This consolidated case involves a dispute between no-fault insurers
FACTS AND PROCEDURAL HISTORY
The facts of this case are not in dispute. A thief "hot-wired" Columbus Bone, Sr.'s, car as it was parked at a private residence. The next morning, while the thief was driving the stolen vehicle northbound on Woodward Avenue, a City of Ferndale police officer patrolling the area observed that the vehicle was running without keys in its ignition. Suspecting that the vehicle had been stolen, the officer activated his overhead lights and signaled the driver to pull over. The thief ignored this direction, and instead accelerated, continuing north on Woodward. The officer followed in quick pursuit.
The chase lasted for about half a mile, at which point the cars approached the intersection of Woodward and Nine Mile Road. The officer saw that the traffic signal for Woodward was red and slowed down, hoping to deter the stolen vehicle from disregarding the red light. The driver still
First, the vehicle crashed into a pickup truck driven by its owner, Clinton Durfee, on eastbound Nine Mile. Next, the vehicle collided with a truck driven by its owner, Randy Leroy Lemons, also on eastbound Nine Mile. The impact of this crash caused the truck to split in two. The rear portion of the truck smashed into a nearby building on the northeast corner of Woodward and Nine Mile. The truck's gas tank exploded, the building caught on fire, and both the building and its contents were destroyed. The police vehicle did not collide with any of the other vehicles, nor did it incur any damage.
The owners and insurers of the building sought no-fault property protection benefits from the insurers of the owners of the truck, the pickup truck, and the stolen vehicle. Auto Club Insurance Association (ACIA), the insurer of the owner of the truck, also filed a third-party complaint against the City of Ferndale, claiming that the allegedly self-insured Ferndale was liable for a share of the property protection benefits.
The insurers disagreed about their respective liabilities. League General Insurance Company, the insurer of the owner of the pickup truck, and ACIA conceded liability for a one-quarter pro-rata share of payable property protection benefits. Royal Insurance Company, the insurer of the owner of the stolen vehicle, denied liability, arguing that under § 3121(1) of the no-fault act, the damage could not be said to have arisen out of the ownership, operation, maintenance, or use of its insured's motor vehicle as a motor vehicle because a thief had been operating the vehicle when the accident occurred. Ferndale also denied liability,
The insurers filed cross-motions for summary disposition of the liability issue. The trial court granted ACIA's motion for summary disposition against Royal, ruling that Royal was liable for a share of property protection benefits. However, it denied ACIA's motion for summary disposition against Ferndale, ruling that Ferndale was not liable for a share of property protection benefits. The Court of Appeals
Royal and ACIA applied for leave to appeal in this Court. We granted both applications and consolidated the appeals.
Our basic task in this case is to interpret sections of the no-fault statute pertaining to property protection benefits. The rules governing interpretation of statutes are well established. The cardinal rule of statutory construction is to identify and to give effect to the intent of the Legislature. Mull v Equitable Life Assurance Society of the United States, 444 Mich. 508, 514, n 7; 510 N.W.2d 184 (1994); Coleman v Gurwin, 443 Mich. 59, 65; 503 N.W.2d 435 (1993). The first step in ascertaining such intent is to focus on the language in the statute itself. Thornton v Allstate Ins Co, 425 Mich. 643, 648; 391 N.W.2d 320 (1986). If the statutory language is certain and unambiguous, judicial construction is neither required nor permitted, and courts must apply the statute as written. Mull and Coleman, supra.
Where the meaning of statutory language is not clear, judicial construction becomes necessary. Courts are to accord statutory words their ordinary and generally accepted meaning. Id. Moreover,
The provisions of the no-fault act dealing with property protection benefits are §§ 3121-3127. Generally, a no-fault insurer will be liable to pay property protection benefits if the three following requirements are met:
When two or more insurers are liable for property protection benefits in the same order of priority, benefits are paid by insurers in a manner that
Property protection benefits are distinguishable from personal protection benefits (PIPS) because, among other things, property protection benefits provide third-party protection, whereas PIPS provide first-party protection. In other words, when a person's property has been damaged because of a motor vehicle, he does not look first to his own no-fault insurer for recovery, but, rather, to the "insurers of owners or registrants of vehicles involved in the accident...." Section 3125. In contrast, when a person suffers injuries because of a motor vehicle, he generally looks first to his own no-fault insurer for recovery. See §§ 3114(1) and 3115(1). A significant exception to the general liability scheme exists with regard to property protection benefits where the property that has been damaged is a moving motor vehicle. In that situation, the damaged property owner does look to his own no-fault insurer for recovery, provided he has purchased optional collision protection. See § 3123(1)(b).
The accidental damage to the building in this case arose out of the use of a motor vehicle as a motor vehicle, thereby making the damaged property owners and insurers eligible for property protection benefits under § 3121(1).
We examined what is meant by the language "arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle" under no-fault law in Thornton, supra. While the specific no-fault benefits at issue in Thornton were PIPS, our analysis in Thornton of the causal nexus that must exist between the injury and the motor vehicle equally applies to property protection benefits.
In Thornton, we adopted several criteria to be used to assess whether the requisite causal connection
Applying the criteria from Thornton to the facts of this case, we conclude that the property damage arose out of the use of a motor vehicle as a motor vehicle. Specifically, we hold that the destruction of the building arose out of the use of the truck as a motor vehicle. The truck was the vehicle that crashed into the building, and the truck's gas tank caused the building to catch fire and sustain serious damage. Seconds before the accident, the driver of the truck was using it for transportation purposes — an activity that is "directly related to [the truck's] character as a motor vehicle." Thornton,
On the basis of the above, we find that the relationship between the use of the truck and the damage was direct for purposes of no-fault law. We consider irrelevant the fact that at the precise moment the truck smashed into the building it was not being used as a motor vehicle because it was cut in half. Suppose a vehicle was being used for transportation purposes seconds before colliding with another vehicle, causing the first vehicle to roll over consecutively and ultimately to hit a pedestrian. The fact that the car was rolling, rather than being used as a motor vehicle, seconds before hitting the pedestrian likewise would lead us to conclude that the injury arose out of the use of the first vehicle as a motor vehicle.
Both Royal and Ferndale argue that they are not liable for property protection benefits because the damage here cannot be said to have arisen out of the use of their particular insured's vehicle as a motor vehicle. We reject this argument because we disagree with its premise that, in a multivehicle accident situation, each insurer's liability for property protection benefits turns on whether the damage arose out of the use of the insured's vehicle as a motor vehicle.
However, in a multivehicle accident, the liability of each insurer of an owner of a vehicle having some physical connection with the accident will not turn on whether the claimant can establish
In other words, in this multivehicle accident, even if we were to accept Royal and Ferndale's claim that the damage did not arise out of the use of their insureds' vehicles as motor vehicles, Royal and Ferndale are not necessarily relieved of liability. Because the damage arose out of the use of a motor vehicle (the truck) as a motor vehicle, and because the insureds' vehicles had more than a random association with the accident scene, Royal and Ferndale may be primarily liable for property protection benefits. Whether they in fact will be found liable will depend on the outcome of analyses under §§ 3123 and 3125.
The facts in this case do not implicate any of the exceptions for property protection liability under the no-fault act.
The Legislature did not choose to preclude coverage for property protection benefits on the basis that a thief was driving the insured's vehicle when the accident occurred. That the Legislature contemplated the car-thief scenario when it drafted the no-fault act is made manifest by the existence of § 3113(a).
Similarly, the Legislature did not articulate any coverage exception for insured police cars, making it inappropriate for us to create one now. The fact that both the Ferndale and Royal insureds are innocent of any wrongdoing is not grounds for an exemption from no-fault liability in light of § 3121(2)'s direction that property protection benefits
Royal and Ferndale are primarily liable for a share of property protection benefits because both their insured's vehicles were "involved in the accident" according to our construction of that phrase as it is used in § 3125.
While the phrase appears in several provisions throughout the no-fault act,
In construing the phrase in Heard, we observed that "[w]hether a vehicle is `involved' cannot be determined by abstract reasoning or resort to dictionary definitions. It depends on the meaning derived from the purpose and structure of the no-fault
Since Heard, several panels of the Court of Appeals also have examined the import of the phrase "involved in the accident" in the context of various no-fault sections,
Combining what we said in Heard with the guidance provided by the Court of Appeals, we hold that for a vehicle to be considered "involved in the accident" under § 3125, the motor vehicle, being operated or used as a motor vehicle, must actively, as opposed to passively, contribute to the accident. Showing a mere "but for" connection between the operation or use of the motor vehicle and the damage is not enough to establish that the vehicle is "involved in the accident." Moreover, physical contact is not required to establish that the vehicle was "involved in the accident," nor is fault a relevant consideration in the determination whether a vehicle is "involved in an accident." Finally, as already indicated by our discussion in part A, the concept of being "involved in the accident" under § 3125 encompasses a broader causal nexus between the use of the vehicle and the damage than what is required under § 3121(1) to show that the damage arose out of the ownership, operation, maintenance, or use of the motor vehicle as a motor vehicle.
The standard we adopt for construction of the phrase "involved in the accident" comports with
The meaning that we give to the phrase "involved in the accident" is also consistent with the structure of the no-fault act. The sections in the no-fault act that set forth the "arising out of" standard precede the act's mention of the "involved in the accident" standard in the case of both PIPS and property protection benefits. This order of appearance accords with our view regarding how to properly assess the liability of an insurer of an owner of a vehicle "involved in the accident" in multivehicle accident situations. First, it must be determined whether the damage arose
Finally, and most importantly, the construction we apply to the language "involved in the accident" is consistent with the Legislature's intent when it drafted the no-fault act. As we explained in Shavers v Attorney General, 402 Mich. 554, 578-579; 267 N.W.2d 72 (1978), cert den 442 U.S. 934 (1979), (After Remand), 412 Mich. 1105 (1982), "The goal of the no-fault insurance system was to provide victims of motor vehicle accidents assured, adequate, and prompt reparation for certain economic losses." Our construction will increase the possibility of "assured" and "adequate" reparation because the liability of each insurer in a multivehicle accident would not turn on whether the claimant could establish that the damage arose out of the ownership, operation, maintenance, or use of that particular insured's motor vehicle as a motor vehicle, but, rather, on the broader criterion that the insured vehicle be "involved in the accident," where the accident arose out of the use of a motor vehicle as a motor vehicle. While the causal nexus is more liberal under the "involved in the accident" standard, the standard's requirement that the vehicle be used as a motor vehicle, and that it make an active contribution to the happening
Applying our construction of the phrase "involved in the accident," we conclude that both the stolen vehicle and the police vehicle were "involved in the accident" under § 3125. The fact that neither vehicle made physical contact with the damaged building is not dispositive. The thief was using the stolen vehicle as a motor vehicle at the time of the accident, and this use directly led to the collision with the truck, and caused it to crash into and damage the building. Hence, the use of the stolen vehicle made an "active contribution" to the accident.
Likewise, the police officer was using his vehicle as a motor vehicle while he pursued the stolen vehicle. This active use perpetuated the stolen vehicle's flight, which, in turn, resulted in the collision with the other cars and the damage to the nearby property. We consider it to be unimportant that seconds before the multivehicle collision, the police vehicle "backed off and allowed more room between the patrol car and the susp[ect] veh[icle]" in an effort to deter the stolen vehicle from running the red light. Before slowing down, the police vehicle had actively pursued the stolen vehicle, and this pursuit, in part, obviously prompted the stolen vehicle to ignore the red light
Because in this case the property damage arose out of the use of the truck as a motor vehicle under § 3121(1), none of the exceptions for liability applied under § 3123, and the Royal and Ferndale insureds' vehicles were "involved in the accident" under § 3125(1), we conclude that Royal and Ferndale are primarily liable to pay a share of the property protection benefits.
Royal argues that it should not be liable for coverage because a thief was driving the car at the time of the accident. Royal supports this argument by referring to Lee v DAIIE, 412 Mich. 505, 509; 315 N.W.2d 413 (1982), in which this Court found that "it is the policy of the no-fault act that persons, not motor vehicles, are insured against loss." Relying on this statement, Royal insists that its insured did not have a role in the accident, and, therefore, Royal's duty to provide no-fault coverage was not triggered. We are not persuaded by Royal's argument.
As a general matter, the principle that we recognized in Lee is true. Moreover, the language in § 3125 is in accord because it directs that primary liability rests with "insurers of owners or registrants of vehicles involved in the accident." While we recognize the validity of the principle we stated in Lee, we are also cognizant that at various
When this Court made the observation in Lee, the benefits at issue were PIPS. With regard to PIPS, the duty to provide coverage for the insured generally is not linked to the involvement of the insured's vehicle in the accident. As indicated, the insurer that is primarily liable for PIPS is the insurer of the injured person. The primary insurer's duty to provide PIPS is triggered when the insured is injured, and the injury arises out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle.
In contrast, when, as in this case, the type of benefit sought is property protection benefits, the primary insurer's obligation to provide benefits is tied to the involvement of its insured's vehicle in the accident. As mentioned, the no-fault automobile insurer of the person who suffers property damage is not primarily liable. Rather, under § 3125, primary liability rests with the "insurers of owners or registrants of vehicles involved in the accident," where the accident arose out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle. Sections 3121(1)
This Court stated:
In this case, while Royal insures a vehicle owner, its primary liability turns on the involvement of the insured's vehicle in the accident. In accord with what we stated in Lee, we conclude that Royal, along with the other insurers of owners of vehicles "involved in the accident," bear primary responsibility for payment of property protection benefits under § 3125.
We hold that Royal and Ferndale are primarily liable to pay a share of property protection benefits because their insureds' vehicles were "involved in the accident," which arose out of the use of a motor vehicle as a motor vehicle. We affirm the Court of Appeals decision regarding Royal's liability, but reverse its decision regarding the City of Ferndale's liability. We remand this case to the
BRICKLEY, C.J., and LEVIN, BOYLE, RILEY, and MALLETT, JJ., concurred with CAVANAGH, J.
WEAVER, J., took no part in the decision of this case.
Section 3121(1) has since been amended by 1993 PA 290. The amendment is not relevant to the facts in this case, and, therefore, we do not include it here.
Section 3116 addresses reimbursement and indemnification schemes among insurers regarding tort claims, and, accordingly, is not a pertinent consideration in this case. MCL 500.3116; MSA 24.13116.
The qualifying language in § 3163 regarding an out-of-state insured's participation in the accident is conspicuously absent from the language in § 3121. We will not contravene the Legislature's intent to omit the limitation when it drafted § 3121(1) by construing the section in the way that Royal advances.
We note that several other Court of Appeals panels may have inadvertently created confusion by their use of the word "involvement" and its derivatives to analyze whether the claimant has satisfied the threshold eligibility requirement for PIP no-fault benefits under § 3105(1). See, e.g., Dep't of Social Services v Auto Club Ins Ass'n, 173 Mich.App. 552, 557; 434 N.W.2d 419 (1988) (stating "no ironclad rule can be discerned as to what involvement is sufficient under MCL 500.3105; MSA 24.13105"); Sanford, n 10 supra at 750 (explaining what is "[t]he generally followed test for whether an accident involves a motor vehicle" in reference to § 3105); and Peck, n 10 supra at 332 (addressing "whether a motorcyclist fleeing from police in a cruiser has sufficient `involvement' to allow recovery under the no-fault act [that] provides coverage for accidental bodily injury `arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle'"). It is apparent from reading these cases that the panels used the word "involvement" in a generic sense, and their discussion of the degree of motor vehicle involvement is not controlling with regard to the proper construction of the specific phrase "involved in the accident" as it appears in sections of the no-fault act.