If self-insured rental car companies are subject to no-fault PIP liability for out of state

vehicles that have not been operated in the state for more than 30 days, they will be

subject to increased unknown exposure for unlimited medical allowable expenses on their

entire fleet of vehicles regardless of whether those vehicles are registered or required to

be registered in Michigan, which is a risk they did not assume when applying for a

Michigan certificate of self-insurance.

An insurer or self-insurer should not be required to pay for a risk it did not assume.

See Cottrill, supra; Matich, supra; Westchester Fire Ins Co, supra; Cosby, supra;

Canadian Universal Ins Co, supra. If the Court of Appeals decision in this case is upheld,

self-insured rental car companies will be required to pay No-Fault benefits for nonresident

out of state vehicles where such risk was not assumed, treating nonresident self-insureds

differently than other non-resident owners/registrants of out of state vehicles.

The Michigan Legislature made a policy decision to draw a bright line requiring

non-residents to maintain security for No-Fault insurance only where an out of state

vehicle has been operated in this state for an aggregate of more than 30 days in any

calendar year, which provides clear guidance to all owners and registrants, enabling them

to know their legal obligations and the risk they may be assuming in the case of self-

insured owners/registrants. MCL 500.3102 should be and is required to be applied to the

facts at issue in this case and to similar cases pending against PV Holding and ABG.

Nonresident rental vehicles which have not been operated in Michigan for more than 30

entity holding a certificate of no fault self-insurance or to a municipal self-insurance pool.” The bulletin further states, “In addition, the PIP choice level apply to ‘an insurance policy.’ Self-insurers and municipal group self-insurance pools do not issue ‘insurance policies,’ and thus the PIP choice options are not available to these entities.” See 2019-15-INS, Ex. D, PV Holding/ABG PV Holding/ABG Amicus Appx. p. 13-15.

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days are not subject to the security requirements under the No-Fault Act, and therefore,

self-insured non-resident rental companies like Enterprise, PV Holding, and ABG, are not

subject to liability for no-fault coverage for such out of state vehicles. The Court of Appeals

decision should be reversed, and that trial court decision granting summary disposition

should be upheld. The established law under Parks, supra and Covington, supra should

be upheld.

RELIEF REQUESTED

WHEREFORE, amicus curiae PV Holding Corp. and Avis Budget Group, Inc.

respectfully request that this honorable Court grant the relief requested by Enterprise in

this Appeal, reverse the Court of Appeals’ erroneous decision, and uphold the established

law under MCL 500.3102(1) as set forth in Parks, supra and Covington, supra.

Respectfully submitted, WARD, ANDERSON, PORRITT, BRYANT, LORD & ZACHARY /s/ Nicolette S. Zachary NICOLETTE S. ZACHARY (P49522) Attorney for Non-Parties PV Holding & Avis Budget Group, Inc 4190 Telegraph Road, Suite 2300 Bloomfield Hills, MI 48302 248-593-1440; 248-593-7920 fax [email protected]

DATED: June 29, 2020 [email protected]

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STATE OF MICHIGAN IN THE SUPREME COURT

WALTER SAKOWSKI, as Conservator for MAEGAN TURNER (Jessica Jacobs), Plaintiff, and RIVERVIEW MACOMB HOME & ATTENDANT CARE, LLC, Intervening Plaintiff, v FARMERS INSURANCE EXCHANGE, Defendant/Cross-Plaintiff/Cross-Defendant-Appellee, and ENTERPRISE LEASING CORPORATION OF DETROIT, LLC, and EAN HOLDINGS, LLC, Defendants/Cross-Defendants-Appellants, and TAMERA HARPER, Defendant/Cross-Defendant, and GARY DUANE RUPP, as Personal Representative for the ESTATE OF JASON PUCKETT, Defendant/Cross-Plaintiff/Cross-Defendant, v PATSY VILLNEFF, Cross-Defendant. _____________________________________________________________________ JONTE EVERSON, Plaintiff, v FARMERS INSURANCE EXCHANGE, Defendant/Third-Party Plaintiff-Appellee, and ENTERPRISE LEASING COMPANY, Third Party Defendant-Appellant. _____________________________________________________________________

APPENDIX TO AMICUS CURIAE BRIEF ON BEHALF OF PV HOLDING CORP. & AVIS BUDGET GROUP INC

MSC No. 159660 COA No. 339324 Lower Ct. No. 16-002031-NF (Wayne County)

CONSOLIDATED WITH MSC No. 159661 COA No. 339815 Lower Ct. No. 16-000359-NF (Washtenaw County)


Respectfully submitted, WARD, ANDERSON, PORRITT, BRYANT, LORD & ZACHARY /s/ Nicolette S. Zachary NICOLETTE S. ZACHARY (P49522) Atty for Amici Curiae PV Holding Corp. & Avis Budget Group, Inc. 4190 Telegraph Road, Suite 2300 Bloomfield Hills, MI 48302 248-593-1440; 248-593-7920 fax [email protected]

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A


EX. A – 5-1-2020 MSD Order Granting Leave p. 1-3

EX. B – Michigan Application for Self-Insurance p. 4-8

EX. C – PV Holding & ABG’s 2017 Self-Insurance Application p. 9-12

EX. D – DFIS Insurance Bulletin 2019-15-INS p. 13-15

EX. E – Heichel case p. 16-19

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EXHIBIT A PV Holding/ABG Amicus Appx. 1

Ex. A - 5-1-2020 MSC Order Granting Leave to AppealR

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Michigan Supreme Court Lansing, Michigan

Bridget M. McCormack,

Chief Justice

David F. Viviano, Chief Justice Pro Tem

Stephen J. Markman

Brian K. Zahra Richard H. Bernstein Elizabeth T. Clement Megan K. Cavanagh,

Justices

Order May 1, 2020 159660-1(91) MAEGAN TURNER, by WALTER SAKOWSKI, Conservator,

Plaintiff, and RIVERVIEW MACOMB HOME & ATTENDANT CARE, LLC, Intervening Plaintiff, SC: 159660 v COA: 339624 Wayne CC: 16-002031-NF FARMERS INSURANCE EXCHANGE,

Defendant/Cross-Plaintiff/ Cross-Defendant-Appellee,

and ENTERPRISE LEASING CORPORATION OF DETROIT, LLC and EAN HOLDINGS, LLC,

Defendants/Cross-Defendants- Appellants,

and ESTATE OF JASON PUCKETT, by GARY DUANE RUPP, Personal Representative,

Defendant/Cross-Plaintiff, and PATSY VILLNEFF and TAMERA HARPER,

Defendants/Cross-Defendants. _________________________________________/

PV Holding/ABG Amicus Appx. 2


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I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the foregoing is a true and complete copy of the order entered at the direction of the Court.

May 1, 2020

2

Clerk

JONTE EVERSON, Plaintiff,

SC: 159661 v COA: 339815 Washtenaw CC: 16-000359-NF FARMERS INSURANCE EXCHANGE,

Defendant/Third-Party Plaintiff-Appellee,

and ENTERPRISE LEASING COMPANY,

Third-Party Defendant-Appellant. _________________________________________/ On order of the Chief Justice, the motion of PV Holding Corp. and Avis Budget Group, Inc. to file a brief amicus curiae consistent with MCR 7.312(H)(3) and (4) is GRANTED.



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EXHIBIT B PV Holding/ABG Amicus Appx. 4

Ex. B - Michigan Checklist & Application for Self-InsuranceR

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Application Checklist for Self-Insurance

Completed Application

Statement of Financial ConditionPrepared in accordance with generally accepted accounting principles, covering a one- year period ending not more than twelve (12) months before the date of application, and audited by a certified public accountant.

Excess Insurance

A copy of the declaration sheet of the excess insurance policy.

Written Estimate of Loss Reserve

Prepared by a qualified actuary or a casualty insurance company.

Claim ContactCopy of written authorization designating a specific person to receive and process claims.

Sample Claim FormA copy of a claim form to be used to submit a claim for benefits. The claim form shallinclude all the following information:

• A statement of claimant’s right to personal protection insurance benefits, propertyprotection insurance benefits, and residual liability insurance benefits under the no- fault law.

• A statement of a self-insurer’s responsibility to pay claims in a timely manner.• An instruction that directs claimants to contact the Department of Insurance and

Financial Services concerning a self-insurer’s failure to fulfill its responsibilities under the no-fault law.

Claims Processing Narrative

Detailed description of how claims will be processed.

Motor Vehicles Registered in MichiganA list of all motor vehicles that are registered in Michigan in the name of the applicant atthe time of application or that are to be self-insured under a certificate of self-insuranceissued to the applicant. The vehicles shall be identified by all of the following:

• Year• Make • Model• Vehicle Identification Number (VIN)• License Plate Number

Assessment Payment (Renewal application only)

The self-insurer has paid the most recent assessment fee pursuant to section 3171 of the no-fault law and R 11.115, within 30 days after billing and any associated late fees (ifapplicable) calculated under MCL 500.3175.

Send completed application package to:

Michigan Department of Insurance and Financial Services Office of Insurance Evaluation

530 West Allegan Street, 7th Floor Lansing, MI 48933

517-284-8762

The self-insurer has paid the most recent assessment fee pursuant to section 3171 of thep pno-fault law and R 11.115, within 30 days after billing and any associated late fees (if, yapplicable) calculated under MCL 500.3175.

Assessment Payment (Renewal application only)y ( pp y)


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Name: Title: Address: City, State, Zip: Telephone No.: Fax No.: E-Mail Address: Name: Title: Address: City, State, Zip: Telephone No.: Fax No.: E-Mail Address: Name: Title: Address: City, State, Zip Telephone No.: Fax No.: E-Mail Address:

FIS 2271 (05/15) Department of Insurance and Financial Services page 1 of 3

APPLICATION FOR SELF-INSURANCE CERTIFICATE

Name of Applicant: Address: City, State, Zip:

(Name and Address as it is to appear on Certificate)

Telephone No.: Fax No.: E-Mail Address:

List the names and addresses of the three principal officers of the company:

1.

2.

3.

Name and address of representative authorized to receive and process claims:

Name: Title: Address: City, State, Zip: Telephone No.: Fax No.: E-Mail Address:


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Name and address of person authorized to accept the invoice regarding the annual assessment for the Michigan Automobile Insurance Placement Facility, which maintains the Michigan Assigned Claims Plan:


(A) The number of motor vehicles, excluding trailers, motorcycles, and mopeds registered in Michigan in theapplicant’s name as of the date of this application: A =

(B) The number of motor vehicles, not included in (A) including trailers with more than 2 wheels, but excluding motorcycles and mopeds owned by or registered to the Applicant, that are to be self-insured under this application, including motor vehicles or trailers having more than 2 wheels, rented or leased by the Applicant for more than 30 days. All motor vehicles, including trailers having more than 2 wheels must be accounted for in (A) or (B), in order to be self-insured under a Certificate of Self-Insuranceissued for this application:

Total Number of Vehicles (A + B):

B =

Total =

Fill in Net Worth and Loss Reserve and cite reference (page number) as applicable to your Statement ofFinancial Status.

Net Worth: $ As documented in our audited

Statement of Financial Status on page #

Loss Reserve $ As documented in our audited


Name and address of financial institution in which Loss Reserve is maintained:

Name: Address: Address: City, State, Zip:

The Applicant hereby applies for the privilege of being a self-insurer under the No-Fault Insurance Act1 and the Michigan Vehicle Code.2 In consideration of the privilege of being certified as a self-insurer for the purposes of the No-Fault Insurance Act and the Michigan Vehicle Code, the Applicant hereby agrees to the following:

(a) To comply with all the provisions of the Michigan No-Fault Insurance Act, the Financial Responsibility Act,3 and the Administrative Rules for no-fault self- insurers.4

(b) To notify the Director, promptly of any change in the Applicant’s financial condition that may affect its ability to maintain the required loss reserve or of a reduction of the Applicant’s net worth below that required by Rule 2 of the No-Fault Self-Insurance Rules5 for the issuance of a Certificate of No-Fault Self-Insurance.

(a) To comply with all the provisions of the Michigan No-Fault Insurance Act, the4

h 3

( ) y gFinancial Responsibility Act,3 and the Administrative Rules for no-fault self- ff insurers.4

(A) The number of motor vehicles, excluding trailers, motorcycles, and mopeds registered in Michigan in thegapplicant’s name as of the date of this application: A =

(B) The number of motor vehicles, not included in (A) including trailers with more than 2 wheels, but excluding ( ) g gmotorcycles and mopeds owned by or registered to the Applicant, that are to be self-ff insured under thisy y gapplication, including motor vehicles or trailers having more than 2 wheels, rented or leased by the Applicantpp g g y ppfor more than 30 days. All motor vehicles, including trailers having more than 2 wheels must be accountedy g gfor in (A) or (B), in order to be self-iff nsured under a Certificate of Self-ff Insurance( ) ( )issued for this application:

0


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For renewal applicants

The self-insurer has paid the most recent assessment fee pursuant to section 3171 of the no-fault law and R 11.115, within 30 days after billing and any associated late fees (if applicable) calculated under MCL 500.3175.

Yes No

Note: any self-insurance renewal application received more than 45 days prior to the expiration of the in-force Certificate may be rejected.

The Applicant hereby certifies that the statements set forth in this application are true and correct. Authorized Officer (Print Name) Title of Authorized Officer

Signature of Authorized Officer

Subscribed and sworn to before me this day of , 20 .

Notary Public

1Chapter 31 of 1956 PA 218, as amended; MCL 500.3101 et seq.2 1949 PA 300, as amended; MCL 257.1 et seq.3 Chapter V of the Michigan Vehicle Code; MCL 257.501 to 257.5324 2000 AC R 257.531 to R 257.5405 2000 AC R 257.532

When complete, please mail to: Office of Insurance EvaluationPO Box 30220Lansing MI 48909-7720

Our delivery address is:Office of Insurance Evaluation530 W Allegan Street, 7th FloorLansing MI 48933

The self-insurer has paid the most recent assessment fee pursuant to section 3171 of the no-fault law and Rp p11.115, within 30 days after billing and any associated late fees (if applicable) calculated under MCL ,500.3175.


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EXHIBIT C PV Holding/ABG Amicus Appx. 9

Ex. C - 2017 Self-Insurance Application-PV Holding/ABGR

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Name: Title: Address: City, State, Zip: Telephone No.: Fax No.: E-Mail Address: Name: Title: Address: City, State, Zip: Telephone No.: Fax No.: E-Mail Address: Name: Title: Address: City, State, Zip Telephone No.: Fax No.: E-Mail Address:


APPLICATION FOR SELF-INSURANCE CERTIFICATE

Name of Applicant: Address: City, State, Zip:

(Name and Address as it is to appear on Certificate)

Telephone No.: Fax No.: E-Mail Address:

List the names and addresses of the three principal officers of the company:

1.

2.

3.

Name and address of representative authorized to receive and process claims:


Avis Budget Group, Inc. & PV Holding Corp

6 Sylvan Way

Parsippany, NJ 07054

973-496-5093

[email protected]

Rochelle Tarlowe

SVP & Treasurer

6 Sylvan Way


973-496-5285

[email protected]

Robert Muhs

VP & Assistant Secretary

6 Sylvan Way


973-496-3532

[email protected]

David Calabria

Chief Accounting Officer

6 Sylvan Way


973-496-6437

[email protected]

Chris Mayo

Sedgwick - VP Operations

P.O. Box 94696

Cleveland, OH 44101

860-315-7152

[email protected]



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Name and address of person authorized to accept the invoice regarding the annual assessment for the Michigan Automobile Insurance Placement Facility, which maintains the Michigan Assigned Claims Plan:


(A) The number of motor vehicles, excluding trailers, motorcycles, and mopeds registered in Michigan in theapplicant’s name as of the date of this application: A =

(B) The number of motor vehicles, not included in (A) including trailers with more than 2 wheels, but excluding motorcycles and mopeds owned by or registered to the Applicant, that are to be self-insured under this application, including motor vehicles or trailers having more than 2 wheels, rented or leased by the Applicant for more than 30 days. All motor vehicles, including trailers having more than 2 wheels must be accounted for in (A) or (B), in order to be self-insured under a Certificate of Self-Insuranceissued for this application:

Total Number of Vehicles (A + B):

B =

Total =

Fill in Net Worth and Loss Reserve and cite reference (page number) as applicable to your Statement ofFinancial Status.

Net Worth: $ As documented in our audited


Loss Reserve $ As documented in our audited


Name and address of financial institution in which Loss Reserve is maintained:

Name: Address: Address: City, State, Zip:

The Applicant hereby applies for the privilege of being a self-insurer under the No-Fault Insurance Act1 and the Michigan Vehicle Code.2 In consideration of the privilege of being certified as a self-insurer for the purposes of the No-Fault Insurance Act and the Michigan Vehicle Code, the Applicant hereby agrees to the following:

(a) To comply with all the provisions of the Michigan No-Fault Insurance Act, the Financial Responsibility Act,3 and the Administrative Rules for no-fault self- insurers.4

(b) To notify the Director, promptly of any change in the Applicant’s financial condition that may affect its ability to maintain the required loss reserve or of a reduction of the Applicant’s net worth below that required by Rule 2 of the No-Fault Self-Insurance Rules5 for the issuance of a Certificate of No-Fault Self-Insurance.

Suzanne Panicoe

Director, Risk Management & Insurance

6 Sylvan Way


973-496-5093

[email protected]

11,813

11,813

221,000,000

F-5

8,030,872F-5 Other Current Liab

JP Morgan Chase

4 MetroTech Center

Brooklyn, NY 11245



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For renewal applicants

The self-insurer has paid the most recent assessment fee pursuant to section 3171 of the no-fault law and R 11.115, within 30 days after billing and any associated late fees (if applicable) calculated under MCL 500.3175.

Yes No

Note: any self-insurance renewal application received more than 45 days prior to the expiration of the in-force Certificate may be rejected.

The Applicant hereby certifies that the statements set forth in this application are true and correct. Authorized Officer (Print Name) Title of Authorized Officer

Signature of Authorized Officer

Subscribed and sworn to before me this day of , 20 .

Notary Public

1Chapter 31 of 1956 PA 218, as amended; MCL 500.3101 et seq.2 1949 PA 300, as amended; MCL 257.1 et seq.3 Chapter V of the Michigan Vehicle Code; MCL 257.501 to 257.5324 2000 AC R 257.531 to R 257.5405 2000 AC R 257.532

When complete, please mail to: Office of Insurance EvaluationPO Box 30220Lansing MI 48909-7720

Our delivery address is:Office of Insurance Evaluation530 W Allegan Street, 7th FloorLansing MI 48933

Senior Vice President & TreasurerRochelle Tarlowe



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EXHIBIT D PV Holding/ABG Amicus Appx. 13

Ex. D-DFIS Insurance Bulletin 2019-15-INSR

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STATE OF MICHIGAN DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES

Bulletin 2019-15-INS

In the matter of:

Applicability of PIP Choice to Self-Insurers and Municipal Governmental Self-Insurance Pools ______________ /

Issued and entered This 27th day of September 2019

by Anita G. Fox Director

Public Acts 21 and 22 of 2019 amended the Insurance Code (Code) to, among other things, allow for "PIP choice" options whereby an "applicant or named insured" must "select 1 of the following coverage levels for personal protection benefits": $50,000, $250,000, $500,000, or unlimited coverage. MCL 500.3107c. The requirement to select PIP coverage applies to every "insurance policy that provides the security required under section 3101(1) and is issued or renewed after July 1, 2020." MCL 500.3107c(1).

Section 3101d(1) of the Code, MCL 500.3101d(1), provides that a "person in whose name more than 25 motor vehicles are registered may qualify as a self-insurer by obtaining a certificate of self-insurance ... " A certificate of self-insurance "constitutes security equivalent to that afforded by a policy of insurance that provides for the payment of benefits pursuant to the no-fault law." Michigan Administrative Code R 257 .532(1 ).

Security provided under a certificate of self-insurance is not an "insurance policy." Instead, it is an assurance that an entity retains all of its risk in the form of sufficient reserves and excess loss coverage to pay its claims.

Similarly, Section 5 of the Intergovernmental Contracts between Municipal Corporations Act (Act), MCL 124.5, authorizes any two or more municipal corporations to "form a group self-insurance pool to provide for joint or cooperative action relative to their financial and administrative resources for the purpose of providing to the participating municipal corporations risk management and coverage for pool members and employees of pool members," including for "automobile insurance, including motor vehicle liability insurance coverage and security for motor vehicles owned or operated, as required by section 3101 of the insurance code of 1956, 1956 PA 218, MCL 500.3101, and protection against other liability and loss associated with the ownership of motor vehicles." The Act expressly provides that a group self-insurance pool "is not an insurance company or insurer under the laws of this state," and that "provision of group self-insurance programs and coverages authorized by this act ... does not constitute doing an insurance business." MCL 124.6.

The PIP choice language in Section 3107c refers to an "applicant or named insured," neither of which applies to an entity holding a certificate of no-fault self-insurance or to a municipal self-insurance pool. In addition, the PIP choice levels apply to "an insurance policy." Self-insurers and municipal group self-insurance pools do not issue "insurance policies," and thus the PIP choice options are not available to these entities.



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Any questions regarding this bulletin should be directed to:

Isl

Anita G. Fox Director

Department of Insurance and Financial Services Office of General Counsel

530 W. Allegan Street- 8th Floor P.O. Box 30220

Lansing, Michigan 48909-7720 Toll Free: (877) 999-6442

EXHIBIT E PV Holding/ABG Amicus Appx. 16

Ex. E-Heichel CaseR

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Heichel v. Geico lndem. Co., Not Reported in N.W.2d (2016)

2016 WL 805524

2016 WL 805524 Only the Westlaw citation is currently available.

UNPUBLISHED OPINION. CHECK COURT RULES BEFORE cmNG.

UNPUBUSHED Court of Appeals of Michigan.

Adam HEICHEL, Plaintiff, and

St. John Macomb-Oakland Hospital, Intervening Plaintiff-Appellee,

and Mendelson Orthopedics, P.C., Intervening

Plaintiff, V.

GEICO INDEMNITY COMPANY, Defendant/Third-Party Plaintiff-Appellant,

and State Farm Mutual Automobile Insurance

Company, Defendant, and

EAN Holdings, L.L.C. and Enterprise Holdings, INC., Defendants/Third-Party

Defendants-Appellees. Adam Heichel, Plaintiff,

and St. John Macomb-Oakland Hospital, Intervening

Plaintiff-Appellee, and

Mendelson Orthopedics, P.C., Intervening Plaintiff,

V.

Geico Indemnity Company, Defendant/Third-Party Plaintiff-Appellant,

and State Farm Mutual Automobile Insurance

Company, Defendant-Appellant, and

EAN Holdings, Inc. and Enterprise Holdings, Inc., Defendants/Third-Party Defendants-Appellees.

Docket Nos. 323818, 324045. I

March 1, 2016.

Wayne Circuit Court; LC No. 12-003780-NF.

Before: GLEICHER, P.J., and JANSEN and SHAPIRO, JJ.

Opinion

PERCURIAM.

*l The no-fault insurance act requires owners of motor vehicles registered in Michigan to maintain security for payment of personal injury protection (PIP) benefits. MCL 500.3101(1). This obligation also extends to the owners of vehicles registered in other states that are operated in Michigan for more than 30 days in a calendar year. MCL 500.3102(1).

The Ford Fusion involved in the accident giving rise to this priority dispute was owned by defendant EAN Holdings, L.L.C., and registered in North Carolina. It had been in Michigan for less than 30 days when it struck plaintiff Adam Heichel's motorcycle. Because the no-fault act's security provision does not apply to the vehicle, neither do the no-fault act's priority provjsions. As a practical matter, this means that EAN is not responsible for paying Heichel's first-party no-fault benefits. The circuit court reached the same conclusion. We affirm.

While driving a Ford Fusion rented from Enterprise Rent-A-Car in Pennsylvania, Krzysztof Pietmczynik ran a red light in Orion Township and struck Heichel's motorcycle. Heichel suffered serious mJunes. Pietruczynik's wife, Mary Roddy, had signed the Enterprise rental agreement. EAN owned the Ford and registered it in North Carolina. In 2010, Michigan's secretary of state certified EAN as a qualified self-insurer under MCL 500.3101(4).

Defendant Geico Indemnity Company insured a personal vehicle owned by Roddy and Pietruczynik. Roddy had a State Farm policy on another personal vehicle; as to that vehicle, Pietruczynik was a named insured. Thus, there were three potential sources through which Heichel could seek payment of PIP benefits: EAN, Geico and State Farm.

Heichel first tagged EAN, which denied his claim. Heichel then filed suit against Geico, which successfully

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moved to join State Farm as a party defendant. Meanwhile, St. John Macomb-Oakland Hospital and Mendelson Orthopedics, P.C. intervened, seeking reimbursement for their services. Many motions and procedural moves later, the circuit court granted EAN's motion for summary disposition, ruling that Parks v. Detroit Auto Inter- Ins Exch, 426 Mich. 191 , 201; 393 NW2d 833 (1986), absolved EAN of liability for Heichel ' s no-fault claim.

Geico and State Farm agreed to a judgment by consent in favor of Heichel, St. John Macomb, and Mendelson Orthopedics. The judgment reserved the two insurance companies' rights to claim an appeal of the circuit court 's summary disposition ruJing. We have consolidated their appeals. Both contend that BAN is liable for payment of Heichel' s no-fault benefits because EAN's self-insured status meant that it assumed the duties of a commercial insurer and thus was highest in priority under MCL 500.3114(5), which governs the order of PIP benefit payment responsibility in motorcycle-motor vehicle accidents.

II

We review de novo a circuit court's resolution of a summary disposition motion. Zaher v. Miotke, 300 Mich .App 132, 139; 832 NW2d 266 (2013). We also review de novo matters of statutory interpretation. Stanton v. City of Battle Creek, 466 Mich. 611, 6 14; 647 NW2d 508 (2002). The goal of statutory interpretation is to discern and give effect to the intent of the Legislature. Odom v. Wayne Co, 482 Mich. 459, 467; 760 NW2d 217 (2008). The first step in determining legislative intent is the language of the statute. Id. lf the statutory language is unambiguous, then the Legislature' s intent is clear and judicial construction is neither necessary nor permitted. Id

Ill

\ ~

that because EAN is not subject to the security requirements of the no-fault act, EAN cannot be held liable for Heichel's PIP benefits.

Michigan's no-fault automobile insurance act, MCL 500.3101 et seq. , requires that Michigan drivers maintain no-fault automobile insurance. American Home Assurance Co v. Mich. Catastrophic Claims Ass 'n, 288 Mich.App 706, 717; 795 NW2d 172 (2010). MCL 500.3 JO 1(1) provides "[tJhe owner or registrant of a motor vehicle required to be registered in this state shall maintain security for payment of benefits under [PIP], property protection insurance, and residual liability insurance." Only vehicles that must be registered in Michigan are subject to the requirements of the no-fault insurance act. Covington v. Interstate Sys, 88 Mich.App 492, 494; 277 NW2d 4 (1979). However, an out-of-state vehicle owner must maintain security for the payment of no-fault benefits if he or she permits a vehicle to be operated in Michigan for "an aggregate of more than 30 days in any calendar year" regardless of whether the vehicle is registered in Michigan. MCL 500.3102( I).

Geico and State Farm insist that these well-established rules fall to the wayside when a vehicle owner such as EAN voluntarily files a certificate with the state of Michigan attesting that when responsible for doing so, it will provide "security equivalent to that afforded by a policy of insurance[.]" MCL 500.3101(4). In enacting§ 3101(4), the Legislature recognized that some vehicle owners, particularly fleet operators such as EAN or Enterprise, might elect to self-insure rather than to purchase no-fault coverage. See MCL 257.531; Allstate Ins Co v. Elassal, 203 Mich.App 548, 553 ; 512 NW2d 856 (1994). We agree with Geico and State Farm that under the no-fault act, a self-insurer is an insurer. Id. at 554. " [S)elf-insurance, as certified by the Secretary of State, is the functional equivalent of a commercial insurance policy, with the purpose of either form being to compensate victims properly." Id . But this concession does not end the analysis.

Despite EAN's status as an insurer, the no-fault act simply did not apply to the Ford Fusion. See Parks, 426 Mich. at 206 ("The fact that a vehicle is actually covered by an insurance policy, or that the owner of the vehicle is selj~insured, does not alter whether the vehicle itself need or need not conform to the requirements of rhe act.") (emphasis added). Consequently, declaring that EAN is an insurer under MCL 500.31 I 4 does not dispose of the broader question: whether the priority provisions of MCL 500.3114(5) pertain at all.

"Generally, under MCL 500.3101 (l) and MCL

*2 The Supreme Court's opinion in Parks v. DA/IE. 462 Mich. 19 I, paves the way to our decision in this case. We readily acknowledge that the facts of Parks differ from those presented here. But Parks 's reasoning is straightforward, and leads inexorably to our conclusion - -"-------'---------------------'-- --

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500.3114(1), an individual must seek no-fault benefits from his own insurer unless one of the exceptions enumerated in MCL 500.3114(2), (3), or (5) applies." Farmers Ins Exch v. Farm Bureau Gen Ins Co of Mich, 272 Mich.App I 06, 111 ; 724 NW2d 485 (2006). One of the exceptions, MCL 500.3114(5), addresses the order of priority for payment of no-fault benefits to the operator of a motorcycle and provides:

*3 A person suffering accidental bodily injury arising from a motor vehicle accident which shows evidence of the involvement of a motor vehicle while an operator or passenger of a motorcycle shall claim [PIP] benefits from insurers in the following order of priority:

(a) The insurer of the owner or registrant of the motor vehicle involved in the accident.

(b) The insurer of the operator of the motor vehicle involved in the accident.

(c) The motor vehicle insurer of the operator of the motorcycle involved in the accident.

(d) The motor vehicle insurer of the owner or registrant of the motorcycle involved in the accident

If the no-fault act applies to the Ford Fusion that struck Heichel, EAN would be first in the order of priority. Geico would be second.

fiowever, Parks, 426 Mich. at 206, instructs that the priority provisions set'forth in § 3114 apply "only in the case in which the insured vehicle is required to be registered in this state." In Parks. as here, the involved vehicle was registered in a state other than Michigan and Michigan law did not require Michigan registration. Id. at 197, 200-201. This fact was central to the Supreme Court's conclusion in Parks that the vehicle owner could not be held liable for payment of PIP benefits because the involved vehicle "was not required to be registered in Michigan and was not subject to the security provisions of the no-fault act." Id at 211. The Court explained that "the plain language of § 3101 (I) subjects only those vehicles required to be registered in this state to the mandatory security requirements." Id at 206. The Court held that the plaintiff's personal automobile insurer, rather than the

vehicle's insurer, bore liability for payment of PIP benefits because the plaintiff

[was] injured in an employer's out-of-state vehicle, which is not required to be registered in this state under the motor vehicle registration act and ... is not subject to the security provisions of the no-fault act because it has not been operated in this state for more than thirty days within the calendar year [.] [Id. at 207.)

Parks is not precisely on point, as it arose from a workplace injury in an employment context, did not involve a motorcycle, and dealt with a different subsection ofMCL 500.3114. These distinctions make no difference. In Parks, the vehicle involved in the accident was owned by a self-insured nonresident company, was registered in another state, and was not required to be registered in Michigan. The same is true here. ln Parks, another insurer contended that the nonresident vehicle owner was liable under MCL 500.3114, regardless of whether the no-fault act required the owner to maintain security on the vehicle. Again, the same is true here. In Parks, the Supreme Court rejected the complaining insurer's argument, holding that the registration requirement set forth in § 3101(1) is the key to liability under the no-fault act. A vehicle that does not need to be registered in Michigan cannot trigger the application of the priority provisions set forth in MCL 500.3114. Parks, 426 Mich. at 203-204. This core holding underpins our decision in this case.

*4 We affirm.

All Citations

Not Reported in N.W.2d, 2016 WL 805524

End of Document © 2019 Thomson Reuters. No claim to original U.S. Government Worl<s.

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