Foster Swift No-Fault E-News
July 1, 2008
On April 29, 2008, the Michigan Court of Appeals issued the unpublished decision in the business insurance/no-fault case of Christina Sisk-Rathburn v Farm Bureau General Insurance Company of Michigan (No. 275121.) The Court approved the decision for publication on June 26, 2008.
Plaintiff was injured in a car accident while driving a rental vehicle. She did not have her own auto insurance policy at the time, but her husband, the sole owner of a small business, had a business insurance policy with Defendant. The policy listed plaintiff as a "driver," and it covered four vehicles. The rental vehicle involved in the accident was temporarily substituting for one of the specifically named vehicles which "was in the shop." After paying Plaintiff PIP benefits for a period of time, Defendant ceased paying those benefits because Plaintiff was not using one of the business’s vehicles at the time of the accident.
In affirming the trial court’s decision, the Court of Appeals first concluded that the policy at issue was indeed a "business" policy. Second, the Court of Appeals affirmed the trial court’s determination that PIP benefits were only available under the business insurance policy in connection with the use of one of the business’s vehicles. While liability coverage extended to any other vehicles, PIP benefits were limited to the vehicles enumerated in the policy.
The court also held (1) that Plaintiff’s status as a named designated driver in the policy did not make her a "named insured"; (2) that Defendant was not required to continue making PIP benefit payments pursuant to the doctrine of equitable estoppel, reasoning that Plaintiff had equal access to the pertinent information and the means to independently assess Defendant’s obligations, and had retained counsel a few months after the accident; and (3) Plaintiff was not an "innocent third party" to the transaction between her husband and Defendant in the procurement of the insurance policy.
The case is important because of the analysis that concluded that Defendant’s business policy did not provide PIP coverage for a driver of a rental vehicle.