Allstate denied coverage because it believed that Mr. Cline was the owner of the uninsured truck involved in the accident and, therefore, was not entitled to uninsured motorist benefits under his mother's policy.

In response, Mr. Cline sued Allstate for breach of contract.

Allstate moved for summary disposition, arguing that, as the owner of the uninsured truck, Mr. Cline was not entitled to uninsured motorist benefits under the policy as a matter of law. Allstate contended that deposition testimony established that Mr. Cline had purchased the truck on August 10, 2012 and had regularly used it until the November 3, 2012 accident without maintaining insurance as required under Michigan's no-fault law for him to be entitled to uninsured motorist benefits.

To support its motion for summary disposition, Allstate relied primarily on the deposition testimony of Gary Keene, Bryan Keene's father and the person who sold the truck, and Ms. Rzendzian.

Gary Keene testified that, in August 2012, Mr. Cline purchased the truck from him for $500. According to Gary Keene, Mr. Cline paid $300 up front and was to pay $200 at a later date. Gary Keene testified that he prepared a receipt memorializing the agreement and gave the receipt and the title, which was in Bryan Keene's name, to Mr. Cline and that Mr. Cline left with the truck. Gary Keene produced the handwritten receipt, which only he had signed, and testified unequivocally that he had sold the truck to Mr. Cline, despite Mr. Cline's signature not appearing on the receipt.

Ms. Rzendzian's testimony corroborated much of Gary Keene's testimony. She testified that Mr. Cline, who needed a new vehicle to drive to work and other places because his vehicle was “falling apart” and “ready to die,” found the truck, negotiated with Gary Keene to purchase the truck, gave Gary Keene money for the truck, and drove the truck home. Ms. Rzendzian was clear that she had not purchased the truck and that it had not been purchased for her. She further testified that, at the time, she had a suspended license and could not drive, and that the truck had been acquired for Mr. Cline to use.

Ms. Rzendzian also testified that, after Mr. Cline acquired the truck, he began using the truck “right away,” that he drove it every day to and from work or into town, and that he drove her around in the truck. She testified that the truck was parked at Mr. Cline's mother's house, where she and Mr. Cline resided, that Mr. Cline always kept the only key to the truck on him, and that she had to ask Mr. Cline for permission to use the truck.

Ms. Rzendzian further testified that, on the night of the accident, Mr. Cline gave her the keys and told her to drive the truck because Mr. Cline, who was on parole, was worried about driving it. Ms. Rzendzian said that she believed that Mr. Cline may have transferred the insurance from his prior vehicle to the truck and was worried about driving because the insurance had expired or lapsed in October 2012.

According to Ms. Rzendzian, Mr. Cline was going to purchase insurance for the truck as soon as he got money. Further, Ms. Rzendzian's grandmother, Joyce Gusa, testified that she understood that Mr. Cline was going to register the truck in his name based on what Ms. Rzendzian had told her, as well as statements made by Mr. Cline that he could not “transfer over . . . everything,” that is, the title and registration, until he had more money.

Ms. Rzendzian also testified that, following the accident, Mr. Cline told her that he had filed a lawsuit and was going to “get back a lot of money” and instructed her to say that the truck was “just parked” at his mother's house, which, according to Ms. Rzendzian, was not true because the truck was their main vehicle for transportation and they drove the truck.

Ms. Gusa also testified that Ms. Rzendzian had told her that Mr. Cline had instructed her to tell the insurance company that Ms. Rzendzian owned the truck so he would not get “in trouble.”

Mr. Cline filed a response to Allstate's motion, denying that he was the owner of the truck and arguing that material facts surrounding the truck's ownership were in dispute. Mr. Cline's motion relied primarily on his own deposition testimony, in which he denied purchasing or ever driving the truck.

Regarding the purchase, Mr. Cline testified that Ms. Rzendzian had purchased the truck from Gary Keene, and that Mr. Cline was there to inspect the truck as a mechanic for Ms. Rzendian, who was his friend and had asked him to look at it for her. Mr. Cline also denied that he ever drove the truck.

The trial court found that Mr. Cline was a constructive owner of the uninsured truck involved in the accident, granted Allstate's motion, and dismissed Mr. Cline's complaint.

He appealed, arguing that the trial court had erred in finding that he was as an “owner” of the uninsured truck involved in the accident and, therefore, was excluded from recovering no-fault personal injury protection (“PIP”) benefits under his mother's insurance policy.

Michigan Law

On the date of the accident, Michigan law defined “owner” to include:

[a] person renting a motor vehicle or having the use thereof, under a lease or otherwise, for a period that is greater than 30 days.

MCL 500.3101(2)(h)(i).

The Appellate Court's Decision

The appellate court affirmed.

In its decision, the appellate court explained that Michigan law precluded owners of uninsured vehicles from receiving PIP benefits. Because the truck was not insured at the time of the accident, the appellate court reasoned, Mr. Cline only could recover PIP benefits as a resident relative under his mother's insurance policy if he was not an “owner” of the truck at the time of the accident.

Ownership under Michigan law, the appellate court said, amounted to a “regular pattern of unsupervised usage” or “unfettered use” in ways comporting with ownership, including involving “the right to use the vehicle for a period greater than 30 days.”

The court then pointed out that evidence presented by Allstate established that Mr. Cline had entered into an agreement with Gary Keene to purchase the truck for Mr. Cline's own use, made a partial payment, took immediate possession of the truck, and then actually used the truck as an owner, thereby demonstrating that he had a continuous right to use the truck after acquiring it.

Additionally, the appellate court added, Mr. Cline's regular and unsupervised use of the truck after acquiring it, attested to by Ms. Rzendzian, further established that he had a right to use the truck – and actually did use the truck – “in a manner comporting with ownership.”

The appellate court conceded that Mr. Cline's deposition testimony “clearly disputed Allstate's evidence” asserting that Mr. Cline had purchased the truck and had driven it on a regular basis. The appellate court then explained that an inquiry about ownership under Michigan law went “beyond these facts,” and the appropriate focus was on Mr. Cline's right to use – not actual use of – the truck for more than 30 days. The appellate court then ruled that Mr. Cline had failed to dispute, with specific facts, the testimony indicating that he had a continuous right to use the truck once it had been acquired.

In the appellate court's opinion, the undisputed testimony “sufficiently established” that Mr. Cline's conduct with respect to the truck after it had been acquired “was in a manner that clearly comport[ed] with ownership, even if he denied purchasing or driving the truck.”

Accordingly, the appellate court held that reasonable minds could not differ regarding whether Mr. Cline had a continuous right to use the truck after it had been acquired and, thus, that he was a person “having the use” of the truck for over 30 days within the meaning of Michigan law. After the truck had been acquired, regardless of who had acquired it or whether Mr. Cline actually drove it, Mr. Cline had a right to use it, as evidenced by Ms. Rzendzian's undisputed testimony that the truck had been acquired for Mr. Cline's use and that he had acted in a proprietary and possessory manner comporting with ownership of the truck, the appellate court found.

Under these circumstances, the appellate court concluded, Mr. Cline failed to create a genuine issue of material fact regarding whether he qualified as an “owner” within the meaning of Michigan law.

The case is Cline v. Allstate Ins. Co., No. 336299 (Mich. Ct.App. June 21, 2018).