"Possessors" of vehicle are insured owners and entitled to PIP benefits; AutoOwners loses technical defense to fraud verdict

Dawn Purchase was hurt in a car accident in 2007.  She was riding in a car titled to her niece, who did not insure the car.  The car was insured with Auto-Owners, however, under a policy paid for by Dawn's parents.  Purchase sued for PIP benefits and demanded a complete copy of Auto-Owners Personal Injury Protection adjustment file.  Auto-Owners claimed it was in full compliance with the discovery request, but later admitted that it provided Purchase's lawyers only 1400 pages of the 5,000 page file.  It also acknowledged, later, that the 1400 pages provided did NOT include a $38,000.00 bill from Sparrow Hospital.

The parties settled the PIP claim, through the case evaluation process, for $65,000.00.  Several months later, Sparrow sued both Purchase and Auto-Owners for non-payment of its $38,000.00 bill--which had never been provided to Purchase or her attorneys.  Purchase sued Auto-Owners for fraudulently providing her with only partial legal discovery, thereby denying her the opportunity to compel payment of the Sparrow billing.  Auto Owners argued that it did not commit fraud and that in any event, it did not insure the "owner" of the vehicle involved.

The trial judge granted summary disposition on the ownership issue, and a jury found Auto-Owners guilty of fraud.  Auto-Owners appealed both decisions.  The Court of Appeals noted that under the No Fault statute, Purchase's parents met one of the three definitions of "owner," in that they enjoyed the use of the car for more than 30 days.  It also pointed out that there was no genuine issue of material fact on the latter issue, given the undisputed testimony that the parents paid for insurance on the vehicle, possessed the only set of keys, kept the vehicle at their home, and used it for short trips without seeking permission from the titled owner--who did not keep a set of keys and needed to ask permission to use the car.

The Court held that Auto-Owners' alleged factual disputes (e.g., that the Morrises owned other cars) were specious, or related to disposal of the car after the accident (and after the relevant time period).  On that basis, the Court upheld the grant of summary disposition on the ownership issue and  deemed the fraud verdict appeal moot, given Auto-Owners' subsequent payment of the hospital bill.