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S T A T E O F M I C H I G A N

C O U R T O F A P P E A L S

GREAT WEST CASUALTY COMPANY,

Plaintiff/CounterdefendantAppellee,

UNPUBLISHED

December 13, 2018

V Nos. 338617; 339612

Wayne Circuit Court

PROGRESSIVE CASUALTY INSURANCE 

COMPANY,

LC No. 15-009936-CK

Defendant/Counterplaintiff/CrossPlaintiff-Appellant,

and

GEORGE ARNAOUT, RONALD GLENN 

BARKLEY, PAMELA DENISE BARKLEY, 

BARKLEY TRUCKING, EXP, LLC, and XPO 

EXPRESS, INC.,

Defendants/Cross-Defendants.

Before: M. J. KELLY, P.J., and METER and O’BRIEN, JJ.

PER CURIAM.

Plaintiff/counterdefendant, Great West Casualty Company (Great West), filed this 

declaratory action against defendant/counterplaintiff/cross-plaintiff-appellant, Progressive 

Casualty Insurance (Progressive), to determine responsibility to provide insurance coverage in 

connection with an automobile accident.

1

 The trial court granted Great West’s motion for 

 1 The defendants/cross-defendants (other defendants) in this action—George Arnaout, Ronald 

Glenn Barkley, Pamela Denise Barkley, Barkley Trucking, XPO Express, Inc., and EXP, LLC—

are persons or entities involved in or connected to the underlying accident. Great West and 

Progressive appear to agree that the other defendants have no interest in this case. Progressive 

advises that the other defendants were only named “because they had technical or theoretical 

interests in [the] outcome” of this case.
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summary disposition, denied Progressive’s motion for summary disposition, directed Progressive 

to reimburse Great West for the latter’s costs in defending earlier litigation, and awarded Great 

West costs and attorney fees. We affirm in part, reverse in part, vacate in part, and remand for 

further proceedings.2

I. FACTS

The underlying facts are not in dispute. Defendant Barkley Trucking consists of 

defendants Ronald and Pamela Barkley, and their tractor. Express-1, an earlier incarnation of 

defendants XPO Express, Inc., and EXP, LLC, contracted with the Barkleys for trucking 

services. Under 49 CFR 376.12(c)(1), their lease was required to grant “the authorized carrier 

lessee . . . exclusive possession, control, and use of the equipment for the duration of the lease,” 

and “the authorized carrier lessee” was to “assume complete responsibility for the operation of 

the equipment for the duration of the lease.” In conformity with this regulation, the agreement 

between Express-1 and Barkley Trucking states that “[t]o the extent required by regulatory 

authorities . . . Express-1 shall have exclusive possession, control and use of the Equipment 

during the term of this Agreement.” While operating under that agreement, the Barkleys 

delivered a loaded trailer to a location in Woodhaven, Michigan. The Barkleys then drove the 

empty trailer to a local Walmart, where Ronald detached it. Ronald then “bobtailed”—meaning 

drove his tractor with no trailer attached—Pamela to a coin-operated laundry facility and 

dropped her off. While bobtailing back to the laundry facility to pick Pamela up, Ronald 

collided with defendant George Arnaout, who suffered injuries. Arnaout later brought an action 

against Express-1 and Ronald (the Arnaout litigation).

Great West insured Express-1 under a policy providing broad coverage, including “the 

financial responsibility requirements of . . . the Motor Carrier Act of 1980.”3 See CFR 

387.301(a) (requiring interstate carriers to maintain security to cover “any final judgment . . . for 

bodily injuries to or the death of any person resulting from the negligent operation, maintenance 

or use of motor vehicles in transportation”). Barkley Trucking had an insurance policy with

Progressive that covered the tractor when it was not being used for business. Progressive denied

Ronald coverage in the Arnaout litigation because Progressive believed that the tractor was being 

used in Express-1’s trucking business when the accident occurred. As a result, Great West

provided for the defense and other coverage of both Express-1 and Ronald.

During the Arnaout litigation, the trial court issued an order granting summary 

disposition to Express-1 because, according to the trial court, Ronald was not operating the 

tractor in furtherance of Express-1’s business at the time of the accident. The trial court based 

 2 In Docket No. 338617, Great West contests whether this Court has jurisdiction because, 

according to Great West, the order appealed in that case is not a final order. But Great West’s 

argument is moot because it concedes that the order appealed in Docket No. 339612 is a final 

order, so this Court has jurisdiction to review that order as well as any earlier non-final orders, 

including the order appealed in Docket No. 338617.

3 49 USC 10101 et seq.
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this finding on the undisputed fact that the trailer was not attached to the tractor when the 

accident occurred. Because Express-1 was not otherwise the owner of the tractor under 

MCL 257.37, the trial court concluded that Express-1 was not vicariously liable for Arnaout’s 

damages. The trial court further declared that Progressive “must defend and indemnify 

Defendant Ronald Barkley,” and directed Progressive to “pay for all actual costs and attorney 

fees incurred by Great West in connection with the defense of Ronald Barkley and Express 1 

Transportation.” A subsequent order in Arnaout directed Ronald to “file a third party complaint 

against Progressive with all allegations relative to the claims and coverage.” But before Ronald 

could do so, Progressive—while continuing to deny responsibility for coverage—took over 

Ronald’s defense and settled with Arnaout. The parties in Arnaout then stipulated to dismiss 

Ronald from the case, and the court entered an order reflecting that stipulation and closing the 

case.

Before the trial court dismissed Arnaout’s claim against Ronald and after the trial court 

ordered Ronald to file a third-party complaint against Progressive, Great West commenced the 

instant declaratory action seeking reimbursement from Progressive for its costs in defending 

Ronald and Express-1. Progressive counterclaimed, seeking a declaratory judgment in its favor

because, among other reasons, it contended that it had no duty to defend or indemnify either 

Ronald or Express-1 in the Arnaout litigation, and that Great West was required to indemnify 

Progressive for any costs that the latter might incur in defending or settling the Arnaout case. 

The parties filed cross-motions for summary disposition, which the trial court decided in Great 

West’s favor. In so doing, the trial court gave deference to its conclusions in Arnaout that 

Ronald was not operating the tractor in furtherance of Express-1’s business at the time of the 

accident, and that Progressive—not Great West—had an obligation to defend and indemnify in 

the matter.

II. INSURERS’ OBLIGATIONS

Both parties sought summary disposition under MCR 2.116(C)(10) (failure to establish a 

genuine issue of material fact), and Great West also sought summary disposition under 

MCR 2.116(C)(8) (failure to state a claim) and (C)(9) (failure to state a valid defense). This 

Court reviews de novo a trial court’s decision on a motion for summary disposition. Ardt v Titan 

Ins Co, 233 Mich App 685, 688; 593 NW2d 215 (1999). When reviewing a motion for summary 

disposition under MCR 2.116(C)(10), this Court examines all documentary evidence in the light 

most favorable to the nonmoving party to determine whether there exists a genuine issue of 

material fact. Id. “A motion for summary disposition under MCR 2.116(C)(8) tests the legal 

sufficiency of a claim by the pleadings alone.” Smith v Stolberg, 231 Mich App 256, 258; 586 

NW2d 103 (1998). In reviewing a (C)(8) motion, this Court accepts as true all factual 

allegations in the claim “to determine whether the claim is so clearly unenforceable as a matter 

of law that no factual development could establish the claim and justify recovery.” Id. A motion 

under MCR 2.116(C)(9) should likewise be decided only on the pleadings. Attorney General v 

City of Flint, 269 Mich App 209, 211; 713 NW2d 782 (2005).

A. PRECLUSION DOCTRINES

Great West argues that the trial court correctly respected its rulings from the Arnaout

litigation because res judicata or collateral estoppel precluded relitigation of those issues. 
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Progressive argues that those doctrines were inapplicable because neither Progressive nor Great 

West was a party in the Arnaout litigation. The applicability of a legal doctrine is a question of 

law that we review de novo. James v Alberts, 464 Mich 12, 14; 626 NW2d 158 (2001).

“Under the doctrine of res judicata, ‘a final judgment rendered by a court of competent 

jurisdiction on the merits is conclusive as to the rights of the parties and their privies, and, as to 

them, constitutes an absolute bar to a subsequent action involving the same claim, demand or 

cause of action.’ ” Wayne Co v Detroit, 233 Mich App 275, 277; 590 NW2d 619 (1998), quoting 

Black’s Law Dictionary (6th ed, 1990), p 1305. “The doctrine operates where the earlier and 

subsequent actions involve the same parties or their privies, the matters of dispute could or 

should have been resolved in the earlier adjudication, and the earlier controversy was decided on 

its merits.” Wayne Co, 233 Mich App at 277. Res judicata thus bars claims predicated on 

disputes that were, or could have been, decided in earlier litigation.

The related doctrine of collateral estoppel “bars relitigation of an issue in a new action 

arising between the same parties or their privies when the earlier proceeding resulted in a valid 

final judgment and the issue in question was actually and necessarily determined in that prior 

proceeding.” Leahy v Orion Twp, 269 Mich App 527, 530; 711 NW2d 438 (2006), citing 1 

Restatement Judgments, 2d, § 27, p 250. In contrast to res judicata, “[c]ollateral estoppel 

conclusively bars only issues ‘actually litigated’ in the first action.” VanDeventer v Mich Nat’l 

Bank, 172 Mich App 456, 463; 432 NW2d 338 (1988).

In addressing whether preclusion doctrines prevented relitigation of the issues decided in 

the earlier Arnaout litigation, the trial court referred to the pertinent order in Arnaout as a “valid 

order” with “full force and effect,” which had not been subject to a motion for reconsideration or 

appeal. The court stated that “there is no basis for Progressive’s policy not to be in effect and the 

Court previously did articulate its position in the motions for summary disposition that were 

discussed in [the Arnaout litigation] and the Court would incorporate all of its arguments in that 

summary disposition as well.” The court further elaborated:

[T]he insured of Progressive, Mr. Barkley was involved in the prior action and 

there has to be—if the insured or their privies or anyone related to them, they are 

bound by the actions and the Court feels that initially, in the first instance, we 

shouldn’t be here because the Court had already made the ruling on these issues 

of summary disposition but the Court indicated, file the dec[laratory] action and 

we’d see it through. So, that being said, Progressive really does step in the shoes 

of Mr. Barkley, in terms of what had transpired, because Mr. Barkley was clearly 

the insured . . . of Progressive at the time of this incident. He had a valid policy. 

It was in full force and effect. . . . [A]s I indicated, . . . Progressive was the proper 

party to pay for the Arnaout claims in the earlier case and . . . this should not be 

imputed to Great Western [sic]. Additionally, . . . the relief requested by Great 

West, in this situation, was to be reimbursed for all costs associated with the 

litigation of this matter. . . .

* * *
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. . . [T]he Court notes that it had . . . time and time again, . . . attempted to 

get Progressive in this case, on numerous occasions, by numerous means, . . . and 

then the Court ultimately issued an order to get Progressive in . . . . [Progressive’s

counsel] did a yeoman’s job . . . in ultimately resolving this case, but the Court 

does order that the interest be paid on these claims, the total of $154,244.64, back 

to the date of this Court’s order when it had indicated that they were to pay . . . .

Although the court also engaged in considerable discussion whether Ronald was operating in the 

service of Express-1 when the collision with Arnaout took place, the court’s repeated and 

emphatic references to its decisions in Arnaout indicate that it was treating them as settled for 

present purposes. It appears that the court engaged in additional discussion of the pertinent 

issues only because counsel drew the court into reiterating its original reasoning. The court 

showed no inclination to reconsider its earlier rulings for either procedural or substantive

reasons.

We hold that collateral estoppel barred relitigation of the court’s determination in 

Arnaout that Express-1 was not responsible for Arnaout’s injuries,4 leaving Express-1’s 

insurer—Great West—with no client to indemnify. But we also hold that neither res judicata nor 

collateral estoppel preclude relitigation of the instant parties’ respective contractual obligations 

to provide a defense in that case.

As an initial matter, we note that the trial court’s complaints at having tried without 

success to bring Progressive into the earlier Arnaout litigation—and especially its having ordered 

Ronald to file a third-party complaint against Progressive in that case—failed to consider that 

Progressive was statutorily barred from becoming a party in Arnaout’s negligence action against 

Ronald and Express-1. See MCL 500.3030 (“In the original action brought by the injured 

person, . . . the insurer shall not be made or joined as a party defendant . . . .”). For that reason, 

the earlier Arnaout litigation was the proper vehicle for determining issues of negligence and 

damages, but the later declaratory action was the proper vehicle for determining the respective 

insurers’ obligations.

 4 Progressive argues that because Arnaout ended with a “consent judgment” resulting in the 

dismissal of Ronald, all earlier rulings in that case were rendered moot and ineffectual, and thus 

not part of a final judgment for purposes of preclusion doctrines. But the order dismissing 

Ronald only reflected the parties’ stipulation in that regard; it did not actually or impliedly 

address the determinations that Express-1 had no liability because Ronald was not acting in 

furtherance of Express-1’s business when the accident occurred, or that Progressive was 

contractually obligated to Ronald in the matter. Indeed, the court took pains to acknowledge on 

the record that its determination that Progressive was responsible for Ronald’s defense survived 

the settlement with Arnaout and stipulation to dismiss Ronald. For these reasons, we reject 

Progressive’s argument that those aspects of the Arnaout litigation became inoperative after 

Ronald was dismissed and the case was closed.
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Even so, there was substantial privity between the instant parties and their respective 

insureds in the underlying Arnaout litigation. “Privity between a party and a non-party requires 

both a substantial identity of interests and a working or functional relationship in which the 

interests of the non-party are presented and protected by the party in the litigation.” Phinisee v 

Rogers, 229 Mich App 547, 553-554; 582 NW2d 852 (1998) (quotation marks, citations, and 

ellipsis omitted). Substantial identity, and not necessarily perfect identity, of parties is sufficient. 

See Dearborn Hts Sch Dist No. 7 v Wayne Co MEA/NEA, 233 Mich App 120, 124, 126; 592 

NW2d 408 (1998). Both the identity of interests and a functional relationship between Great 

West and Express-1, as insurer and insured, in avoiding tort liability in the underlying Arnaout

litigation are obvious. Also apparent is the identity of interests between Progressive and Ronald 

in preferring that the latter not face sole responsibility for Arnaout’s injuries, an interest that 

Progressive could have better promoted had it more aggressively exercised its prerogative—if 

not duty—to undertake Ronald’s defense. We further note that Great West invoked collateral 

estoppel defensively, so the mutual privity requirement is somewhat relaxed. See Monat v State 

Farm Ins Co, 469 Mich 679, 680-681; 677 NW2d 843 (2004); Wilcox v Sealey, 132 Mich App 

38, 46; 346 NW2d 889 (1984). We therefore conclude that collateral estoppel barred relitigation 

of the trial court’s determination in Arnaout regarding the tort liability between Ronald and 

Express-1. In particular, collateral estoppel barred relitigation of the trial court’s ruling that 

Express-1 was not liable to Arnaout because Ronald was not driving his tractor in furtherance of 

Express-1’s business.5

Yet, especially in light of MCL 500.3030’s prohibition of the insurers’ direct 

participation in Arnaout’s negligence action against Ronald and Express-1, the question of the 

insurers’ respective contractual obligations in the matter was not properly litigated or decided in 

Arnaout, so the trial court’s determination that Progressive alone was responsible for the costs of 

defending the two defendants was not a matter necessarily decided in that case for purposes of 

collateral estoppel. In other words, the court was attending to the issues properly before it in 

deciding the extent of the Arnaout defendants’ obligations to Arnaout—including its 

determination that Express-1 had none—but to the extent that the court was drawn into and 

endeavored to determine questions of insurer liability, it was acting beyond the scope of the 

controversy before it. And as pointed out by Progressive, there was no privity between 

Progressive and Ronald in Arnaout regarding Progressive’s contractual duty to provide coverage 

for Ronald; indeed, with Express-1—and therefore Great West—no longer involved in the 

litigation, Progressive’s and Ronald’s respective interests regarding Progressive’s contractual 

duties were decidedly adverse. And no other party participating in the bulk of Arnaout was in 

privity with Progressive; no party in that case had an incentive to contest a finding that 

Progressive was responsible for coverage. For these reasons, neither res judicata nor collateral 

 5 Progressive contends that its constitutional due process rights are violated if it is bound by an 

order from a case that it was not a party to. See US Const, Am XIV, § 1; Const 1963, art 1, § 17. 

But because Progressive’s insured and privy, Ronald, was a party, there is no dispute that 

Progressive had notice of the proceedings in Arnaout. And because Progressive refused to 

exercise its prerogative to provide Ronald’s defense in Arnaout until the two months before the 

latter’s dismissal by stipulation, Progressive’s argument is unpersuasive.
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estoppel precluded Progressive from challenging the trial court’s determination in Arnaout that 

Progressive, and only Progressive, was contractually obligated to defend Ronald in that 

litigation.6

B. CONTRACTUAL COVERAGE

In light of Progressive’s settlement with Arnaout on Ronald’s behalf, neither Ronald’s 

negligence in causing the collision with Arnaout nor the extent of Arnaout’s resulting injuries

remains at issue. And because we have concluded that collateral estoppel prevents the parties 

from relitigating Express-1’s liability, we reiterate that Great West is left with no party to 

indemnify. Yet still at issue are the parties’ respective obligations to cover the costs of 

defending the underlying Arnaout litigation.

This Court reviews de novo issues of contract interpretation. Sands Appliance Servs, Inc 

v Wilson, 463 Mich 231, 238; 615 NW2d 241 (2000). The primary goal in contract 

interpretation is to ascertain and effectuate the intent of the parties. Old Kent Bank v Sobczak, 

243 Mich App 57, 63; 620 NW2d 663 (2000). To determine the parties’ intent, this Court reads

the contract as a whole and attempts to apply its plain language. Id. Where the contractual 

language is not ambiguous, its construction is a question of law for the court. Id. at 63-64.

The contract between Barkley Trucking and Express-1 specifies that Express-1 is 

arranging for the services of “an independent contractor,” and that “neither Subcontractor nor its 

 6 Great West characterizes Progressive’s attempts to avoid preclusion doctrines as improper 

collateral attacks on earlier judicial determinations. But preclusion doctrines reflect the “general 

rule . . . that the proceedings of a court can be attacked collaterally [only] if the court never 

acquired jurisdiction of the subject matter or the persons involved.” Life Ins Co of Detroit v 

Burton, 306 Mich 81, 85; 10 NW2d 315 (1943) (quotation marks and citation omitted). A 

component of both subject-matter and personal jurisdiction is operational or procedural

jurisdiction, for which the inquiry is whether the pertinent procedural law authorizes the court to 

exercise its jurisdiction under the circumstances. See Stephens, Florida’s Third Species of 

Jurisdiction, 82 Fla B J 10, 22 (March 2008) (noting that inquiry into a court’s subject-matter 

and personal jurisdiction in a particular case includes inquiry into “whether the applicable 

procedural law affords the court a green light to proceed under the circumstances,” and 

advocating recognition of “procedural jurisdiction as a distinct species”). That claim preclusion 

by operation of res judicata, or issue preclusion by operation of collateral estoppel, may be 

invoked against only parties or their privies in the earlier adjudication necessarily means that a 

party is free to collaterally attack judicial determinations of that party’s rights or responsibilities 

from an earlier case in which the court failed to exercise proper jurisdiction over that party. See 

also Workers’ Compensation Agency Dir v MacDonald’s Indus Prod, Inc (On Reconsideration), 

305 Mich App 460, 476; 853 NW2d 467 (2014) (“only void decisions are subject to collateral 

attack”); State Treasurer v Eaton, 92 Mich App 327, 331; 284 NW2d 801 (1979) (“A taxpayer’s 

failure to contest a property tax assessment by direct appeal precludes collateral attack on the 

amount of the assessment, but does not necessarily preclude collateral attack on the validity of 

the assessment.”).
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employees or personnel are employees of Express-1.” It further specifies that “the leased 

equipment is ‘engaged in providing transportation services [on] behalf of Express-1’ only upon 

completion of loading, and thereafter proceeding under actual load while carrying cargo to 

completion of delivery.” The agreement obligates the subcontractor to obtain liability insurance 

for “all use of the subcontracted Equipment when not engaged in providing transportation 

services to Express-1.”

To satisfy this obligation, the Barkleys obtained insurance from Progressive.

7

 The 

policy’s renewal declarations page describes a “Non-Trucking Liability to Others.” 

Progressive’s argument that it was not responsible for defending in Arnaout relies on an 

endorsement in the renewal declarations setting forth the following exclusion:

Coverage . . . , including our duty to defend, does not apply to an Insured 

auto or any attached trailer while operated, maintained, or used:

a. To carry property or while such property is being loaded or unloaded 

from the insured auto or an attached trailer; or

b. In any business or for any business purpose.

There is no dispute that when the subject accident took place, Ronald was not using the vehicle 

to carry, load, or unload property; at issue is whether Barkley was nonetheless operating or using 

the vehicle “[i]n any business or for any business purpose” relating to Express-1.8

Progressive acknowledges that the Barkleys obtained the subject policy “in an attempt to 

satisfy a contractual obligation to Express-1,” but asserts that “the coverage afforded under the 

policy does not mirror the terms of said contractual obligation.” Progressive suggests that actual 

coverage under the policy was limited to such situation as “if the Barkleys were bobtailing to 

work before a tour of duty, or bobtailing home from the terminal after one,” or if “Ronald 

Barkley drove the tractor from his house to the store and back.” We do not join Progressive in 

interpreting the coverage obligation so narrowly.

“Where the language of a contract is clear and unambiguous, the intent of the parties will 

be ascertained according to its plain sense and meaning.” Haywood v Fowler, 190 Mich App 

253, 258; 475 NW2d 458 (1991). While the various parts of a contract should be read together,

see, e.g., JAM Corp v AARO Disposal, Inc, 461 Mich 161, 170; 600 NW2d 617 (1999), 

 7 We are mindful that Progressive’s obligations under its policy with Barkley Trucking are 

purely a function of the contract between Progressive and Barkley Trucking, regardless of the 

particulars of Barkley Trucking’s agreement with Express-1, or the terms of the policy between 

Express-1 and Great West.

8 The trial court’s earlier and binding determination that Ronald was not operating in furtherance 

of Express-1’s business for purposes of deciding the latter’s vicarious tort liability to Arnaout is 

not necessarily dispositive of whether Ronald was operating in or for any business for purposes 

of bringing this contractual exclusion to bear.
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exclusions limiting insurance coverage should be read independently, Hawkeye-Security Ins Co v 

Vector Constr Co, 185 Mich App 369, 385; 460 NW2d 329 (1990). “[C]overage under a policy 

is lost if any exclusion within the policy applies to an insured’s particular claims.” Auto-Owners 

Ins Co v Churchman, 440 Mich 560, 567; 489 NW2d 431 (1992).

Again, because the issue of tort liability was settled in the earlier litigation, what 

remained at issue was the parties’ contractual duty to defend. “[T]he duty to defend is broader 

than the duty to indemnify.” American Bumper & Mfg Co v Hartford Fire Ins Co, 452 Mich 

440, 450; 550 NW2d 475 (1996). Thus, “[i]f the allegations of a third party against the 

policyholder even arguably come within the policy coverage, the insurer must provide a defense. 

This is true even where the claim may be groundless or frivolous.” Id. at 450-451 (citations 

omitted).

The parties do not disagree over the pertinent facts or the interpretation of the 

exclusionary language at issue. Instead, they disagree whether the facts bring that exclusion to 

bear.

To support its argument that Ronald was operating in the service of Express-1 while 

bobtailing to a laundry facility to pick up his wife, Progressive relies on Freed v Travelers, 300 

F2d 395 (CA 7, 1962). In that case, a truck tractor was deemed to be operating in furtherance of 

the carrier’s business when its driver got into an accident while bobtailing en route to having the 

tractor repaired after completing a delivery. Id. at 397-398. Progressive similarly relies on 

Hartford Ins Co v Occidental Fire & Cas Co, 908 F2d 235 (CA 7, 1990), in which a tractor was 

deemed operating in furtherance of the carrier’s business when its driver got into an accident 

while bobtailing on personal business while awaiting repairs on the trailer, the need for which 

had interrupted a delivery. Id. at 236-237. Both of these federal cases9 are distinguishable from 

the instant case; they involved a driver who was bobtailing while their respective equipment was 

being repaired in furtherance of the respective carriers’ business. In contrast, Ronald had 

completed a job for Express-1 when he elected to disconnect the trailer for reasons wholly 

unrelated to Express-1’s business, and then was bobtailing on purely personal business.

Progressive also cites Bush v Parmenter, Forsythe, Rude & Dethmers, 413 Mich 444; 320 

NW2d 858 (1982), for the proposition that personal activity otherwise unrelated to one’s work 

may be deemed part of the job when taking place as part of a “special mission” to operate at a 

location of significant physical distance from one’s home or normal workplace. In Bush, the 

Court observed:

“When an employee, having identifiable time and space limits on his 

employment, makes an off-premises journey which would normally not be 

covered under the usual going and coming rule, the journey may be brought 

within the course of employment by the fact that the trouble and time of making 

the journey, or the special inconvenience, hazard, or urgency of making it in the 

 9 “Although lower federal court decisions may be persuasive, they are not binding on state 

courts.” Abela v Gen Motors Corp, 469 Mich 603, 607; 677 NW2d 325 (2004).
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particular circumstances, is itself sufficiently substantial to be viewed as an 

integral part of the service itself.” [Id. at 452, quoting 1 Larson, Workmen’s 

Compensation Law, § 16.10, p 4-123 (footnotes omitted).]

But Bush offers little instruction for how this case should be resolved. Not only is it a workers’ 

compensation case involving an employer-employee relationship—rather than the leasing or 

subcontracting agreement at issue here—but it also involved an employer sending an employee, 

exceptionally, away from the normal workplace on a “special mission.” Bush, 413 Mich at 451. 

Here, the relationship between the parties’ respective insureds envisioned interstate trucking 

from the start. There was nothing “special” about the Barkleys using their tractor for personal 

errands unrelated to Express-1’s business while they were on the road.

In contrast to the cases cited by Progressive, we find instructive Engle v Zurich-American

Ins Group, 216 Mich App 482; 549 NW2d 589 (1996). That case concerned an accident that 

took place while a truck driver was bobtailing en route to the carrier’s location, after having left a 

trailer with the carrier’s customer and thinking his day’s work was over, and then taking a dinner 

break. Id. at 484. The bobtail insurance policy in that case “excluded coverage ‘[w]hile the 

automobile is being used in the business of any person or organization to whom the automobile 

is rented.’ ” Id. at 485. This Court noted that various jurisdictions have differed over whether 

exclusions of that sort applied when a truck is being used after the driver has completed their 

assigned deliveries. Id. at 486. This Court concluded that the exclusion was susceptible to 

“more than one reasonable interpretation,” and so construed it against the insurer and in favor of 

coverage. Id. at 487.

The exclusion at issue here—barring coverage for a vehicle “operated . . . or used . . . [i]n 

any business or for any business purpose”—might be considered similarly ambiguous with 

respect to a trucker’s bobtailing back to the carrier between jobs, but no such ambiguity is 

apparent in connection with Ronald’s leaving Express-1’s empty trailer at a location unrelated to 

Express-1’s business and then bobtailing on clearly personal errands. In Engle, the driver’s 

“parking his truck at the yard was coincidentally a matter of convenience” for the driver, but 

“also benefited” the carrier “because it permitted the truck to be ready for use at any time.” Id. at 

485. And that the driver “stopped at the yard every night . . . allowed for the two way exchange 

of information between trucker and carrier, a fact which also indicates a business purpose.” Id. 

If that amount of business purpose still called for resolving against the insurer an ambiguous 

exclusion for a use “in the business of any person or organization to whom the automobile is 

rented,” the plainly lesser business purpose attendant to Ronald’s picking up his wife from the 

laundry facility militates all the more against application of the exclusion for a vehicle used “[i]n 

any business or for any business purpose.”

For these reasons, Progressive has failed to show that the trial court erred in holding that 

the exclusion on which Progressive relied did not apply, and so Progressive was obligated to 

provide Ronald a defense throughout the underlying Arnaout litigation.

C. GREAT WEST’S OBLIGATION TO DEFEND

The conclusion that Progressive had an obligation to defend Ronald does not determine 

whether Progressive had a like obligation to Express-1. And even if Progressive did have a duty 
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to defend Express-1, that does not necessarily relieve Great West of any duties it may have had

under its contract with Express-1.

As noted, Great West may invoke defensive collateral estoppel to preclude relitigation of 

the trial court’s determination in the Arnaout litigation that Great West’s insured, Express-1, had 

no liability to Arnaout. And because any duty Great West might have had to Ronald was 

derivative of its duties to Express-1, the determination in Arnaout that Express-1 had no liability 

to Arnaout relieved Great West of any duty to indemnify. But this is not determinative of Great 

West’s duty to defend because the duty to defend is broader than the duty to indemnify. See 

American Bumper, 452 Mich at 450.

Great West invested in defending Express-1, as well as Ronald as Express-1’s agent, and 

the trial court apparently ruled that Progressive was responsible for the entire cost of this 

defense. Progressive’s position is that “while the lease was in effect and the [tractor] was being 

used for a business purpose, only Great West had coverage,” but “while the lease was in effect 

and the [tractor] was not being used for a business purpose, both Great West and Progressive had 

coverage.” This position has merit.

Express-1, as an interstate carrier contracting with Barkley Trucking for transportation 

services, came under substantial federal regulation. As stated earlier, 49 CFR 376.12(c)(1)

requires a carrier to contract for “exclusive possession, control, and use of the equipment for the 

duration of the lease,” and also to “assume complete responsibility for the operation of the 

equipment for the duration of the lease.” And Express-1’s policy with Great West guaranteed 

commensurate coverage. But 49 CFR 376.12(j) does permit parties to agree to apportion liability 

between themselves by means of additional insurance, and it expressly mentions “bobtail 

insurance.” If such arrangements are made, they are “supplemental to the lessee’s obligation to 

provide coverage at all times the lease is in effect,” and “[t]he existence of additional insurance 

funds affects only the ultimate distribution of liability, a subject on which the regulations are 

indifferent.” Hartford Ins Co, 908 F2d at 238.

In Engle, after interpreting the insurance contract against the bobtail insurer in favor of 

coverage, this Court’s majority was satisfied for procedural reasons not to concern itself with the 

possibility that the carrier’s insurer also had obligations in the matter. Engle, 216 Mich App at 

488. The partial dissent opined that the panel should have determined whether coverage existed 

under both policies. Id. at 489 (O’CONNELL, J., concurring in part and dissenting in part). Our 

Supreme Court ultimately agreed with the partial dissent and remanded the case to this Court 

with instructions to determine whether there was coverage under the policy issued by the 

carrier’s insurer. Engle v Zurich Ins Group, 455 Mich 866 (1997). On remand, this Court 

answered that question in the affirmative and remanded the case to the trial court for further 

proceedings. Engle v Zurich Ins Group (On Remand), 230 Mich App 105, 107, 110-111; 583 

NW2d 484 (1998).

For these reasons, we reverse in part and remand this case to the trial court with 

instructions to apportion responsibility for Ronald’s and Express-1’s defense in the underlying 

Arnaout case in light of the instant parties’ respective and possibly overlapping contractual 

obligations. Engle, 455 Mich at 866; Hartford Ins Co, 908 F2d at 238. See also ZurichAmerican Ins Co v Amerisure Ins Co, 215 Mich App 526, 531; 547 NW2d 52 (1996) (“We 
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disagree with the parties’ suggestion that a finding of coverage under one policy necessarily 

implies a lack of coverage under the other policy. Rather, the extent of Zurich’s and Amerisure’s 

insurance obligations is governed by the terms of each of their individual policies.”).

III. ATTORNEY FEES AND COSTS

Our decision to reverse in part and remand for the reasons discussed in Part II requires

that we also vacate the trial court’s award of attorney fees and costs pursuant to MCR 2.405, and 

obviates our need to address Progressive’s procedural objections to that award.

Affirmed in part, reversed in part, vacated in part, and remanded for further proceedings

consistent with this opinion. No taxable costs, neither party having prevailed in full. We do not 

retain jurisdiction.

/s/ Michael J. Kelly 

/s/ Patrick M. Meter 

/s/ Colleen A. O’Brien