PIP in the balance: Must insurer pay?
Victor Caballero was involved in an accident while driving a vehicle that was insured under a personal auto policy issued by State Auto Property and Casualty Insurance Company to Maria Caballero, Victor’s wife. Victor sustained injuries and was treated by Bronson Health Care Group, Inc. He assigned to Bronson his right to seek payment of personal protection insurance (PIP) benefits under the Michigan no-fault insurance act, and Bronson in turn sought to recover the benefits from State Auto.
State Auto denied coverage on the grounds that Victor was an excluded operator under the policy. Bronson brought suit, asserting that Victor had a statutory right to receive PIP benefits and that Bronson, by assignment, had a right to recover those benefits for the services it provided to Victor.
State Auto moved for summary disposition under a relevant state rule, contending that, as an excluded operator, Victor (and therefore Bronson by assignment) was not entitled to recover PIP benefits from State Auto.
Bronson argued that it was entitled to recover PIP benefits from State Auto because the policy’s named driver exclusion endorsement did not specify that PIP benefits would not apply if Victor operated a covered motor vehicle; instead, it only stated that certain other kinds of benefits would not apply. The court concluded that the language of the policy as a whole reflected an intent to exclude PIP benefits when Victor, an excluded driver, was driving a covered vehicle. It therefore granted State Auto’s motion. Bronson appealed.
On appeal, Bronson argued that the trial court erred by granting summary judgment in favor of State Auto because, based on the plain and unambiguous language of the endorsement, it did not apply to PIP benefits. The court, however, disagreed with Bronson’s framing of the issue. The court concluded, after appropriately framing the issue that the trial court properly granted summary disposition in favor of State Auto, although the appellate court’s reasoning differed somewhat from that of the trial court.
Although Bronson argued that the issue was purely one of contractual interpretation, the court concluded that when, as in this case, the benefits are mandated by statute, the issue is actually one of statutory interpretation.
The court said that because of the statutorily mandated nature of PIP benefits, the no-fault act requires that, in order to issue a policy consistent with the act, the insurer must provide PIP benefits to a “named insured” and to his or her spouse and household relatives. The statute provides, however, that a person is not entitled to PIP benefits for accidental bodily injury if at the time of the accident “the person was operating a motor vehicle or motorcycle as to which he or she was named as an excluded operator” as allowed under a section of the statute.
The court concluded that Victor was appropriately named as an excluded operator and that he therefore was statutorily barred from receiving PIP benefits. Accordingly, the trial court properly granted State Auto’s motion for summary disposition because no genuine issue of material fact existed regarding Victor’s entitlement to PIP benefits.
Bronson Health Care Group, Inc. v. State Auto Property and Casualty Insurance Company—Court of Appeals of Michigan—November 7, 2019—No. 345332.
