This summary also appears under Insurance
Issues: The Worker's Disability Compensation Act (WDCA) (MCL 418.101 et seq.); The interpretation of § 161(1) of the WDCA (specifically defining who is an "employee" under the WDCA); Auto-Owners Ins. Co. v. All Star Lawn Specialists Plus Inc.; Amerisure Ins. Cos. v. Time Auto Transp., Inc.; Whether all three of the statutory criteria in subsection (n) must be shown for an individual to lose the "employee" classification or whether just one of any of the three criteria will do so; Statutory interpretation; Thompson v .Thompson; In re Bradley Estate; Petipren v. Jaskowski; Presumption that the Legislature knows the rules of grammar; Greater Bethesda Healing Springs Ministry v. Evangel Builders & Constr. Managers, LLC; "And"; Amerisure Ins. Co. v. Plumb; "Or"; Titan Ins. Co. v. State Farm Mut. Auto Ins.; Commercial general liability (CGL)
Court: Michigan Court of Appeals (Published)
Case Name: Auto-Owners Ins. Co. v. All Star Lawn Specialists Plus, Inc.
e-Journal Number: 55920
Judge(s): Special panel - K.F. Kelly, Cavanagh, O'Connell, and Stephens; Dissent – Borrello, Fort Hood, and M.J. Kelly
Agreeing with the analysis of the prior opinion in this case (Auto-Owners), the court overruled Amerisure, which held that if any one of the three statutory criteria in § 161(1)(n) are met the person is an "independent contractor" and not an "employee." Instead it adopted the reasoning in Auto-Owners and concluded "that all three of the statutory criteria in § 161(1)(n) must be met before an individual is divested of 'employee' status." Because defendant-Derry met only two of the three criteria, the court held that he enjoyed the status of an "employee" rather than that of an "independent contractor" at the time he was injured performing work for defendant-All Star. Thus, his exclusive remedy for his injuries was the WDCA. Of the three insurance policies issued by plaintiff-Auto-Owners (workers' compensation, CGL, and commercial automobile) only the workers' compensation policy provided coverage. "Auto-Owners had no obligation to provide coverage under the remaining two policies because they each contained exclusions for workers' compensation claims." Thus, the court reversed the trial court's order granting summary judgment in favor of Derry. He was injured while working on a lawn crew of All Star. Derry filed a personal injury action against All Star and defendant-Harrison, who co-owned and worked for All Star, claiming that Harrison negligently failed to lock the leaf vacuum machine to the truck, which caused the machine to tip over and strike him. Derry also filed an action against Auto-Owners, seeking coverage for no-fault benefits for his injuries. He argued that he was not an employee of All Star at the time of the injuries, but was an independent contractor, and thus, the workers' compensation policy did not apply. At issue was whether all three of the statutory criteria in subsection (n) - "that an individual 'does not maintain a separate business, does not hold himself or herself out to and render service to the public, and is not an employer subject to this act' - must be shown for an individual to lose the 'employee' classification (as the panel in Auto-Owners would have concluded) or whether just one of any of the three criteria will do so (as the panel in Amerisure concluded)." The court held that Amerisure was wrongly decided and that the principles of statutory construction were inappropriately applied. The Amerisure court "ignored the legislature's use of the word 'and.'" The court concluded that treating the use of "and" in § 161(1)(n) "as linking the three criteria for identifying independent subcontractors does not render the statute 'dubious.' But reading the statute as if the legislature used 'or,' instead of 'and,' which seems to be the approach that Amerisure took, produces results that might fairly be so described." The court held that the prior panel in Auto-Owners "properly emphasized that the three provisions are connected with the word 'and,' indicating the legislative intention that all three be satisfied for that exception to the definition of 'employee' to apply."
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