Insurer priority under the No-Fault Act (NFA); Personal protection insurance (PIP) benefits; MCL 500.3114(3) (employee entitled to benefits from the insurer of employer’s furnished vehicle); Whether an individual is an employee or an independent contractor; The economic reality test; Parham v Preferred Risk Mut Ins Co; McKissic v Bodine; Adanalic v Harco Nat’l Ins Co; Duckworth v Cherokee Ins Co; Powell v Employment Sec Comm’n; Auto Club Insurance Association (AAA)

The court held that plaintiff qualified as an employee of the nonparty company (TS) for whom he was acting as a truck driver at the time of his accident. Thus, because defendant-Carolina Casualty Insurance Company insured the truck, it was first in priority for paying PIP benefits under MCL 500.3114(3). This insurer priority dispute was between Carolina and defendant-AAA, which insured the personal vehicles of plaintiff and his spouse. The trial court granted Carolina summary disposition, ruling that AAA was first in priority because plaintiff was an independent contractor, not a TS employee, under the economic reality test. On appeal, the court reviewed case precedent, including recent cases “interpreting MCL 500.3114(3) in the context of injured semi-truck drivers[.]” Among other things, it noted “the fact that an individual may be regarded as an independent contractor for tax purposes does not control the determination of employee status under” the NFA. It found that the “more salient aspect of plaintiff’s compensation is that he was remunerated solely by [TS], for whom he exclusively hauled cargo.” It concluded that the factual record here did not support a finding that he fit within the description of quintessential independent contractors. It did support a finding that he “was wholly dependent on [TS] for the income derived from his central professional pursuit.” As to the rights to hire, fire, and discipline, the “facts collectively point to an at-will, terminable relationship, and the record does not reflect any likelihood that [TS] would incur liability upon” its dissolution. This factor weighed “in favor of an employee-employer relationship.” Further, while he had “a measure of discretion in the performance of his duties, such discretion is consistent with the inherent nature of the work and does not equate to the autonomy characteristic of an independent contractor.” The court also concluded that he was “subject to a degree of control congruent with the economic realities of the relationship” and that this supported “a finding of employee status.” In addition, the evidence showed that he “was one among several drivers employed by [TS] and that the company’s ongoing operations were fundamentally reliant upon this cadre of drivers to carry out its essential activities.” Reversed and remanded for entry of an order granting AAA summary disposition.