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Case: Mohammed Abdulla v. Progressive Southeastern Insurance Company and Auto Club Group Insurance Company (Mich. Supreme Court, Nos. 167532 and 167533)
Status: Decided (July 7, 2026)
Overview
Under Michigan’s No-Fault Act, every owner or registrant of a motor vehicle required to be registered in the state must maintain statutory personal protection insurance (PIP) coverage. An individual who is an owner of an uninsured vehicle involved in an accident is barred from recovering no-fault PIP benefits under MCL 500.3113(b).
For years, a significant loophole persisted in Michigan case law, notably illustrated in DGI / Irwin v. Farm Bureau General Insurance Co. of Mich. (Mich. Ct. App., Docket No. 360819) and Irwin v. Farm Bureau. In Irwin, the Court of Appeals held that an individual sole member of a limited liability company (LLC) was not the “constructive owner” of a commercial vehicle titled in the LLC’s name, reasoning that the LLC was a separate legal entity under statutes like MCL 450.4210 and MCL 450.4406 and that the record lacked proof of the individual using the vehicle for non-LLC, personal reasons. This allowed commercial operators to forgo statutory PIP coverage on business vehicles, often carrying only cheap liability or “bobtail” policies, while retaining access to no-fault PIP benefits through personal or resident-relative household auto policies if an accident occurred. A “bobtail” policy typically provides coverage only when the tractor is being used without a trailer or with an empty trailer and is not being operated in the business of an authorized carrier (Hunt v. Drielick, 496 Mich. 366, 373; 852 N.W.2d 562 (2014)).
In a unanimous opinion in Abdulla v. Progressive Southeastern Insurance Company, the Michigan Supreme Court reversed the Court of Appeals and permanently closed this loophole. The Supreme Court clarified that statutory ownership under MCL 500.3101(3)(l)(i) turns on the right to use and control a vehicle, prioritizing function over corporate form.
The Anatomy of the Decision
In Abdulla, the plaintiff suffered injuries in December 2020 while operating a commercial tractor-trailer in Missouri. The tractor was registered in Michigan and titled to Tornado Trucking, LLC, an entity solely owned and managed by the plaintiff. The vehicle carried only a “bobtail” policy, which explicitly excluded PIP coverage when hauling cargo. Following the accident, the plaintiff sought PIP benefits from Auto Club under MCL 500.3114(1) as a domiciled relative living with his parents in Michigan, whose Auto Club no-fault policy provided PIP coverage, though it listed neither the plaintiff as a named insured nor the tractor as a covered vehicle.
Auto Club moved for summary disposition, arguing that the plaintiff was an owner of the uninsured tractor and therefore disqualified from receiving PIP benefits under MCL 500.3113(b). A divided Court of Appeals affirmed the denial, relying on Irwin to conclude that because the vehicle was titled to the LLC, the plaintiff was merely an agent rather than an owner. Dissenting Judge Jansen countered that the plaintiff was, at minimum, a statutory co-owner who failed to maintain required no-fault coverage under §3101(1), barring him from recovery.
The Michigan Supreme Court rejected the Court of Appeals’ reasoning, establishing several key statutory principles under the No-Fault Act. First, the Court clarified that the right to use controls ownership under MCL 500.3101(3)(l)(i), which defines an owner as someone having the use of a motor vehicle under a lease or otherwise for more than 30 days. The proper focus must remain on the nature of the individual’s right to use and control the vehicle, rather than whether they actually put it to personal use. Second, the ruling prioritized function over form by holding that while an LLC is a distinct legal entity, general LLC statutes do not override the No-Fault Act’s expansive definition of an owner. Because the plaintiff was the sole member with unfettered authority to operate the tractor without seeking permission, he was functionally an owner. Importantly, the Court noted that establishing statutory ownership does not require piercing the corporate veil; rather, the No-Fault Act contemplates that multiple parties can hold ownership rights simultaneously. Finally, the Court confirmed there is no alternate priority bypass, ruling that neither out-of-state accident provisions nor resident-relative priority rules can override the absolute statutory disqualification under MCL 500.3113(b) for operating an uninsured owned vehicle.
Key Takeaways
- Elimination of Corporate Shielding for PIP Disqualification: Sole members and operators of LLCs cannot avoid statutory vehicle ownership classifications simply by titling commercial vehicles under an LLC name.
- A Standard Based on Right to Use: Defense counsel and claims examiners should evaluate whether an individual possessed unfettered control and right of use over a vehicle for 30+ days, rather than searching for proof of actual personal driving history.
- Rejection of Flawed Precedents: Prior rulings following the Irwin framework that prioritized corporate formalities over functional control are no longer persuasive or applicable in evaluating no-fault ownership.
Update by:
- Rana Lange – Farmington Hills Senior Partner
- Kevin Davis – Farmington Hills Law Clerk
This article is intended for informational purposes only and does not constitute legal advice. Please consult with an attorney to discuss your specific legal situation.
Article reporting by Quintairos, Prieto, Wood & Boyer, P.A.. Legal update by Michigan Senior Partner Rana Lange & Law Clerk Kevin Davis.