Background
Mohammed Abdulla is a commercial truck driver who was injured in December 2020 when the tractor-trailer he was operating collided with another tractor-trailer in Missouri. He was hauling cargo from Michigan to Texas. The tractor he drove was titled to Tornado Trucking, LLC — a Michigan limited-liability company of which Abdulla was the sole member and only driver. Under an independent-contractor lease agreement, Land Trucking, LLC engaged Tornado Trucking to haul freight, with Abdulla retaining the right to make all operational and maintenance decisions for the tractor. The trailer was owned by Land Trucking.
No policy in place provided personal protection insurance (PIP) coverage for Abdulla under the circumstances of the accident. Tornado Trucking’s bobtail policy with Great American excluded PIP when the tractor was being used to transport cargo for a lessee. Land Trucking’s Progressive Southeastern policy did not list the tractor as a covered vehicle. Abdulla’s father held an Auto Club no-fault policy, but it did not name Abdulla as an insured and did not list the tractor. Abdulla sued all three insurers and eventually added the Michigan Automobile Insurance Placement Facility, seeking a declaration that one of them owed him PIP benefits.
Auto Club moved for summary disposition, arguing that Abdulla qualified as an “owner” of the tractor under MCL 500.3101(3)(l)(i) — which defines “owner” to include anyone “having the use of a motor vehicle, under a lease or otherwise, for a period that is greater than 30 days” — and that because no required PIP security was in effect on the tractor, MCL 500.3113(b) barred him from any PIP recovery. The Wayne Circuit Court denied that motion. The Court of Appeals affirmed in a split decision, reasoning that Abdulla had only business use of the tractor in his capacity as a member of a separate legal entity and therefore lacked sufficient indicia of personal ownership. Judge Jansen dissented. The Michigan Supreme Court granted Auto Club’s application and heard oral argument.
The Court’s Holding
In a unanimous opinion by Justice Zahra, the Michigan Supreme Court reversed the Court of Appeals and held that Abdulla was an “owner” of the tractor within the meaning of MCL 500.3101(3)(l)(i). The Court applied the standard from Twichel v. MIC Gen. Ins. Corp., 469 Mich 524 (2004), which directs courts to focus on the nature of a person’s right to use the vehicle rather than the character or quantity of actual use. Abdulla drove the tractor exclusively and continuously for at least six months before the accident, was the sole decision-maker as to its operation and upkeep, needed no one’s permission to use it, and kept it in his custody at a Dearborn truck stop. Those facts established proprietary and possessory use comporting with ownership for well over 30 days.
The Court rejected the Court of Appeals’ business-versus-personal-use distinction, finding no such limitation in the statutory text. MCL 500.3101(3)(l)(i) defines “owner” as a “person . . . having the use of a motor vehicle,” without any qualifier restricting that phrase to individual or personal use. The Court also rejected the argument that Tornado Trucking’s status as a separate legal entity shielded Abdulla from the owner designation. While LLC statutes make the company a distinct entity, they cannot override the no-fault act’s broader, function-over-form definition of “owner.” The Court emphasized that the statute is designed to ensure that those who actually control and benefit from a vehicle maintain appropriate insurance, and it deliberately includes the catchall phrase “or otherwise” to capture proprietary arrangements beyond formal leases or rentals.
Because Abdulla was an owner of the tractor and no required security was in effect at the time of the accident, MCL 500.3113(b) barred him from recovering PIP benefits from any source. The Court further held that neither the out-of-state-accident provision (MCL 500.3111) nor the priority provision (MCL 500.3114) could override MCL 500.3113(b)’s disqualification. The judgment of the Court of Appeals was reversed and the case remanded for further proceedings.
Key Takeaways
- A sole member of an LLC who exercises exclusive, unsupervised, and proprietary control over a company-owned vehicle for more than 30 days qualifies as a statutory “owner” under MCL 500.3101(3)(l)(i), even though title is held in the LLC’s name.
- The ownership inquiry under Michigan’s no-fault act focuses on the right to use the vehicle — not whether use is personal versus commercial — making the business/personal distinction legally irrelevant under this statute.
- An owner of an uninsured vehicle is barred from PIP benefits under MCL 500.3113(b) regardless of other potentially applicable priority or out-of-state-accident provisions in the no-fault act.
- Where an uninsured vehicle has multiple owners, all such owners are subject to the statutory exclusion — meaning LLC entity status does not insulate a sole-member operator from the insurance-maintenance obligation or its consequences.
- Commercial trucking lease agreements that fail to clearly designate insurance responsibility (as required by 49 CFR 376.12(j)(1)) create significant coverage gaps that courts will not fill through liberal construction of the no-fault act.
Why It Matters
This decision has significant practical consequences for owner-operators in the trucking industry who conduct business through single-member LLCs. Many such drivers assume that titling a vehicle in the company’s name shields them personally from the no-fault act’s insurance-maintenance requirements. The Michigan Supreme Court has now made clear that the substance of a person’s relationship with a vehicle — exclusive, unsupervised, long-term control — governs the ownership determination, not corporate form. Owner-operators who fail to maintain PIP coverage on vehicles they effectively control will be left without recourse for their own injuries if an accident occurs.
More broadly, the decision reinforces the no-fault act’s policy of aligning insurance obligations with actual patterns of vehicle use. Attorneys advising trucking companies, owner-operators, or anyone who uses a business-owned vehicle as a primary driver should counsel clients to ensure PIP coverage is in place — and that lease agreements explicitly allocate insurance responsibility as federal regulations require — or risk a total bar to no-fault benefits.