Supreme Court Vacates Grant Order and Leaves Intact Court of Appeals Ruling on “Primary Purpose” / “Incidental Nature” Test Applied by Court of Appeals to Determine Priority of Insurers in a Motor Vehicle Accident Involving a Passenger Van

MCL 500.3114(2) of Michigan’s No-Fault Automobile Insurance Act establishes a priority of insurers of motor vehicles for certain types of vehicles.  The first sentence provides, simply, as follows:  “A person suffering accidental bodily injury while an operator or a passenger of a motor vehicle operated in the business of transporting passengers shall receive the personal protection insurance benefits to which the person is entitled from the insurer of the motor vehicle.”

I have written extensively on this issue in trial courts and appellate courts.  For years, the Court of Appeals has applied a “primary purpose / incidental nature” test to determine whether, in a given circumstance, the insurer of the vehicle or the insurer of the occupants should be “primary” or take “priority” for responsibility to pay benefits.

The Court of Appeals in the instant case applied the test, and ruled, correctly, in my judgment, that the vehicle’s insurer was not liable as primary insurer for injuries suffered by its occupants.  The Court of Appeals opinion is here:  Farmers Ins. Co. v. Michigan Ins. Co. (COA Opinion).  The Court of Appeals ruled that the occupants’ insurers were liable.

The Supreme Court granted the application for leave to appeal to consider whether use of the “incidental nature / primary purpose” test should continue.   The grant order is here:  Farmers Ins. Co. v. Michigan Ins. Co. (Supreme Court Grant Order).

However, the Court recently vacated its grant order, leaving intact the Court of Appeals ruling, and, unfortunately, its continued reliance on the “primary purpose / incidental nature” test to determine priority of insurers under these circumstances.  The Supreme Court’s order is here:  Farmers Ins. Co. v. Michigan Ins. Co. (Supreme Court Post-Grant Denial Order).

Not that I disagree with the Court of Appeals opinion in this case. I think it reaches the right result.  But, I feel the tergiversations that courts go through in applying this “primary use / incidental nature” test is unnecessary. The plain language of the statute, including the several excepted types of vehicles enumerated later in the section is all that is necessary to take a common-sense, plain language approach to determine whether a vehicle is, or is not, used as “a motor vehicle operated in the business of transporting passengers”.  The “test” creates a circumstance in which the facts of the given case dictate the outcome of the applied law, rather than, as it should be in my judgment, the applied law dictating the outcome of the case.


About cjtucker06

Owner of law firm since July 2014; Handles all types of appellate matters and assists other lawyers with complex litigation and insurance coverage issues; Admitted to the Supreme Court of the United States, the Sixth Circuit Court of Appeals and the State Bar of Michigan; Expertise in prosecuting and defending appeals with several significant successes in the Sixth Circuit Court of Appeals, the Michigan Supreme Court and the Michigan Court of Appeals; Author of briefs amicus curiae in the Michigan Supreme Court for the Michigan Defense Trial Counsel and the Insurance Institute of Michigan; Represents Insurance Companies, Major International Business, Governmental Entities, Law Enforcement Officers and County Sheriffs. Board of Directors, Michigan Defense Trial Counsel Amicus Committee Co-Chair, Michigan Defense Trial Counsel Military - Retired Major in the Judge Advocate General (JAG) Corps of the United States Army, Brigade Judge Advocate and Staff JAG officer for the Maneuver Training Center, Camp Grayling, Michigan; Recipient of the Army's Meritorious Service Medal (the highest medal of honor available to Soldiers serving in non-combat roles); 2012 Graduate of the Judge Advocate Officer Advanced Course, at The Judge Advocate Legal Center and School, Charlottesville, Virginia. United States Navy Reserves, Combat Warfare Qualification, January 1989 to July 2003 Former law clerk to Justice Stephen J. Markman, Michigan Supreme Court, Research Attorney, Michigan Court of Appeals. Insurance Coverage Associate Plunkett Cooney; Environmental Law Attorney at Squire Sanders, now Squire Patton Boggs; Master's Degree in Environmental Law; Environmental Law Scholar, ALI/ABA Washington, D.C., Juris Doctorate, Vermont Law School, Environmental Editor, Vermont Law Review; Treasurer and Finalist, Moot Court Advisory Board.
Gallery | This entry was posted in Insurance and Indemnity, May It Please the Court, Michigan Court of Appeals Unpublished Opinions, Michigan Supreme Court Orders. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s