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Michigan Supreme Court again examines the impact of "joyriding" statute; reverses summary disposition for injured operator of cycle


Under the No Fault Act, a person may not collect Personal Injury Protection benefits (medical and three years' wages) if he or she is using a motor vehicle or motorcycle that had been "taken unlawfully."  The Supreme Court recently re-evaluated this rule in Spectrum Health Hospitals v. Farm Bureau, and sharply limited when insurers must pay benefits. Prior to the decision in Spectrum, the Michigan Courts had held that this exclusion did not apply to some "joyriding" operators who lacked the express legal consent of the owner to take the vehicle.  

When the hospital in  Spectrumstanding law and granted insurers a broader exclusion.  If the owner denied giving consent to operation of a vehicle, the insurer would be relieved of the duty to pay PIP benefits, even if there was inadequate foundation for a criminal conviction of "unlawful taking." 

In Rambin v. Allstate and Titan, the Court of Appeals had held  that under the facts as documented for summary disposition, the Plaintiff Rambin was entitled to PIP benefits because he had no knowledge that the vehicle he was operating was "taken unlawfully."  He claimed that he had borrowed the bike from a friend in order to participate in a Club Ride.  

The Supreme Court rejected Titan's claim that the operator was guilty of a "strict liability crime" regardless of his knowledge or intent, and concluded that an alleged "joyrider" may prove that he was unaware of an unlawful taking.  Nevertheless, the high court reversed the summary disposition in favor of Rambin and sent the case back to give the insurer a further opportunity to prove that Rambin's claim of lack of knowledge was false.

Justice Cavanaugh dissented, reaffirming his dissenting opinion in Spectrum that the historical understanding of the statute was correct, and the phrase "taken unlawfully" should exclude from PIP benefits only those cases where there was an actual "vehicle theft."

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