TOV Injury and Safety Blog

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. 

Court upholds insurer's second-guessing of doctor's long-term disability

David B. Cox was awarded long-term disability insurance and Social Security disability after suffering an event which his neurologist described as a stroke.  After paying benefits for two years, the ERISA insurer, Standard Insurance Company, "reevaluated" Cox's disability and determined that he could return to the practice of Family Medicine.  Cox filed an administrative appeal, which was denied, and then filed suit in Federal Court to challenge the decision.

Attorney must pay child's injury settlement after releasing funds to parent without restrictive endorsement

In the matter of The Estate of Calvin Graves, the Court of Appeals recently ruled that a child's attorney must pay the child's Estate the money that the attorney mistakenly turned over to the child's father.  The father was the child's Conservator, however, after an injury settlement was achieved, the attorney issued the child's check to the father without making it payable to him as Conservator for Calvin.  As a result, he was able to (and did) cash the check and spend it.  When he could not fulfill his duty to pay the money over to the Estate, the Probate Court required the attorney to come up with the money.  On appeal, the Court of Appeals rejected the attorney's claims arguing lack of subject matter jurisdiction and that he could not be sued by the Court for "malpractice."  The higher court pointed out that his client was the boy's Estate, and it was entitled to hold him responsible for his failure to act with due care.

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." 

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.

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."

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.

Texas resident cannot collect Michigan PIP benefits from his insurer

Rochelle Washington, a Texas resident driving a car registered in Texas, was injured in a Michigan car accident.  Initially, her insurer, "Old American County Mutual Fire Insurance Co.," paid her PIP benefits.  After paying a little over $13,000.00 in medical and wages, however, Old American stopped paying and Washington sued it and Titan Insurance--the assigned insurance company under the Assigned Claims Plan. Old American is not registered in the State of Michigan, and therefore not obligated to pay PIP benefits under Michigan law; it could still be obligated under the terms of its policy/contract.  The Court of Appeals concluded that it was not, however.

Home owner cannot hold insurer responsible for allowing fraudulent "agent" to cancel policy

Robert Gaines purchased a home which he immediately sold to a realtor-friend.  The realtor-friend was authorized to manage the transaction, and she allowed her boyfriend to purchase homeowner's coverage.  Before Gaines could sell the home to his friend, however, the house burned.  When Gaines sought coverage from Michigan Basic, he was informed that "his son" [actually the friend's boyfriend]had cancelled the coverage prior to the sale.  Gaines sued the insurer for negligence in allowing a third-party to cancel coverage, however, his claim was dismissed.  The Court pointed to the fact that Notice of Cancellation had been mailed to the proper address, precluding Gaines from arguing that the insurer should be estopped from cancelling.  The Court also rejected his claim that he should be treated as an "equitable subrogee," noting that the protection provided under that doctrine applies only to a third-party who pays the legal debt of another.

Defense attorney's misconduct is not adequate grounds for new trial

The Court of Appeals this week reversed a Barry County Circuit judge and denied a new trial to a woman who claimed she sufferred injury at the hands of a JC Penney Co. hairdresser.   A jury entered verdict against the woman after her trial, but the presiding judge ordered a new trial, citing several instances of misconduct by the Defendant's attorney.  He had apparently interjected into the trial irrelevant and misleading suggestions of prior lawsuits by and against her, inaccurately suggested a prior lawsuit was dismissed on its merits, suggested a bankruptcy filing, and impeached her credibility based on her failure to acknowledge that she  was a paralegal who had once attended a Paralegal Institute in Georgia.

The appellate panel, including the insurers' advocate, Richard Bandstra, reversed the opinion of the judge who supervised the trial, concluding that the several errors of the defense attorney were harmless and cured by the judge's instructions. That appellate decision certainly won't discourage defense attorneys from wrongfully interjecting prejudicial and irrelevant matters into civil trials:  it tells insurance attorneys, "hey, if someone is bold enough to seek legal redress and you don't have a solid defense, just attack, attack, attack...throw up enough garbage and something may stick."

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.

Victim of ATV injury suffered on highway can collect PIP benefits: Farm Bureau pays costs

Leslie Shankster was injured in a single-vehicle accident involving his ORV.  The accident occurred on a public road.  Since the ATV has four wheels and was operated on a public road, Shankster is entitled to collect no fault PIP benefits, even though the ATV was not insured-- or insurable-- as a no fault "motor vehicle" (because it was not 'designed for use on the highway').  Farm Bureau attempted to get around the existing law by arguing that as a matter of public policy, occupants of ATVs should never be entitled to obtain PIP benefits, even though the plain language of the no fault law had made them eligible when riding on a highway, for 30 years.  The appellate court unanimously rejected Farm Bureau's arguement and awarded costs to Shankster as the prevailing party.

Citizens Insurance allowed to rescind its umbrella policy after car accident

Cyrus Trent was killed in a motor vehicle caused by Hilda Mae Rippy, the mother of Barbara Goldmanl   The Estate of Trent sued Rippy but Citizens refused to honor the liability policy that would otherwise have provided umbrella protection to Rippy and the Goldman family.  Citizens argued that under the Oade v. Jackson National LIfe case, it owed no coverage because the Goldmans had not included Rippy--who lived above their garage--as a member of their "household" in their original application for the umbrella insurance policy.  In the Oade case, the insured's life insurance application had accurately stated that he had never been hospitalized with cardiac concerns when he submitted it, however, he had been seen in the Emergency Room and hospitalized with chest pain prior to the issuance of the policy.  His failure to up-date his application was deemed to be a material misrepresentation.

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.

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.

Ex-wife must pay life insurance to Estate; not protected by ERISA rules

Kathleen Wright, formerly Kathleen Sanger, had been divorced from her husband for 14 years when Edwin Sanger died. The marriage had lasted only two years when the couple divorced in 1992, and the rights of each spouse to the other's life insurance was expressly extinguished in the judgment of divorce.  Edwin never wrote to his insurer to change the beneficiary, however, and under ERISA rules, the Metropolitan Life Insurance Company paid the proceeds of his policy to his ex, Kathleen. 

Allstate forced to pay seven-figure PIP claim over technical objections

Jerome Crutcher-Bey suffered a catastrophic head injury while a passenger in a motor vehicle collision in 2003.  His Personal Injury Protection (PIP) claim for medical expenses was assigned to the Auto Club (ACIA), which paid out over one million dollars.  The ACIA then sought reimbursement from Citizens, the owner of the car, and Allstate, the insurer of the injured boy's brother.  With agreement of the parties, the trial court conducted an evidentiary hearing to determine whether Crutcher-Bey was actually domiciled with his brother in the Allstate-insured household.  The judge concluded that he was, and held Allstate responsible for the medical expenses paid by the Auto Club.

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.

Court addresses complicated interaction between no fault PIP benefits and ERISA health plan

The Hillsdale Community Health Center provided physical therapy to a 16 year-old who was injured in a motor vehicle collision.  She was driving a car insured with Pioneer State Mutual Insurance Company, and she had health insurance with Empire Blue Cross Blue Shield through her father's employer.  The two insurers responsible for her medical care both claimed that  the other had priority and should be paying the bills, leaving HCHC [and many other providers] unpaid.  Ultimately, the court determined that Empire Blue Cross should have been paying and it assessed attorneys fees in favor of HCHC.  Empire Blue Cross appealed.  Among many other arguments, it claimed that its denial of payment was justified by the fact that the insured did not secure its consent after 20 therapy sessions, that HCHC lacked standing to sue for the payments and that under ERISA, HCHC and the insured had failed to exhaust their administrative remedies prior to suit.

Allstate, bottom-rung of insurers, settles discrimination suit by employees

The Associated Press reported on September 11 that Allstate Insurance Company will pay $4.5 million dollars to settle an age discrimination suit brought by 90 employees.  The Equal Employment Opportunity Commission had assisted the employees, who apparently established that Allstate's effort to treat its sales agents as "independent contractors," discriminated against agents over 40.  Apparently ninety percent of the agents who were not "re-hired" or re-assigned (or whatever you do when you fire people and then hire some back as "independent contractors") were over 40.  Allstate is well known among lawyers and judges for cutting corners and abusing civil procedure whenever an extra few pennies of profit might be at stake.

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.

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. 

Sixth Circuit addresses statute of limitations issues under ERISA

In Rice v. Jefferson Pilot Financial Insurance Co., the Sixth Circuit upheld the dismissal of a disability suit brought by a floor covering installer who suffered from depression and chronic fatigue syndrome.  The installer, Jerry Rice, was deemed disabled by the Social Security Administration, but his claim for disability benefits under his employer's ERISA contract was denied by the insurer.  When he subsequently sued, the lawsuit was dismissed in response to Jefferson Pilot's argument that Rice did not comply with the three-year statute of limitations expressly incorporated into the disability insurance contract. 

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. 

Auto Club must pay PIP benefits to woman exiting her car

Michigan's No Fault auto insurance scheme requires that an auto insurer pay PIP benefits (medical and three years of wage loss or domestic services) if someone is injured while "entering or alighting" from a motor vehicle.  Florine Burks was getting out of her daughter's car, after a trip to the grocery store, when the car was hit by another car.  Florine had both of her feet on the ground, but was in the process of removing her groceries from the back seat when she noticed the out-of-control car, pushed the door closed and attempted to "brace her body" against the car.  The Auto Club argued that since she did not have either foot inside the car, the court should create a bright-line distinction and hold that she was not "entering or alighting" from the car and not entitled to no fault PIP benefits.

The Court rejected this approach and required the insurer to pay PIP benefits, noting that by any reasonable interpretation of the events, Ms. Burks was in the process of gathering her bags of groceries and leaving the car when the injury occurred. 

Probate Court can order no fault insurer to pay injury victim's attorney fees

Ever-aggressive Farm Bureau was the no fault insurer responsible for Jennifer L. Geror's medical expenses.  When questions arose over the adequacy of care being provided to Geror--who is not mentally competent--the Court appointed a guardian at litem to represent her interests.  Even though Michigan courts have recognized for almost 15 years that guardianship expenses are an "allowable expense" under the no fault act, Farm Bureau refused to pay Geror's guardian's legal fees, claiming the Probate Court lacked jurisdiction to require the payment.

The Court of Appeals unanimously rejected Farm Bureau's argument, noting that the fees were "expenses incurred for the reasonably necessary services for an injured person's care" and were thus payable under MCL 500.3107(1)(a).

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 of Appeals sends PIP claim back to Wayne County Circuit bench

In James v. AAA Insurance Company, the Court of Appeals held that the Wayne County Circuit Court would have to take a second look at James' PIP claims.  The lower court had held that James could not collect for her hospital billings because she did not admit into evidence the actual itemized hospital billings, however, the Appellate Court ruled that James' testimonial evidence was adequate to support an award of these expenses, if the jury chose to believe the testimony:  she was not required to offer the "best evidence" of the expenses reasonably incurred, leaving the jury to decide what weight should be given her testimonial evidence.

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."

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.

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.