Mich. Supreme Court Will Scrutinize ‘Joyriding Exception’

The Michigan Supreme Court has agreed to hear arguments in separate cases that hinge on whether auto insurance companies are obligated to cover medical costs for drunken drivers who crash vehicles they are not supposed to be driving.

In one case, an appeals court ruled that an intoxicated man who crashed his wife Nicole’s car after taking it without her permission was covered by a “joyriding exception” to the state’s no-fault insurance law designed to require insurers to pay for medical treatment of teenagers who are hurt after crashing their parents’ vehicles.

According to court documents, Ryan DeYoung was intoxicated when he crashed his wife’s Oldsmobile Bravada on Sept. 17, 2008. DeYoung had driven despite knowing he was listed as an excluded driver on her auto policy and, as such, “was not allowed to drive the vehicle.”

DeYoung received medical treatment at a hospital, but Progressive refused to pay for the treatment because DeYoung was an excluded driver.

A trial court found that Progressive was not required to pay for the care of someone who was not covered. But in May, a state appeals court reversed that decision, ruling that the joyriding exception applied and that DeYoung was in fact covered.

Michigan insurance law states that a person is not entitled to personal injury protection (PIP) benefits if he or she crashes behind the wheel of a vehicle that was taken unlawfully, unless the person reasonably believed he or she was entitled to drive it.

But the state Supreme Court established the joyriding exception after concluding that the law did not apply to teens driving their family vehicles without permission and that legislators could not have meant to deny them coverage, according to court documents.

“Based on the reasoning in cases in which this Court has applied the joyriding exception, we must conclude that it applies here, notwithstanding that (DeYoung) was an adult, was intoxicated, and was an excluded driver on Nicole’s policy,” the court wrote.

The appellate panel noted that its members had voted against “holding a conflict panel to resolve the validity of this judicially created” exception.

“Consequently, whether this exception should have any continuing validity in our jurisprudence is squarely a matter left to our Supreme Court,” the panel wrote.

In the other case, an appeals court upheld an earlier ruling that required Farm Bureau Insurance to pay for medical treatment of a man who was drunk and had no driver’s license when he crashed his father’s truck into a tree in May 2008.

The coverage provider had argued at trial that, because Craig Smith Jr. knew his father did not want him to drive the vehicle—and because he was intoxicated and unlicensed—it was not obligated to pay.

But the hospital where Smith was treated argued successfully that Farm Bureau must pay because Craig Smith Sr. had given permission to drive the vehicle to his girlfriend, who had in turn permitted Smith Jr. to drive it.

An appeals court ruled in February that Smith Jr.’s actions did not constitute “unlawful” taking of the truck, and the insurer was therefore legally obligated to pay about $33,000 in medical bills.

The cases come up at a time of intense debate surrounding Michigan’s no-fault system.

The state is the only one nationwide to require insurers to provide unlimited PIP for motorists who suffer catastrophic injuries in crashes.

Proposed legislation would lessen the amount of PIP coverage drivers are required to carry. Proponents say that would lower premiums statewide, but critics believe it would benefit only insurers at the cost of taxpayers and accident victims in need of care.

The debate has led to a barrage of conflicting studies and surveys and a host of questions about auto insurance policy in the state.

About Gregor McGavin
Gregor McGavin is an award-winning journalist who has reported across the country for such publications as The Associated Press, the Arizona Republic, the Pittsburgh Tribune-Review and the Press-Enterprise.

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