No-fault insurance priority dispute; MCL 500.3114(2)’s prioritization for vehicles “operated in the business of transporting passengers”; Farmers Ins Exch v AAA of MI; Smith v Farm Bureau Mut Ins Co of MI; Carveout for “a bus operating under a government sponsored transportation program” (MCL 500.3114(2)(c)); MIC Gen Ins Corp v Michigan Mun Risk Mgmt Auth (Unpub); Ahee v Novi (Unpub); Dial-A-Ride Transportation (DART); Michigan Assigned Claims Plan (MACP); The No-Fault Act (NFA); Personal protection insurance (PIP)

Concluding MCL 500.3114(2)(c) applied, the court held that plaintiff-Pool was first in priority for providing PIP benefits to a person (nonparty-C) injured while boarding a city-owned vehicle providing transportation services to the public. Plaintiff is the city’s insurer. After initially paying C benefits, plaintiff told her to instead seek them through the MACP. The MACP denied responsibility and later assigned C’s claim to defendant-Farmers Insurance Exchange. The trial court granted defendant summary disposition. Resolving this case required “examining MCL 500.3114(2)’s prioritization for vehicles ‘operated in the business of transporting passengers’ and its related carveout for ‘a bus operating under a government sponsored transportation program’” – MCL 500.3114(2)(c). In Farmers, the court “concluded subsection (2)’s applicability turns ‘on a primary purpose/incidental nature inquiry with respect to whether a motor vehicle is operated in the business of transporting passengers.’” In addition, Smith “recently distilled Farmers as having two components: ‘(1) whether the transportation of passengers is the primary purpose for which the vehicle is used and (2) whether the transportation of passengers is a primary, as opposed to incidental, component of the overall business or activity of the operator. If answered affirmatively,’” the vehicle in question “is ‘in the business of transporting passengers.’” But the court noted that neither case considered “this judicially created test in relation to subsection (2)(c)’s carveout for ‘a bus operating under a government sponsored transportation program’ and thus do not control. Reading the [NFA] as a whole, and subsection (2) of MCL 500.3114 specifically, the distinction between commercial enterprises and government-operated systems is paramount.” The court could not “imagine a more straightforward application of subsection (2)(c). First, all parties agree that DART is plainly a ‘government sponsored transportation program.’ . . . Second, the trial court found that the vehicle at issue was a ‘bus’ as contemplated by subsection (2)(c), and the Pool conceded at argument that it did not challenge that assertion below. Third, the parties agree that [C] was ‘not entitled to [PIP] benefits under any other policy’ (and that MACP does not constitute ‘any other policy’ for purposes of subsection (2)(c)). Under these facts and applying the plain language of the statute,” the Pool was first in priority. Affirmed.