Court Opinion

ID: 4098772
Source: CourtListenerOpinion
Date Created: 2016-11-16 17:08:18.664415+00
Date Added: 2024-06-11T07:45:37.641061
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

LAURA MONACO, Personal Representative of                           FOR PUBLICATION
the ESTATE OF ALISON MONACO,                                       November 15, 2016
                                                                   9:10 a.m.
               Plaintiff-Appellee,
and

COVENANT MEDICAL CENTER, INC., and
MARY FREE BED REHABILITATION
HOSPITAL,

               Intervenors-Plaintiffs/Appellees,

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

               Defendant-Appellant.

Before: JANSEN, P.J., and MURPHY and RIORDAN, JJ.

MURPHY, J.

        In this dispute concerning the recovery of personal protection insurance benefits,
commonly referred to as PIP benefits, under the no-fault act, MCL 500.3101 et seq., defendant
Home-Owners Insurance Company (HOIC) appeals as of right the judgment entered in favor of
plaintiff Laura Monaco (hereafter “plaintiff” in the singular) and intervening plaintiffs Covenant
Medical Center, Inc., and Mary Free Bed Rehabilitation Hospital (jointly referred to as “the
medical providers”).1 The judgment reflected the verdict rendered by a jury following trial and
certain stipulations between HOIC and the medical providers regarding the amount of damages.
HOIC challenges the pretrial denial of its motion for summary disposition and the denial of its
motion for a directed verdict. There 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 that he or she had “taken unlawfully,” where the owner of the vehicle

1
 Any reference in this opinion to “plaintiffs” in the plural shall pertain to plaintiff and the
medical providers.

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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 violation of the law with the owner’s
knowledge. We hold that PIP benefits are available in such circumstances, given that the phrase
“taken unlawfully,” as employed in MCL 500.3113(a), does not encompass 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 daughter Alison, then 15 years old, sustained severe injuries
when she lost control of a vehicle that she was driving and crashed into a roadside ditch. At the
time, Alison had completed and passed a driver’s training course and obtained a permit to drive,
but only if accompanied by a licensed parent, guardian, or 21-year-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 and assisted in her rehabilitation.

        Plaintiff filed a claim with HOIC for PIP benefits. In a recorded statement, plaintiff told
HOIC’s insurance adjustor that Alison did not have permission to drive the vehicle when the
accident took place. HOIC thus denied coverage under MCL 500.3113(a) and language in the
insurance policy that tracked the statutory provision. Plaintiff then telephoned the adjustor
inquiring if there would be coverage if her partner had permitted Alison to use the vehicle.
According to HOIC’s adjustor, she informed plaintiff that HOIC would “reevaluate” the question
of coverage in that event, but the adjuster never heard back from plaintiff in the matter.

        Plaintiff, then acting as Alison’s next friend, filed suit challenging HOIC’s denial of PIP
benefits. The medical providers, aligning themselves with plaintiff, intervened in the action,
seeking reimbursement for costs associated with providing medical care to Alison. HOIC filed a
motion for summary disposition under MCR 2.116(C)(10), asserting that plaintiff had admitted
during her deposition that she had previously lied to HOIC’s adjuster when she stated that Alison
lacked permission to drive the vehicle. HOIC argued that MCL 500.3113(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 contradicted plaintiff’s earlier
recorded statement, was inadequate to establish a genuine issue of material fact for trial. HOIC
additionally contended that Alison had taken the vehicle unlawfully 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] person issued a level 1 graduated
licensing status may operate a motor vehicle only when accompanied either by a licensed parent
or legal guardian or, with the permission of the parent or legal guardian, a licensed driver 21
years of age or older.”

                                                -2-
        Plaintiffs responded that Alison had taken the vehicle lawfully, citing the deposition
testimony of plaintiff, her partner, and Alison, which indicated 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, as HOIC was conflating unlawful
taking with unlawful use. The trial court denied HOIC’s motion for summary disposition,
concluding that there was a factual issue regarding whether Alison had permission to take the
vehicle and that the law supported plaintiffs’ proffered distinction between “taking” and “using”
a vehicle for purposes of MCL 500.3113(a).

        At trial, plaintiff testified that her initial statement to the insurance adjustor was not
truthful and that Alison actually had permission to take and use the vehicle on the day of the
crash. Plaintiff admitted that she feared criminal liability for allowing her daughter to drive
when she gave the statement to HOIC’s adjustor. Plaintiff’s partner testified that Alison had
permission to take and use the vehicle on the day of the accident, and Alison indicated that she
frequently drove the vehicle with plaintiff’s knowledge and consent.3 Plaintiffs additionally
produced witnesses who testified that they saw Alison driving the 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 who questioned the credibility of
plaintiffs’ witnesses, and one of HOIC’s witnesses testified that the partner had stated that he
told Alison not to take the vehicle.

        At trial, HOIC renewed its summary disposition arguments in moving for a directed
verdict at the close of proofs, and the court again rejected them. 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, leaving for the jury to resolve the issue
of liability. And the jury concluded that HOIC had failed to meet its burden of showing that
Alison took the car without permission, effectively rendering HOIC liable for the stipulated
sums. The jury, of course, reached the same conclusion on liability relative to plaintiff, and the
jurors made additional findings in regard to the nature and amount of allowable expenses and
interest to which plaintiff was entitled. A judgment consistent with the jury’s verdict and the
stipulation was entered, and this appeal followed.

                                          II. ANALYSIS

    A. STANDARD OF REVIEW AND GOVERNING TEST FOR SUMMARY DISPOSITION
                      AND DIRECTED VERDICT MOTIONS

        “A trial court’s decision regarding a motion for summary disposition 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 trial; therefore, the trial court allowed
her deposition testimony to be read into the trial record.

                                                 -3-
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 same in regard to a motion for a
directed verdict, “namely, whether reasonable minds, taking the evidence in a light most
favorable to the nonmovant, could reach different conclusions regarding a material fact.”
Skinner v Square D Co, 445 Mich. 153, 165 n 9; 516 NW2d 475 (1994).

                   B. PRINCIPLES OF STATUTORY CONSTRUCTION

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

               When interpreting a statute, we follow the established rules of
       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 given 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 exists in the
       language of the statute is it proper for a court to go beyond the statutory text to
       ascertain legislative intent. [Citations omitted.]

                                       C. DISCUSSION

        HOIC contends on appeal that Alison necessarily took the vehicle unlawfully given her
age and restricted license, precluding entitlement to PIP benefits pursuant to MCL 500.3113(a).
We note that HOIC does not challenge the jury’s factual determination 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 construction. There is no genuine issue of
material fact that Alison was only 15 years old when the accident took place and that in light of
the limited nature of her license or permit, it was unlawful for her to drive the car
unaccompanied by a licensed adult identified in MCL 257.310e(4). Thus, we must entertain the
question whether those undisputed facts bar the recovery of PIP benefits under MCL 500.3113(a)
as a matter of law, such that an order granting summary disposition or a directed verdict should
have entered in favor of HOIC.

       “The Michigan no-fault act requires that owners and registrants of automobiles carry
personal protection insurance to cover an insured’s medical care 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 insurance benefits
       for accidental bodily injury if at the time of the accident any of the following
       circumstances existed:

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              (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 entitled to
       take and use the vehicle. [Emphasis added.]

        This provision was subsequently amended pursuant to 2014 PA 489, but it still generally
bars the recovery of PIP benefits by a person who operated a vehicle that he or she had “taken
unlawfully[.]” The first level of inquiry when applying MCL 500.3113(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 Court 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 phrase “taken
       unlawfully,” we must accord the phrase its plain and ordinary meaning, and we
       may consult dictionary definitions because the no-fault act does not define the
       phrase. The word “unlawful” commonly means “not lawful; contrary 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 considered together, the
       plain meaning of the phrase “taken unlawfully” readily embraces a situation in
       which an individual gains possession of a vehicle contrary to Michigan law.
       [Citations omitted.]

        The Spectrum Health Court further held that “any person who takes a vehicle contrary to
a provision of the Michigan Penal Code—including MCL 750.413 and MCL 750.414, informally
known as the ‘joyriding’ statutes—has taken the vehicle unlawfully for purposes of MCL
500.3113(a).” Id. at 509. After analyzing the language of the two joyriding statutes, the Court
concluded that both “make it unlawful to take any motor vehicle without authority, effectively
defining an unlawful taking of a vehicle as that which is unauthorized.” Id. at 517-518. A taking
does not have to be larcenous to qualify as unlawful, and MCL 500.3113(a) applies to any person
who takes a vehicle without the owner’s authority, regardless of 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 obviously the
       authority of the owner of the vehicle. Accordingly, for purposes of MCL
       500.3113(a), a vehicle is “unlawfully taken” if it is taken without the authority of
       its owner. . . . Therefore, MCL 500.3113(a) does not apply to the lawful owner of
       a vehicle, even if that person drives it under a circumstance that 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 reasonably believe that
       he or she is entitled to use a vehicle when the person knows that he or she is

                                               -5-
       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 never 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 her legally unable to operate a
vehicle.” Id. This statement effectively signifies, in direct contradiction of 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 Supreme Court’s example
concerning an owner would not hold water. Our view is buttressed 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) allowing 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, the unlawful operation or use of
a motor vehicle is simply not a concern in the context of analyzing 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 “the unlawful use of a vehicle . . . is not relevant under the
unlawful taking language in MCL 500.3113[.]” And this Court has observed that, with respect to
the language in MCL 500.3113(a), “[c]learly, the terms ‘take’ and ‘use’ are not interchangeable
or even synonymous; obtaining possession of an object is very different 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 part 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 Vehicle Code (MVC), MCL 257.1 et seq.; therefore, there effectively was no
recognizable authorization to operate the vehicle, resulting in the unlawful taking of the vehicle
by Alison. MCL 257.326 provides that “[n]o person shall knowingly 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].” (Emphasis added.) As noted earlier in this opinion, Alison was
driving the car in violation of the MVC, particularly MCL 257.310e(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 negate, 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 Michigan law, Plumb, 282 Mich. App. at
428. Plaintiff was not in violation of MCL 257.326 by merely allowing Alison to take
possession and control of the car; it was the permission allowing Alison to drive the car that
implicated MCL 257.326. While plaintiff’s actions might have subjected her to prosecution
under MCL 257.326, they did not turn an authorized or permitted taking into an unlawful taking.

                                                -6-
                                      III. CONCLUSION

        Here, all of HOIC’s arguments are unavailing as they ultimately conflate the unlawful use
or operation of a motor vehicle with the unlawful taking of a vehicle. Despite HOIC’s
protestation to the contrary and our appreciation that a very fine line exists, “taking” and “use”
are simply not synonymous or interchangeable for purposes of MCL 500.3113(a), as reflected in
the statute’s plain and unambiguous language and the caselaw interpreting the statute. The trial
court did not err in denying HOIC’s motions for summary disposition and a directed verdict.

     Affirmed. Having fully prevailed on appeal, plaintiffs are awarded taxable costs under
MCR 7.219.

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

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