TOV Injury and Safety Blog

Contractor must pay for cost to repair home to make it saleable, and diminution of market value

Gerald T. and Jonna Heaton sued their builders after the foundation of their new home shifted twice, during construction, necessitating substantial repairs and modifications.  They sued alleging contract violations and negligence, but only the negligence theories went to trial.  Ultimately, the jury awarded them more than $70,000.00 in costs to repair and another $200,000.00+ for diminution in market value.  The Defendants argued that Heatons should not have been allowed to recover both forms of damages. 

Two former employees win battle with "defamed" home health care provider

Evergreen Home Health Care sued two former employees (a nurse and a nurse aid) in an effort to punish them for criticizing the care given by Evergreen.  It alleged breach of a non-compete agreement, defamation and interference in its legal contracts with residents and their families.  It rejected mediation-proposed settlements and nominal settlement offers before its claims were ultimately dismissed by the trial court. 

Evergreen never produced a non-compete involving one of the former employees and the court deemed the other agreement "unreasonable" and unenforcible.  It concluded the suit was filed in retaliation for the employees' complaints reaching the office of the Attorney General and were in the nature of a "spite" or vengeance action--particularly given the fact that the employees had no insurance coverage and the suit appeared intended primarily to "ruin them financially."  The Court found no "significant, material" evidentiary support for Evergreen's claim and awarded the employees  sanctions in the form of costs and fees. 

The Court of Appeals upheld the decision, and agreed with the lower court that the action was frivolous. The higher court also returned the case to the lower court to explain why it had not awarded the employees' attorney the full amount of fees that they documented.  Given the attorney's 30+ years of experience, the lower court's failure to sanction his $200.00 per hour fee appeared to the Court of Appeals to be arbitrary on its face.

Court allows evidence from litigant who had earlier claimed fifth amendment privilege

Paul Paulson claimed the fifth amendment privilege against self-incrimination in a debtor's examination arising out of his bankruptcy claim.  Later, the assignee of Old Kent Bank, who was a major creditor of his defunct business, Lakeside Machine, Inc., sued Paulson and his wife for fraud or "reckless disregard of the truth."  The wife claimed that she was simply acting in a ministerial role when she signed various loan documents for the bank, and her husband filed an affidavit supporting this claim. 

Condo owner cannot sue condo association for negligent acts of independent contractor

Steven Valentine's lawsuit against the Barclay Association was dismissed by the Court of Appeals this week, and the Court opened the door for additional fees and costs to be awarded to the association he sued.  Valentine had become embroiled in a dispute with his condo association after it hired a roofing company whose negligent acts allegedly caused damage to the interior of Valentine's condominium.  Valentine withheld his dues and sued the Association, arguing that it was responsible for the damage to his unit caused by the roofer's negligence in re-roofing [a common area duty of the Association]. 

Where employer leases parking lot, injured employee cannot sue landlord after fall.

Simon Thwaite attempted to sue Vincenti Court, LLC, and others, after he suffered injury in a fall on his way into his office.  He was employed by a company that enjoyed an exclusive lease of the parking lot, and was traversing the lot, on crutches, on his way to work, when he fell.  He argued that he fell on ice that resulted from a defect in the building, a pipe that allowed water to drain from the roof of the building on to the asphalt; and that the duty to repair this condition could not be delegated by Vincenti to his employer.

The Court of Appeals rejected Thwaite's claim, holding that his employer had the sole duty to clear ice from the parking lot, since it enjoyed exclusive possession of the lot.  Unfortunately, the judges failed to address the building owner's active negligence in failing to repair the known defective roof condition that was rendering the parking lot unsafe.  Under the employer's lease with Vincenti, the employer had no right to repair the roof defect.  Perhaps the Supreme Court will address this failure of common sense and justice.

Court dismisses claim arising out of fall on freshly-mopped floor

Jacqueline Maness sued the Carlton Pharmacy and a company hired to mop its floors, alleging that she hadn't been adequately warned of the slippery, wet floor on which she fell, suffering serious injury.  Initially, her claim was dismissed on appeal, after the defendants claimed that the trial court should have found the condition of the floor to be an "open and obvious" danger.  The Supreme Court reversed, however, noting that Maness' claim against the cleaning company, which was not in possession of the drugstore premises, could not be evaluated under the "open and obvious" doctrine, since that doctrine applies only to hazards maintained by a landowner/possessor.  The claim against the cleaning agency was sent back to the trial court to be evaluated on the basis of negligence and comparative fault.

Minority owner vindicated after partners steal business

William Junge created a business with James Bartles and Oscar Burrell, with each man being a one-third owner.  They were stunned when they did more than a million dollars worth of business in the first year, moving and installing equipment.  Apparently, the business was destroyed by its success, as disputes arose over use of credit cards, withdrawal of profits and job performance.  Ultimately, Bartles and Burrell opened a new, competing business using the same employees and serving the same customers, but without Junge as an owner.  He sued, alleging an equitable claim of ownership in the new company.  While he was denied treble damages or attorney fees, the Court of Appeals upheld the lower court's award of one-third of the book value of the new business. 

Court rules doctor was unfairly denied malpractice insurance

Doctor Manisha Gupta was hired by Anchor Senior Medical Services to provide direct patient care.  Under her contract, Anchor, doing business as Grand River Medical Center, agreed to provide Gupta with $100,000.00 of malpractice coverage.  Gupta left the practice after 15 months, but later was served with a malpractice complaint arising out of the death of Glenna Wojnicki.  Her employer refused to provide liability coverage for Gupta, arguing that the employment contract it imposed on her was "ambiguous" and should be interpreted to require that when she left Anchor's employment, it became her obligation to purchase a "tail" to cover claims related to her period of employment. 

The Court of Appeals rejected this claim and enforced the plain terms and meaning of the parties' contract.  It was Anchor's obligation to provide $100,000.00 of coverage for Gupta relating to claims arising during her term of employment.

No homeowner coverage for defective workmanship or mold

Hometowne Building Company built a house for a customer in South Lyons and then experienced problems with water seepage and mold.  After several unsuccessful attempts at remediation, the owner sued Hometowne and ultimately, one of its insurers, the North American Specialty Insurance Company (NASIC) settled the claim with the owners.  NASIC then sued Amerisure Mutual to force it to contribute to the settlement.  Amerisure argued that two exclusions in its policy let it off the hook, and the Court of Appeals agreed. 

The Court concluded that the "defective workmanship" exclusion precluded coverage for any damage to the structure caused by mistakes made by Hometowne.  This would leave limited liability for Amerisure to cover injury or damage to contents caused by defective workmanship, however, the policy also contained a "fungi or bacteria" exclusion which eliminated any contents coverage for damage caused by mold, fungi or mildew or their ramifications.

Ludington Holiday Inn case sent back to lower court to address fees owed by AutoOwners

Earlier on this website, we reported on litigation involving the Ludington Holiday Inn, where a family suffered a toxic exposure as a result of a problem with the heating system.  AutoOwners insured the Inn but refused to defend the injury claims against the Inn, arguing that they fell within an exclusion for injuries caused by pollution.  The trial court rejected that argument, and enforced an exception for "heating equipment" in the policy language applicable to the pollution exclusion. The lower court also awarded the Inn and the injured family significant attorneys fees and costs. 

Employer held accountable, beyond workers compensation, for traumatic amputation

Kristi Fries lost both hands above the wrist when the stamping machine she was operating cycled in response to her loose clothing.  She sued her employer, Mavrick Metal Stamping, arguing that it was responsible beyond workers compensation benefits because it had intentionally caused her injury.  An employer in Michigan is immune even from gross negligence or willful misconduct, if an employee is covered by workers compensation:  the courts have been exceedingly slow to allow employees to recover more than medical and partial wages, no matter how egregious the employer's fault is causing an injury.  The Court of Appeals allowed Fries to recover outside work comp, however, after reciting the facts leading up to her horrible injury.

ADA standards and regulations set to change

On September 23, the Equal Employment Opportunity Commission published its proposed new regulations for administering the Americans with Disabilities Act, which was amended effective January 1st.  According to experts, the new regulations will "significantly lower the standard for an employee to establish that he or she has a covered disability."  The amendment is expected to move the interaction under the ADA from a fight over whether an employee is qualified for consideration under the act to a fight over the employer's duty to make reasonble accommodations.  From the amendment forward, the employee's proofs will primarily be directed to whether the "diability" limits an employee's ability to work or is perceived to perform his or her job.  The new regulations will also take into account "mitigating measures" such as medication, eyeglasses, hearing aids and other measures which formerly precluded an employee from qualifying as "disabled" and eliminated any duty of accommodation.

Progressive Insurance may have to pay benefits to injured worker

In Progressive Insurance v. Contract Towing, Inc., the Court of Appeals concluded that a jury must be impaneled to resolve the factual issue of whether an injured man was an "employee" or merely a "hanger-on."  The injured man, Larry Dodson, was hurt while performing maintenance on a Contract Towing truck insured by Progressive.  The Progressive policy excluded coverage for any injury to an employee of Contract Towing.

In a pre-trial hearing, the court concluded that Dodson was not an employee because he had never been paid for his services, even though he showed up on a daily basis, five days per week. The owner, James Wilson, who had provided Dodson with a place to live, meals and occasional spending money, testified that none of these benefits were "bargained for compensation" and that his support of Dodson was a charitable effort.  The Court of Appeals determined that resolving Dodson's status as an employee was a factual question involving issues of credibility.  Therefore it could not be decided by the court in a pre-trial ruling.

Employee limited to work comp as exclusive remedy for injuries

Zoran Saveski attempted to sue the Ford Motor Company, alleging that he suffered injury as a direct result of intentional misconduct by a supervisor.  Saveski , a toolmaker, was directed to assist with maintenance on a "Lamb" machine while the plant was shut down.  During maintenance, he was left holding a 100 pound component, causing a blown disc.  He maintained that the supervisor intentionally placed him in a position likely to cause injury.  The Court held that he had not pleaded sufficient facts to document an exception to the workers comp "exclusive remedy" provision applicable to injuries suffered at work.  In order to avoid that provision and sue his employer for negligence, Saveski would have needed to show that the supervisor actually intended his injury; it was not enough to show that an injury was "likely" or "probable".

Landlord again avoids liability for criminal activity against tenant

Joyce Memminger sued the landlord of her gated apartment complex, McKinley Properties, alleging that it should be responsible for allowing access to her ex-husband.  The ex-husband held her captive for hours and shot her when she attempted to escape.  Memminger initially argued that the landlord was negligent in allowing the assailant unauthorized access to the premises, however, the court dismissed that claim.  She then filed a second action alleging that she had been fraudulently induced to rent the apartment based on false representations regarding the landlord's restrictions on non-tenant entry.  The Court of Appeals rejected this claim, as well.  That result probably did not surprise the parties, once Judge Henry Saad was assigned to the hear the appellate case.  His is a consistent voice for the interests of insurance companies.

Court reaffirms: no remedy for Michigan insureds when Farm Bureau acts in bad faith

Shirley Nixon sued Farm Bureau General after it refused to pay benefits under her homeowner's policy and accused her of intentionally setting fire to her home.  The trial court refused to dismiss her "bad faith" claim or her cause of action for "intentional infliction of emotional distress."  Farm Bureau appealed to the Court of Appeals, arguing that even if it acted in "bad faith" and wrongfully denied Nixon's purchased benefits, she had no claim for damages.

Citing an earlier case where Blue Cross wrongfully refused to pay for treatment of Stage IV metastatic breast cancer treatment, the Court of Appeals reversed the lower court ruling in Nixon's case and dismissed her claim for "bad faith."  The Court held that "the mere failure to pay insurance benefits" does not create a cause of action against the insurer in Michigan.  Unlike most states, Michigan does not recognize a cause of action for bad-faith refusal to pay an insurance claim, no matter how egregious the insurer's conduct, as "[f]ailure to pay a contractual obligation does not amount to outrageous conduct, eve if it is willful or in bad faith."  

Do you still have doubt about the power of insurance companies to control the law in Michigan?

Trucker can sue for lumber yard employees' negligence

Wilmer Floyd fell 13 feet from the top of a flatbed load of lumber as he was attempting to cover it with a tarp that weighed 150 pounds.  Floyd had been sent to the Insulspan, Inc., lumberyard to pick up the lumber and was attempting to cover it prior to transport.  Despite instructions to the contrary, the Insulspan employees allegedly had left the lumber stacked out in a snowstorm and loaded it on Floyd's flatbed without removing several inches of snow fromt the materials.  Floyd claimed that he slipped on the snow and fell while adjusting the tarp, and sued Insulspan for negligence in failing to cover the lumber or remove the snow prior to loading.  The lower court dismissed Floyd's claim, applying the "open and obvious" exclusion to premises liability to obviate any duty by Insulspan.  The Appellate Court reversed, pointing out that the claim was one for negligence unrelated to Insulspan's  possession of the property and not alleging a hazard on the property.

Court determines question of employee or independent contractor is one for the jury

Bristol West and Amerisure Mutual ended up in Court, arguing over who should provide PIP benefits to an injured truck driver.  Bristol West insured the driver for no fault benefits, while Amerisure insured the company for whom he was driving.  The trial court had heard the evidence under the "economic reality" test and the McKissic opinion, and concluded that the driver was an independent contractor.  The Court of Appeals reversed, sending the case back for the jury to resolve the factual disputes arising out of controverted testimony.  Witnesses disagreed over some of the factors determining employment status, and ultimately the issue was one for the finder of fact to sort out:  the Court was not allowed to make findings of fact in order to support its ruling over independent contractor status.

Buyer who opts for dual-agency contract with seller's broker cannot complain about the agent's failure to protect him

The VanHellemonts agreed to buy a $1.6 million dollar estate from the McManamons in Oakland County.  They used as their agent the McManamon's broker, and signed a dual-agency disclosure agreement.  The deal slowly fell apart and the VanHellemonts were sued for damages or specific performance.  They sued their realtor for malpractice, arguing that the agent should have written the buy-sell to protect them more fully:  in particular, they alleged the document should have called for the loss of their $35,000 earnest money deposit, rather than a $500,000 penalty, in the event that they did not close on the purchase.  The Court concluded that the VanHellemonts gave up their fiduciary duty claim against the realtor when they agreed to the dual-agency relationship.

Chinese drywall manufacturers snub U.S. Courts investigating defects

Virtually every day, another article appears in the U.S. media discussing the thousands of homes where defective Chinese drywall has caused substantial problems.  The drywall breaks down, emitting chemicals and odors, has been shown to ruin copper piping and to cause health problems. While a number of lawsuits have been filed, the Chinese manufacturers have simply refused to appear in court.  They recognize that U.S. judgments against them will not be enforced in China, allowing them to ignore the consequences of their negligence with impunity.  Fortunately for consumers in most of the affected states, the retailers and intermediaries involved in the purchase and installation of the defective drywall will be held accountable:  unfortunately, many of those intermediaries are completely without fault or will not survive the economic impact of these claims.

For consumers in some states, however, the problem is even more substantial.  If a state has rejected joint and several liability, thereby eliminating the duty of an at-fault with a "deep pocket" to make an innocent victim whole, innocent victims will achieve little or no compensation for a defect that has virtually destroyed new homes.  In Michigan, the problem goes even deeper.  Through tort "reform" adopted during the Engler era, even the retailers who sold the drywall would not be required to stand behind it:  unless they were independently negligent, retailers in Michigan have no liability for selling a defective product.  Thus, a Michigan resident would be required to prove that the retailer knew of the drywall defect before purchase, in order to hold the seller accountable.

The major problem with this "retailer immunity" is that is takes away the retailer's incentive to either confirm the quality of its suppliers, or to demand insurance indemnity coverage in the event of a defect.  Ultimately, the consumer is left at the mercy of unscrupulous, ignorant or simply negligent manufactuers.  In a "flat world," we have learned that this  policy exposes consumers to injury from defective toys, clothing, medicines, and all manner of products that are shipped to this country from unaccountable sources who are only a step above criminal enterprises.

A note discussing this issue was recently published by Ashley Thompson in the University of Michigan Journal of Law Reform.

Title Agency must defend claim of gross negligence

When BCV Colonnade attempted to sell the K-Mart it owned in Jackson, it relied upon United Realty Companies, LLC and the Morris Home Title Agency to close the transaction. It required the buyer to maintain a $100,000.00 cash deposit with Chicago Title Insurance Company and Morris Home until the closing date, and was twice assured by Morris that the deposit was secure.  The buyer failed to perform, and when BCV sought the escrow from Morris, it was informed that the buyer had also failed to place the cash deposit with Morris. 

Physician group seeks new warnings on prescriptions

According to the Los Angeles Times, the American College of Physicians has gone on record criticizing the Food and Drug Administration for its passive lack of supervision of prescription labeling.  The nation's primary association of Internal Medicine physicians, the ACP made a number of concrete suggestions and recommendations.  These included placing limits on the advertising of newly-approved medicines, identifying them as "new" through appropriate consumer labeling, creating a better system of tracking complications in newly-approved drugs and better identifying drugs formulated abroad.  The organization documented its concerns and justified these recommendations by reference to recent medical product recall and patient injury history.

FDA was pressured into approving unsafe knee implant

The New York Times today published an article detailing how the FDA succumbed to political pressure to approve a surgical implant called a "scaffold" for repairing torn medial [knee] menisici even though it deemed the device to be flawed.  The meniscus in the knee is a sort-of-pie-shaped section of cartilage that cushions the joint and provides a slippery joint surface between the tibial head and the end of the femur.  This device is intended to supplant or supplement the function of the meniscus in a damaged or worn-out knee.

Court denies actively negligent contractor's third-party claim for common law indemnification

Dr. Fred Leff  and his wife sued Morgan-Heller & Associates for damages after their renovated shower collapsed.  A sub-contractor, Tartan Plumbing, had cut through a floor joist during installation of the new shower, and the Leffs claimed that Morgan-Heller was actively negligent in concealing and failing to repair the structural damage.  Morgan-Heller attempted to join Tartan in the action as a third-party defendant, based on its admitted negligence in severing the floor joist.

Intermittent tourist whistle is not a "private nuisance"

In a relatively unusual case, the Court of Appeals concluded that sounding a navigating whistle on the tourist riverboat operated in Frankenmuth does not constitute a private nuisance.  The resident who filed suit to limit or eliminate the whistle sounding was denied relief, even though the whistle is sounded almost ten time per hour during the 12 hours of operation and seven cruises daily.  In essence, the court held that the sound wasn't so obnoxious as to be unreasonable, given the Coast Guard regulations that applied and the location in a tourist magnet community.

Pfizer admits fraud in marketing drugs and is fined $2.3 billion dollars

If you are wondering why pharmaceuticals are adding so much to the cost of health care, take a look at Pfizer.  For the fourth time since 2002, the company or one of its subsidiaries has agreed to settle criminal or civil charges arising out of its improper marketing of a drug.  Previously it was Lipitor, Neurontin and Genotropin.  This time it is Bextra and three other medications which Pfizer was promoting to doctors for uses not authorized by the Food and Drug Administration.  Bextra has since been pulled off the market by Pfizer after serious safety concerns were raised.

Court allows "common work area" injury claim to go to jury

    In Alderman v. JC Development Communities, LLC, the Court of Appeals reversed a trial court dismissal of Alderman's injury claim.  The Defendant was the general contractor on a subdivision project of 200 homesites where Alderman suffered severe electrical burn injuries.  Alderman's injuries occurred when a subcontractor's employee accidentally contacted an overhead power line with a crane.  Alderman's attorneys claimed that he was injured because the general contractor failed to take reasonable steps to supervise or coordinate protections against readily observable dangers that created a high degree of risk to a significant number of workers in a common work area.

Bank can't grab fire insurance proceeds to pay off loan

Since the economy has turned home equity upside-down on so many people, a new problem has surfaced.  When a structure suffers damage that is insured, the mortgagee bank is tempted to grab the money for repayment of its loan, rather than allowing the home to be re-built.  That's exactly what happened to Allen and Julie Hilliker in Ogemaw County after their home suffered a fire loss.  They were insured by Wolverine Mutual and elected to have the home re-built.  Rebuilding would cost $185,859.51, but the actual cash value of the home was only $119,127.13---less than the $140,000.00 mortgage. 

The ugly under-belly of lawsuit financing

Several companies now offer lawsuit financing to injury victims while their cases are pending.  Sometimes such a loan is necessary to help a family keep its "head above water," however, these loans are by no means an altruistic gesture.  In Lawsuit Financing, Inc., and Rainmaker USA, LLC v. Elias Muawad, the Court of Appeals allowed a glimpse into the problems these loans can create.  The Plaintiff loaned Lawsuit Financing loaned one of Muawad's clients $10,000.00 under a "Purchase Agreement" pursuant to which the client was obligated to pay the lender $50,000.00 when the case settled.

Verdict in favor of contractor upheld

John Kotsonis sued Raymond Anglin, his contractor, for defective work installing a roof on Kotsonis' home.  The jury found that Anglin's work was not in accordance with industry standards, but also held that installing the insulation and vapor barrier upside down did not "cause" Kotsonis' condensation and moisture problems.   The Court of Appeals upheld the defense verdict, finding that there was adequate evidence to support the defendant's claim that he acted reasonably in installing the vapor barrier upside down, expecting it to be removed and reinstalled after drywall repairs were completed.  While the defendant's claim sounds preposterous and it appears that something else influenced the jurors' decision, the Kotsonis case confirms how difficult it is for a losing litigant to overturn a jury's verdict.

Photographers may not be liable for improper publication of model's photos

Phenomenon Productions, Inc., an assumed name of photographers Toriano Treadwell and Anthony Thomas, signed a contract with Diamalynn Arnold to publish her pictures on a website they own.  The site is ostensibly used to garner publicity and contracts for models.  Eventually, however, Arnold found her likeness on another (allegedly racier) website operated by the photographers, a s0-called "street magazine" dedicated to illegal, underground conduct, and an advertisement ostensibly used for prurient purposes.  She sued claiming an invasion of privacy that portrayed her in a "false light" and also arguing that the defendants had illegally appropriated her likeness for commercial value.  The Court of Appeals upheld dismissal of all of her claims except the latter appropriation claim.

Inspector can't be "the" cause of damages resulting from negligent construction

In Smylie v. Dryden Construction, Inc, et al., the Court of Appeals dismissed a case against the township building inspector arising out of defective construction.  The plaintiffs argued that the home they purchased was built over "natural underground watercourse" and that the inspector's failure to consult drain commission maps was the primary cause of their problems.  The Court of Appeals held that even though there was evidence of "gross negligence" by the inspector, he was immune from responsibility because his inspection responsibilities--when compared with the actions of the builder--could not qualify as "the one most immediate, efficient, and direct cause preceding an injury."  The latter is the formulation of "the" proximate cause requirement devised by the Engler Majority when it held that a government actor should not be jointly responsible for damages caused by multiple actors.

Progressive can't duck insurance obligation to rodeo

In Progressive Michigan Insurance Co. v. Super Kicker Rodeo Productions, et al., Progressive and ACE American Insurance Co. both tried to avoid paying for injuries suffered by Donielle Hart.  Both companies had underwritten liability coverage for the Rodeo's activities, but both argued that the coverage did not apply to Hart's very severe injuries.  Hart was a family member who helped out with the rodeo on an unpaid basis.  She helped to tear down the aluminum rodeo gates following a performance and suffered a skull fracture and other severe injuries when the loaded gates fell off a semi-trailer after a rope broke.  The trial court had dismissed the case against ACE and Progressive concluding that there were no questions of fact regarding the application of the insurance policies to the various individuals' employment status and the nature of Donielle's activities at the time of the injuries.

Title insurer once again insulated from error by contract language

In an Emmet County case filed by Brian Ludlow, the Court was forced to adjudicate the relative rights to Block 16 in a Carp Lake Township platted subdivision.  The Defendants in the case, who were accused of selling more than they owned [specifically abandoned roadways], joined their title insurers in the action as third-party defendants.  The latter defendants, Petoskey Title Company and Lawyer's Title Insurance Corporation, argued that they should be dismissed because their contract did not insure against the Plaintiff's claims. 

Farm Bureau avoids coverage for employee theft

In Great Northern Insurance Co. v. Dan Ngo, et al., an insurer attempted to recover for an insured loss by suing the liability insurer of a U.S. Nails store in Royal Oak.  An employee of the store had stolen jewelry from Great Northern's insured.  Farm Bureau insured the store for liability, but argued that the employee theft was not an "occurrence" which it had agreed to insure, because it was an intentional crime by a store employee.  The store's owner argued that the event was an "occurrence" from his standpoint, because it was a loss he did not intend or participate in, other than by negligently managing the property and the employee who stole it.  The Court of Appeals ruled that the the event must be viewed from the perspective of the insured employee, and therefore it was not a "chance happening" or an "accident," and therefore it was not a covered "occurrence."

Defective Chinese drywall brings to prominence concerns about inability to hold Chinese manufacturers accountable

The Kansas City Star pointed out on June 30, 2009, that the enormous problems associated with defective Chinese drywall have brought to the surface the compounding problems associated with holding Chinese manufacturers accountable.  The paper reminded readers that in recent months the list of faulty Chinese products identified in the media have included:

    "highchairs whose seat backs failed, steam cleaners that burned their users, bikes whose front-wheel forks broke, saunas that overheated, illuminated exit signs that stopped working when commercial power failed, dune buggies whose seat belts broke on impact and coffee makers that overheated and started fire...a soccer goal net that entrapped and stangled a child and a toy chest whose poorly supported lid fell on a toddler's neck and killed him."

During 2007, fully 69 percent of products recalled in the U.S. were manufactured in China, and previously recalled products continue to be imported, including "breakable toys on which infants can choke, lead toys, toys painted in lead-based colors and cribs whose slats are far enough apart to trap babies' heads."

G. M. agrees to maintain legal liabilty for future claims involving defective products after bankruptcy

As it was initially envisioned, the bankruptcy process involving General Motors would have resulted in the elimination of any liability for injuries caused by defective products, whether filed currently or in the future.  That would have closed the doors on a number of pending claims alleging death or serious injury resulting from a defective product.  After several state Attorneys General protested on behalf of injury victims, the company  and the Obama Administration have agreed to continue to recognize G.M.'s pre-existing product liability obligations, but apparently only with respect to unfiled claims. 

Fall from ladder evokes "common work area" doctrine; employee of sub-contractor can sue

David Slater was injured in a fall from a 32 foot ladder, as he attempted to unchain it.  The General Contractor had suggested that he unchain the ladder, left by another subcontractor, despite Slater's lack of experience on roofs, ladders or heights and his lack of fall protection.  His claim was initally dismissed by the trial court, but reinstatted by the Court of Appeals.  The higher court ruled that these circumstances brought into play the "common work area" doctrine, under which the owner or general contractor must assume a legal duty to maintain safety in certain construction areas.

FDA shuts down Detroit-area drug manufacturer Caraco Pharmaceuticals

Bloomberg.com reported on June 25 that U.S. authorities seized generic drugs produced by Caraco Pharmaceutical Laboratories, Ltd., citing multiple violations of manufacturing standards.  Inspectors found "serious violations" of manufacturing standards and "serious deficiencies" in quality control when they inspected the facility in May of 2009.  

State attorney generals complain about FedEx treatment of employees

In a previous blog, we reported on the FedEx policy of claiming that its employees are independent contractors, and then abusing them by forcing them to buy their delivery trucks, failing to pay for proper insurances and generally taking advantage of them in an illegal manner.  On June 25 the Attorney Generals of Montana and seven other states demanded that Fed Ex Ground properly classify their drivers and manage employment issues in accordance with employee protection laws. 

Insurer allowed to exclude coverage arising from use of an auto

The Estate of Michael Verschure sued Essex Insurance Co. after Michael was run over in a bar parking lot.  Essex wrote liability insurance on the bar, "Wild Woody's" in Roseville.  Essex denied responsibility for the incident, claiming the events leading to Verschure's death were not an "occurrence" under the policy, that liability was excluded as an "intended injury" and that the broad auto-related injury exclusion in its policy applied to Michael's death.

Woman who "file-shared" 24 songs (worth less than $50 on iTunes) hit with $1.92 million verdict

According to the Associated Press, last week a jury awarded a verdict of $1.92 million dollars against Jammie Tomas-Rasset on behalf of a music industry plaintiff.  She had placed 24 songs on the music-sharing site Kazaa.  The songs could have been purchased on iTunes for $1.99 each, according to her attorney. 

This was the woman's second trial, as the judge had previously overturned a $222,000.00 verdict against her as "wholly disproportionate."  Chances are the outcome will be similar this time, particularly since the Supreme Court, in the Exxon Valdez case, recently overturned the punitive damage case against Exxon, even though it represented only a few weeks' profit.  Spokespersons for the Progress & Freedom Foundation's Center for Study of Digital Property (a so-called "free market think tank" fronting for big-money supporters) supported the verdict as "fairly seek[ing] to punish and deter such flagrant wrongdoing."

Law firm not responsible for employee's fraudulent notarization of signature.

Susan Grossman sued Liss and Associates, her ex-husband's attorneys, after an employee allegedly notarized her forged signature on an assignment of mortgage.  The case has made its way to the appellate court twice previously, and the court had overturned both a summary disposition and a directed verdict that had been granted to the defendant law firm.  Previously the court had held that whether the employee was acting "within the scope of her employment" at the time of the allegedly illegal act was a question of fact for the jury.  On this appeal, the plaintiff was attempting to overturn a jury verdict for the defense, based on what she claimed were unfair instructions from the trial judge.

Progressive's attempt to avoid coverage is rejected in death case

Progressive wrote insurance on the trucks operated by Rozafa Transport, however when William Neill was killed during the unloading of one of Rozafa's trucks, Progressive denied coverage.  The insurer admitted it had coverage if liability arose out of the "use, ownership or maintenance" of the semi-tractor and trailer, however, it argued that since a forklift was being used in the unloading process, the coverage was eliminated by an exclusion relating to injuries "caused by movement..of an unattached..mechanical device."

Bloomberg reports cost of medical malpractice claims are "a drop in the bucket"

On June 16, the Bloomberg News Agency responded to President Obama's talk to the American Medical Association by citing figures from a Harvard economist showing that the total cost of medical malpractice claims is about $12 per person in the U.S.  That amounts to about $3.6 billion dollars of a total $2.3 trillion dollars spent on health care (or one in every six dollars of our gross domestic product, by some calculations).  As Bloomberg and Harvard pointed out, this makes the total cost of malpractice claims "a drop in the bucket" when compared to the total cost of health care:  even eliminating malpractice claims entirely would have a negligible impact on the runaway cost of medical care in the U.S.  The U.S.'s largerst health insurer, WellPoint, Inc., conceded the same point last month when it issued a report acknowledging that medical liability was not driving up the cost of health insurance premiums.

Treble damage claim for fencing stolen property dismissed

American Auto Recyclers sued the Ferrous Processing & Trading Company, alleging that the defendant had illegally and knowingly accepted stolen automobiles for scrap.  Under Michigan law, MCL 600.2919a, a person who knowingly buys or accepts stolen property can be forced to pay treble damages to the theft victim. 

Supreme Court rules 5-4 that taking too much money from a litigant can disqualify a judge

In prior log entries we have discussed the Caperton v. A.T. Massey Coal Company brouhaha.  Several small coal companies sued Massey, the state's largest, claiming that its owner had put them out of business through illegal fraud.  They won a verdict in the amount of $50 million dollars.  Massey then counted noses on the West Virginia Supreme Court, and contributed 3 million dollars to the campaign to replace one of the sitting justices with a candidate he favored.  That candidate won and became the deciding vote in a 3-2 decision overturning the verdict against Massey.  Yesterday the U.S. Supreme Court held 5-4 that the small coal companies had been denied due process.

Workers compensation "exclusive remedy" provision upheld

In Stallings v. General Motors Corp., the Court of Appeals again upheld the dismissal of an injury action against the injured employee's employer.  As has been explained in previous web log entries, adoption of the workers compensation scheme resulted in partial immunity for employers' negligence.  People hurt on the job are guaranteed certain benefits including medical expenses and a fraction of their normal wage, but cannot secure complete recovery from their employer, even if the employer is guilty of negligence or gross negligence.

Chamber of Commerce amps up disinformation campaign

The U.S. Chamber of Commerce is a wealthy organization that represents more than three million businesses.  In the past two decades it has become an extremely aggressive political and special interest lobbying entity, charged with spending millions of dollars to buy judges, wipe out consumer protection legislation and  prevent government regulation.  It is currently campaigning against rules that would require that the nation's food supply be labeled with the country of origin. 

Sixth Circuit limits, rejects "contract immunity" defense

Joy Davis sued Venture One Construction after an unhinged door fell on her while she was retrieving a dustpan on her employer's premises.  The door had been temporarily stored outside the construction area by a subcontractor performing remodeling on a Subway restaurant, and Venture One was the general contractor having a duty to maintain safety at the site.  Venture had persuaded the trial court to dismiss Davis' claim by arguing that it owed no duty to Davis, relying upon the Michigan Supreme Court's activist interpretation of "contractual immunity."  The Sixth Circuit overturned the lower court's decision, rejected Venture's claim that it owed plaintiff no duty, and returned the case to the District Court for trial.