Ellis v. State Farm Insurance Co.

Danhof, C. J. Defendant State Farm appeals as of right from a declaratory judgment dated October 22, 1976, issued by the Jackson County Circuit Court. That judgment found that plaintiffs stepson, Craig Hull, was covered under the uninsured motorist coverage provided in a policy of insurance issued by State Farm to plaintiff Ellis. The State Farm policy was issued on plaintiffs automobile. On August 7, 1973, Craig Hull was fatally injured in a collision with an uninsured motorist. At the time of the accident, Craig Hull was operating a motorcycle which he owned and for which he had purchased liability insurance. However, he had expressly rejected uninsured motorist coverage under that policy. Clauses in both the liability and uninsured motorist sections of the policy issued by State Farm to plaintiff Ellis excluded coverage of the motorcycle. Assuming that Craig Hull was not protected from the acts of uninsured motorists under the terms of the uninsured motorist clause in the policy issued by State Farm, the Secretary of State *191 argues that the exclusionary clause is void as against public policy and that under the law at the time of the accident, the policy must be read to include such coverage. MCLA 500.3010; MSA 24.13010, in effect at the time the policy was issued and the time the accident occurred, read in part: "No automobile liability or motor vehicle liability policy insuring against loss * * * shall be delivered or issued for delivery * * * unless coverage is provided therein or supplemental thereto * * * for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles * * * unless the named insured rejects such coverage in writing as provided herein. (Emphasis supplied.)” In Boettner v State Farm Mutual Insurance Co, 388 Mich 482, 488; 201 NW2d 795 (1972), the Court held that the uninsured motorist protection required by the statute was not limited to injuries suffered while occupying the insured vehicle. In Blakeslee v Farm Bureau Mutual Insurance Co of Michigan, 388 Mich 464, 474; 201 NW2d 786 (1972), the Court found that the statutory language was mandatory and had the clear legislative purpose of reducing claims against the motor vehicle accident claims fund and that it would be unconscionable for an insurance company to charge for the required coverage while using a self-devised clause to exclude recovery by the "insured”. The liability coverage of the State Farm policy defines the "insured” as including "if residents of the same household, the relatives of the first person named in the declarations, or of his spouse”. At the time of the fatal accident Craig Hull was a *192 household resident relative of the named insured or his spouse. Therefore, the policy’s own definitional terms conferred insured status on Craig Hull at the time of the accident by virtue of his being a household resident relative. Since Craig Hull was a person insured under the liability section of the policy, MCLA 500.3010; MSA 24.13010 necessarily requires uninsured motorist coverage for him under the policy. Such coverage must therefore be read into the State Farm policy. See MCLA 500.3012; MSA 24.13012. State Farm contends that the decision of this Court in Nunley v Turner, 57 Mich App 473; 226 NW2d 528 (1975), supports its position that the exclusion clause is valid. The facts of the Nunley case are very similar to those in the instant case. In Nunley the opinion stated: "It is hard to see how Farmers could possibly be held liable to plaintiff. Such a rule of law, if extended, would mean that an insurer to whom a premium had been paid on one car would be liable for uninsured motorist coverage on any number of motor vehicles bought by an insured subsequent to the original purchase of uninsured motorist coverage without purchasing such additional coverage.” 57 Mich App at 483-484. While this is a forceful and logically appealing argument, we cannot ignore the holdings in the Supreme Court decisions in this area that the statute is mandatory, that it requires coverage that is personal to the insured rather than limited to injuries which occur in the insured vehicle, and that the purpose of the statute was to reduce claims on the motor vehicle accident claims fund. State Farm contends that 'Nunley, Rice [infra], and Priestly [infra], establish that public policy, as expressed in the statute, voids exclusionary lan *193 guage of uninsured motorist coverage only in instances where the plaintiff would be covered under the liability sections of the policy”. We believe this argument ignores the result in Boettner, supra. A similar argument was rejected by the Supreme Court in Pappas v Central National Insurance Group of Omaha, 400 Mich 475; 255 NW2d 629 (1977). The opinion reads in part: "Proof of the facts Central demands triggers the insurer’s liability, but we do not believe it has any effect on a passenger’s status as an insured under the terms of the policy.” 400 Mich at 482. The Court also states in that opinion: "That the plaintiff in Blakeslee was a named insured responsible for paying premiums whereas Pappas was not does not undermine the authority of that case. The critical fact in Blakeslee was that statutorily required coverage was being limited. _ " * * * The legislative policy expressed in the statute is not affected by circumstances peculiar to the situation of a particular plaintiff.” 400 Mich at 480-481. We are not unmindful of the fact that Nunley v Turner, supra, Rice v Detroit Automobile Inter-Insurance Exchange, 66 Mich App 600; 239 NW2d 675 (1976), and Priestly v Secretary of State, 67 Mich App 96; 240 NW2d 282 (1976), all appear to reach results contrary to the decision in the instant case. We read those cases as allowing the insurer and the insured to narrowly define the class of persons protected by the uninsured motorist coverage, but we read Pappas, supra, as rejecting such narrow definitions. We further read Nunley, Rice, and Priestly as attempting to circumscribe the factual situation in which the insured *194 party injured by an uninsured motorist may recover under a policy providing the statutorily required coverage. Pappas, supra, allows no such circumscription. In the instant case and its two companion cases, Bradley v Mid-Century Insurance Co, 78 Mich App 67; 259 NW2d 378 (1977), and Hickman v Community Service Insurance Co, 78 Mich App 1; 259 NW2d 367 (1977), the plaintiff is or represents an "insured” under the liability section definition of the insurance policy in question. Once having been afforded this status, and so long as it lasts, MCLA 500.3010; MSA 24.13010 requires that an offer of uninsured motorist insurance must be extended, for protection from injuries caused by uninsured motorist wherever the "insured” happens to be and whatever the "insured” happens to be doing at the time of the injury. Since the insurance policy issued by State Farm conferred insured status on Craig Hull by virtue of his being a household resident relative, and not by virtue of his operating any particular given vehicle, he had insured status at the time of the accident, whether or not State Farm was liable under the liability coverage of the policy, and therefore was necessarily covered by the uninsured motorist section of the policy. Under the statute such coverage could not be limited by self-devised exclusionary clauses written into the policy by State Farm. We agree with the well-written and well-reasoned opinion of the circuit court wherein Judge Britten pointed out: "The question becomes whether the public policy behind the statute is for the protection of vehicles or persons. * * * "The uninsured motorist coverage required by the *195 statute provides that no policy shall issue without coverage for 'the protection of persons insured thereunder’. The coverage appears to be personal in nature and would logically remain with the insured regardless of the circumstances when he became involved with the uninsured motorist.” Affirmed. No costs.