TOV Injury and Safety Blog

Court of Appeals upholds jury verdict against family in Lenawee County death case

The family of a young man killed in a Highway collision on US 223 filed suit against the trucking firm that struck the man's van while it was making a left turn.  The family claimed that the defendant was illegally passing the victim's left-turning vehicle and provided proof that the turn signal was activated.  The Defendant driver claimed that the van turned off the right shoulder into the path of his truck without warning, constituting a "sudden emergency."  Each side presented expert reconstruction testimony supporting their theory of how the collision happened, and the jury found in favor of the Defendant.  The Plaintiff family objected to the trial court's incomplete instruction on sudden emergency and also asked the higher court to overturn the verdict as "against the great weight of the evidence."  The Court of Appeals refused. 

Court rules "No dual domicile" for emancipated kid

Farmers Insurance Exchange and the Auto Club fought over which should provide No Fault PIP benefits to Edward Carter and his Conservator, Angela Henderson, after Carter suffered catastrophic motor vehicle accident injuries. He was a pedestrian when he was struck by a car.  He had no car or car insurance of his own, but family members with whom he sometimes stayed did have auto insurance.  The trial court heard the various facts about where Carter was living, and concluded that he was maintaining a "dual domicile" with two different family members.  The Court of Appeals rejected this outcome and sent the case back to the lower court to determine which of the places where he sometimes stayed was his "only one domicile that is the place where there is a true fixed permanent and principal establishment to which the person has the intention to return."

Multiple fractures in lower spine constitute "serious impairment:" AutoOwners must pay

Jake Vielstra suffered multiple fractures in his lower spine when the driver of the car he was in accidently rolled it several times.  She had only $20,000.00 in coverage, which her insurer promptly offered to pay Vielstra.  After complying with AutoOwner's settlement restrictions, Vielstra took that money and filed an Underinsured Motorist claim against AutoOwners (his own carrier).  AutoOwners declined to pay any settlement, maintaining that Vielstra did not suffer a "serious impairment of bodily function." 

Insurer denied right to treat cleaning agents as "pollutant" and avoid liability coverage

Safety King Incorporated provides cleaning services and specializes in cleaning and treating ductwork.  It uses a sanitizing agent, triclosan, which is an antimicrobial found in a variety of uses, including personal hygiene products and cosmetics, although it is also categorized as a pesticide. Safety King purchased liability coverage through Hastings Mutual Insurance Company.  In 2007, a homeowner filed suit against Safety King, arguing that the children in the home suffered injury by mis-use of the sanitizing agent.  Hastings Mutual argued that it did not have to provide coverage to Safety King because its pollution exclusion applied to Safety King's use of a known pesticide.  The trial court agreed and refused to enforce the liability insurance contract.

Bronson Hospital denied right to recover for medical care provided to no fault victim: Allstate avoids payment on a technicality

Bronson Methodist Hospital provided $37,000.00 of care to an uninsured accident victim (probably one day's hospitalization, one x-ray, hang-nail surgery and three aspirin.....at going rates).  By law, it was entitled to recover these expenses from an "assigned insurer" licensed to sell auto insurance in Michigan.  MI insurers are randomly assigned to provide PIP benefits to uninsured passengers and pedestrians if they don't have coverage through a vehicle or a member of the household.  In this case, however, Bronson did not identify the victim as uninsured immediately, and did not apply for an "assigned' insurer for nearly 12 months.  By the time Allstate was assigned to the claim, the services were one year and two days old, and Allstate refused to pay for them, citing the "one year back rule."

Farm Bureau allowed to enforce one-year limit on notice of Uninsured Motorist Coverage

Farm Bureau was allowed to avoid paying Uninsured Motorist benefits purchased by Robert M. Marshall by relying on Farm Bureau's insurance policy language requiring that notice of uninsured fault be provided the insurer within one year of suffering injury.  Marshall's attorneys had claimed that the one-year notice provision was illegal and unconscionable and relied heavily on the fact that the policy was not sent to Marshall until after he purchased it, frequently injury victims do not know that the at-fault is uninsured within one calendar year, and in many cases they do not even know that their injury is severe enough to meet the "life-altering" standard established in the Kreiner decision. 

The trial court found these arguments persuasive and denied Farm Bureau summary disposition, however, the Court of Appeals reversed and threw out Marshall's claim.  It relied heavily on several decisions issued by the "Engler Majority" several years ago:  those decisions essentially overturned Michigan law and denied relief to insureds who were issued insurance policies that contained provisions that defied the insured's "reasonable expectations." 

Pioneer State Mutual loses PIP argument about domicile

Pioneer is a late-starting competitor for cheapest no fault insurer in Michigan.  While not up to the standards of Allstate in cynical denial of benefits, Pioneer has demonstrated a willingness to challenge its insureds' claims on virtually any grounds available.  This week, it lost an argument attempting to transfer PIP expenses to State Farm. 

Jason Teeple is a 34 year-old resident of the U.P.  He doesn't have a driver's license or own a car.  He was injured in a motor vehicle collision while a passenger in a vehicle insured with Pioneer.  Pioneer denied his PIP benefits, arguing that he was a resident of his mother's home, even though he hadn't lived with her in about eight years.  Teeple used his mother's home on a regular basis for visits with his child and as his mailing address, but was currently living in an RV with a girlfriend.  Since living with his mother, he had lived for several years with a fiance and in several other cities for significant periods.  The Court found that under the facts as elicited, he was not domiciled with his mother and not a "member of her household."

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 the proceeds of the third-party negligence action were held in an equitable constructive trust for "reimbursement" of the plan's medical expenses.  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.

Jury must decide whether woman's neck injuries are a "serious impairment of bodily function"

Emma O'Keefe was hurt when Francis Kirchoff backed into her car in Oakland County.  The Auto Club acknowledged that O'Keefe suffered an objectively manifested injury, but denied that the consequences were a "serious impairment of bodily function" as that threshold requirement was re-defined in the Kreiner v. Fischer case. On that basis, O'Keefe's lawsuit seeking non-economic damages from Kirchoff's insurer was dismissed.

Observing that O'Keefe's back and neck injuries now prevent her from performing yard work, housework, baking, walking on a treadmill and playing with, or even reading to her grandchildren, the Court of Appeals concluded that it was an error to dismiss her case as a matter of law.  Since these and other restrictions and limitations, including a loss of marital relations, appear to be permanent, a jury should determine whether O'Keefe has suffered a "serious impairment of bodily function." 

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.

Court reverses summary disposition for Allstate regarding PIP benefits

Dustin Stevens, who was legally incapacitated at the time, suffered further injury in a single vehicle collision.  He was the driver of an  uninsured car registered to his mother.  Although he and the mother denied he had permission to use the vehicle, there were other circumstantial pieces of evidence that would imply that he was either buying the car or enjoyed regular use.  The trial court granted Allstate summary judgment, however, the Court of Appeals reversed, noting that it was not appropriate for the judge to weigh credibility and decide disputed facts:  under our Constitution, the case should  have been decided by jurors.

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.