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Carpool Passenger Injured in Michigan Car Accident Entitled to Underinsured Motorist Benefits

In Pugh v. Farmers, ____ Mich App ____ decided October 20, 2011, (Docket No. 299034) the Court issue a published decision holding that a car pooler is not excluded from underinsured motorist benefits. In this the case, Farmers insured a vehicle owned by Orlander Meadows, Jr., which was involved in an accident while plaintiff was riding as a passenger. Plaintiff suffered injuries and sought underinsured motorist benefits from Farmers.

The underinsured motorist provision of the insurance policy included an exception providing, “This coverage does not apply to bodily injury sustained by a person . . . [w]hile occupying your insured car when used to carry persons or property for a charge. This exclusion does not apply to shared-expense car pools.”

In this case, Meadows was driving plaintiff and a colleague to work in his vehicle. Plaintiff gave Meadows approximately $20 a week. Meadows maintained that he was not hired, and that he had never entered into a contract by which money would be exchanged for his driving services. Instead, Meadows maintained, he was involved in a carpool. Meadows argued that he never charged or billed plaintiff for his driving services, but that plaintiff would occasionally “chip in” money to help pay for gasoline.

Meadows stated any money he collected “was used primarily for gas and was not earned income.” Plaintiff does not have a driver’s license and thus never took turns driving. Farmers argued before the trial court that plaintiff had “hired . . . Meadows . . . to drive her around” and that she was accordingly not entitled to underinsured motorist benefits. Defendant maintained that this was unequivocally a “carry for charge situation,” and not a carpool situation.

The trial court ruled that the arrangement could fit into the definition of a car-pool and therefore denied Farmers motion to dismiss the case. The Court of Appeals agreed with the trial court, holding that the arrangement at issue in this case qualified as a “shared expense car pool[]” within the meaning of the insurance policy and did not involve Meadows using the vehicle for hire.

In its holding, the Court stated that it was immaterial that Meadows and Plaintiff were not “friends” or “coworkers” because “there is simply no requirement that members of a carpool know one another socially.” In addition, the Court held that it did not matter that Meadows and the Plaintiff were not going to the same, exact location. In sum, the Court concluded that plaintiff and Meadows were participants in a shared expense carpool. Accordingly, the insurance policy’s exclusion for “bodily injury sustained . . . [w]hile . . . carry[ing] persons or property for a charge” did not apply in this case.