TOV Injury and Safety Blog

Farm Bureau avoids coverage for employee theft

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

Auto-Owners' attempt to deny a day in court to injury victim is rejected

Gary Hayward was injured while engaged in construction activity, allegedly as a result of an equipment explosion.  He argued that Keizer-Morris negligently caused the explosion.  In an effort to fend off Hayward's claim, AutoOwners filed a declaratory judgment action against Keizer-Morris, which was undergoing corporate dissolution, alleging that it did not owe coverage for Keizer-Morris's negligence.  Of course, particularly with a soon-to-be-defunct corporation involved, Hayward's claim would be defeated if the at-fault's insurer could deny coverage.

Hayward moved to join in Auto Owner's dec action, but the trial court denied his request.  Keizer-Morris made the willful decision not to oppose AutoOwner's decision, thereby allowing Auto Owners to secure an unopposed holding that it did not owe Hayward coverage. 

The Court of Appeals ruled, unanimously, that the lower court had erred in refusing Hayward's request to join in the action determining Auto Owner's obligation to provide coverage.  It noted that Keizer-Morris was not motivated to zealously advocate its position, and if fact did not even choose to make an appearance in the litigation.  It is in the interests of justice, both from a substantive perspective and from the perspective of judicial economy, to allow Hayward standing to argue the coverage issue.  "[T]he default of one party, [Keitzer-Morris] does not deprive the trial court of its power to decide the rights and liabilities of the remaining parties..."

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.

Doctors' affidavits establish question of fact regarding traumatic brain injury

In MacDonald v. Koch and Norandex Reynolds Distribution Co. the Court of Appeals recently held that affidavits filed by the injured man's doctors were sufficient to create a question of fact with regard to whether MacDonald had suffered a traumatic brain injury that constituted a "serious impairment of bodily function."   MacDonald had sued the at-fault driver and his employer after a motor vehicle collision.  By law he must prove that he suffered a "threshold" injury, and the pertinent statute addresses the proofs necessary to prove a head injury separately from other injuries. 

Insurer allowed to exclude coverage arising from use of an auto

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

Insurers 4 and 0 on the day: Auto Club not required to cover accidental shooting

Insurers enjoyed a good day in Michigan on June 18.  The Court of Appeals reported four injury cases, and all four were wins for insurers and defendants.  The last reported decision involved 15-year old Cody, a resident of Dan Mitchell's household. 

Cody took possession of Mitchell's rifle and accidentally shot his friend Marissa in the abdomen.  The Auto Club insured Mitchell and his household, and filed a declaratory judgment action, asking the court to rule that it did not owe Mitchell coverage for negligent supervision of Cody or the rifle.  The Court ruled that Cody's action in continuing to load and fire a rifle with a defectively operating magazine, and the fact that he had pointed it in the direction of Marissa, constituted "reckless use of a firearm" and therefore a [negligent] criminal act which was excluded from the Auto Club's coverage duties.

Herniated disc suffered while adjusting trailer "dolly legs" is not an "accident"

The Court of Appeals concluded that Marshall Munger's case against Transguard Insurance Company should be dismissed because the injuries he suffered were not caused by an insured "accident."  Munger, an over-the-road truck driver, ruptured a disc while adjusting his trailer's dolly legs.  He claimed benefits under the defendant's insurance policy, arguing that "torquing" the disc between L-4 and S-1 constituted an "accident," but the court ruled that an accident under the policy does not include an injury that results from voluntarily-initiated activity.  The Court held that Munger needed to allege an "event" that was unforeseeable, unexpected and unintended, not merely an injury that met that definition.

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.

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

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

Nationwide Mutual admits underpayment to insureds for 13 years

On June 16, the Columbus Dispatch reported that Nationwide Mutual Insurance had agreed to pay policyholders an additional 20 percent on top of previous payments to settle a class action alleging systematic underpayment of home repair claims.  The paper explained that over a 13 year period, Nationwide had underpaid insureds by withholding payment for general contractors' overhead and profit, leaving insureds inadequate insurance coverage to complete insured repairs.  A spokeswoman for Nationwide denied wrongdoing and refused to discuss the case, pending court approval of the class-action settlement.

Fraud case against Auto Club allowed to proceed

Sharon Strozewski sued the Auto Club Insurance Association, alleging that it fraudulently denied her proper payment for quitting her job to care for her two small children who suffered severe brain damage in a car accident.  Her case came back to the Court of Appeals, after appeal to the Supreme Court, to determine whether the insurer could properly be charged with defrauding two brain-damaged very young children.  The Court concluded that even though the children were no misled by the alleged fraud, their representative, Strozewski, was:  therefore a fraud case was viable.

Over-reaching Farm Bureau claim gets dunked

Bill Carpenter, a Farm Bureau insured and Michigan resident, was working in Indiana when he was hurt in a car wreck. The at-fault, Wendy Black, happened also to be a Michigan resident.  Indiana, like Michigan, requires injury victims to bring suit in the County where the injury occurred.  When Carpenter sued, however, Farm Bureau ran to court in Michigan and filed its own suit, seeking to force Carpenter's case in Indiana to be dismissed.  Turns out that Farm Bureau liked Michigan law better and wanted a court to apply Michigan law because the two drivers were both from Michigan.

Commercial tenant held responsible for damage caused by fire

In American States Insurance and Ratcliff v. Hampton, dba VIP Truck & Trailer, a building owner and his insurer sued the tenant who caused a fire in the leased premises for the damage caused to his building.  Under the parties' written lease, Hampton had assumed responsibility for any damage resulting from "his negligence or the negligence of invitees or guests."  Hampton argued, however, thast Ratliff's purchase of fire insurance and his admission that his building was under-insured constituted proof that the landlord had assumed the risk associated with a fire caused by Hampton.

The Courts rejected this analysis, and distinguished this case from a prior case where the tenant's only relevant leasehold duty was to pay the insurance premiums incurred by the landlord.

Michigan Insurance Company loses battle over residency

Chunqin Han and his wife emigrated from China to the U.S. in the 80s.  They attended school at Michigan State and became U.S. citizens.  After graduation Han worked for the DEQ, but in 2002 he accepted a job as a microbiologist in Arkansas.  His wife and daughter remained in Haslett.  He was killed in a motor vehicle collision, and Michigan Insurance refused to pay wrongful death benefits owed to his family under his wife's policy, claiming he was no longer domiciled in Michigan.

Fractured femur isn't a serious impairment? Maybe if its not your femur.

The Court of Appeals recently threw out a case filed by James Plaggemeyer against the Lee family.  Apparently one of the Lees (sounds like the kid was driving a car titled jointly by both parents) hit Plaggemeyer's bike (although in an interestingly-foretelling description, the opinion says that "his bicycle collided with defendants' motor vehicle").  The man had surgery, used a walker for four weeks, crutches for eight weeks and returned to work without restrictions after fourteen weeks. He couldn't do lawn work for a year.  He can't hike, jog or play tennis "because of pain."  His left leg has atrophied about an inch. 

Nevertheless, because the latter restrictions are "self-imposed" and not supported by proof from a physician, however, the court refused to consider them.  It concluded that under the Kreiner analysis, as a matter of law, he had not shown a "life-altering injury."  We can't help but wonder whether these judges would agree with this analysis of "serious impairment" if it were their lives disrupted in this fashion.

Expenses for care of catastrophically injured Michigan no fault victims

Attorneys and the families of catastrophically injured no fault victims continue to watch the Michigan Supreme Court to see what will happen with PIP expenses in the situation where the families avoid institutionalization.  From 1974 until a few years ago, the Supreme Court took the position that families could be fully compensated for keeping a catastrophically-injured loved one out of an institution by providing care for him or her.  The Court held that if an expense was payable to an institution, it would be payable to the family, as well. 

Fractured wrist is not a "serious impairment"

Three judges of the Court of Appeals upheld the lower court's decision that Alisha Recker's fractured wrist was not a "serious impairment" under the Kreiner standard, and dismissed her case against Charter Communications and its negligent driver.

Fraud verdict against American Family Insurance is reinstated

The Kansas City Star reported on Tuesday that a $17 million dollar verdict against American Family Insurance had been reinstated by the appellate courts.  The jury verdict had initially been overturned by a judge who questioned whether the plaintiffs had made a satisfactory proof of their claim that American Family committed fraud by using inferior, nonoriginal equipment to repair insured's damaged vehicles. 

Health Insurer trade group offers to eliminate gender rate disparity

As matters currently stand, U.S. women pay from 25 to 50 percent more than men for health insurance.  The reasons for this disparity have been discussed previously in this web log, and include higher utilization rates by women, childbearing issues and better medical compliance by female patients, in addition to old-fashioned gender bias.  Although the health insurance industry has always maintained that underwriting principles underly the disparity, Karen M. Ignagni, president of America's Health Insurance Plans, a trade group, was quoted by the New York Times as having told the Senate Finance Committee on May 5, 2009, that the practice would be discontinued.

This is one of a series of concessions the trade group has offered since the Obama Administration began discussing creation of a government-run insurance option to compete or replace private insurers in the market place.

Citizens Insurance ducks an obligation

In 2003, the City of Flint replaced the sidewalk in front of a building insured by Citizens.  The basement, occupied by Legal Services Plan of Eastern Michigan, occupied land up to and underneath the sidewalk.  During construction, the contractors accidentally opened an abandoned coal chute allowing access to the basement.  Over the July 4 weekend, a significant rain deposited 20 inches of surface water from the paved road adjacent to the sidewalk in the basement rooms occupied by the Plan.  The Plan looked to Citizens to cover the damage.

State Farm appeal of PIP benefits denied

In Greene v. State Farm, the defendant refused to pay contracted PIP benefits after the plaintiff suffered an alleged head injury in her fifth motor vehicle collision in four years.  The jury awarded her benefits after a hotly-disputed trial, despite testimony from State Farm's hired-gun IME doctor.  The Court of Appeals upheld the jury's decision, even though the injury victim's attorney inappropriately called on the jurors to take into account the Defendant's size and wealth in reaching a verdict. 

Harleysville/Lake States can't take "second bite at the apple"

Keith Kangas was badly hurt on US-23 when another driver struck a truck tire in the road, lost control and struck Kangas' car.  Kangas had purchased Uninsured Motorist Coverage from Lake States and raised a claim under the policy for the [unidentifiable--and therefore "uninsured"] truck tire owner.  Harleysville/Lake States proceeded to arbitration, but when the arbitrators awarded the remainder of its $500,000.00 policy to Kangas, after credit for the payments by the insurers of the young woman who lost control, Harleysville attempted to overturn the award in Circuit Court.   

Saad allows Farm Bureau to avoid payout again

Henry Saad was Governor Engler's hand-pointed shill for the insurance industry.  Farm Bureau is the Michigan insurer most eager to exploit litigation to avoid fiduciary responsibilities.  They patted each other on the back again this week, when Saad's panel of the Court of Appeals denied life insurance to a widow.

Court orders Farm Bureau to pay PIP benefits in domicile dispute

 Farm Bureau has become one of the more contentious and aggressive insurers in attempting to use litigation to avoid contractual obligations.  Its bid to avoid paying the medical expenses associated with a young girl's head injury back-fired, however, this week.  In Phillip v. State Farm Mutual and Farm Bureau General Insurance, the trial court and a unanimous panel of the Court of Appeals held Farm Bureau owed benefits to the child.

Previously disabled injury victim can maintain "serious impairment" claim from second injury

Michigan no fault insurers have enjoyed a field day, summarily dismissing significant injury claims because they occurred to people who had already suffered a different, relatively serious injury.  This trend has been reversed somewhat, and the Tipton v. Lang decision helps to illustrate why.  The three Court of Appeals judges in Tipton unanimously pointed to prior decisions recognizing the relative importance of particular activities and bodily functions, where a broad range of activity or function has previously been lost.

Contractor's insurance claim denied, except for estoppel

Demolition Contractors, Inc.  (DCI) experienced difficulty with the concrete gravel it used in rebuilding a subdivision's roads and had to spend more than $200,000.00 to re-do its work.  It made a claim against its insurer, Westchester Surplus Lines, for covered property damage.  Westchester denied payment and Demolition Contractors sued.  The parties agree there was coverage for the claim, however, Westchester argued that in making "voluntary payments" to remediate the road, Demolition Contractors had released Westchester from its contract obligation.

Can AutoOwners dodge responsibility for injuries at Ludington Motel?

The Bronkema family was injured by chlorine gas while staying at the Holiday Inn Express in Ludington.  No one denied the family's injuries, and AutoOwners initially paid more than $10,000.00 in medical expenses incurred by the family.  When the incident turned out to be more significant than anticipated, however, AutoOwners denied responsibility and stopped paying, citing the "pollution" exception in the coverage it wrote for the motel.  The trial judge rejected AutoOwners' pollution argument and awarded the motel and the Bronkemas more than $500,000.00 in damages, fees and costs.

State Farm forced to pay more than $200,000.00 in overdue rehabilitation benefits

State Farm refused to pay Community Resource Consultants, Inc., of Macomb County, for rehabilitation benefits that CRC provided to 15 different no fault insureds.  CRC attempted to work matters out with State Farm, apparently, and did not sue for over a year.  Eventually, it secured a verdict for more than $200,000.00,  plus another $200,000.00 in fees, costs and sanctions, after which State Farm's attorneys asked the court to reduce the verdict to eliminate all PIP benefits that were more than one year old when CRC filed suit. 

The trial court concluded that it was bound by the Engler Majority's re-interpretation of the no fault statute limiting PIP benefits to "one year back" from the date suit is filed.  On that basis, it overturned the $400,000.00 judgment it had previously entered, and signed a judgment in State Farm's favor, essentially wiping out the jury verdict.  The Court of Appeals noted that the "one year back rule" is an affirmative defense which State Farm was obligated to raise prior to trial.  On that basis it reinstituted the jury's verdict including the substantial fees, interest and costs.  Apparently, if you want to live by a technicality, you can expect to die by one, as well.

No PIP benefits for man killed when machine falls from tractor trailer

Gwendolyn Neill sued MEEMIC and Progressive Michigan Insurance Company after her husband was crushed under a machine that fell from a tractor trailer.  Neill's husband was unloading the machine from a parked trailer in the course of his employment, and the Court denied the widow benefits after finding that the tractor trailer was not "parked in such a way as to cause unreasonable risk of the bodily injury which occurred." 

Insurance agents held accountable for arranging illusory health coverage for employees

This week the Court of Appeals upheld a $1.2 million dollar verdict against Joseph Saigh and Lawrence Wells.  The jury had concluded that Saigh and Wells had allowed their employee to sell illusory coverage, provided by an unlicensed insurer, through negligent or intentional misrepresentations.  The Court rejected the defendants claims that they were not responsible for the representations made by their employee and also  rejected arguments that they owed no duty to the employer, even though they were retained expressly  because they claimed to be "specialists in health insurance coverage." 

The Court also allowed the corporate employer to collect exemplary damages from the defendants, based on the injury the company suffered to its good name.  The court noted that as a result of the illusory coverage the Defendants arranged and facilitated, the corporate employer suffered loss of good employees, hundreds of complaints from employees and health care providers, and a loss of reputation.  The case is Unibar Maintenance Services, Inc. v. Joseph Saigh and Lawrence Wells.

Car accident claim without a lawyer? Read this.

None of us like the ads some lawyers run on TV, seeking clients with personal injury claims.  The alternative, though, can be catastrophic.  Here is one example, taken from the Michigan Court of Appeals in April of 2009:  The case is Tammy Johnson, Guardian of Nancy Eastman v. Wausau Insurance Company and Nationwide Indemnity, Inc.

In 1983, Nancy Eastman suffered profound brain injury at ten months old in a car accident.  Under Michigan law, she was entitled to full lifetime medical benefits, including hourly attendant care, as needed.  It is undisputed that the brain injured child required 24 hour care.  Her parents could not provide that care when she came home from the hospital, so Dorothy Bencheck assumed her care and ultimately became her guardian.  Bencheck was paid $20.00 per day by Wausau/Nationwide to care for Nancy.  She repeatedly asked if she was entitled to any other financial support and was told by the adjuster, one Albert Abdey, that she was not entitled to anything else.

Woman not an "owner" of vehicle borrowed from live-in companion

Detroit Medical Center provided signficant medical care to Maria Jiminez after she was injured in a motor vehicle collision.  Titan Insurance Company was assigned by the State to cover Jiminez's PIP benefits because she was an uninsured occupant [the driver] of an uninsured motor vehicle.  Titan refused to pay her medical bills, claiming that Jiminez was exempted from receiving PIP benefits as the "owner or registrant" operating an uninsured car.  The Court concluded that DMC was entitled to be paid after examining the circumstances of Jiminez' use of the vehicle.

Court upholds jury verdict of "serious impairment"

Glenn Forgette suffered injuries to his right wrist, left shoulder and lower back as a result of Gail Jones' negligent operation of her husband's business-owned car.  Forgette's injuries included a torn rotator cuff, a fractured wrist and probable fractures in the lower back.  The insurer appealed, claiming that even though these injuries severely curtailed Forgette's lifestyle, they did not constitute a "serious impairment of bodily function."  The unanimous Court of Appeals rejected the insurer's arguments, noting that while many of Forgette's activities were restricted by pain and not by explicit physician instructions, the limitations were based upon physician-identified physiological explanations and "tru[e] suffering".

Court interprets release signed by uninsured motorcyle operator

Mark Sindler was injured while operating a motorcycle he owned but had not insured.  He collected damages from Farmers Insurance, which provided liability insurance on the at-fault car driver, but insisted on language in the release that preserved his right to collect PIP benefits (wages, replacement domestic service expenses and medical).  After paying these benefits for more than a decade, Farmers notified Sindler it would no longer pay PIP benfits because Sindler was operating his own, uninsured bike at the time of the injury.  He sued to enforce his right to PIP benefits and Farmers sued to collect from him the medical it had paid.

State Farm clobbered for repeatedly disputing PIP benefits

Antonina Juzba suffered a severe brain injury in a motor vehicle accident.  She was insured for no fault benefits by State Farm.  The insurer paid for her treatment initially, but stopped paying after she spent months at the Rainbow Rehabilitation Center and the Ann Arbor Rehabilitation Center (AARC). 

Uninsured Motorist Coverage denied where insured suggests erratic driving was intentional

Kimberly Gray was seriously injured in a motor vehicle collision.  She attributed the other, unidentified, driver's erratic behavior to a fit of "road rage" over lane usage on the highway.  Citing her description, MEEMIC refused to pay Gray's Uninsured Motorist Coverage to her, using the the at-fault's "intentional" conduct as a defense.  The Court of Appeals agreed with MEEMIC and ruled that the insurer did not have to stand in the shoes of the erratic driver, even though the driver and her own insurer--had they been capable of identification--would have been legally responsible for her erratic, "intentional" conduct.

Post-Taylor court rejects third-party "fault" without duty

Part of the history of tort "reform" legislation was a movement to eliminate joint and several [or "deep-pocket"] liability.  The Michigan Legislature adopted a statute that achieved that end by allowing victims to recover from a particular defendant only those damages attributable to that defendant's fault.   (In this way, the innocent victim bears the weight of the "third-party's" uninsured or uncollectible share of fault.  The reform legislation also allowed the defendant in a lawsuit to blame others who are "at fault" in causing the victim's injuries, without actually suing them.  Insurers had argued that they should be able to place blame on third parties, and avoid responsibility for their "share" of responsibility, even if the third party wasn't included in the lawsuit.  They went an additional step, next, and argued that they should be able to deduct damages for the "fault" of a third-party who owed no duty to the victim.

Court holds man alleging back injury from car accident failed to prove causation.

In McLaren v. Emcasco Insurance Co., the plaintiff sued his no fault insurance carrier after being injured by an uninsured motorist (he had purchased optional uninsured motorist coverage).  Although McLaren had  a history of cervical and lumbar problems with his back, he claimed he had different, more severe symptoms, after the collision. The court noted that McLaren offered no medical documentation or expert opinion testimony in the trial court to document his claim that the motor vehicle collision exacerbated his back problems and necessitated surgery.  On the contrary, the records suggested that he had disc herniations and degenerative spinal disease before the collision.

McLaren's attorneys also argued that his insurer had admitted that a causal relationship existed by paying [as a result of litigation] no fault PIP medical benefits after the collision.  The court pointed out, however, that the standard of proof relating to causation for PIP medical is a lower standard than the standard applied in liability settings, referenceing MCL 500.3105 and Scott v. State Farm.

Farmers' "stray voltage" case dismissed as court rejects their experts' testimony

In Schaendorf v. Consumers Energy, the Court of Appeals acknowledged that it is common knowledge and undisputed by either party that stray voltage in a barn can and will decrease milk production.  Nevertheless, it upheld the dismissal of the Plaintiff's economic damage claim, citing a lack of scientific foundation for the farmers' three experts' testimony.

Insurer avoids claim for water damage after corporate identity change

The owners of the Alexis Manor Apartments decided to convert them to condomimiums.  To facilitate the change, they created a second corporation and transferred title to the building.  They maintained the same insurance policy with Michigan Millers.  When they suffered water damage, they attempted to collect on the policy, but were denied.  The court ultimately ruled that despite taking the owners' money for coverage, the insurer and the agent who sold the insurance owed the owners no duty to procure the proper coverage, because only the predecessor corporation was a "client" of the insurer and agent.  By accepting premiums from the new corporation, the insurer and agent did not incur any obligation to the property-owning corporation.  The case is Belfor USA Group, Inc., v. Alexis Manor Apartments, et al.

Pioneer State Mutual avoids paying for water damage

Pioneer State Mutual, a recent entrant in the "cheapest insurer" competition with long-standing champion Allstate and aggressive newcomer Farm Bureau, gained "cheapness standing" when it won a recent battle with one of its insureds.  It avoided paying for water damage to the insured's home by citing fine-print exceptions to its coverage.

Farm Bureau's efforts to avoid paying fire loss are discredited by court

Brittany Smith's home burned.  She had bought coverage with Farm Bureau.  Farm  Bureau demanded that Smith complete the copious Proof of Loss which can be required by law (and it has short time limits, by the way) and she filled it out including between $900 and $1,000 dollars of personal property in the residence destroyed by fire but not owned by her.  She explained that apparent discrepancy to Farm Bureau when it forced her to sit for an examination under oath.  Nevertheless, Farm Bureau attempted to void her policy and refused to pay her the insured value of her loss--which was in excess of $200,000.00 in real and personal property.

Denial of ERISA long-term disability benefits was arbitrary and capricious

In DeLisle v. Sun Life Assurance Co. of Canada, the Sixth Circuit agreed with the Eastern District of Michigan trial judge in assessing the propriety of Sun Life's denial of long-term disability (LTD) payments to the Plaintiff.  The court concluded that her denial was not the result of a "deliberate and principled reasoning process".

Three new "serious impairment" decisions

In the past two weeks, the Court of Appeals has addressed three new defenses of "no serious impairment" in auto accident cases.  The Court sent two of the cases back to the lower court , apparently holding that the plaintiff suffered a "life-altering serious impairment."   In Yarger v. Garchow, et al., the Court upheld the dismissal of the accident victim's claim because the victim's second injury in a two year period did not sufficiently exacerbate the cervical fusion he had endured after a car accident a year earlier. 

Farm Bureau evades another obligation

Dynamic Land, L.L.C., bought commercial insurance from Farm Bureau on a two-unit commercial building.  It was renovating the insured property when a sprinkler system pipe broke.  It attempted to recover for lost rent and actual expenses of nearly $300,000.00, incurred over the twelve months the property was under repair.  Farm Bureau denied payment, arguing that the company had not shown an "actual loss of business income" during the repair period. 

Farm Bureau forced to pay attendant care benefits, despite reimbursement claim

In Cooper v. Farm Bureau, the defendant appealed to the Court of Appeals in a last-ditch effort to avoid paying statutorily-obligated no fault PIP attendant care benefits.  Cooper was badly hurt in a car accident while driving his girlfriend's uninsured vehicle.  Farm Bureau owed Cooper $60,000.00 in attendant care which was provided by the girlfriend, and argued that since the girlfriend could be required to reimburse it for uninsured vehicle no fault expenses, it should not be required to pay Cooper and the girlfriend, but rather should be allowed to simply deduct the reimbursement.

The lower court and the appellate court both rejected Farm Bureau's argument, pointing out that it could not unilaterally withold statutorily-mandated benefits from Cooper because of a debt allegedly owed by his attendant care provider.  In a unanimous opinion, the appellate court suggested that Farm Bureau take its public policy argument up with the Legislature and upheld the fee award against Farm Bureau for unreasonable denial of benefits.

Compensation for injuries suffered in a Michigan car accident: the Kreiner standard

Much has been discussed about the so-called Engler Majority's "Kreiner" standard for suing an at-fault driver if a person is hurt in a car accident.  Kreiner is the name of a plaintiff victim who sued several years ago, alleging that he had suffered a "serious impairment of bodily function" in a car wreck.  Since 1973, the Michigan no fault act has allowed an innocent victim to sue the at-fault driver after an accident, only if he or she suffered a "threshold injury": death, permanent serious disfigurement or serious impairment of a particular bodily function. 

Farm Bureau required to fulfill its duties under insurance contract; State Farm allowed to skate

The owners of Aladdin's Carpet Cleaning purchased commercial liability from State Farm and an umbrella from Farm Bureau.  State Farm had the insight to exclude coverage for "mold claims" in the small print of its policy, but Farm Bureau's loop-hole generators weren't as effective.  Aladdin was hired to help clean water damage in a home and allegedly performed badly, negligently contributing to a mold problem throughout the house.  When Aladdin turned the claim over to its (two) insurers to defend, they both ran for the "back forty".  Aladdin defended the lawsuit with the homeowner and resolved it, before suing State Farm and Farm Bureau for the costs it incurred.