Supreme Court Provides Guidance on Relevant Inquiry for “Unlawful Taking” of Motor Vehicles Pursuant to MCL 500.313(a)

In Swoope v Citizens Ins Co, the Michigan Supreme Court distilled MCL 500.3113(a)’s rule that bars eligibility for PIP benefits where a vehicle in use was “taken unlawfully,” to limit its application to only where the taking of the vehicle was unlawful, as opposed to potential unlawful use of the vehicle itself. The Court’s interpretation of § 3113(a), while limiting the reach of the statute’s bar for recovery of PIP benefits in certain situations, appears consistent with both canons of statutory construction and prior decisions from the Court of Appeals. With clarification by the Supreme Court, the “unlawful taking” defense to PIP claims will rest on “how possession of the vehicle that was involved in the accident was gained” and whether that act was unlawful. Swoope v Citizens, slip op. at 12.

In Swoope, because the claimant’s possession of the vehicle was not unlawful, but rather her alleged use of it was (i.e., operating without a valid driver’s license or requisite insurance), the Supreme Court reversed the Court of Appeals’ decision that she was precluded from recovering PIP benefits, thereby reviving Plaintiff’s claim for first-party recovery. Swoope, slip op. 17. With this decision, the Court handed insurers and insureds alike what appears to be a limited application of §3113(a)’s bar.