INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Making “unlawful” distinctions about PIP benefits
Carlonda Naishe Swoope’s (Swoope) injury in a car accident initiated an important debate over wording distinctions. The stakes were high as the answer would affect the ability of others to secure state Personal Injury Protection (PIP) benefits.
The day after Swoope had been injured, her friend, Kandice Valentine, drove to Swoope’s house to bring her back to her house to spend the night. Swoope’s mother and other members of her family remained at the Swoope residence.
The next morning Swoope received a call from her mother. Her mom shared that she was awaiting an ambulance for a medical emergency, but she feared the emergency vehicle would arrive too late. Swoope rushed over to pick up her mother, but she was injured in another accident. As it happened, the accident occurred while Swoope was using Valetine’s car without asking permission. The matter became more complicated. Swoope was involved in the accident without a driver’s license and she was uninsured.
Swoope sought benefits under her state’s PIP plan. The state responded by assigning Citizens Insurance Company of the Midwest (Citizens) to handle her claim. However, Citizens denied her request for coverage for the personal injuries that she incurred. Swoope sued after her claim was turned down.
Citizens took its own legal action. It filed for summary judgment, arguing that Swoope’s taking a vehicle without permission disqualified her from receiving benefits. The insurer appealed after the trial court ruled in favor of Swoope. The appellate court reversed, ruling in favor of Citizens. Swoope appealed.
The high court spent its time focusing on how to interpret a particular portion of the state’s law concerning the eligibility of receiving PIP benefits. The relevant statute advised that a party could not receive PIP benefits available for accidental bodily injury if the person operated or used a vehicle/motorcycle with the knowledge that the vehicle/motorcycle was unlawfully taken.
Prior to rendering judgment, the court made note of two cases that featured the question of whether ineligibility to collect PIP benefits resulted from unlawfully taking a vehicle/motorcycle.
The first case was a consolidation of two situations. In one, the vehicle operator was told by the vehicle owner not to use the vehicle because the operator did not have a driver’s license. The operator used the car and crashed into a tree after becoming inebriated.
In the second instance, the vehicle operator was forbidden to use any vehicles and their owner also had the operator listed as an excluded driver on her insurance policies. Regardless, and also after becoming drunk, the operator took a set of keys to one of the cars and was injured in a single car accident. The court determined that the question of unlawful taking had to be considered from the point of view of the person who took possession of a vehicle. In both situations, the court’s interpretation was that any instance where the party was aware that they were using a vehicle without permission made them ineligible for PIP benefits.
In the second case, the person operating the vehicle when an accident occurred was loaned the vehicle. However, unknown to the operator, the vehicle lender was not the owner; rather, it was a person who had stolen the vehicle. The court ruled that, when an operator was not aware of an owner’s permission, an effort must be made to determine the mindset of the operator in order to determine whether benefits could be barred.
In the higher court’s opinion, the appellate court ruled in favor of Citizens based on a misreading of applicable law. Specifically, it ruled that Swoope was barred from receiving benefits due to unlawful operation of a vehicle (because she was not a licensed driver). That was in error as the law bars coverage only due to unlawful taking and the legality of vehicle operation was irrelevant. In light of its finding, the high court reversed the appellate ruling and remanded the matter for rehearing.
Carlonda Naishe Swoope v. Citizens Insurance Company of the Midwest—State of Michigan Supreme Court—No. 166790—March 10, 2026.
