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### STATE OF MICHIGAN

COURT OF APPEALS

LAURA MONACO, Personal Representative of the ESTATE OF ALISON MONACO,

Plaintiff-Appellee,
and

COVENANT MEDICAL CENTER, INC., and

MARY FREE BED REHABILITATION HOSPITAL,

Intervenors-Plaintiffs/Appellees, FOR PUBLICATION November 15, 2016

9:10 a.m.

v No. 329214
Huron Circuit Court HOME-OWNERS INSURANCE COMPANY, LC No. 13-105217-NF

Defendant-Appellant.

Before: J ANSEN , P.J., and M URPHY and R IORDAN , JJ.

M URPHY

, J.

In this dispute concerning the recovery of personal protection insurance benefits, commonly referred to as PIP bene fits, under the no-fault act, M CL 500.3101 et seq. , defendant Home-Owners Insurance Company ( HOIC) appeals as of right the ju dgment entered in favor of plaintiff Laura Monaco (hereaf ter “plaintiff” in the singular) and intervening plaintiffs Covenant Medical Center, Inc., and Mary F ree Bed Rehabilitation Hospital (jointly referred to as “the medical providers”). 1 The judgment reflected the verd ict rendered by a jury followi ng trial and certain stipulations between HOIC and the medical providers reg arding the amount of damages. HOIC challenges the pretrial denial of its motion for summary d isposition and the denial of its
motion for a directed verdict. T here is but one issue in this appeal that we must resolve. It concerns the legal question whether a person injured in a motor vehicle accident is barred from recovering PIP benefits under MCL 500.3113(a), which generally precludes coverage when a person used a vehicle t hat he or she had “taken unlawfully,” wh ere the owner of the vehicle

1 Any reference in this opinion to “plaintiffs” in the plural sh all pertain to plaintiff and the medical providers.-2- permitted, gave consent to, or otherwise authorized the injured person to take and use the vehicle, but where the injured person used the vehicle in viola tion of the law with the owner’s knowledge. We hold that PIP benefits are available in such cir cumstances, given that the phrase “taken unlawfully,” as employed in MCL 500.3113(a), does not en compass the unlawful use or operation of a motor vehicle, just the unlawful taking of a vehicle. Accordingly, we affirm.

I. BACKGROUND

In July 2012, plaintiff’s da ughter Alison, then 15 years old, sustained severe injuries when she lost control of a vehicle that she was driving and cra shed into a roadside ditch. At the time, Alison had completed and pa ssed a driver’s t raining cours e and obtained a permit to drive, but only if accompanied by a licensed parent, guardian, or 21-y ear-old, and she was not so accompanied when the accident occurred. 2 The motor vehicle was owned by plaintiff, customarily driven by plaintiff’s partner, and insured by HOIC. The medical providers treated Alison’s extensive injuries a nd assisted in her rehabilitation.

Plaintiff filed a claim with HOIC for PIP benefits. In a reco rded statement, plaintiff told HOIC’s insurance adjustor that Alison did not have permission t o drive the vehicle when the accident took place. HOIC thus denied coverage under MCL 500.3 113(a) and language in the insurance policy that tracked the statutory provision. Plainti ff then telephoned the adjustor inquiring if there would be coverage if her partner had permitt ed Alison to use the vehicle. According to HOIC’s adjustor, sh e informed plaintiff that HOIC would “reevaluate” the question of coverage in that event, but the adjuster never heard back fr om plaintiff in the matter.

Plaintiff, then acting as Alison’s next friend, filed suit cha llenging HOIC’s denial of PIP benefits. The medical providers , aligning themselves with plai ntiff, intervened in the action, seeking reimbursement for costs a ssociated with providing medic al care to Alison. HOIC filed a motion for summary disposition under MCR 2.116(C)(10), assertin g that plaintiff had admitted during her deposition that she h ad previously lied to HOIC’s ad juster when she stated that Alison lacked permission to drive the vehicle. HOIC argued that MCL 5 00.3113(a) barred Alison from obtaining PIP benefits because she took the vehicle unlawfully and did not reasonably believe that she had permission to use the car. HOIC maintained that “ self-serving” deposition testimony given by plaintiff, her partner, and Alison, which co ntradicted plaintiff’s earlier recorded statement, was inadequate to establish a genuine issue of material fact for trial. HOIC additionally contended that Alis on had taken the vehicle unlawf ully regardless of any possible parental permission, considering that, in light of Alison’s age and the restricted nature of the driver’s permit, plaintiff had violated the law by allowing or authorizing Alison’s unaccompanied operation of the car.

2 MCL 257.310e(4) applied to Alison, and it provides that “[a] p erson issued a level 1 graduated licensing status may operate a motor vehicle only when accompan ied either by a licensed parent or legal guardian or, with the permission of the parent or lega l guardian, a licensed driver 21 years of age or older.”-3- Plaintiffs responded that Alison h ad taken the vehicle lawfull y, citing the deposition testimony of plaintiff, her partner, and Alison, which indicate d that Alison had permission to
take and drive the car on her own at the time of the accident. Plaintiffs further asserted that
Alison’s lack of a driver’s license that would have allowed her to drive on her own was irrelevant with respect to whether she took the car lawfully, a s HOIC was conflating unlawful taking with unlawful use. The t rial court denied HOIC’s motion for summary disposition, concluding that there was a factua l issue regarding whether Ali son had permission to take the vehicle and that the law supporte d plaintiffs’ proffered distin ction between “taking” and “using” a vehicle for purposes of MCL 500.3113(a).

At trial, plaintiff testified that her initial statement to th e insurance adjustor was not truthful and that Alison actually had permission to take and us e the vehicle on the day of the crash. Plaintiff admitted that she feared criminal liability f or allowing her daughter to drive when she gave the statement to HOIC’s adjustor. Plaintiff’s pa rtner testified that Alison had permission to take and use the vehicle on the day of the accide nt, and Alison indicated that she frequently drove the vehicle with plaintiff’s knowledge and con sent. 3 Plaintiffs additionally produced witnesses who testified that they saw Alison driving t he vehicle alone on several occasions, with one witness claiming that he observed plaintiff ’s partner at times giving Alison the car keys. HOIC in turn elicited testimony from witnesses w ho questioned the credibility of plaintiffs’ witnesses, and one of HOIC’s witnesses testified th at the partner had stated that he
told Alison not to take the vehicle.

At trial, HOIC renewed its summary disposition arguments in mo ving for a directed verdict at the close of proofs, and the court again rejected th em. HOIC and the medical providers had stipulated before trial to the amount of damages (outstanding medical charges plus penalty interest) should there be liability for PIP benefits, l eaving for the jury to resolve the issue of liability. And the jury concluded that HOIC had failed to m eet its burden of showing that Alison took the car without per mission, effectively rendering H OIC liable for the stipulated sums. The jury, of course, reach ed the same conclusion on liab ility relative to plaintiff, and the jurors made additional findings in regard to the nature and amo unt of allowable expenses and interest to which plaintiff was entitled. A judgment consisten t with the jury’s verdict and the stipulation was entered, a nd this appeal followed.

II. ANALYSIS

A. STANDARD OF REVIE W AND GOVERNING TEST FOR SUMMARY DISPOSIT ION

AND DIRECTED VERDICT MOTIONS

“A trial court’s decision regarding a motion for summary dispo sition and a motion for a directed verdict are reviewed de novo[,]” Lewis v LeGrow , 258 Mich App 175, 192; 670 NW2d 675 (2003), as is the question of statutory interpretation, Krohn v Home-Owners Ins Co , 490

3 Tragically, Alison died in an unrelated house fire before tria l; therefore, the trial court allowed her deposition testimony to be r ead into the trial record.-4- Mich 145, 155; 802 NW2d 281 (2011). The test with respect to a motion for summary disposition brought under MCR 2.116( C)(10) is essentially the s ame in regard to a motion for a directed verdict, “namely, whet her reasonable minds, taking the evidence in a light most favorable to the nonmovant, could reach different conclusions r egarding a material fact.” Skinner v Square D Co , 445 Mich 153, 165 n 9; 516 NW2d 475 (1994).

B. PRINCIPLES OF STAT UTORY CONSTRUCTION

The Michigan Supreme Court in Whitman v City of Burton , 493 Mich 303, 311-312; 831 NW2d 223 (2013), set forth the we ll-established principles gove rning statutory construction, observing:

When interpreting a statute, we follow the established rules o f statutory construction, the foremost of which is to discern and give effect to the intent of the Legislature. To do so, we begin by examining the most reliable evidence of that intent, the language of the statute itself. If the language of a statute is clear and unambiguous, the statute must be enforced as written and no further judicial construction is permitted. Effect should be gi ven to every phrase, clause, and word in the statute and, whenever possible, no word should be treated as surplusage or rendered nugatory. Only when an ambiguity exis ts in the language of the statute is it proper for a court to go beyond t he statutory text to ascertain legislative intent. [Citations omitted.]

C. DISCUSSION

HOIC contends on appeal that Alison necessarily took the vehic le unlawfully given her age and restricted license, prec luding entitlement to PIP benef its pursuant to MCL 500.3113(a).
We note that HOIC does not challe nge the jury’s factual determi nation that HOIC failed to satisfy its burden of showing that Alison took the car without permission. HOIC’s appellate argument is squarely one of law, entailing statutory constructi on. There is no genuine issue of material fact that Alison was only 15 years old when the accide nt took place and that in light of the limited nature of her license or permit, it was unlawful fo r her to drive the car unaccompanied by a licensed adult identified in MCL 257.310e(4) . Thus, we must entertain the question whether those undispute d facts bar the recovery of PIP benefits under MCL 500.3113(a) as a matter of law, such that an order granting summary disposi tion or a directed verdict should
have entered in favor of HOIC.

“The Michigan no-fault act requi res that owners and registran ts of automobiles carry personal protection insurance to cover an insured’s medical car e arising from injuries sustained

in an automobile accident.” Krohn , 490 Mich at 155, citing MCL 500.3101(1) and MCL 500.3105(1). At the time of Alison’s accident, MCL 500.3113(a) provided:

A person is not entitled to be paid personal protection insura nce benefits for accidental bodily injury if at the time of the accident any of the following
circumstances existed:-5- (a) The person was using a motor vehicle . . . which he or she had taken unlawfully , unless the person reasonably believed that he or she was enti tled to take and use the vehicle. [Emphasis added.]

This provision was subsequen tly amended pursuant to 2014 PA 48 9, but it still generally bars the recovery of PIP benef its by a person who operated a ve hicle that he or she had “taken unlawfully[.]” The first level of inquiry when applying MCL 50 0.3113(a) always concerns whether the taking of a vehicle was unlawful, and if the taking was lawful, the inquiry ends as the statute is inapplicable. Henry Ford Health Sys v Esurance Ins Co , 288 Mich App 593, 599; 808 NW2d 1 (2010).

In construing the language “taken unlawfully,” our Supreme Cou rt in Spectrum Health Hosps v Farm Bureau Mut Ins Co of Mich , 492 Mich 503, 516-517; 821 NW2d 117 (2012),
observed:

In determining the Legislature's intended meaning of the phras e “taken unlawfully,” we must accord the phrase its plain and ordinary m eaning, and we may consult dictionary definitions because the no-fault act doe s not define the phrase. The word “unlawful” commonly means “not lawful; contrar y to law; illegal,” and the word “take” is commonly understood as “to get into one's hands or possession by voluntary action.” When the words are consider ed together, the plain meaning of the phrase “taken unlawfully” readily embraces a situation in which an individual gains possess ion of a vehicle contrary to M ichigan law. [Citations omitted.]

The Spectrum Health Court further held that “any pers on who takes a vehicle contrary to a provision of the M ichigan Penal Code—i ncluding MCL 750.413 an d MCL 750.414, informally known as the ‘joyriding’ statute s—has taken the vehicle unlawfu lly for purposes of MCL 500.3113(a).” Id . at 509. After analyzing the language of the two joyriding st atutes, the Court concluded that both “make it unlawful to take any motor vehicle without authority, effectively defining an unlawful taking of a ve hicle as that which is unaut horized.” Id . at 517-518. A taking does not have to be larcenous to qua lify as unlawful, and MCL 5 00.3113(a) applies to any person
who takes a vehicle without the owner’s authority, regardless o f whether that person had the
intent to steal the vehicle. Id. at 518. MCL 500.3113(a) examines the legality of a taking from the perspective of the driver. Id. at 522. The following language from Spectrum Health effectively belies HOIC’s argument in this case:

The “authority” referred to in the joyriding statutes is obvio usly the authority of the owner of the vehicle. Accordingly, for purpose s of MCL 500.3113(a), a vehicle is “unlawfully taken” if it is taken wit hout the authority of its owner. . . . Therefore, MCL 500.3113(a) does not apply to t he lawful owner of a vehicle, even if that person drives it under a circumstance t hat renders him or her legally unable to operate a vehicle. However, driving while legally unable may have implications under MCL 500.3113(a) for a person who has taken a vehicle unlawfully because as a matter of law, one cannot reaso nably believe that he or she is entitled to use a vehicle when the person knows th at he or she is-6- unable to legally operate the vehicle. [ Id. at 518 n 25 (citation and quotation marks omitted; emphasis in original).]

As reflected in this language, the owner of a vehicle could ne ver be barred from coverage under MCL 500.3113(a) because he or she would not be capable of taking the vehicle absent owner authorization; he or she is the owner. And, importantly, this is true even if the owner
drives the vehicle “under a circumstance that renders him or he r legally unable to operate a
vehicle.” Id. This statement effectively signifies, in direct contradiction o f HOIC’s theory, that
the unlawful operation or use of a motor vehicle is irrelevant with respect to examining the “taken unlawfully” phrase in MCL 500.3113(a), otherwise the Sup reme Court’s example concerning an owner would not hold water. Our view is buttress ed by the final sentence in the quoted passage from Spectrum Health , which indicates that the unlawful operation or use of a motor vehicle is only relevant when the injured person had actually unlawfully taken the vehicle and was attempting to invoke the language in MCL 500.3113(a) al lowing recovery where “the person reasonably believed that he or she was entitled to take and use the vehicle,” despite the unlawful taking. Spectrum Health , 492 Mich at 518 n 25. Thus, t he unlawful operation or use of a motor vehicle is simply not a concern in the context of analy zing whether the vehicle was taken unlawfully.

The distinction between unlawfully taking a motor vehicle and unlawfully using a vehicle was recognized in Rambin v Allstate Ins Co , 495 Mich 316, 331; 852 NW2d 34 (2014), wherein the Supreme Court stated that “t he unlawful use of a vehicle . . . is not relevant under the unlawful taking language in M CL 500.3113[.]” And this Court ha s observed that, with respect to the language in MCL 500.3113(a), “[c]learly, the terms ‘take’ a nd ‘use’ are not interchangeable or even synonymous; obtaining possession of an object is very d ifferent from employing that object or putting it into service.” Amerisure Ins Co v Plumb , 282 Mich App 417, 428; 766 NW2d 878 (2009), abrogated in p art on other grounds by Rambin , 495 Mich at 323-324 n 7.

HOIC argues that it was unlawful for plaintiff to give Alison permission to drive the car under the Michigan Vehic le Code (MVC), MCL 257.1 et seq .; therefore, there effectively was no recognizable authorization to ope rate the vehicle, resulting in the unlawful taking of the vehicle by Alison. MCL 257.326 provides that “[n]o person shall knowin gly authorize or permit a motor vehicle owned by him or under his control to be driven by any person in violation of any of the provisions of [the MVC].” (Empha sis added.) As noted earlier in this opinion, Alison was driving the car in violation of the MVC, particularly MCL 257.3 10e(4). Although it may have been unlawful for plaintiff, as owner of the car, to authorize or permit Alison to drive the vehicle in violation of the law, it had no bearing on, nor did it negat e, the authorization and permission given by plaintiff for Alison to take the vehicle . Alison did not “gain possession of [the] vehicle contrary to Michigan law[,]” Spectrum Health , 492 Mich at 517; rather, she unlawfully used the vehicle, i.e., Alison “put[] it into service” in violation of M ichigan law, Plumb , 282 Mich App at 428. Plaintiff was not in violation of MCL 257.326 by merely a llowing Alison to take possession and control of the car; it was the permission allowi ng Alison to drive the car that implicated MCL 257.326. While plaintiff’s actions might have s ubjected her to prosecution under MCL 257.326, they did not turn an authorized or permitted taking into an unlawful taking.-7- III. CONCLUSION

Here, all of HOIC’s arguments are unavailing as they ultimatel y conflate the unlawful use or operation of a motor vehicle with the unlawful taking of a v ehicle. Despite HOIC’s protestation to the contrary a nd our appreciation that a very f ine line exists, “taking” and “use” are simply not synonymous or inte rchangeable for purposes of MC L 500.3113(a), as reflected in the statute’s plain and unambiguous language and the caselaw in terpreting the statute. The trial court did not err in denying HOIC’ s motions for summary disposi tion and a directed verdict.

Affirmed. Having fully prevaile d on appeal, plaintiffs are aw arded taxable costs under

MCR 7.219.

/s/ William B. Murphy
/s/ Kathleen Jansen
/s/ Michael J. Riordan