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Farm Bureau Gen Ins Co of America v Westfield Ins Co (COA - UNP; 5/30/2017; RB # 3643)


Michigan Court of Appeals; Docket # 330961; Unpublished
Judges Riordan, Ronayne Krause and Swartzle; Unanimous, per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion

Priority Rules for Payment of Benefits: Exception for Commercial Vehicles [§3114(2)]
Priority Rules for Payment of Benefits: Exception for Employer Provided Vehicles [§3114(3)]

Not Applicable

In this unanimous unpublished per curiam opinion involving a priority dispute between no-fault insurers, the Court of Appeals held that based on the economic reality test, a semi-tractor operator was not an “employee” of the company that owned the semi-tractor and, as a result, the operator’s personal no-fault insurer was liable for no-fault PIP benefits under MCL 500.3114.

Mark LaPointe collided with a train and was seriously injured while transporting a load of grain in a semi-tractor owned by Larry Benore & Son, a Michigan farming business. LaPointe had a personal no-fault policy with Farm Bureau. At the time of the accident, Craig Benore and his mother owned Larry Benore & Son. The company had two full-time, year-round employees and a third worker performed seasonal planting. LaPointe and another man worked as seasonal truck drivers from October until the end of December each year. LaPointe was friends with Benore, had worked with him on a seasonal basis for several years and did not have a written work agreement. According to Benore, LaPointe worked less than six hours per day because he had another job. At the time of LaPointe’s accident, the semi-tractor was insured by Westfield under a policy issued to Benore and his mother doing business as Larry Benore & Son. After paying no-fault benefits to LaPointe, Farm Bureau sought reimbursement from Westfield and a declaratory judgment that Westfield was the higher priority insurer under §3114. Farm Bureau moved for summary disposition, claiming LaPointe was an “employee” of Larry Benore & Son and was operating a truck during the course of his employment. The trial court granted Farm Bureau’s motion for summary disposition and deemed that Westfield was the higher priority insurer that was liable for paying benefits.

The Court of Appeals reversed, finding that under the economic reality test, which dictates whether §3114(3) is triggered, LaPointe was not an employee of Larry Benore & Son. Citing Adanalic v Harco Nat Ins Co, 309 Mich App 173 (2015), the Court of Appeals explained the economic reality test considers four factors: 1) control of the worker’s duties, 2) payment of wages, 3) right to hire, fire and discipline, and 4) the performance of the duties as an integral part of the employer’s business towards the accomplishment of a common goal. “Th[e] test takes into account the totality of the circumstances around the work performed …,” the Court stated. According to the Court, upon examining the evidence in the record, in conjunction with the factors of the economic reality test, LaPointe was not an employee but was, at most, an independent contractor.

In reaching this conclusion, the Court noted the following about the first factor of the economic reality test: 1) Benore did little to monitor LaPointe; 2) LaPointe performed other tasks in addition to driving trucks; 3) LaPointe could refuse to haul a load “for any reason”; 4) Benore did not control the hours that LaPointe worked or whether he worked at all; 5) there was no agreement that LaPointe would only haul loads for Benore; and 6) LaPointe had a full-time job with another trucking company.

Concerning the second factor of the economic reality test, the Court pointed out that: 1) sometimes LaPointe would work for Benore “on trade,” as part of an informal “barter system”; 2) LaPointe tracked his own time; 3) taxes were not withheld from LaPointe’s wages and he did not receive health benefits; and 4) LaPointe did not receive a 1099 or W-2 form.

Regarding the third factor of the economic reality test, the Court observed: 1) Benore had no ongoing obligation to use LaPointe and LaPointe had no ongoing obligation to drive trucks for Benore; 2) the working relationship was terminable at will by either party; 3) it did not appear that Benore could discipline LaPointe; and 4) there was no indication that Benore could “fire” or “terminate” LaPointe.

As to the fourth factor of the economic reality test, the Court noted that: 1) LaPointe could refuse to transport a load, and either party could discontinue the relationship; 2) Benore knew that LaPointe had a full-time job that took priority; and 3) LaPointe’s contribution to the company was sporadic and fungible, and Benore did not rely upon LaPointe as an “employee” of the company.

Based on the foregoing, the Court of Appeals concluded LaPointe was not an employee and held:

“The trial court’s grant of summary disposition in favor of Farm Bureau was improper. Westfield is correct that under the economic reality test, LaPointe was not an ‘employee’ of Westfield’s insured. As a result, Farm Bureau was higher in priority.”

The Court of Appeals continued by rejecting Farm Bureau’s argument that, under Celina Mut Ins Co v Lake States Ins Co, 452 Mich 84 (1996), and Besic v Citizens Ins Co of the Midwest, 290 Mich App 19 (2010), the insurer of a commercial vehicle used by a self-employed person is responsible for the payment of that person’s no-fault PIP benefits. The Court stated:

Celina and Besic are not relevant here. An inextricable component of the conclusion and reasoning in Celina is that a self-employed person operating a motor vehicle owned by that self-employed person in the course of his or her self-employment is both an employee and employer for purposes of MCL 500.3114(3). The vehicle that LaPointe was occupying was a vehicle was owned by Larry Benore & Son, not by LaPointe or a business that he owned. Neither Celina nor Besic support the broad conclusion that the insurer of a commercial vehicle is responsible for the payment of no-fault PIP benefits under MCL 500.3114(3) when the injured self-proprietor was not the owner of the vehicle.”

Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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