Employer-Employee Relationship & Multiple Carriers Addressed in PIP Truck Accident Appeal
The payment of personal protection insurance (PIP) benefits is addressed in this case originating from a 2016 trucking accident. The injured driver was an independent contractor, yet the appellate court found the existence of an employer-employee relationship by applying the economic-reality test to evaluate four specific employment factors. According to MCL 500.3114(1), a person claiming PIP benefits “is to obtain them from his or her own insurer.” An exception is found in MCL 500.3114(3), which states that an employee who is injured while an occupant of an employer-owned vehicle shall receive benefits from the insurer of the vehicle.
The truck involved in the accident was owned by a transport company, which leased it to a cartage company. The truck driver’s job was to drive his personal vehicle to the truck, drive the truck to a Michigan location to pick up a load of auto parts, deliver the full load to a Missouri location, then drive the empty truck back to Michigan. The plaintiff driver made this circuit twice a week and was paid $550 for each trip.
Multiple insurance companies were involved in the case and this resulted in a priority dispute over the obligation to pay PIP benefits. The transport company had two insurance policies on the truck that were in effect. Great American Insurance provided “bobtail coverage,” Hudson Insurance provided commercial auto liability coverage, and the third insurance company, defendant Farm Bureau Mutual Insurance, insured plaintiff’s personal vehicles. The Michigan Automobile Insurance Placement Facility (MAIPF) was named as a defendant, and the Michigan Assigned Claims Plan (MACP) denied PIP benefits twice, stating that there was higher identifiable coverage available at the time of the accident. The Great American policy had exclusions for bodily injury arising out of any accident occurring while the vehicle was being used in the business of any lessee or while being used to transport cargo. In this case, both instances applied. The same policy also had an endorsement that listed 15 new situations in which PIP benefits would not be covered.
The appellate court agreed with the trial court’s decision to grant summary disposition for Great American, thus affirming Great American’s exclusions for claims occurring while the truck was being used for business (i.e., under dispatch). The appellate court also affirmed the lower court’s grant of summary disposition in favor of Farm Bureau, the cartage company, and MAIPF. The appellate court held that Hudson Insurance, the commercial auto insurer, was in the highest order of priority.
The case is Lekli v Farm Bureau Mutual Insurance Company of Michigan et al, No. 350942, Macomb County Circuit Court, LC No. 2017-004762-NF, May 20, 2021.
Click on the link to read the full appellate court opinion.
ABOUT ALEXANDER & ANGELAS, P.C.
Alexander & Angelas, P.C. represents defendants in civil liability litigation across Michigan and Northern Ohio. The firm’s practice areas include insurance defense litigation, premises liability, motor carrier (trucking) defense, corporate and commercial litigation, construction defect litigation, auto negligence, insurance coverage disputes, emergency casualty response services, alternative dispute resolution, subrogation claims, workers’ compensation, employment law, and liquor liability.
Attorneys practice in all state and federal courts in Michigan, including Wayne County (Detroit), Macomb County (Mount Clemens), Oakland County (Pontiac), Washtenaw County (Ann Arbor), and Genesee County (Flint). Legal services are also provided in Northern Ohio. Since its founding in 1992, the firm has litigated over 4,000 civil cases.
A 24/7 Emergency Hotline is available (800-219-0007) for trucking and insurance company clients. When an accident requires an immediate response to protect evidence, members of the firm quickly launch an investigation with the assistance of well-qualified accident investigators, crash re-constructionists, mechanical engineers, civil evidence photographers, and independent adjusters positioned throughout Michigan and Northern Ohio.
Alexander & Angelas, P.C. measures its performance based upon three key metrics: aging of claims, indemnity expense, and legal defense costs. The firm refuses to over-litigate cases merely to increase legal fees, and strives to resolve matters within one year from initial case assignment.
Visit Alexander & Angelas online at www.alexanderandangelas.com for more information. Partner Peter A. Angelas is available to discuss a confidential matter.
