Summary
holding that intentional gunshot injury allegedly caused by defendant's failure to provide a protective partition in a taxicab primarily driven in areas of high crime did not invoke coverage because the automobile was not the instrumentality of the injury
Summary of this case from Mid-Century Insurance Company v. LindseyOpinion
Docket Nos. 162911, 162924, 165938.
Submitted January 12, 1995, at Grand Rapids.
Decided August 29, 1995, at 9:25 A.M. Leave to appeal sought.
Birkhold Associates, P.C. (by Mark C. Charter), for Wakefield Leasing Corporation.
Dilley, Dewey, Damon Condon, P.C. (by Jonathan S. Damon), for Transamerica Insurance Company.
Foster, Swift, Collins Smith, P.C. (by Scott L. Mandel and William F. Pettit), for Michigan Mutual Insurance Company.
Plaszczak Bauhof, P.C. (by James F. Bauhof), for Donald and Vickie Muraoka.
Before: MacKENZIE, P.J., and GRIFFIN and NEFF, JJ.
These consolidated appeals involve two actions for declaratory judgment regarding liability coverage for a personal injury claim asserted by Donald and Vickie Muraoka against Wakefield Leasing Corporation, doing business as Port City Cab and Kalamazoo Yellow Cab (Wakefield). Donald Muraoka seeks damages for personal injury and Vickie Muraoka seeks damages for loss of consortium arising out of an assault and battery committed upon Donald Muraoka by a passenger in Muraoka's taxicab. Muraoka alleges the status of a subcontractor at the time he was leasing a taxicab from Wakefield.
In the underlying complaint for personal injuries against Wakefield, the Muraokas assert the following theories of liability: (1) failure to warn of other delivery robberies that were known or should have been known by Wakefield, (2) failure to properly train its employees, agents, or assigns to warn subcontractor drivers such as Donald Muraoka of the dangers of driving a taxicab, (3) failure to instruct its employees or agents to notify the police department when subcontracting drivers are sent into an area known for its high crime rate, and (4) failure "to provide a safe motor vehicle to be used as a taxicab, in that there was no protection in the way of a screen or shield between the front and rear seats to prevent persons in the rear of the vehicle from robbing or assaulting the driver."
In this appeal, we express no opinion regarding the merits of the underlying personal injury action. We review only the order of the lower court holding Wakefield's automobile liability insurance carrier, defendant Michigan Mutual Insurance Company, solely responsible for providing a defense. On cross appeal, Wakefield contends that the lower court erred in failing to order both indemnification and defense. Although the personal injury action had not been tried, Wakefield argues that the lower court erred in limiting its ruling to a duty to defend.
With regard to the cross claim, we hold that the lower court correctly reserved its ruling regarding the duty to indemnify on the ground that the issue was premature. With regard to the principal appeal, we hold that the duty to defend the underlying tort action is the sole responsibility of the general liability carrier, defendant Transamerica Insurance Company. Accordingly, we reverse and remand for entry of judgment in favor of defendant Michigan Mutual and against defendant Transamerica.
I
At the outset, we dispense with three of the claims in the personal injury complaint that clearly fall within the scope of the general commercial liability policy and not the automobile liability policy. The allegations of failure to warn of other robberies in the area; failure to properly train employees, agents, or assigns to warn drivers; and failure to instruct employees or agents to notify the police department when drivers are sent into areas with high crime rates are clearly claims that do not arise out of the ownership, operation, or use of a motor vehicle. These claims pertain directly to the general operation of a taxicab business; they are unrelated to the operation, maintenance, or use of a motor vehicle itself. Accordingly, defendant Transamerica must provide a defense because these claims are clearly within its coverage.
II
The main issue is whether the allegation of Wakefield's liability for failing to install a partition in the taxicab also triggers a duty to defend under defendant Michigan Mutual's automobile liability policy. We hold that it does not.
In this appeal, both Wakefield and Transamerica argue that the causality standard for residual liability insurance is different from the causality standard for no-fault personal protection or property protection insurance. We disagree and have rejected this argument in Century Mutual Ins Co v League General Ins Co, 213 Mich. App. 114; ___ N.W.2d ___ (1995). See also A G Associates, Inc, v Michigan Mutual Ins Co, 110 Mich. App. 293; 312 N.W.2d 235 (1981).
In Century Mutual, we applied the Thornton / Kangas causality standard to a question of residual automobile liability coverage. In doing so, we adopted 6B Appleman, Insurance Law Practice (Buckley ed), § 4317, pp 367-369, as a clarifying test:
Thornton v Allstate Ins Co, 425 Mich. 643; 391 N.W.2d 320 (1986).
Kangas v Aetna Casualty Surety Co, 64 Mich. App. 1; 235 N.W.2d 42 (1975).
[T]hree rather interesting rules have been set up to determine the insurer's liability: 1. The accident must have arisen out of the inherent nature of the automobile, as such; 2. The accident must have arisen within the natural territorial limits of an automobile, and the actual use, loading, or unloading must not have terminated; 3. The automobile must not merely contribute to cause the condition which produces the injury, but must, itself, produce the injury.
III
Applying the above principles to the present case, we conclude that the allegation in the underlying personal injury complaint of failure to provide a protective partition is insufficient to invoke automobile liability coverage. Under the third part of the Appleman test, the "automobile must not merely contribute to cause the condition which produces the injury, but must, itself, produce the injury. See also Thornton, supra at 661, and A G Associates, supra at 296-298.
The allegation at issue relates not to the automobile itself, but to a special modification to the vehicle that should have been made in light of the automobile's use in areas with high crime rates. Wakefield's liability, if any, arises from a negligent or intentional business decision. No liability arising out of the ownership, maintenance, or use of the automobile itself is alleged. Rather, liability is predicated on the theory that it was tortious for Wakefield to: (a) dispatch an automobile, (b) as a commercial taxicab, (c) to an area with a high crime rate, (d) without providing safety partitions to separate the driver from his dangerous passengers. Like in Marzonie v Auto Club Ins Ass'n, 441 Mich. 522, 529; 495 N.W.2d 788 (1992), quoting with approval O'Key v State Farm Mutual Automobile Ins Co, 89 Mich. App. 526, 530; 280 N.W.2d 583 (1979), "the automobile was not the instrumentality of the injury." See also Bourne v Farmers Ins Exchange 449 Mich. 193; 534 N.W.2d 491 (1995). Cf. Vanguard Ins Co v Clarke, 438 Mich. 463, 473; 475 N.W.2d 48 (1991).
Accordingly, we hold that the duty to defend the underlying personal injury action is the sole responsibility of the general liability carrier, defendant Transamerica Insurance Company.
Reversed and remanded. We do not retain jurisdiction.
MacKENZIE, P.J., concurred.
NEFF, J. I concur in the result only.