The No-Fault Act (the Act); PIP benefits; Whether plaintiff was an employee under the economic reality test; Priority of insurers; MCL 500.3114(3); Factors that should be considered in applying the economic reality test; Adanalic v. Harco Nat’l Ins. Co.; McKissic v. Bodine

The court held that the McKissic factors should be considered as well as those in Adanalic when determining whether a worker is an employee or independent contractor under the Act. It found that the trial court erred by ruling that plaintiff was not an employee under MCL 500.3114(3). Because that subsection applied, defendant-Cherokee Insurance was first in priority to pay him PIP benefits. Plaintiff was injured when he lost control of the truck he was driving. The truck was owned by a non-party (Speed Express), which had contracted with him to haul and deliver goods on its behalf. He sought PIP benefits from Speed Express’s no-fault insurer, Cherokee, but it “denied the claim on the grounds that plaintiff was an independent contractor of Speed Express and not its employee for purposes of MCL 500.3114(3). The trial court agreed that plaintiff was not an employee of Speed Express under the economic reality test and” thus, defendant-Progressive, “plaintiff’s personal no-fault insurer, was first in priority pursuant to MCL 500.3114(1).” Progressive argued that the trial court erred by determining “that plaintiff was not a Speed Express employee under the economic reality test . . . .” The parties disputed “what factors may be considered in applying the economic reality test.” In applying the economic reality test here, the court first analyzed the four Adanalic factors, which overlapped with the first, second, and seventh McKissic factors. It found that three of them supported “a finding that plaintiff was an employee.” In addition, “the McKissic factors not encompassed by the four-general factors also” weighed in favor of a finding that he should be considered an employee. Thus, considering the relevant factors, the court determined the economic reality test clearly showed “that an employee-employer relationship existed between plaintiff and Speed Express for purposes of the” Act. Reversed and remanded.