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Auto insurer must pay medical expenses of boy injured as passenger in stolen vehicle

Tamika Brown and the Detroit Medical Center sued State Farm and Farm Bureau to recover medical expneses incurred when Brown's 16 year-old son was paralyzed in a motor vehicle collision.  The boy testified that another young man had offered him a ride home in "his aunt's car."  Young Brown claimed that he was unaware the driver was only 15 and unaware that the vehicle was stolen--although the two boys had been involved in a car theft about one month earlier.

Under the statutory priority scheme, State Farm would owe PIP benefits to a passenger of this vehicle, however, State Farm was not required to pay these benefits if the passenger was "using" a vehicle "that he had taken  unlawfully."  On the basis of this language, State Farm argued that  young Brown "must have known" that the vehicle was stolen and Brown was therefore "using a vehicle that he had taken unlawfully" and ineligible for PIP benefits.

The trial court and the Court of Appeals rejected State Farm's argument, noting that there was no evidence to tie Brown to the theft of this vehicle.  Further, there was no evidence to contradict Brown's claim that his friend told him the vehicle was his aunt's.  Under the circumstances, while the evidence might support an inference that Brown "should have known"  the vehicle was stolen, there was absolutely no evidence to support a statutory claim that he had taken the vehicle unlawfully.  The medical expenses involved will be allocated to the No Fault scheme, rather than to Medicaid as a simple matter of statutory interpretation.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
Fax: 231-929-7262