Court Of Appeals Affirms Insurer’s Priority In DART Bus Injury Case Under No-Fault Act Exception

Michigan Municipal League Liability & Property Pool v Farmers Insurance Exchange

• Opinion Published: September 16, 2025 (Borrello, Kelly, Trebilcock)

• COA Docket No. 371789

• Oakland County Circuit Court

Holding: MCL 500.3114(2)(c) prioritizes vehicles “operated in the business of transporting passengers” and contains a related carveout for “a bus operating under a government sponsored transportation program.” In this case, the Court of Appeals ruled that this subsection applies in this case, and it affirms the trial court’s grant of summary disposition in favor of the defendant.

Facts: In the city of Niles, there is a Dial A Ride Transportation (DART) program, which provides transportation to residents who don’t otherwise have reliable transportation. The city owns and insures the vehicles used by DART, and city employees drive those vehicles. Niles resident Onlee Clemans was injured while boarding one of these vehicles. She did not have insurance that offered personal protection insurance (PIP) benefits under the no-fault act, so she sought coverage from the city’s insurer, plaintiff Michigan Municipal League Liability & Property Pool (Pool). After she was paid some benefits, the Pool then advised her to instead seek benefits through the Michigan Assigned Claims Plan (MACP), which provides PIP benefits to persons injured in an auto accident who otherwise do not have applicable insurance coverage under  MCL 500.3172(1). MACP ultimately denied responsibility. The Pool subsequently filed suit.

The Pool requested declaratory relief concluding MACP, not the Pool, must pay Clemans’s claims under MCL 500.3114. MACP then assigned the claim to defendant Farmers Insurance Exchange, and the Pool filed an amended complaint substituting Farmers for MACP. The Pool eventually sought summary disposition under MCR 2.116(C)(10), and Farmers requested summary disposition under MCR 2.116(I)(2) in response. The trial court ruled in favor of the defendant, Farmers, and the Pool appealed.

Key Appellate Rulings:

DART transportation services not incidental to city’s governmental functions such that city insurer is first priority to provide benefits.

Under Michigan’s no-fault act, an injured person’s insurer typically provides PIP benefits. In part, the act reads “[e]xcept as provided in subsection[] (2) . . . , a person who suffers accidental bodily injury arising from a motor vehicle accident while an occupant of a motor vehicle who is not covered under a personal insurance policy as provided in subsection (1)” shall claim PIP benefits through the MACP instead. MCL 500.3114(4);” However, this does not apply if subsection 2 - the exception at issue in this lawsuit - does apply.

One such exception set forth in subsection 2 is “A bus operating under a government sponsored transportation program.” At issue between the parties is whether the DART vehicle that Clemans injured herself while boarding constitutes “a motor vehicle operated in the business of transporting passengers” under MCL 500.3114(2). The court ruled in favor of Farmers, rejecting the Pool’s argument that DART’s transportation services are incidental to the city’s governmental functions, thus concluding that subsection 2’s exception is inapplicable.

All parties in this case agree that DART is a “government sponsored transportation program” and the trial court found that the vehicle Clemans injured herself entering was a “bus” without any challenge from the plaintiff. The parties also agree that Clemans was “not entitled to personal insurance benefits under any other policy” (and that MACP does not constitute “any other policy” for the purposes of subsection (2)(c)). Therefore, the appeals court ruled that the Pool is first priority in providing Clemans with her benefits, affirming the trial court’s decision.