Buckeye Union Insurance v. Johnson
Buckeye Union Insurance v. Johnson
Opinion of the Court
Plaintiffs in these consolidated cases appeal the order of the trial court granting summary judgment in favor of defendant United Security Insurance Company.
On November 27, 1974, the fuel line connecting the main and auxiliary fuel tanks on a truck belonging to Olen Morgan was cut by an unknown person. Morgan took the truck to a Ford dealer, Kenneth Johnson, who was doing business as Johnson Ford in Sparta, Michigan. Repairs were completed and Morgan picked up the truck. Fuel was not properly flowing between the two tanks, however, so Morgan returned the truck to the dealer for further repairs on December 2 or 3, 1974. A mechanic got under the truck with a trouble light in order to check on the problem. He planned to disconnect the fuel line, directing the fuel into a bucket. Unfortunately the fuel squirted past the bucket and hit the light bulb, causing the fuel to explode and ignite a fire that ultimately caused several hundred thousand dollars worth of damages.
United brought a motion for summary judgment on the basis that it was not liable as a matter of law. The motion was granted and plaintiffs have appealed.
Section 3121(1) of the no-fault automobile insurance act provides in part as follows:
"Under property protection insurance an insurer is liable to pay benefits for accidental damage to tangible property arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle * * MCL 500.3121(1); MSA 24.13121(1).
In the instant case it is not disputed that the damage was to tangible property or that it was accidental. Instead, the issue is whether the damage arose out of the maintenance of a motor vehicle as a motor vehicle. Clearly, Morgan’s truck was being maintained at the time of the accident. It is difficult to imagine a clearer example of maintenance of a motor vehicle as a motor vehicle. Work was being undertaken to correct a problem in the fuel line between two fuel tanks, work that was clearly related to the truck’s characteristics as a motor vehicle. Cf. Kudek v Detroit Automobile Inter-Ins Exchange, 100 Mich App 635, 637; 300
Based on these principles, we hold that a sufficient causal connection existed in the instant case between the maintenance of Morgan’s truck and the damage which resulted. The damage arose directly out of the work being done on Morgan’s truck. While the alleged negligence of the dealership and its mechanic might be seen as an independent cause, this does not defeat the otherwise established causal connection. Accordingly, under the no-fault act, United would be liable for the damage based on its policy with Morgan.
United also argues, however, that the no-fault act was not intended to displace well-established principles concerning the liability of garage keepers. In support of this position is this Court’s recent decision in Liberty Mutual Ins Co v Allied Truck Equipment Co, 103 Mich App 33; 302 NW2d 588 (1981), where the facts were strikingly similar to those in the instant case. In Liberty Mutual Gerald K. Sterling brought his truck to the Allied Truck Equipment Company for the installation of an auxiliary fuel tank. The tank was installed but did not function properly, so Sterling returned the truck to Allied. Repairs were made but Sterling returned the truck a second time complaining that the problem still had not been resolved. This time the service manager crawled under the truck to examine the auxiliary tank’s fuel line. While working underneath the truck, fuel dripped from the line, hit the floor, and splashed on the bulb of a trouble light. The fuel ignited, resulting in a fire which destroyed Allied’s building and several trucks which had been left with Allied for repairs.
On appeal, this Court examined both the garage keepers’ liability act and the property protection provisions of the no-fault act and concluded that the damage did not arise out of the maintenance of a motor vehicle, but out of a bailment for hire. The Court continued:
"While a strong argument may be made that the accident arose out of the maintenance of the vehicle within the meaning of the no-fault insurance act, we feel constrained to hold that, whenever a bailment-forhire situation is presented, it is the bailment of the vehicle and not the maintenance of the vehicle that governs. To hold otherwise would unnecessarily eviscerate the garage keepers’ liability act and would extend no-fault insurance coverage beyond what we believe the Legislature intended. The garage keepers’ liability act protects a vehicle owner from property damages inflicted on the vehicle while in the care and custody of a bailee for hire. The no-fault insurance act, if applicable to a bailment situation, would render that presumption in the garage keepers’ liability act meaningless. We cannot find that the Legislature intended to alter the common law of bailments for hire so drastically when it enacted the no-fault insurance act.” Liberty Mutual, supra, 40-41.
After careful analysis, we do not believe that the
This does not end matters since at least two of the claims in the instant case concern damage to vehicles entrusted to the dealership and since Liberty Mutual could be read as holding that the no-fault act does not apply to damage to any sort of property which results from an accident such as that in the instant case. In this regard we respectfully suggest that Liberty Mutual was wrongly decided. The garage keepers’ liability act is princi
The Court in Liberty Mutual was obviously concerned that a holding such as ours in the instant case would effectively destroy the garage keepers’ liability act. This is not necessarily tbe case. In cases where the causal connection between the ownership, operation, maintenance, or use of a motor vehicle and damage to a motor vehicle entrusted to a garage keeper is insufficient to invoke the operation of the no-fault act the parties will be cast back into a fault-based system of recovery and the presumptions set up in the garage keepers’ liability act will be in full force. In cases where the causal connection is established, however, we can only conclude that the Legislature intended the no-fault act (which was enacted well after the garage keepers’ liability act) to apply notwithstanding fault-based concepts such as those involved in the garage keepers’ liability act.
The trial court erred in granting summary judgment in favor of defendant United Security Insur
Reversed and remanded.
Reversed by the Supreme Court September 1, 1981, 411 Mich 633; 309 NW2d 544 — Reporter.
Dissenting Opinion
(dissenting). I respectfully dissent for the reasons set forth in Liberty Mutual Ins Co v Allied Truck Equipment Co, 103 Mich App 33; 302 NW2d 588 (1981).
Reference
- Full Case Name
- Buckeye Union Insurance Company v. Johnson; Home Insurance Company v. Johnson
- Cited By
- 23 cases
- Status
- Published