Opinion
No. 1:15-cv-869
2016-09-07
HANSON COLD STORAGE CO., Plaintiff, v. CHIZEK ELEVATOR & TRANSPORT, INC. and Jason Scott Turley, Defendants.
Patrick D. Murphy, Boveri Murphy Rice & Ladue LLP, South Bend, IN, for Plaintiff. Dirk H. Beckwith, Foster Swift Collins & Smith PC, Farmington Hills, MI, for Defendant.
Patrick D. Murphy, Boveri Murphy Rice & Ladue LLP, South Bend, IN, for Plaintiff.
Dirk H. Beckwith, Foster Swift Collins & Smith PC, Farmington Hills, MI, for Defendant.
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS
Paul L. Maloney, United States District Judge
Defendant Chizek Elevator & Transport's tractor-trailer rolled into Plaintiff Hanson Cold Storage's warehouse, causing damage. At the time of the accident, no one was in the cab of the tractor-trailer. Plaintiff Hanson Cold Storage sued Chizek Transport and Defendant Jason Turley, the individual who parked the vehicle. Plaintiff filed a first-amended complaint. (ECF No. 8 "Complaint.") Defendants have moved to dismiss the complaint for failure to state a claim upon which relief can be granted. (ECF No. 14.) Plaintiff filed a response (ECF No. 15) and Defendants filed a reply (ECF No. 16). The Court has reviewed the pleadings, the briefs, and the applicable law. The matter will be decided without a hearing. See W.D. Mich LCivR 7.2(d).
The parties disagree about whether the lawsuit arises under Michigan's no-fault insurance act. Because the accident and resulting property damage arose from the tractor-trailer's use as a motor vehicle, Michigan's no-fault act governs the dispute, and the one-year limitations period applies. Therefore, Defendants' motion to dismiss is GRANTED because the lawsuit was untimely filed.
I. Standard of Review
A complaint must contain "a short and plain statement of the claim showing how the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). This statement is intended to "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The complaint need not contain detailed factual allegations, but it must include more than recitations of the elements of a cause of action. Id. "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). A plaintiff must allege facts that "state a claim to relief that is plausible on its face," and that are sufficient to "raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 570, 127 S.Ct. 1955.
An action may be dismissed if the complaint fails to state a claim upon which relief can be granted. Fed.R.Civ.P. 12(b)(6). A Rule 12(b)(6) motion to dismiss requires the Court to " ‘construe the complaint in the light most favorable to the plaintiff, accept its allegations as true, and draw all reasonable inferences in favor of the plaintiff.’ " Jones v. City of Cincinnati , 521 F.3d 555, 559 (6th Cir.2008) (quoting Directv, Inc. v. Treesh, 487 F.3d 471,476 (6th Cir.2007) ). A defendant bringing a motion to dismiss for failure to state a claim under Rule 12(b)(6) tests whether a cognizable claim has been pled in the complaint. Scheid v. Fanny Farmer Candy Shops, Inc., 859 F.2d 434,436 (6th Cir.1988). Although the court considers the well-pled factual allegations in the complaint, a motion to dismiss turns exclusively on questions of law. See Thomas v. Arn, 474 U.S. 140, 150 n. 8, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985) ; see also Ashcroft , 556 U.S. at 674–75, 129 S.Ct. 1937 ("Evaluating the sufficiency of the complaint is not a ‘fact-based’ question of law, ....").
When the allegations in "in the complaint affirmatively show that the claim is time-barred" dismissal of the claim under Rule 12(b)(6) is appropriate. Cataldo v. United States Steel Corp. , 676 F.3d 542, 547 (6th Cir.2012).
II. Applicable Law
This lawsuit requires the Court to apply Michigan law. This Court has jurisdiction over this case on the basis of diversity of citizenship between the parties. "In federal cases based on diversity jurisdiction, the court must apply state law as dictated by applicable state's highest court and legislature." Erie R.R. v. Tompkins , 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). When the highest court has not yet ruled on a matter, the court looks to "all available data" to determine state law, including the state appellate courts, potentially relevant dicta from the state supreme court, restatements of law, commentaries, and the majority rule among other states. Angelotta v. American Broad. Corp., 820 F.2d 806, 807 (6th Cir.1987). As the parties are diverse and Plaintiff has pled the required amount in controversy, see 8 U.S.C. § 1332(a), the Court applies Michigan law for the purposes of this case as the events giving rise to this action occurred in Oceana County, Michigan.
III. Discussion
The parties do not dispute the material facts underlying this lawsuit. The incident occurred on August 20, 2014. Jason Turley, an agent of Chizek Transport, parked the semi-truck and attached trailer across the street from the Hanson Cold Storage warehouse. The tractor-trailer was parked on a downhill grade. Turley forgot to set the brakes on the trailer and did not place wheel chocks under the tires of either the semi-truck or the attached trailer. The semi-truck and attached trailer rolled from a parked position on a downhill grade, crossed the road, jumped a curb, went through a fence, and collided with the side of Plaintiff's warehouse. When the accident occurred, no one was inside the vehicle driving, braking, steering, controlling, or otherwise operating the truck.
Plaintiff sued Chizek Transport and Jason Turley. Plaintiff alleges Defendants had a duty to secure and park the truck in a safe and reasonable manner. Plaintiff asserts Defendants breached that duty. Plaintiff asserts further that the proximate cause of the damage to its warehouse was Defendants' negligence. Plaintiff insists that Defendants can be held liable because Michigan's no-fault insurance statute does not apply to this accident. The gist of Plaintiff's argument is that the tractor-trailer was not being used as a motor vehicle when the accident occurred. In their motion, Defendants argue that the no-fault act governs the cause of action. Whether a motor vehicle is being used as a motor vehicle, for the purposes of the no-fault act, is a question of law and not a question of fact. See Putkamer v. Transamerica Ins. Corp. of America, 454 Mich. 626, 563 N.W.2d 683, 685 (1997) ; Krueger v. Lumbermen's Mut. Cas. and Home Ins. Co., 112 Mich.App. 511, 316 N.W.2d 474, 476 (1982).
A. Intersection of Michigan's Owner's Liability Act and Michigan's No-Fault Insurance Act
Plaintiff seeks compensation for property damage. Through the owner's liability statute, Mich. Comp. Laws §§ 257.401, et seq. , Michigan allows a cause of action against the owner of a motor vehicle for injuries arising from the negligent operation of the vehicle by authorized users. DeHart v. Joe Lunghamer Chevrolet, Inc., 239 Mich.App. 181, 607 N.W.2d 417, 419 (1999) ; Travelers Ins. v. U – Haul of Michigan, Inc., 235 Mich.App. 273, 597 N.W.2d 235, 237 (1999). The no-fault insurance statute, Mich. Comp. Laws §§ 500.3101, et seq. , however, abrogates owner liability when certain conditions are met. "The tort liability abolished by the no-fault act is only such liability as arises out of the defendant's ownership, maintenance or use of a motor vehicle, not liability which arises out of other conduct [.]" Citizens Ins. Co. of America v. Tuttle, 411 Mich. 536, 309 N.W.2d 174, 176 (1981) (owner of a cow was liable to the insurer of a truck for damages to the truck which occurred when the truck swerved to avoid a cow running loose on the road; the no-fault act did not abrogate liability for negligent keeping of cattle). When owner liability is abrogated, the cause of action lies against the insurer of the vehicle, not the owner. Travelers Ins., 597 N.W.2d at 240.
B. Causation Under the No-Fault Act—Transportational Function
The no-fault statute outlines when the insurer of a motor vehicle may be held liable for property damage. "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 subject to the provisions of this section and sections 3123, 3125, and 3127." Mich. Comp. Laws § 500.3121(1). The Michigan Supreme Court referred to this passage as a "threshold requirement." Turner v. Auto Club Ins. Ass'n, 528 N.W.2d 681, 687 (Mich.1995). For a claimant to be entitled to insurance benefits from the insurer of the owner of a motor vehicle, the injury must result from the use of a motor vehicle as a motor vehicle. McKenzie v. Auto Club Ins. Ass'n, 458 Mich. 214, 580 N.W.2d 424,426 (1998) ; Turner, 528 N.W.2d at 685 ; Thor n ton v. Allstate Ins. Co., 425 Mich. 643, 391 N.W.2d 320, 327 (1986).
Section 3123 identifies exceptions to liability for damages to property, none of which apply. Defendants have not argued that any exception in § 3123 applies. Section 3125 provides for an order of priority when there are property protection benefit claims against several insurers. Defendants have not argued that this section is relevant to this motion. Finally, § 3127 incorporates for property protection insurers the provisions for distribution of loss and for reimbursement and indemnification for personal protection insurers, §§ 3115 and 3116. Defendants have not argued that § 3127 is relevant to this motion.
The Turner opinion addressed issues arising from an accident involving multiple vehicles. The driver of a stolen car crashed into two different trucks, both of which were being driven at the time of the accident. One of the two trucks split in half and the rear portion of the truck hit a building. The gas tank in the rear portion of the truck exploded and the building caught fire. The owners and insurers of the building sought property protection benefits from the insurers of the owners of the stolen vehicle and the insurers of the owners of both trucks. In its opinion, the court discussed the phrase "use of a motor vehicle as a motor vehicle."
The court found that the damage to the building occurred because of the use of a motor vehicle as a motor vehicle. Turner , 538 N.W.2d at 685–86. The court found the holding in Thornton v. Allstate Insurance Company , 425 Mich. 643, 391 N.W.2d 320 (1986), a personal injury benefits case, applicable for the causation analysis. "The primary consideration in the causation analysis ‘must be the relationship between the injury and the vehicular use of a motor vehicle.’ " Turner , 528 N.W.2d at 686 (quoting Thornton , 391 N.W.2d at 327 ). In Thornton , a taxi cab driver was assaulted by his passenger. The court held that the insurer of the taxi cab was not liable for the driver's personal injury benefits because there lacked a causal connection between the use of the vehicle as a vehicle and the injuries suffered. Thornton , 391 N.W.2d at 326. The taxi was not the "instrumentality of the injury;" the vehicle was "merely the situs of the armed robbery—the injury could have occurred whether or not Mr. Thornton used the motor vehicle as a motor vehicle." Id. Applying this reasoning, in Turner the court found that the damage to the building occurred from the use of the truck as a motor vehicle. Turner , 528 N.W.2d at 686. Seconds before the truck split in half, the driver of the truck was using it for transportational purposes. Id. The court found it irrelevant that the truck had split in half before the rear half collided with the building. Id.
In McKenzie v. Auto Club Insurance Association , 458 Mich. 214, 580 N.W.2d 424 (1998), the Michigan Supreme Court further discussed the phrase "use of a motor vehicle as a motor vehicle." The court considered the provision for benefits for accidental bodily injuries arising out of the ownership, operation, maintenance or use of a motor vehicle as a motor vehicle. See Mich. Comp. Laws § 500.3105(1). The court reasoned that the phrase assumes the existence of other possible uses of a motor vehicle. McKenzie , 580 N.W.2d at 426. The court held that the "as a vehicle" language limited insurance coverage to situations where the accidental bodily injuries "result [ ] from the use of motor vehicles when closely related to their transportational function and only when engaged in that function." Id. The plaintiff was injured while sleeping in a camper attached to his pickup truck. The camper filled with carbon monoxide from a forced-air propane fueled heater. The court held that the plaintiff was not entitled to accidental bodily injury benefits because the camper was not being used as a vehicle when the injuries occurred.
Although § 3105 applies to personal injury benefits, the relevant phrase, "arising out of the ownership, operation, maintenance, or use of a motor vehicle as a vehicle," also appears in § 3121, which applies to property damage. "It is a basic canon of statutory construction that phrases within a single statutory section be afforded a consistent meaning." First City Bank v. Nat'l Credit Union Admin. Bd. , 111 F.3d 433, 438 (6th Cir.1997). Conversely, when the legislature used different terms within similar statutes, courts imply that different meanings were intended. United States Fid. Ins. Guar. Co. v. Michigan Catastrophic Claims Ass'n , 484 Mich. 1, 795 N.W.2d 101, 108 (2009). At least one panel of the Michigan Court of Appeals explicitly stated that the reasoning in McKenzie "which focused on the syntax of § 3105, applies equally to § 3121." EMC, Inc. v. Richter, No. 267643, 2008 WL 141112, at *1 (Mich.Ct.App. Jan. 15, 2008) (per curiam).
C. Use of a Motor Vehicle as a Motor Vehicle—The Case of Parked Cars
Applying the transportational function analysis, two courts have held that property damage resulting from a fire that originated in a parked car fell under the no-fault act. In both cases, the courts found a causal connection between the property damage and the ownership or use of the vehicle as a vehicle. See Michigan Millers Mut. Ins. Co. v. Lancer Ins. Co., 23 F.Supp.3d 850, 855–58 (E.D.Mich.2014) ; State Farm Fire & Cas. Co. v. Auto – Club Ins. Ass'n, No. 194426, 1998 WL 1991209, at *2–*3 (Mich.Ct.App. June 9, 1998) (per curiam). As a result, the insurer of the owner of the vehicle was liable under the no-fault act.
The lawsuit in State Farm was a dispute between the insurer of the homeowner and the insurer of the vehicle. The homeowner allowed a friend to park his truck in a carport connected to her home. The truck spontaneously caught fire and caused damaged to the home. The trial court looked to § 3121(1) of the no-fault act and granted summary disposition to the home's insurer. On appeal, the court found the required connection between the property damage and the ownership of the vehicle as a vehicle. The court explained
the quality that made the vehicle a motor vehicle are [sic] what caused the property damage. The truck is filled with flammable gasoline, has a source of ignition (such as the wiring), and has many flammable parts. Unlike a tree, sign post or boulder, these very qualities of the motor vehicle can lead it to spontaneously burst into fire. Further, the truck was parked in the carport precisely because it was a motor vehicle.
Id. at *2.
Michigan Millers was a similar dispute between insurance companies. A limousine insured by Lancer Insurance spontaneously caught fire while parked in a parking garage insured by Michigan Millers. Addressing the transportational function question, the court found that the limousine was not a dual-use vehicle, and concluded that "there is therefore no need to distinguish its use as a motor vehicle from any other possible use." Michigan Millers , 23 F.Supp.3d at 857. The court rejected any significance of the fact that the vehicle had not been driven for three days, and the owner had no intention of driving the limousine for another two days. "As a matter of logic, parking is a necessarily [sic] corollary of motoring" and, therefore, is " ‘closely related to transportational function of a vehicle.’ " Id. (quoting McKenzie , 580 N.W.2d at 428 ). The court found the reasoning and result in State Farm persuasive. Id. at 858.
Michigan courts have applied the causation analysis to personal injuries that occurred in accidents involving parked cars. See Putkamer, 563 N.W.2d at 687 ; Truby v. Farm Bur. Gen. Ins. of Michigan, 175 Mich.App. 569, 438 N.W.2d 249, 251 (1988) (per curiam); Krueger., 316 N.W.2d at 476–77. These opinions provide some useful insight for property damage claims brought under the no-fault act. The parked car statutory exceptions provide that injuries do "not arise of the ownership, operation, maintenance, or use of a parked vehicle as a motor vehicle unless any of the following occur[.]" Mich. Comp. Laws § 500.3106(1) (italics added). Thus, when one of the listed exceptions applies, the court must find that the injuries arose from the use of the parked car as a vehicle; there must be some causal connection between the injury and the vehicle as a motor vehicle. E.g., Block v. Citizen Ins. Co. of America, 111 Mich.App. 106, 314 N.W.2d 536, 538 (1981) (holding that injuries sustained when the plaintiff slipped carrying a load of boxes to a van did not have the required connection with the ownership, maintenance, and use of the van). "Occupying, entering into, or alighting from the vehicle" is one of the parked-car personal-injury statutory exceptions for receiving personal injury benefits under the no-fault act. See Mich. Comp. Laws § 600.3106(1)(c). Under this provision, Michigan courts have found a causal connection between the injury and the vehicle when the plaintiff was getting in and out of a car. See Putkamer, 563 N.W.2d at 688 (involving injuries sustained when the plaintiff slipped on ice while entering the vehicle and one leg was already in the vehicle); Krueger, 316 N.W.2d at 476–77 (involving injuries sustained when the plaintiff was exiting the vehicle and stepped into a hole).
As explained by the Michigan Supreme Court, for the parked car exceptions in § 3106, the claimant must show that the his or her injury meets one of the exceptions "because unless one of those exceptions is not met, the injury does not arise out of the use of a vehicle as a motor vehicle, under MCL 500.3105(1)." Frazier v. Allstate Ins. Co., 490 Mich. 381, 808 N.W.2d 450, 451 (2011). 10
In Truby , the plaintiff was granted benefits from the insurer of the vehicle under the no-fault act when the accident occurred while he was halfway in and halfway out of the car. Truby , 438 N.W.2d at 249. The plaintiff, Truby, was loading vehicles onto a two-tiered car hauler. After loading a pickup truck on the top tier, Truby set the parking brake in the pickup and began to exit the truck. The pickup truck began to roll and Truby fell to the ground, where he was injured. The Michigan Court of Appeals found that it was "foreseeable that a vehicle parked on a steep incline might roll backwards causing injury to a person alighting from the vehicle." Id. at 251. The court concluded that the injury arose from the use of the pickup. Id.
D. Application of the Transportational Function Test
Applying the lessons from these cases to Chizek Transport's tractor-trailer, the property damage to Plaintiff's warehouse occurred as the result of the ownership and use of the tractor-trailer as a vehicle. The Court finds the two spontaneous fire cases most analogous. Those two cases involved property damage, not personal injuries. In both cases, the damage to property resulted from something happening to an unattended vehicle. The application of the transportational function test in both cases is persuasive. The factual situation in this case does not present as difficult a legal question for the no-fault act as the two spontaneous fire cases. Unlike the two cases involving spontaneous fires, the tractor-trailer performed as it was supposed to perform. Gravity, rather than a combustion engine, caused the tractor-trailer to roll down a hill where it collided with a building. The vehicle did exactly what it was designed to do, it moved. In doing so, it struck Plaintiff's building, causing the property damage. The fact that no one was driving the vehicle does not resolve the question in Plaintiff's favor. At best, the absence of a driver undermines liability arising from the use of a motor vehicle, but it does not affect liability arising from the ownership of a motor vehicle. And, a motor vehicle may still be used in its transportational function even though it was not then being driven; parking is a corollary to driving. See Michigan Millers , 23 F.Supp.3d at 857. That Turley did not intend the tractor-trailer to roll down the hill does not alter the outcome; owners do not intend for their vehicles to spontaneously combust, and yet courts have found the insurers of vehicle owners liable for damage caused by such fires. To the extent the personal injury cases provide relevant reasoning, it was entirely foreseeable that a vehicle parked on an incline might roll down the hill, causing property damage along the way. See Truby , 438 N.W.2d at 251. Here, the tractor-trailer was the "instrumentality of the injury." See Thornton , 391 N.W.2d at 326.
E. One-Year Statute of Limitations
Because Chizek Transport's tractor-trailer caused accidental damage to property arising out of the ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle, the cause of action falls under the no-fault act. The no-fault act contains a one-year statute of limitations; a lawsuit for recovery of property protection insurance benefits cannot be commenced later than one year after the accident. Mich. Comp. Laws Ann. § 500.3145(2). The one-year limitation period for property protection benefits is not subject to tolling. Secura Ins. Co. v. Auto – Owners Ins. Co., 461 Mich. 382, 605 N.W.2d 308, 311 (2000) ; United States Fid. & Guar. Co. v. Amerisure Ins. Co. , 195 Mich.App. 1, 489 N.W.2d 115, 117–18 (1992) (per curiam).
This lawsuit is barred by the no-fault act's one-year statute of limitations. The accident occurred on August 20, 2014. Any lawsuit for property protection benefits arising from the accident must have been filed no later than August 20, 2015. This lawsuit was filed on August 27, 2015, one week after the statutory limitations period expired. As a result, this Court must grant the motion and dismiss the lawsuit.
The statute of limitation compels this result, even if Plaintiff sued the wrong party. Because the action falls under the no-fault act, Plaintiff should have sued the insurer of the tractor-trailer. In the complaint, Plaintiff alleges that Chizek Transport is self insured. (Compl. ¶ 33 PageID.34.) The one-year limitations period for property damage claims under the no-fault act applies to self-insured entities. Dep't of Transp. v. Landstar Ligon, Inc., No. 250744, 2004 WL 1752983, at *2 (Mich.Ct.App. Aug. 5, 2004) (per curiam). Defendants contend that Chizek Transport purchased the required insurance, and attach an affidavit attesting to that fact. (Def. Resp. Br. at 7 n.1 PageID.95; ECF No. 14-1 Affidavit ¶ 3 PageID.102.) Defendants do not identify the insurer. A factual dispute, if material, could not be resolved as part of a motion to dismiss and would require this Court to convert the motion into one for summary judgment. See Fed. R. Civ. P. 12(d). Because the lawsuit was filed outside the limitations period, any factual dispute about whether Chizek Transp purchased insurance is not a material fact. Therefore, the Court has not considered the affidavit and need not convert the motion to one for summary judgment.
IV.
The factual allegations in the complaint are taken as true. The lawsuit comes to federal court on diversity jurisdiction grounds. The cause of action arises under Michigan law, which the Court has applied to the facts. As a matter of law, Plaintiff's cause of action falls under Michigan's no-fault insurance act. The property damage occurred when Chizek Transport's tractor-trailer rolled into Plaintiff's warehouse. The property damage arose from the ownership and use of the tractor-trailer as a motor vehicle. Because the lawsuit falls under the no-fault act, it must have been filed within one year of the accident. Plaintiff filed this lawsuit after the one-year limitation period expired and the lawsuit must be dismissed.
ORDER
For the reasons provided in the accompanying Opinion, Defendants' motion to dismiss (ECF No. 14) is GRANTED and the claims brought against Defendants are DISMISSED WITH PREJUDICE. IT IS SO ORDERED.