Michigan Insurance Company loses appeal over PIP payments to corporate "ward" in assisted living

Lawrence Stubbe, a pedestrian, suffered more than $700,000.00 in medical expenses after he was struck by a car.  The insurer of the car, Michigan Insurance Company, was required to pay Stubbe's no fault PIP benefits (including medical) as the insurer of the car that hit Stubbe, because he did not own a car or have his own PIP coverage.  Michigan sued National Liability & Fire Insurance, the auto insurer of Stubbe's assisted living facility, arguing that Stubbe was a "ward" of Quality AFC Homes, Inc., and therefore covered under Quality's PIP coverage.

The trial judge ruled that National owed Stubbe's PIP benefits, holding that Stubbe was Quality's "ward" as a matter of law.  National appealed, arguing that under the law and under the policy issued to Quality, there was a material factual question with regard to whether Stubbe was a ward of the corporation.  While a corporation can have a "ward" under Michigan law, the facts suggested that Quality had not been appointed a Conservator or Guardian for Stubbe, that Stubbe was highly independent, and that the parties' relationship did not meet the normal understanding of a "wardship."  The Court of Appeals agreed with National and sent the case back to the trial court for a jury evaluation of whether Stubbe was Quality's ward.  Even  though the no fault statute would not have mandated PIP coverage for Stubbe, an insurer's language can provide broader coverage than the no fault law mandates, and it is a question of fact whether it did so in this case.