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Miclea, et al. v. Cherokee Ins. Co., et al. (COA – PUB 9/17/2020; RB #4146)

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Michigan Court of Appeals; Docket # 344694; Published
Judges Jansen, Kelly, and Cameron; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion; Link to Dissent


STATUTORY INDEXING:
Exception for Employer Provided Vehicles [§3114(3)]

TOPICAL INDEXING:
Not Applicable


SUMMARY:
In this unanimous published per curiam decision, the Court of Appeals reversed the trial court’s denial of defendant Auto Club Insurance Association’s motion for summary disposition seeking dismissal of the plaintiff’s first-party claim against it on the grounds that co-defendant Cherokee Insurance Company was the insurer of highest priority.  Auto Club was the plaintiff’s personal automobile insurer, and Cherokee was the insurer of Universal Am-Can, Ltd., a trucking company with whom plaintiff had entered into an independent contractor agreement.  The plaintiff held legal title to the truck in question, but at the time of the subject accident, Universal was leasing the truck from him pursuant to the terms of the independent contractor agreement.  The Court of Appeals held that, as an independent contractor, the plaintiff was an employee of himself, and since he owned the truck that was being leased to Universal, and since Universal was insured by Cherokee, MCL 500.3114(3) applied and established Cherokee as the insurer of highest priority.

Gavril Miclea was injured as a result of a slip-and-fall accident while he tried to put antifreeze in his truck.  At the time of the accident, Miclea was performing trucking services as an independent contractor for Universal.  Per the independent contractor agreement, Universal leased the truck, which Miclea held legal title to, from Miclea.  After the accident, Miclea unsuccessfully pursued no-fault PIP benefits from his own insurer, Auto Club, Universal’s insurer, Cherokee, and the Michigan Assigned Claims Plan.  In his resultant first-party action against Auto Club and Cherokee, each moved for summary disposition, arguing that the other was the insurer of highest priority.  The trial court relied on the economic reality test in determining “that plaintiff was acting as an independent contractor at the time he sustained his injuries,” and “therefore concluded that he was not an employee, so his personal insurer, Auto Club, was the no-fault insurer of highest priority.”

The Court of Appeals reversed the trial court’s summary disposition order in favor of Cherokee, noting that while the plaintiff was, in fact, an independent contractor at the time of the collision, he was also his own employee.  And thus, since he owned the truck, and since the truck was being leased by Universal, Universal’s insurer, Cherokee, was the highest priority insurer pursuant to MCL 500.3114(3).  In reaching its holding, the Court of Appeals expressly affirmed its prior resolution of this issue in Sappington v. Shoemake, unpublished per curiam opinion of the Court of Appeals, issued October 30, 2018 (Docket No. 337994), which read, in pertinent part:

Our Supreme Court has unambiguously established that a person can simultaneously be both an employer and an employee under the no-fault act. Celina[], 452 Mich [at] 87-90[]. In particular, someone who is self-employed is an employee of himself. Id. This Court further explained that a person can be a self- employed independent contractor and retain the status of both employer and employee. Besic, 290 Mich App at 31-32. Both cases are holdings as a matter of law: if a person is self-employed, that person is necessarily both employer and employee for purposes of MCL 500.3114(3). Therefore, if [plaintiff] is an independent contractor of [Universal], then [plaintiff] is necessarily an employee of himself.

Cherokee correctly observes that “[a]n independent contractor is not considered an ‘employee’ for purposes of the no-fault act.” Adanalic[], 309 Mich App [at] 191[]. However, Adanalic clearly addressed only whether a person could simultaneously be an employee and an independent contractor of the same entity at the same time. Furthermore, Adanalic is consistent with Celina and Besic. In the latter cases, the injured parties owned the vehicles in which they were injured. Celina, 452 Mich at 86; Besic, 290 Mich App at 21. In Adanalic, the injured party owned a truck, but his injuries involved his occupancy of a semi-trailer that he did not own. Adanalic, 309 Mich App at 177-178. In all three cases, the courts were called upon to determine whether an owner of the occupied vehicle employed the injured party. Because the injured party in Adanalic did not own the vehicle in which he was injured, his self-employment status was irrelevant.

If [plaintiff] was an independent contractor of [Universal], Adanalic only establishes that [plaintiff] was not an employee of [Universal]. Binding case law rejects Cherokee’s argument that [plaintiff]’s status as an independent contractor necessarily precludes him from being an employee of anyone. [Id., unpub at 3-4 (emphasis in original).]

* * *

A person cannot be an employee and independent contractor of the same entity at the same time. However, being an independent contractor of one entity does not preclude a person from simultaneously being an employee of another entity, which can include one’s self. On these facts, plaintiff was not an employee of Universal, but he was an employee of himself. Because plaintiff also “owned” the vehicle, MCL 500.3114(3) applies. Because Cherokee insured the vehicle, it is the insurer of highest priority. The trial court’s order denying summary disposition to Auto Club and granting summary disposition in favor of Cherokee is reversed, and the matter is remanded for any further proceedings the trial court deems necessary or proper.


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 SinasDramis.com.

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