1. Circuit Court – unlimited – minimum $25,000.00.

2. District Court – up to $25,000.00.

3. Small Claims Court – up to $3,000.00.

Removal of proceedings from Small Claims Court to Circuit Court.

Issuance of Summons, expiration of Summons, dismissal of action for failure to serve (MCR 2.102)

(A)    Issuance.

(B)    Form.

(C)    Amendment.

(D)    Expiration – 91 days; Second Summons – up to one year.

(E)    Dismissal as to defendant not served; Without prejudice.

(F)    Setting aside dismissal.

Process, Who May Serve (MCR 2.103)

(A)    Any legally competent adult.

(B)    Service requiring seizure of property.

Process, Manner of Service (MCR 2.105)

(A)    Individuals

1. Personal service, or

2. Certified or Registered Mail, Return Receipt Requested, Restricted Delivery to addressee.

(B)    Individuals; substituted service

1. Non-resident individual;

2. Minor;

3. Guardian or conservator;

4. Doing business under an assumed name.

(C)    Partnerships.

(D)    Corporations – generally resident agent.

(F)    Insurer – service may be made on Commissioner of Insurance as permitted by MCLS 500.456. However, service on an insurer that satisfies any of the other methods prescribed under MCR 2.105 is also sufficient.

1. Process delivered or mailed (registered or certified) to the Office of the Commissioner of Insurance.

    

2. Serving Summons and a copy of the Complaint on an officer or resident agent.

    

3. Serving Summons and a copy of the Complaint on a director, trustee or person in charge of an office or business establishment of the corporation, and sending a Summons and a copy of the complaint by registered mail, addressed to the principal office of the corporation.

In the event a Summons and Complaint is served at the local branch, claims personnel should immediately notify defense counsel so that a timely determination as to proper service can be made. Proper service to an insurance company should be considered as being the date of receipt by the Commissioner of Insurance.

(I)    Discretion of the Court.

        If all else fails – order permitting service to be made in any manner reasonably calculated to give defendant actual notice.

Notice by Posting or Publication (MCR 2.106)

Time for filing Answer (MCR 2.108)

1. 21 days if personally served;

    

2. 28 days if by Registered Mail.

Security for Costs (MCR 2.109)

Party against who claim has been made – Court may require bond or security for costs.

Pleadings (MCR 2.110)

Complaint.

Cross-Complaint.

Counter-Complaint.

Third-Party Complaint.

Answer – should an adjuster routinely request an extension of time in which to file responsive pleadings before referral to litigation attorneys? That determination will greatly depend upon the method of service to the insured (personal service – 21 days to answer; service by registered mail – 28 days to answer), the length of time between the date of service and notification by the insured, as well as the inherent delay in conducting preliminary investigation and copying of file material. If in doubt, it is recommended that the adjuster attempt to obtain a "reasonable" extension. Defendant counsel will be able to take additional steps if necessary.

Reply to Answer if demanded.

General Rules of Pleading (MCR 2.111)

Statement of facts.

Jurisdictional amount.

Form of Denials.

Effect of failure to deny – admitted.

Affirmative Defenses – may assert as many defenses as the pleader has against an opposing party. A defense not asserted is waived with certain exceptions.

Pleadings – Special Matters (MCR 2.112)

Action on policy of insurance.

Must be Signed by Attorney (MCR 2.114)

Effect of signature.

1. Verifies that signature of attorney or party has read the pleading;

2. That the pleading is well-grounded in fact and warranted by existing law;

3. The pleading is not interposed for any improper purpose such as to harass or cause unnecessary delay.

(F)     Sanctions for Frivolous Claims and Defenses.

Summary Disposition (MCR 2.116)

(C)    Grounds.

(D)    Time to Raise Defenses and Objections.

(G)    Motion and Brief must be filed and served at least 21 days before the time set for hearing.   Responses due at least 7 days before the hearing.

Motion Practice (MCR2.119)

Time for Service and Filing of Motion and Responses (MCR 2.119)

9 days before time set for hearing if served by mail or 7 days before time set for hearing if personally served.

    Response

    5 days before hearing if by mail or 3 days before hearing if personally served.

Third-Party Practice (MCR 2.204)

General Rules Governing Discovery (MCR 2.302)

2. Scope of discovery – parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.

Insurance Agreements – a party may obtain discovery of the existence and contents of an insurance agreement under which a person carrying on an insurance business may be liable to satisfy part or all of a judgment.

An application for insurance is not a part of an insurance agreement.

3. Trial Preparation; Materials   

A party may obtain discovery of documents (statements) prepared in anticipation of litigation or for trial by or for another party or another party’s representative (including insurer, etc.) only on a showing that the party seeking discovery has substantial need of the materials in the preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means.

The court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.

COMMENT  It would be our opinion that MCR 2.302(B)(3)(a) would preclude production of the insurer’s entire file as is often requested.

A party may obtain opinions of experts through Interrogatories regarding subject matter about which the expert is expected to testify and summary of grounds for each opinion.

A party may also take the Deposition of a person whom the other party expects to call as an expert witness at trial.

A party may not discover the identity of and facts known or opinions held by an expert who has been retained or specially employed by another party in anticipation of litigation or preparation for trial and who is not expected to be called as a witness at trial except:

1. Physical and mental examination of persons;

2. Where an order has been entered on a showing of exceptional circumstances.

(C)  Protective Orders

Subpoena for Taking Deposition (MCR 2.305)

A Subpoena may be signed by an attorney of record which constitutes an authorized signature.

It may command production of designated books, papers, documents or tangible things within the scope of discovery.

A subpoenaed person may, within seven days after service of the Subpoena, serve written objection to inspection or copying.

A party serving a Subpoena is not entitled to inspect or copy materials without an order compelling deponent to produce the documents if the subpoenaed person serves written objections to inspection or copying of some or all of the designated materials within 7 days after service.

A deponent may be required to attend in the county where he/she resides, is employed, or transacts business in person, unless ordered by the court.

Depositions on Oral Examination (MCR 2.306)

(B)    Notice of Examination; Subpoena; Production of Documents and Things.

(C)    Conduct of Deposition; Examination and Cross-Examination; Manner of Recording; Objections.

(D)    Motion to Terminate or Limit Examination.

Use of Depositions in Court Proceedings (MCR 2.308)

Interrogatories to Parties (MCR 2.309)

    (B)    Answers and Objections.

    (C)    Motion to Compel Answers.

    (D)    Scope; Use at Trial.

Production of Documents and Things; Entry on Land for Inspection and Other Purposes (MCR 2.310)

Physical and Mental Examination of Persons (MCR 2.311)

Request for Admissions (MCR 2.312)

    (B)    Answers; Objection – within 28 days.

An answer must specifically deny the matter or state in detail the reasons why the answering party cannot truthfully admit or deny.

An answering party may not give lack of information or knowledge as a reason for failure to admit or deny unless the party states that he or she has made reasonable inquiry and that the information known or readily obtainable is insufficient to enable the party to admit or deny.

If an objection is made the reasons must be stated.

Failure to Provide or Permit Discovery; Sanctions (MCR 2.313)

Procedure to be utilized in obtaining an Order Compelling Discovery when a deponent fails to answer a question; a party fails to answer an interrogatory; a person fails to respond that inspection will be permitted as requested, etc.

Discovery of Medical Information Concerning Party (MCR 2.314)

Assertion of privilege and effect thereof.

(D) Release of Medical Information by Custodian.

1. A physician, hospital or other custodian of medical information shall comply with a properly authorized request for the medical information within 28 days after receipt of the request or, if at the time the request is made the patient is hospitalized for the mental or physical condition for which the medical information is sought, within 28 days after the patient is discharged or released.

                    In complying with request for medical information, the custodian is entitled to receive reasonable reimbursement in advance for expenses of compliance.

                    If a custodian does not respond within the time permitted to a party's authorized request for medical information, a subpoena may be issued directing that the custodian present the information for examination and copying at the time and place stated in the subpoena.

This rule does not prevent the assertion of privilege as permitted.

Video Depositions (MCR 2.315)

Pre-Trial Procedure; Alternative Dispute Resolution; Offers of Judgment; Settlements (MCR 2.400)

(B)    Early Scheduling Conference and Order.

(C)    Pre-Trial Conference; Scope.

(F)     Presence of Parties at Conference.

The court may direct that persons with authority to settle the case including the parties to the action, agents of parties, representatives of lien holders or representatives of insurance carriers be in attendance personally or be immediately available at the time of the conference.

The court’s order may specify whether the availability is to be in person or by telephone.

(G) Failure to Attend; Default; Dismissal.

Failure of a party or the party’s attorney to attend a scheduled conference constitutes a default or grounds for dismissal.

(I)     The parties shall file and serve Witness Lists designating whether the witness is an expert and if so, the field of expertise.

Use of Communication Equipment (MCR 2.402)

This rule permits Motion Hearing, Pre-Trial Conferences or Status Conferences by telephone at the court’s own initiative or upon written request of a party made at least 7 days before the date of the hearing.

The cost of the use of the communication equipment is to be shared equally unless otherwise directed.

Case Evaluation (MCR 2.403)

The procedure for selecting Case Evaluation panels must be provided by local administrative order and may set minimum qualifications.

A judge may be selected as a member of a case evaluation panel but may not preside at the trial of any action in which he or she served in that capacity.

Disqualification of case evaluators is the same as that for disqualification of a judge.

Fees are due within 14 days after mailing Notice of Case Evaluation.

Case evaluation resumes are due at least 14 days before the date of hearing.

Acceptance or Rejection – must be made within 28 days after service of the panel’s evaluation. Failure to file a written acceptance or rejection within 28 days constitutes rejection.

If a party’s action or defense is frivolous, the posting of a cash or surety bond in the amount of $5,000.00 may be required.

An insurance company that insures the defendant against a claim made in the action may not act as the surety.

If the bond is not posted, the court shall dismiss a claim found to have been frivolous and enter the default of a defendant whose defense was found to be frivolous. The action shall proceed to trial as to the remaining claims and parties and as to the amount of damages against a defendant in default.

In the event all or part of the Evaluation is rejected, the action will proceed to Trial in the normal fashion. If a party has rejected an Evaluation and the action proceeds to Trial, that party must pay the opposing side’s actual costs unless the verdict is more favorable to the rejecting party than the Evaluation. If the opposing party has also rejected the Evaluation, it is entitled to costs only if the verdict is more favorable to that party than the Evaluation. A "verdict" includes:

1.  A jury verdict;

    b.    A Judgment by the Court after a non-jury Trial.

    c.    A Judgment entered as a result of a ruling on a Motion, filed after Case Evaluation.

A verdict must be adjusted by adding to it assessable costs and interest on the amount of the verdict from the filing of the Complaint to the date of the Evaluation. After this adjustment, the verdict is considered more favorable to a defendant if it is more than 10% below the Evaluation, and is considered more favorable to the Plaintiff if it is more than 10% above the Evaluation. If the Evaluation was zero, a verdict finding that a defendant is not liable to the plaintiff shall be deemed more favorable to the defendant.

Additional guidelines exist in cases involving multiple parties. Applicability of those rules should be determined on a case-by-case basis. In addition, Case Evaluation sanctions can be awarded even if a verdict awards equitable relief.

For purposes of the Case Evaluation sanction rule, actual costs include those costs taxable in any civil action as well as a reasonable attorney fee based on a reasonable hourly or daily rate as determined by the Trial Judge for services necessitated by the rejection of the Evaluation. However, costs shall not be awarded if the Award was not unanimous.

IMPORTANT – copies of Case Evaluation summaries, post evaluation correspondence discussing acceptance/rejection, as well as Acceptance/Rejection Notice should always be provided to the insured so as to keep the client apprised of all developments and decisions. This will assist in alleviating potential claims for bad faith failure to settle. This procedure will also allow the insured to have input in the decision-making process.

The ultimate decision to accept or reject an Award will involve certain considerations. Obviously, a rejection can be used to materially lower the plaintiff’s expectations. Acceptance of an Award can be used to establish entitlement to sanctions should the accepting party prevail. The decision to use either method must be determined on a case-by-case basis, and should also be utilized in conjunction with the Offer of Judgment Rule described below.

Request for costs must be filed within 28 days after entry of Judgment or order denying timely motion for a new trial.

Offers to Stipulate to Entry of Judgment (MCR 2.405)

Until 28 days before trial a party may serve on the adverse party a written offer to stipulate to entry of judgment for the whole or part of the claim including interest and costs then accrued.

To accept the adverse party within 21 days after service of the offer must serve a written notice of agreement to stipulate to entry of the judgment offered.

The court shall enter a judgment according to the terms of the stipulation.

If the offer of judgment is rejected, actual costs may be assessed if the adjusted verdict is more favorable to the offerer than the offeree.

The offeree who has not made a counter-offer may not recover actual costs.

The court shall determine the actual costs incurred.

Costs may not be awarded under this rule in a case that has been submitted to case evaluation under MCR 2.403 unless the case evaluation award was not unanimous.

Settlements for Minors and Incompetent Persons (MCR 2.420)

Consolidation; Separate Trials (MCR 2.505)

(A)    Consolidation – when actions involve a substantial and controlling common question of law or fact.

(B)    Separate Trials – for convenience, or to avoid prejudice or when separate Trials will be conducive to expedition and economy.

Subpoena; Order to Attend Trial Proceedings (MCR 2.506)

(C)    A witness must be served sufficiently in advance of Trial or Hearing to give the witness reasonable notice of the date and time of appearance. Unless the court orders otherwise, the Subpoena must be served at least two days before the witness is to appear.

(E)    Refusal to attend or testify – considered contempt of court.

(F)     Failure of party to attend or produce documents – Court may tax costs, strike all or a part of the pleadings of that party, refuse to allow that party to support or oppose designated claims and defenses, dismiss the action or any part of it, or enter Judgment by default against that party.

(G)     Fees – the fee for one day’s attendance and mileage provided by law must be tendered to the person upon whom the Subpoena is served at the time of service. A Subpoena may also be served by mailing to a witness a copy of the Subpoena and a postage paid card acknowledging service. If the Acknowledgment card is not returned, the Subpoena must be served in the normal fashion.

Appeals (MCR 7.100 – Appeals to Circuit Court; MCR 7.201 – Court of Appeals and MCR 7.301 Supreme Court)

Appeals can be classified as "of Right" and "by Leave". An Appeal of Right may be filed by an aggrieved party from a final Judgment or final Order. Appeal by Leave is discretionary and covers situations where a final Judgment or final Order has not been entered. Application for Leave to Appeal will typically be filed in a situation where the parties require additional guidelines or an immediate decision as to an important issue which will be addressed.

Procedurally, the Appellant (the person filing the Appeal) will prepare a Brief with pertinent legal citations to be filed according to the Michigan Court Rules. The Appellee (the person opposing the Appeal) will have a prescribed period of time in which to file a responsive Brief. Generally speaking, the initial Motion Brief from which the Appeal has been taken will be utilized. However, additional issues may arise and thus the need for modification or additional case development.

The Appellant is responsible for providing a transcript of proceedings. An Appellate bond may or may not be required by the Trial Court.

(A)    Preliminary investigation. Often times, it will become necessary to personally contact witnesses or individuals involved in a claim prior to commencement of litigation. It is suggested that before obtaining a written or recorded statement, the adjuster first speak with the party to be interviewed so as to determine whether it may be appropriate to preserve an individual’s recollection of events, especially where extremely adverse to the insured’s interests. Many judges in this area routinely order production of written or recorded statements when requested by Plaintiff Attorneys regardless of the fact that such information could easily be obtained by other means (Deposition, etc.). If in doubt, a short summary of the initial conversation can be prepared by claims personnel in his or her own words, thus effectively precluding the opposing party from gaining access to this information.

(B)    Other sources of information which may prove to be beneficial include recreational sports league rosters, bowling league yearbooks (often published by county or area), Michigan State Police Freedom of Information Act Criminal History and Driving Record Requests and Cleveland Index Bureau Searches.

(C)    In all cases where damages may exceed the insured’s policy limit, or where policy exceptions or exclusions may preclude coverage at a future date, reservation of rights correspondence should be forwarded to the insured as a matter of course.

(D)    Recently, we have noticed that the Michigan Environmental Response Act (MERA) and the Michigan Environmental Protection Act (MEPA) are being utilized by Plaintiff Attorneys on a more frequent basis where contamination or pollution may constitute an element of damages. It has been our position that where damages are caused as a result of the ownership, operation, maintenance or use of a motor vehicle, the Michigan No-Fault Act applies, thus bringing into play the one-year Statute of Limitation as set forth within Section 3145 of the Act. Please note that as presently constituted, the Environmental Protection Statutes contain no set Statute of Limitations and may in fact impose strict liability for the entire amount of damages claimed, no matter how insignificant the contribution to that condition may have been.

(E)    Potential conflicts of interest between defense counsel and insureds will sometimes arise. For instance, a situation may exist where more than one insured is involved in an occurrence, and also named as a defendant. Separate defense counsel may be required where potential conflicts of interest might arise, such as non-permissive use (Owner Liability Statute), subsequent negligence, or intervening act creating new or additional injuries. In the event it appears that co-defendants may be potentially adverse parties, it is more desirable to engage separate representation from the outset than to discover a conflict after discovery has occurred (thus potentially eliminating the original defense counsel from representing either insured).

(F)    Due to the personal nature of information contained within a claim file, the release of any information must be with the permission and knowledge of the insured or through a court order. To prevent any difficulties in the area of cross files or derivative claims for both No-Fault and Tort actions, separate adjusters should be assigned with a clear understanding that they are not to share information without first obtaining the consent of the claimant. Often times an adjuster can obtain a "Co-Mingle" Release which will allow the exchange of information between files. In addition, a No-Fault insurer should not voluntarily disclose portions of its file to either claims adjusters or attorneys who are involved in Tort claims or litigation with the No-Fault claimant.

(G)    In certain situations, an adjuster may be listed as a witness for use at Trial. In a Third-party personal injury case, those situations are few and far between, and would primarily occur where necessary to establish a foundation for use of a recorded statement, or perhaps for impeachment purposes. In a First-Party case, the adjuster will be listed as a matter of course, given his/her direct contact with the insured. In determining whether the adjuster should be deposed, defense counsel must determine whether sworn testimony will be necessary prior to Trial (or for use at Case Evaluation, etc.). Deposition testimony may be used in lieu of the adjuster’s personal appearance at the time of Trial where he/she is "unavailable" or as defined within MRE 804:

1. The witness is at a greater distance than 100 miles from the place of Trial or Hearing (unless it appears that the absence of the witness was procured by the party offering the Deposition), or

            2.    Exceptional circumstances exist as to make it     desirable in the interests of        justice and with due regard to the importance of presenting the testimony of witnesses orally in open court, to allow the deposition to be used.

(H)    The Uniform Trade Practices Act (MCLS 500.2001) represents one of the more complete sets of guidelines for claim handlers.

(I)    Considerations in claim handling:

1. Consider that at some point your file will be examined and read by someone who will be looking for the worst. If you state a conclusion, support it with facts.

2. Do not couch your decision to settle a case solely in terms of policy limits.

3. Do not discuss coverage issues with the defense attorney or even consider coverage issues in your file as a factor which you may be considering with respect to the defense of the case.

4. Do not decide to settle or defend based upon a policy to try all threshold cases or to never pay policy limits no matter what.

5. Do not request defense counsel to suggest that the insured contribute to the settlement of the underlying case using a Declaratory Judgment Action as leverage.

6. Do not admit responsibility for an accident without the insured’s consent (generally, there should be a good reason for the insured to admit responsibility such as plaintiff’s agreement to cap recovery to the policy limits, or a determination that liability factors are so aggravating that to dispute liability would likely result in a punitive verdict from the jury).

7. Do not rely on biased evaluations. When you are considering the amount of verdict that would likely be returned by a jury, you must consider the evidence that will be evaluated. You must also ask yourself whether the factors upon which you are basing your decision will be admissible at the time of Trial.

8. Keep the insured informed. (Demand for settlement, offers of settlement, trail dates, case evaluation dates, sanction provisions, your evaluation of liability and damages claims, etc.)

9. Investigate, obtain statements from witnesses, and visit the accident scene.

10. Evaluate your case. Get an initial evaluation and update periodically as investigation/discovery progresses.

11. Negotiate, solicit a demand, make an offer.

(J)    Where an action has been commenced on behalf of a minor, settlement of the claim shall be approved by the Circuit Court. Where a settlement is made prior to the filing of litigation, same will be approved by the Probate Court. If a settlement or Judgment requires payment of more than $5,000 to the minor either immediately or if the settlement or Judgment is payable in installments in any single year during his or her minority, a conservator must be appointed by the Probate Court before the entry of the Judgment or dismissal. If the settlement or Judgment does not require payment of more than $5,000.00 to the minor in any single year, the money may be paid in accordance with the provisions of MCLS 700.403 (paying or delivering the money or property to the minor, if the minor is married; a parent or person having care or custody of the minor under court order and with whom the minor resides; or a guardian of the minor. This section does not apply if the person making payment or delivery has actual knowledge that a conservator has been appointed or if proceedings for appointment of a conservator are pending). Please note however that the parent does not have authority to execute a release under these circumstances. As such, you should have your defense attorney obtain Probate Court approval.

From a defense standpoint, where litigation involves a Decedent, Plaintiff counsel will have already had a personal representative appointed on behalf of the Estate by the Probate Court. Where settlement occurs after litigation has been commenced, the circuit judge will approve settlement on behalf of the Estate. Where settlement occurs prior to the commencement of litigation, the probate court will approve any and all requests for authority to settle.

When considering a claim for personal injury protection benefits, the following should be kept in mind:

1. "Reasonably incurred" requires actual payment or assumption of liability to pay, not merely fair market value of service rendered – Section 3107.

2. Replacement services are not available for income or profit-motivated activities – Section 3107.

3. The claimant has the burden of providing reasonable proof so as to justify imposition of the interest penalty – Section 3142.

4. The trial court can make a finding as a matter of law that reasonable proof was not provided, although the jury will usually resolve any factual dispute regarding submission of reasonable proof – Section 3107.

5. Delayed payment of benefits may create a rebuttable presumption of unreasonableness which then shifts the burden of proof to the insurer. For that reason, log notes should be kept up to date and well documented so as to provide a basis for delay in payment of benefits if applicable – Section 3142.

6. An insurer may commence an action for reimbursement in the event benefits are overpaid – Section 3109.

7. Voluntary payment of benefits is not an admission that such expense is reasonable, necessary or related to the accident – Section 3107.

8. Acupuncture may be a reasonably necessary expense when performed by a licensed physician – Section 3107.