Michigan Appeals Court Rules On Auto Insurance Company Dispute In Personal Injury Case

In 2013, Mark LaPointe was transporting a load in a semi-truck for Benore & Son, a farming company, when he was in a collision with a train at a railway crossing. LaPointe was thrown from the vehicle and incurred several injuries. The company was owned by Craig Benore and his mother, and they had two full-time and one seasonal employee. Benore and LaPointe were friends going back to childhood and LaPointe often helped out part-time in an informal arrangement. Benore used Westfield as their business auto insurance provider and Farm Bureau General as their personal vehicle insurer. After the accident, Farm Bureau paid benefits to LaPointe. Michigan is one of several states to employ a no-fault auto insurance model where each driver’s insurance provider pays for their own medical and damage claims regardless of fault. In 2014, Farm Bureau brought suit against Westfield citing that they should be responsible for coverage in the accident which was associated with the business.

The dispute centers on whether LaPointe was considered to be an employee or an independent contractor. Farm Bureau felt they were owed reimbursement because LaPointe was an employee working for the company at that time. Although the state laws do not clearly define an employee, it explains that independent contractors are not covered under commercial insurance. The means of determining whether an individual is an employee is by using an “economic reality test” which considers the following:

• How duties of the worker are controlled
• How wages are paid
• Whether the employee may be fired or disciplined
• Whether the individual and organization are seeking to accomplish a common goal

In the arrangement, LaPointe did not have control over his own duties, rather, Benore instructed him on exactly what to accomplish. His duty was exclusively to drive a truck. LaPointe obviously could quit if he chose to and Benore could have fired him. LaPointe was being compensated at a $12 per hour wage; however, he tracked his own hours and submitted them for pay.

In the trial court case, they determined that LaPointe was a seasonal employee used primarily during the harvest season. The trial court disagreed with Westfield that he was an independent contractor and ordered them to pay Farm Bureau for the claim. Westfield disagreed with the ruling and appealed it. The Appeals Court applied the economic reality test, yet they reached a different finding for these reasons:

• Benore had minimal control over LaPointe’s assigned duties
• LaPointe was rarely supervised or monitored
• LaPointe sometimes did more than just drive—often based on his own choice
• LaPointe decided when and for how long he worked
• Benore & LaPointe were friends who often bartered for work
• Benore did not have him on a formal W2 payroll nor issued him a 1099 form

The Appeals Court determined that LaPointe was not an employee during the truck accident. The prior decision was reversed by ordering a summary disposition in favor of Westfield. Farm Bureau was the party responsible for paying the claim