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Michigan Court of Appeals Broadens Definition of ‘Unlawful’ Under Michigan PIP Law

February 20, 2024

In a recent appeal, an insurance company argued that a trial court erred in denying its motion for summary disposition under MCR 2.116(C)(10) because there was no genuine question of fact that the plaintiff was unlawfully operating the car, and therefore wasn’t entitled to PIP benefits under the Michigan No-Fault Act,.


Carlonda Swoope was injured in an October 27, 2020 car accident. She was driving a car that was owned by a friend. At the time of the accident, she didn’t have a valid driver’s license. Neither Carlonda nor the car’s owner maintained an automobile insurance policy. As a result, Carlonda sought personal protection insurance (PIP) benefits for her injuries through the Michigan Assigned Claims Plain (MACP), which assigned her claim to Citizens Insurance Company of the Midwest. The insurer denied coverage, and Carlonda filed a complaint seeking payment of PIP benefits. But Citizens moved for summary disposition, asserting there was no genuine question of fact that Carlonda was unlawfully operating the vehicle. The trial court denied Citizens’ motion, and the insurer appealed.

Court of Appeals Analysis

Judge Thomas C. Cameron wrote in his opinion that under the no-fault act, automobile insurers are required to provide PIP benefits for certain injuries related to motor vehicle accidents. MCL 500.3105 states that insurers are “liable to pay benefits for accidental bodily injury arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle…” However, the law allows an insurer to avoid paying PIP benefits in some situations. MCL 500.3113(a) sets out one of these circumstances:

A person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident any of the following circumstances existed:

(a) The person was willingly operating or willingly using a motor vehicle or motorcycle that was taken unlawfully, and the person knew or should have known that the motor vehicle or motorcycle was taken unlawfully.

Judge Cameron explained that in Ahmed v Tokio Marine America Ins Co (2021), the Court of Appeals articulated a three-prong test to evaluate claims under MCL 500.3113(a). The decision stated that the disqualification of PIP benefits applies to anyone (1) willingly operating or willingly using a motor vehicle or motorcycle that (2) was unlawfully taken, and (3) the person seeking benefits knew or should have known that the motor vehicle was taken unlawfully.

This “should have known” standard requires an individual to determine if they have permission to take a vehicle “because a person may not simply take what he knows to be another’s property without taking any steps to determine if the owner authorized the taking.” Indeed, Judge Cameron explained that the mere assumption that it must be permissible to take a third party’s property, without more, doesn’t satisfy the “should have known” standard of MCL 500.3113(a).

Citizens’ motion for summary disposition focused on the second and third prong of the Ahmed test (The parties agree the first prong—whether Carlonda operated the vehicle willingly—wasn’t at issue.). The insurer moved for summary disposition, in part, because Carlonda admitted she didn’t have a valid driver’s license at the time of the crash. In her deposition, she admitted this—which satisfied the second prong because operating a vehicle without a valid license is unlawful for purposes of MCL 500.3113(a).

In addition, Judge Cameron said that her admission also satisfied the third prong, whether she knew or should have known the vehicle was taken unlawfully. Carlonda testified she knew her license was suspended when she took the vehicle; as a result, she should’ve understood that driving the vehicle without a valid license was unlawful. Plus, she admitted the car’s owner didn’t give her permission to use it.

Moreover, by Carlonda’s own admission, she failed to take any action to ensure her use of the car was authorized. As such, the insurance company satisfied its preliminary burden to show there was no genuine question of fact for a jury to resolve. The burden then shifted to Carlonda to demonstrate a genuine question of material fact to be resolved at trial. While she presented some documentary evidence, Judge Cameron and the Court of Appeals found that none of this showed she had a valid driver’s license at the time of the accident. In addition, she didn’t offer any evidence showing the vehicle’s owner authorized her use of the vehicle. As a result, she failed to meet her burden. The Court of Appeals held that summary disposition should have been granted on this basis, and the trial court erred when it concluded otherwise. The case was reversed. Swoope v. Citizens Ins. Co. of the Midwest, 2023 Mich. App. LEXIS 9654 (Mich. App. December 14, 2023).

Questions About Insurance Coverage After an Accident?

Under Michigan No-Fault Law, all drivers must have proof of insurance that the motor vehicle is insured. Driving without insurance is illegal. In Michigan, uninsured driving can result in a fine of up to $500, a year in jail, or a suspended license.

For a free consultation with an experienced auto accident attorney in Michigan, contact Buchanan Firm. Our firm proudly serves people all across Michigan, including major cities like Grand Rapids and Detroit, and rural towns such as Lowell, Ada, Fremont, Newaygo, Grand Haven, Rockford, and Cedar Springs. We will meet you after hours, at home, or in the hospital to accommodate you.