Supreme Court to Consider “Residency” of Migrant Farm Workers Under No-Fault Act for Purposes of Priority of Insurance Coverage for No-Fault Benefits

Yesterday, the Michigan Supreme Court ordered oral argument on an insurer’s application to consider the question of whether a migrant farm worker Salvador Lorenzo (Lorenzo) who maintained no permanent residency but spent time in North Carolina, Florida and Michigan every year was a “resident” of Michigan at the time passengers riding in his vehicle (Plaintiffs) were injured in an accident involving a vehicle that Lorenzo owned and insured through an insurer under a policy of automobile liability insurance issued in North Carolina by Integon National Insurance Company (Integon).  Lorenzo et al. v. Intergon National Ins. Co. et al.Supreme.Court.Order

Lorenzo was a migrant farm workers who spent time each year in three different states during the agricultural season in that particular state.  He had a Michigan driver’s license, but procured insurance for his automobile in North Carolina.  That policy was issued by Integon.  His automobile was not registered in the state of Michigan and Lorenzo did not have no-fault automobile insurance in Michigan.  After a few days in Michigan, an auto accident occurred involving Lorenzo’s vehicle and Plaintiffs, who were passengers, were injured.  Plaintiffs sought no-fault personal protection insurance (PIP) benefits from Integon.

In Lorenzo et al. v. Integon National Ins. Co., et al.COA.Opinion, Integon denied Plaintiffs’ claims PIP benefits stating that at the time of the accident Lorenzo (the owner of the vehicle in which Plaintiffs were passengers) was a resident of Michigan.  Under the No-Fault Act, pursuant to MCL 500.3163(1), an insurer must file a certification with the state of Michigan ensuring that “any accidental bodily injury…occurring in this state arising from the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle by an out of state resident who is insured under its automobile liability insurance policies, is subject to the personal and property protection insurance system under [the No-Fault Act].”

Integon’s insurance policy was issued in another state, North Carolina.  Thus, under this provision it would only be responsible to Plaintiffs for PIP “no-fault benefits” in Michigan if Lorenzo was a “non-resident” or an “out of state resident”.  Titan Insurance Company intervened when it paid benefits as an assigned insurer under the Michigan assigned claims facility provisions.  It claimed Lorenzo was an out of state resident and therefore Integon was primarily liable to Plaintiffs for the PIP benefits under the No-Fault Act.

The trial court found Lorenzo was an out-of-state resident and not a resident of Michigan.  Therefore, the trial court held Integon was responsible for coverage of the claims.  Integon appealed and the Court of Appeals reversed.  It noted an issue of first impression:

“The answer to the question of which insurer, Integon or Titan, is responsible for personal protection insurance (PIP) benefits arising out of a Michigan automobile accident depends on where the insured…resided at the time of the accident. Because of its peculiar facts, this case raises a question of first impression because Lorenzo, an itinerant agricultural worker, did not have a “permanent” residence in any state, but lived, worked, and resided in three different states where he picked fruit on a seasonal basis. At the time of the accident, Lorenzo lived and worked in Michigan, had all his possessions with him in Michigan, and had no other residence or place he looked to or could be regarded as his home. Accordingly, for purposes of the no-fault act, Lorenzo was a resident of Michigan, and neither his out-of-state policy with Integon nor Integon’s choice to also do business in Michigan makes Integon liable for plaintiffs’ no-fault benefits. Instead, and contrary to the trial court’s ruling, Titan is the insurer responsible for the payment of plaintiffs’ PIP benefits as the carrier assigned by the Assigned Claims Facility.”

This is an important case in that it addresses the priority of insurers responsible to pay no-fault benefits when anyone is injured in automobile accidents that involve vehicles owned, operated, maintained or used by migrant farm workers and where the worker or the vehicle does not maintain a no-fault policy of insurance in Michigan.  This is especially relevant because in cases such as the one here, the workers might carry insurance under an automobile insurance policy issued by an insurer in another state, i.e., not a Michigan “no-fault” policy.  Or, they may not carry any automobile insurance.  Thus, the insurers of the vehicles and the assigned insurers will be looked to as a benefits provider.  In such cases, the payment of benefits depends on the residency of the owner or operator or user of a motor vehicle as noted by MCL 500.3163(1), and by operation of other various provisions of the No-Fault Act, which determine the source, and priority of payors to provide no-fault benefits under the No-Fault Act.

The Court of Appeals pointed out the volume of workers coming into the state of Michigan each year:

“We note that tens of thousands of migrant workers come to this state each year to harvest crops, and, if they own or operate a motor vehicle in Michigan, they must be aware of, and abide by, the no-fault act. Michigan residents must register their vehicles and maintain adequate insurance under the act, and out-of-state residents must obtain Michigan no-fault coverage if they operate a vehicle in Michigan for more than 30 days in a calendar year pursuant to MCL 500.3102(1). In other words, although not at issue here because Lorenzo had not yet operated the vehicle in Michigan for 30 days when the accident occurred, if he was, indeed, a resident of Florida, it was incumbent on him to maintain no-fault insurance coverage if he did drive the vehicle in Michigan for more than 30 days. Failure to carry no-fault coverage is a misdemeanor under MCL 500.3102(2), and a conviction carries a mandatory fine of $200 to $500 and/or imprisonment for up to a year. Thus, for people who travel to Michigan for, as here, three to four months out of each year for agricultural work or other reasons, they must carry no-fault insurance coverage as a matter of law or face criminal penalties.” Slip Op. at 9, n. 3.

The Supreme Court’s order requests the parties to address the issue “whether the insured upon whose policy the plaintiffs seek the payment of benefits was an ‘out-of-state resident,’ as that term is used in MCL 500.3163(1), at the time of the Michigan accident giving rise to the plaintiffs’ claim.”  Read the full order here: Lorenzo et al. v. Intergon National Ins. Co. et al.Supreme.Court.Order

Feel free to call Carson J. Tucker, Chair of the Appeals and Legal Research Group at Lacey & Jones, LLP at (248) 283-0763 if you have any questions about any of these cases.  Mr. Tucker regularly participates in cases before the Supreme Court and Court of Appeals on issues touching many subject-matter areas of civil litigation, including insurance coverage disputes such as that at issue in the instant case.

Throughout its storied history, Lacey & Jones has distinguished itself from other law firms by maintaining a robust Appeals and Legal Research Group.  Effective appellate representation demands different skills than those required by litigation attorneys.  Our appellate attorneys are adept at analyzing the intricacies of each case from an objective and critical perspective.  From reviewing and preparing the lower court record, identifying appealable errors, and developing a strategy to raise issues that will be addressed by appellate courts, our seasoned appellate team is capable of handling the most complex appeals from the application stage to oral advocacy before the highest courts.  Our research abilities and knowledge of current issues in nearly all major subject-matter areas of the law provide our clients with efficient and immediate assistance with complex and high-exposure cases.   We are experienced at navigating through the Michigan Court of Appeals and Supreme Court to shepherd the appeal in the most expeditious fashion possible so that it can be reviewed and quickly ruled upon.  During the last three decades alone, the Appeals and Legal Research Group at Lacey & Jones has been responsible for over 150 published decisions in the Michigan Court of Appeals and Supreme Court, including seminal decisions in workers’ compensation, governmental immunity, employment and labor law, civil rights law and insurance coverage.  Because of its specialized knowledge and focus on appellate law and its recognized expertise, the Appeals and Legal Research Group at Lacey & Jones has been asked to participate as amicus curiae writing briefs for the Supreme Court or as special counsel to the Michigan Attorney General and other governmental entities in some of the most significant cases in the Court of Appeals and Supreme Court.   Below are some of the recent significant cases in which Lacey & Jones, LLP’s Appeals and Legal Research Group has participated.

• Hamed v. Wayne County, et al., 490 Mich. 1 (2011), reversing Court of Appeals published opinion after being briefed and argued by Carson J. Tucker on behalf of Wayne County
• Odom v. Wayne County, et al., 482 Mich. 459 (2008), reversing Court of Appeals after being briefed and argued by Carson J. Tucker on behalf of Wayne County and Wayne County Sheriff and Deputies
• Michigan Department of Transportation v Employers Mutual Casualty Co, et al., 481Mich. 862 (2008), reversing Court of Appeals after being briefed and argued on application by Carson J. Tucker for Trucking Company and Insurer
• Nuculovic v. Hill and SMART, 287 Mich. App. 58 (2010), briefed by Carson J. Tucker for SMART
• Molnar v. Amy Allen, Oakland County Care House, et al, 359 Fed. Appx. 623 (6th Cir. 2009), affirming district court’s judgment in favor of client represented by Carson J. Tucker
• Molnar v. Amy Allen, Oakland County Care House, et al., Case No. 09-1536 (2009), successful defense of application to United States Supreme Court by Carson J. Tucker
• Wetherill v. McHugh, et al., Case No. 10-638 (2011), co-draft response on behalf of South Dakota National Guard to petition for appeal to United States Supreme Court, cert denied by Supreme Court.