TOV Injury and Safety Blog

Sixth Circuit says health insurer need not pay its share of attorneys fees or costs

On November 16, 2009, the Sixth Circuit decided Longaberger Company v. Kolt,  a dispute over an ERISA health insurance plan's demand for an injury victim's negligence recovery from the at-fault driver's insurance.  Samuel Billiter was hurt in a car accident in Ohio, and his medical expenses were covered by Longaberger, a self-funded employee welfare benefit plan.  Billiter sued, through his attorney Jeffrey Kolt, and recovered $135,000.00 from the negligent driver's insurers.  Acting on the law as he understood it prior to the Supreme Court's recent decision in Sereboff v. Mid-Atlantic, Kolt distributed the insurance recovery without honoring the claimed Longaberger lien of $113,000.00. 

Longaberger sued Kolt and Billiter, claiming that they were held in an equitable constructive trust for "reimbursement" of the plan.  The Sixth Circuit upheld the District Court's summary judgment for Longaberger and refused to honor Kolt's state law "charging lien" for creating the recovery.  Billiter was required to pay Longaberger almost $76,000.00 of his $86,000.00 recovery and Kolt was required to turn over about $38,000.00 of his $45,000.00 fee.  Chances are that if it weren't "for the honor of the thing," both men would have forsaken the lawsuit entirely, had they known that their efforts would only inure to the ERISA plan's benefit.

The outcome of this case either violates or endorses our belief that "pigs get fat and hogs get slaughtered," but we don't know which of the parties initially exhibited the pig-headedness.   It would appear that a fair outcome would have involved some compromise by both parties.

Disability insurer cannot avoid obligation to drunk driver by characterizing his injuries as "intentional"

The Sixth Circuit recently handed down an important decision interpreting ERISA insurance policies.  Under these policies, insurers have traditionally excluded payment of benefits where an insured intentionally suffered injury.  The Reagan-Bush appointees to the Court has, over the past decade, begun recognizing a broader range of negligent conduct as "intentional" at the request of insurers seeking to avoid a duty to pay health or accident benefits.  The result has been the "activist" development of a line of cases suggesting that insurers could avoid paying benefits where an insured did something "stupid," in cases where no one would categorize the actual injuries as "intentionally" suffered.  In Kovach, et al. v. Zurich American Insurance Company, the Sixth Circuit finally handed down a ruling placing a limit on this development under ERISA.

State Farm chastised for "disingenuous" actions in delaying payment of PIP benefits

Woodrow Byers was a bail bondsman employed by his wife's corporation until he suffered a severe knee injury in a motor vehicle collision.  State Farm stopped paying PIP benefits because it believed that he was continuing to work for his wife's business, even though he wasn't paid, a substitute "bounty hunter" was employed, and the medical testimony was undisputed regarding Byers' inability to work as a "bounty hunter."  On the eve of trial, State Farm finally paid for Byers' knee surgery--one year late--in what the court concluded was a calculated attempt to avoid defending the delay at trial.  The jury still awarded Byers' wage loss, a modest recovery for domestic service losses, and interest.  When the Court awarded attorneys' fees relating to the "overdue" medical benefits, State Farm appealed both the jury verdict and the Court's fee award. 

AutoOwners wins partial victory in dispute over PIP benefits

When a no fault insured Michigan resident is so badly injured in a motor vehicle accident that he or she cannot manage his or her own affairs--necessitating the appointment of a guardian or conservator--the insurer responsible for paying PIP benefits (medical, three years of wages and household services) is required to pay the expense of the guardian.  William McDonald became the Conservator for Larry Jerome LeBoeuf under these circumstances, but was not initially aware of his right to bill AutoOwners for his service.  More than a year after some of his services were incurred, but less than a year after they were approved by the Probate Court, as required, he sued AutoOwners to recover his expenses. 

Husband is not an "owner" of wife's uninsured vehicle where there is no evidence of 30 days' use

Kevin Zoerman was injured while driving his wife's uninsured car.  Titan Insurance was assigned to pay his Personal Injury Protection (PIP) medical expenses, but declined to pay, arguing that Zoerman was an "owner" of the car, even though his name did not appear on the title.  The owner-operator of an uninsured vehicle is not allowed to collect PIP benefits---because he or she hasn't complied with the law and paid for PIP coverage on the car.

The lower court threw out Titan's claim, however, when it failed to present any evidence that Zoerman was an owner of the vehicle.  To be an owner, the individual must be a registered owner (appearing on the title or registration) or enjoy the regular use of the vehicle for 30 days.  In the instant case, at trial Titan presented no evidence to support its claim that Kevin enjoyed the right to operate this vehicle on demand.  The testimony indicated Kevin's wife bought the car without his knowledge, that she maintained it, and that she possessed the only keys.  The Zoerman's claimed that Kevin used the vehicle infrequently and that his wife retained the right to grant permissive use.  Under these facts, Titan had not created a question of fact with regard to whether Kevin was an "owner" on the alternative statutory basis (by reason of enjoying the right to exercise regular use for 30 days).

Dental injury is a "serious impairment of bodily function"

Brian Fisher was stopped at a stoplight when he was rear-ended by Derrick Blankenship.  His face struck the steering wheel and among other minor injuries, he lost a tooth.  Ultimately, his dentist concluded that when the traumatic injury was combined with other pre-existing dental problems, the 42-year old Fisher needed to remove 14 of his upper teeth and replace them with a prosthesis.  Fisher did not lose much work and still engaged in all of his normal activities, however, he noted that  his appearance was changed, that some days it took him 45 minutes to an hour to adjust the prosthesis, that it sometime made him drool and altered his speech, and that he experienced difficulty eating certain foods. He also testified that it created a "severe gag reflex" and was often painful, awkward and frustrating.  Two judges of the Court of Appeals agreed with the lower court that Fisher's injuries constituted a "serious impairment" and a "permanent disfigurement," even though the impact of the injuries was diminished by the prosthesis.

Judge Kirsten Kelly, who tends to favor the interests of insurers, noted that Fisher "remains employed,"..."takes no medication"..."continues to engage in his favorite hobby"...and "his weight has remained constant."  Citing these facts and others, she would have dismissed Fisher's claim as neither "serious" nor a "serious disfigurement."

Insurer wins appeal: injury victim's right to PIP benefits must be determined by jury

The trial court originally ruled that Jenne Ott was entitled to PIP benefits from Progressive Michigan Insurance Co., because Progressive had insured the vehicle in which she suffered injuries as a passenger.  Progressive argued, however, that the woman who purchased its insurance policy might not have enjoyed an ownership interest in the car, and therefore Ott should collect PIP benefits from the Assigned Claims plan (because Progressive should be allowed to cancel the insurance). 

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. 

Supreme Court reverses lower court decision; allows State Farm to claim fraud

Raymond Andres was horribly injured in a car accident and now requires 24 hour attendant care.  State Farm was his auto (PIP) insurer and has been obligated to pay for this care.  State Farm initially entered into an agreement to pay Andres' family for the care provided, but later refused to pay, alleging that the agreement had been fraudulently arrived at by some form of collusion between Andres' attorney and State Farm's adjuster. 

5 months in wheelchar, 5 more with walker, followed by need of cane to walk doesn't prove "serious" injury

Judges Christopher Murray, Jane Markey and Stephen Borrello wrapped up a good month for the insurance industry by ruling against Linda Berishaj on her "serious impairment" claim.  The judges found a basis to throw out each of the injury cases on their docket, completing a "clean sweep" on Friday by dismissing four cases.  In Berishaj v. Shkreli and Auto Club, the judges ruled that a woman injured in a car accident couldn't sue the at-fault driver, even though her injury was objectively manifested and signficantly impaired her ability to walk.  The evidence showed that Berishaj was confined to a wheelchair for five months, used a walker for five more, and then began using a cane to ambulate:  the judges concluded this was not adequate proof to demonstrate that she had suffered a "serious impairment of bodily function." 

Man struck while inspecting his (uninsured) vehicle at stop sign is eligible for PIP benefits.

Normally, the operator of an uninsured vehicle involved in a collision is not eligible to collect PIP benefits.  In Knox v. Auto Club Group Insurance Co., the Court of Appeals relied upon Supreme Court precedent to force the Auto Club to pay benefits it refused to pay.

Knox observed his ex-girlfriend parked in a pickup truck near his apartment.  He concluded that she was planning on vandalizing his van and decided to move it.  When he drove away from the apartment, however, the girlfriend followed him in her pickup.  At the intersection of Ballenger Highway, he stopped at a stop sign and the ex- drove her vehicle in to the rear of the van.  He put it in park and went to the rear of the van to inspect the damage:  she promptly struck him and the van with her pickup, causing him injury, prior to fleeing the scene.

Auto Club was assigned to respond to Knox's request for PIP benefits.  It maintained that his vehicle was "involved" in the collision, since it was parked partly on the road and therefore was therefore "parked in such a way as to cause unreasonable risk of the bodily injury."  The Court pointed to the Miller v. AutoOwners decision where the Supreme Court refused to apply a bright-line "on the road--unsafely parked" distinction.  In Miller, the Court had refused to consider a State Police cruiser unsafely parked, where it protruded into the traveled lane and was struck by a motorcylist.  In the instant case, even though Knox's vehicle was "parked" in the road, the Court concluded that under the circumstances and in broad daylight, it was not parked in a way as to cause unreasonable risk of injury."

Retiree cannot sue for car accident injuries, despite two surgeries

Judges Christopher Murray, Jane Markey and Stephen Borello, constituting a panel of the Court of Appeals, handed down several opinions this week, all of which managed to result in victories for an insurance company.  Among them:  the dismissal of Gunnard Kyllonen's injury case against William Luepnitz.  Luepnitz had caused a car accident in which Kyllonen suffered a shoulder injury.  Kyllonen endured two surgeries on the shoulder (one to insert a screw and another to remove it) and pain, limitation of work and recreational activities, and some continuing disability.  The judges held that his injury was not a "serious impairment."

Insurer pays life insurance proceeds to ex-wife; pays again to Estate

UNUM Life Insurance Company, rated one of the worst insurers in the country for treatment of insureds, put some of its flaws on display in a recent St. Clair County Probate case.  Gaylord Genaw had purchased a life insurance policy from the company and its value in 2006 was $110,000.00.  That year he and his wife divorced and the divorce judgment extinguished the ex-wife's interest in the life insurance. Days later, Gaylord was killed in a motor vehicle collision.  His ex- was still listed as a beneficiary on the policy and she applied for the proceeds, identifying herself as the divorced "ex-spouse."

Allstate first on list of "Ten Worst Insurance Companies"

The American Association of Justice recently published a Report detailing the conduct of the "Ten Worst Insurance Companies".  Allstate topped the list (it consistently tops everyone's list of most abusive insurers), of course.  Here is the full list:

    1.  Allstate; 2. Unum; 3. AIG; 4. State Farm; 5. Conseco; 6. WellPoint; 7. Farmers; 8. United Health; 9. Torchmark; and 10. Liberty Mutual.

The Chief Executive Officers of these ten companies averaged an annual salary of nearlly $9 million dollars (that's $9 million EACH) for 2007. 

To view the entire report, go to http://www.justice.org/docs/TenWorstInsuranceCompanies.pdf.

Study finds malpractice insurers "gouge" doctors and reap stunning profits

The American Association of Justice (essentially America's trial lawyers) funded a study of insurance profits by malpractice insurers.  It reported this week that the insurers achieved "astronomical" profits year after year--higher than 99 percent of Fortune 500 companies.  The Washington Independent quoted the Report as concluding that the malpractice insurance companies studied reported profits that were 35 times higher than the Fortune 500 average and ranged from a low of 5.9 percent to a high of 74.8 percent.  The average reported profit for these insurers during the period was 31.2 percent.  Nowhere else in our economy can a corporation or individual anticipate achieving profits that even approach this level--and yet the public conversation about malpractice "reforms" has focused solely on eliminating the rights of badly-injured individuals, rather than redressing premium-gouging of doctors by insurance companies.

Health care symposium concludes malpractice is very minor influence on health care costs

The O'Neill Institute for National and Global Health Law at Georgetown University concluded its symposium this week with the finding that curbing medical malpractice litigation isn't the "silver bullet" needed to slay rising health care costs.  The panel of academics, quoted by McClatchy's Washington Bureau, included medical, law and economics professionals.  It noted that partisan interests make "bloated" anecdotal claims arguing for malpractice reforms, but that in fact they result in only meager cost savings.  It further noted that even in considering so-called "defensive medicine" costs, malpractice claims account for only "2 to 3 percent---at most" of the cost of health care. 

The Institute's findings were very similar to the conclusions reached by surgeon Atul Gawande when he analyzed Medicare costs in Texas:  the problem lies in "fee for service" medicine and an attitude among some medical professionals of "leave no dollar on the table." Texas malpractice reforms had minimal impact on the escalation of costs when compared with the problems Gawande identified.

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?

State Farm not required to pay uninsured motorist benefits where suit not filed within one year

Kimberly Idalski was seriously injured in a motor vehicle collision.  She had bought Uninsured Motorist [UM] benefits from State Farm, and the at-fault driver turned out to be uninsured.  In theory, this would allow Idalski to recover from her insurer, State Farm, for any damages the uninsured motorist should have paid.  Although Idalski sued within the three-year statute of limitations provided by law, she did not provide a formal notice to State Farm or file suit within the shorter period State Farm imposed in the contract.  Her attorneys argued that State Farm had suffered no prejudice by Idalski's failure to comply with the shorter notice and suit period, but the Court of Appeals held that State Farm need not show prejudice:  it was allowed to enforce the shorter limitation period without regard to any claim of harm or prejudice. Most insurance companies do not impose a contractual limitation period that is shorter than the period provided by law:  the so-called "Engler Majority" allowed insurers to impose a shorter limitation, however, during a period of insurer-favored activism that lasted most of the past decade.

Court refuses to apply "discovery" extension where Doctor's employment is misrepresented in chart

Gary Tyson went the the VA Medical Center in Ann Arbor for x-rays on his ankle.  One Dr. Ebrahim was identified as his "Primary Interpreting Staff" and "Attending Radiologist," and it turns out that Ebrahim mis-read the x-ray.  Tyson continued to ambulate on a fractured ankle for several weeks, before the mis-diagnosis was discovered.  Under the Federal Tort Claims Act, he filed a claim against the VA Medical Center.  Under that Act, the veteran cannot sue the individual practitioner and must look only to the Federal Government for compensation.  To his surprise, the VA eventually responded--after the two-year statute of limitations for malpractice claims--by notifying Tyson that it was not responsible under the FTCA for the error made by Ebrahim, because Ebrahim was not employed on staff by the VA:  he was an employee of the University of Michigan working under contract for the VA.

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.

California recognizes insured's right to sue insurer who destroys evidence

Lawyers USA reported this week that a California Appeals Court has recognized a cause of action in favor of an insured who could not pursue a product liability claim because his insurer, State Farm, disposed of an allegedly defective tire.  Under the facts of the case, the Court agreed that State Farm could be sued for "third party spoliation" of evidence.  Michigan's Supreme Court, while dominated by activist judges energized to protect insurance interests, have been reluctant to recognize this cause of action in Michigan.

Insurer limits pay-out from vandalism claim related to plumbing removal

Acorn Investment Company [AIC] owned a single-family rental home in Detroit that was insured with Michigan Basic.  After the tenants moved out, vandals removed copper piping and other fixtures, resulting in substantial water damage to the home. Michigan Basic relied on several exclusions in the policy to deny payment to AIC, which then filed suit.  The lower court granted judgment in favor of the insurer, relying on language in the policy related to both vandalism and earth movement, and AIC appealed.

Insurer bit by consequences of judicial activism

Several years ago, the Michigan Supreme Court was dominated by a group of Justices hand-selected by Governor Engler for their fidelity to the Chamber of Commerce and the insurance industry.  In a 4-3 decision, these Justices reversed a 19-year old precedent and re-interpreted the no-fault law to limit PIP actions by a one-year statute of limitations. This week, their decision cost an insurer thousands of dollars in reimbursement.

Uninsured Motorist insurer can't avoid coverage on a technicality

Annie Smith was injured in a motor vehicle collision.  She sued the at-fault, who turned out to be uninsured.  Her attorneys wrote to her insurer, MEEMIC Insurance Company, informing them of the latter development and seeking to negotiate her Uninsured Motorist (UM) claim.  MEEMIC refused to respond.  Smith's attorneys obtained a default judgment against the at-fault and then sued MEEMIC.  The trial court dismissed Smith's action against MEEMIC, in reliance on MEEMIC's policy provision that voided its UM Coverage in the event that the insured settled with, or took a judgment against, the at-fault.  Smith's attorneys appealed.

Farm Bureau punished for "lying in the weeds" on experts

Laura Putnam-Wesener suffered a head injury, apparently, in a motor vehicle collision.  She sued the other driver and she also had to fight with her own insurer, Farm Bureau, to collect PIP benefits.  Ultimately, she settled the claim against the at-fault.  In the meantime, Farm Bureau sought leave of the court to add as expert witnesses the neurologist and neuropsychologist who had examined the injured woman for the at-fault's insurer.  The problem was that Farm Bureau sought to add the experts 18 months late, and the Court had already extended the expert witness deadline once to accommodate Farm Bureau's request to add expert physicians.

Court interprets insurer's duty after accidental shooting

Liberty Mutual successfully refused to represent its insured after he accidentally shot a guest in his home.  The facts of the case, Liberty Mutual Fire Insurance Co. v. Patrick Stoutenburg, et al., are a little bizarre, to say the least, so this outcome was no surprise.  Nevertheless, the holding is worth reading for Judge Beckering's thoughtful concurrence, explaining the impact of Michigan Supreme Court precedent governing intentional, injurious acts and also the doctrine of judicial estoppel.  Judge Beckering reiterated the two-prong test that must be satisfied in determining whether an insured will have coverage for an "occurrence" that is in the nature of an intentional act.

State Farm clobbered after refusing to pay for pain management

The Court of Appeals recently affirmed a $2.5 million dollar verdict in favor of Sheri Anderson against State Farm Mutual.  Anderson suffered from facial pain and headaches after striking the car window in a motor vehicle collision.  Already suffering from multiple sclerosis, Anderson received pain treatment from anesthesiologist Maurice Converse, an M.D. who graduated from Ohio State's medical school.  His treatment included facial injections of steroids, anesthetic and Sarapin.  State Farm covered the treatments for about three years before rejecting payment.  Converse continued to treat Anderson without payment, and she filed suit for Personal Injury Protection benefits. 

State Farm argued to the jury that the treatments were unnecessary, inappropriate, and valuable to Anderson because of her underlying MS, rather than the motor vehicle injuries.  It also argued that Anderson was malingering.  Both sides presented expert testimony to support their claims.  The jury rejected State Farm's defense and awarded Anderson and Converse the full amount owed, including punitive interest.

The unanimous Court of Appeals panel noted that State Farm was cherry-picking the evidence on appeal, and that the trial court had properly limited some of State Farm's evidence in response to State Farm's failure to properly comply with discovery requirements of the Court.  It concluded that the jury verdict was an appropriate outcome under the circumstances of the evidence presented.

Court "elevates form over substance;" dismisses malpractice claim on technicality

After 54 year-old Edris Ligons underwent a colonscopy, she started suffering vomiting, diarrhea, chills and fever.  Her husband took her to Crittenton Hospital where she was treated by Dr. Bruce Bauer and the Rochester Emergency Group.  Bauer treated her for gastroenteritis and dehydration and sent her home.  She continued to experience severe pain and returned to the E.R. the following day.  She was admitted with a perforated colon, peritonitis (or infection in her abdomen caused by leakage of bowel contents) and severe sepsis.  She died within the week. Her Estate filed suit against Bauer and his practice, alleging that he didn't do the tests that the standard of care required before dismissing Ligons; and that if Bauer had ordered those tests, Mrs. Ligons would have been timely diagnosed and treated--preventing her death.

Spleen injuries and "serious impairment"

When the Engler Majority of the Michigan Supreme Court jacked up the proof required to document a "serious impairment of bodily function" under the no fault act, one group of victims denied compensation was composed of people who suffered injuries to the spleen.  In a number of cases, Michigan courts applying the "life-altering injury" standard engrafted on the threshold by insurance activists had held that a victim's spleen injury was not "serious," even if it resulted in a major operation and removal of the spleen.  Recent medical research has documented the short-sighted unfairness of these decisions.

Court overturns absurd "serious impairment" decision

In its recent decision in Caiger v. Oakley, et al., the Court of Appeals unanimously reversed a St. Clair County judge's dismissal of Donald Caiger's injury claim.  Caiger suffered a knee injury in a car accident caused by Oakley in 2005.  Within weeks, Caiger's doctor performed arthroscopic surgery on the knee, and 11 months after the collision Caiger was forced to undergo a knee replacement. 

Michigan Supreme Court to reconsider Kreiner no fault "serious impairment" standard?

The Associated Press reported on August 21 that the Michigan Supreme Court has agreed to reconsider a case involving the "life-altering" serious impairment interpretation of the no fault law adopted by Justice Clifford Taylor and the so-called Engler Gang of Four.  The latter justices, hand-selected by then-Governor Engler with an eye toward cozying up to the Chamber of Commerce and the insurance industry, adopted a number of lawsuit "reforms," including a re-analysis of the no fault threshold that severely limited when injured car accident victims could sue. 

Lexington Herald-Leader and other sources confirm that tort "reform" doesn't cut health costs and fails to address "the leading cause of accidental death in America"

In an editorial written on August 16, 2009, the Herald-Leader, obviously a disinterested observer, pointed out that tort "reform" is a red herrring in the current conversation over health care costs.  That is, malpractice recoveries and "defensive medicine" are a literal drop-in-the-bucket compared to the overwhelming cost of medical care.  The paper pointed to Texas and other states where malpractice caps and reforms in 2003 did not significantly slow the exorbitant rise in health care spending. 

Insurer can't avoid payment of no fault PIP benefits

Met Life Auto and Home denied Harless Hairston no fault PIP benefits when he suffered serious injuries in a car accident.  Met LIfe argued that it was entitled to consider Hairston an "owner" of his mother's car because she had loaned it to him for more than 30 days.  It argued that since Hairston was a Michigan resident and his mother insured the car in Illinois where she lived, Hairston could be denied benefits as the owner of an uninsured vehicle, even though he was not operating it at the time of his injuries.

The Court noted that under the facts of this case, the car was properly insured in Illinois, and that in accordance with MCL 257.243(1), the vehicle was not required to be insured in Michigan.  Therefore, even though Hairston was occupying (not driving) a vehicle that was not insured under Michigan's no fault scheme, he was still entitled to PIP benefits--which were paid under a policy issued to the uncle with whom he lived.

Farm Bureau can't re-write insurance contract to reduce coverage from 300K to 20K

Tracie Couture's husband, while driving a motorcycle, was killed by a negligent driver.  The at-fault driver was insured with Farm Bureau.  Prior to the fatal collision, the at-fault's husband had asked his insurance agent to reduce the cost of their auto insurance coverage.  The agent re-wrote the terms of the policy to eliminate or reduce several coverages, but by mistake Farm Bureau increased their liability coverage to $300,000.00.  The insured, Rodney Daniels, paid the insurance bill--now reduced--without noticing that his liability coverage and premium had actually increased.  After Couture's husband was killed, however, Farm Bureau attempted to reduce the coverage to $20,000.00, even though Daniels had paid for the greater coverage.

Court upholds $90,000.00 fee award against Farm Bureau for unreasonable delay in paying benefits

Daniel Bamm was injured in a motor vehicle collision.  All three of his treating doctors agreed that his newly-identifed herniated discs were caused by the accident, however Farm Bureau refused to pay the related Personal Injury Protection (PIP) benefits, claiming that his back problems predated the collision.  Ultimately, the jury found that the back problems were related to the collision, and the trial judge hit Farm Bureau with $90,000.00 in attorney fees, finding that it "unreasonably delayed payment" of benefits.  The Court of Appeals upheld this award.

Court of Appeals affirms fraud-type verdict against State Farm

In 2004, Patricia Paquette sued her son Richard's auto insurance carrier, State Farm, for fraud and misconduct related to its failure to pay Personal Injury Protection benefits for Richard's care.  Richard suffered a catastrophic brain injury in 1985 and Patricia cared for him at home.  She maintained that State Farm concealed its duty to pay a reasonable sum for attendant care and basically defrauded Richard of his right to benefits.  State Farm claimed that it had no duty to advise her with regard to her son's legal PIP benefits and that, in any event, even if it committed misconduct, Ms. Paquette was too late in filing suit.

Court decides catastrophic claim fund cannot "second-guess" PIP settlements

Under the no fault act, when no fault PIP expenses (medical and the first three years of wages and replacement domestic services expenses) exceed a statutory minimum, they are deemed "catastrophic" and the insurer is indemnified through a fund established under the statute, and governed by an association of insurers called the Michigan Catastrophic Claims Association.  The MCCA was given statutory authority to establish rules governing the management of the fund among its member insurers, but it sued recently seeking the authority to deny indemnification for PIP payments it deemed "unreasonable."

Bush Administration withheld data on danger of cell phone use while driving

This month, the Center for Auto Safety and Public Citizen published data they secured through the Freedom of Information Act, documenting the significant safety risk associated with cell phone use while driving.  The federal Transportation Department had gathered this information in 2005 and 2006, but did not disseminate it during the Bush Administration in order to maintain favor with the cell phone industry. Until 2009, the latter industry argued that cellphone use while driving was not a danger and should not be regulated.

Cement falls from overpass injuring doctor--he MIGHT have valid claim against road authority

Dr. Anthony Adeleye was hurt when a chunk of concrete fell from the M-39 overpass and struck his windshield, as he was driving south on the Lodge.  He sued the Michigan Department of Transportation (MDOT) for failing to properly maintain the overpass bridge.  Luckily, his attorneys alleged that one cause of the deterioration of the bridge was the failure to maintain the roadway surface that rested on the bridge.  MDOT argued that it should have no responsibility for failing to properly inspect and maintain the bridge because its statutory duty to "maintain a reasonably safe roadway" applies only to the traveled surface and not to the structure supporting it.

Kids get extra time (to adulthood) to sue government, but must serve formal notice of claim within 6 months

Katerina Super suffered very severe injuries at age 3 when her car was struck by a MDOT vehicle driven on the freeway by an MDOT employee at 90+ miles per hour.  The employee, one Melissa Kane, was late for a meeting, driving like an idiot, and lost control of her car.  MDOT investigated the incident and disciplined her.  Katerina's family did not immediately take any legal action, however.  When it did file a lawsuit to compensate Katerina a year later, MDOT argued that the case must be dismissed because the three-year old did not serve MDOT with a written notice of her injury.  The family argued that the tolling provision giving minors (and other incompetent persons) the right to sue until a year after they reach the age of majority (or their disability is removed) applied to allow Katerina's suit to go forward.  Incredibly, the Court of Appeals majority reversed the trial court and held that Katerina's case must be dismissed because she didn't serve a written notice.

Woman's right to attendant care under no fault is rejected

Charlotte Chalko sued State Farm for 24 hour attendant care.  Chalko is obese and has other health problems, and suffered a severe ankle fracture in a motor vehicle collision.  She claimed that the ankle fracture compounded her existing physical problems, resulting in respiratory failures and the need for full-time attendant care.  She presented the testimony of her doctor in support of her claim, but State Farm hired two doctors who testified that any need for attendant care was solely the result of her other health problems and unrelated to her ankle injury.

Michigan House hears insurer complaints; considers reforms

The Detroit Free Press reported on July 14 that the State House was conducting hearings on a series of bills that would punish insurance companies or executives who encourage the wrongful denial of claims.  The bills would authorize the Insurance Commissioner to levy fines and civil penalties and even provide criminal penalties for wrongful conduct.  The bill will go nowhere, however, since the State Senate is controlled by a Republican majority that will never reform insurance law in Michigan to favor consumers. 

Despite record profits by insurers, the Republican majority in the Senate has treated the insurance industry as a "favored child" because of its special interest lobbying wealth.  For a simple example, the no fault maximum limit for domestic replacement services payable to accident victims under the no fault act remains at $20.00 per day as established in 1974; the minimum statutory no fault liability coverage has not been increased from $20,000.00 as written in the same original bill.  It goes without saying that if $20,000.00 dollars was a reasonable potential level of compensation for "death, permanent serious disfigurement or serious impairment of bodily function" in the 70s, it is grossly inadequate today, but Michigan insurers and their Republican toadies have battled any inflationary up-date to a standstill on several occasions.

It will not surprise experienced attorneys to learn that Jo Anne Katzman, a claims adjuster from Bloomfield Hills who supports the bills, told reporters that she quit Allstate Insurance Company in 2003 because she and other adjusters were "pressured to deny claims to people who deserved them."  Allstate is the company that single-handedly led a change in the insurance industry from a fiduciary "good hands" identity to a no-holds-barred, "boxing gloves" approach to claims management that placed profits above the interest of its insureds.  That entire development and the enormous resulting profits have been documented in earlier entries of this web log.

Allstate achieves dismissal of PIP claim on a technicality

Kinda Kayl suffered a knee injury in a 1994 motor vehicle collision.  Ten years later, she was still having trouble and required medical care which her doctor attributed to the collision.  Under Michigan's no fault law, if Kayl's current care was caused, in part, by the prior collision, Allstate, her insurer at the time, was obligated to pay the medical expenses.  Kayl filed suit, and Allstate sought summary disposition claiming the recent care was caused by a more recent collision and not by the 1994 injuries.  Allstate's attorney also argued, at some point, that Kayl had not properly submitted evidence of her current expenses and treatment.  Her attorney responded with an affidavit documenting her submission of claims, however, Kayl's signature was not secured on the affidavit until after the hearing.

Woman dies in home fire, Allstate investigates and destroys evidence: court rules no claim against Allstate

The Estate of Lillian Teel sued Lillian's landlord and Allstate after Lillian died in a home fire.  They alleged that Allstate sent an inspector to the apartment, without notice to the Teels, and that its inspector altered the scene, removing certain items that had the effect of destroying evidence of the fire's cause and origin.  When the Teels learned of Allstate's destruction or "spoliation" of evidence, they joined Allstate in their suit against the landlord, whom they claimed had not maintained reasonably safe premises.

Quadraplegiac gets a new van under no fault rules.

Neil Begin was rendered a quadraplegiac in a motor vehicle collision while he worked for Michigan Bell Telephone.  Bell is self-insured for no fault and workers compensation.  It argued that since Begin drove a van before his injuries, it should not be required to provide him with a replacement van after his wore out; it relied upon the Engler majority's decision in the Griffith v. State Farm case, where the Court ruled that the no fault insurer was not required to compensate a seriously-injured accident victim for necessities that non-injured persons also require.

Eleven-year old with multiple fractures can't sue the drunk

In Cottrill v. Craig Kenneth Senter, two judges of the Court of Appeals recently held that an injured eighth grader could not sue the drunk who crossed the center line and hurt him.  The two judges ruled that even though there wer intimations of a head injury, and proven evidence of a fractured wrist, comminuted fracture of bones in the foot, and fractured ribs, the minor plaintiff had not alleged a "serious impairment of bodily function."

The dissenting judge pointed out that the drunk (with a .30 blood alcohol) caused the boy to miss two months of eighth grade and two full seasons of football, along with enduring several months of inactivity and an episode of difficulty breathing resulting from the multiple rib fractures.  He was still experiencing residual chest pain and had gone a full month without weight-bearing, along with needing attendant care for several weeks.

The two judges who dismissed the case determined that young Cottrill's injuries "did not change the trajectory of his life," applying the Engler Majority's Kreiner standard of "serious impairment."  The majority opinion pointed out, a propos of the latter conclusion, that the boy testified "he did not expect [his rib pain] to continue much longer."  We are glad to hear that an eleven-year old's anticipated prognosis for his own injuries is now admissible on the subject of "serious impairment."  Clearly the standard of intellectual analysis and discourse in our judiciary is becoming elevated.

Michigan Blue Cross agrees to provide limited benefits to autistic insureds

On June 20, 2009, Blue Cross Blue Shield of Michigan agreed to pay one million dollars to settle a class action brought by 100 Michigan families.  The families had argued that the health insurer should be providing coverage for behavioral therapy to young children diagnosed with autism.  Most private Michigan health insurers do not provide coverage for autism, however, BCBS announced in May that it would provide limited coverage for intensive early intervention.

Dealer's insurer must provide primary coverage to customers

The No Fault Act requires vehicle owners' insurers to provide "primary" insurance coverage to all consensual users of the vehicle.  Over the years, self-insurers and insurers writing commercial insurance have attempted to side-step this obligation by writing exclusions and limitations into policies.  In a fairly significant ruling last decade, Enterprise Leasing was required to provide primary coverage for rented vehicles and was not allowed to limit its coverage to the statutory minimum of $20,000.00 per injury.  This month, the court rejected Auto Owners Insurance Company's effort to deflect primary coverage on so-called "garage customers" of dealerships.