Facts – Defendant sought reimbursement for expert witness fees. Two of the experts testified at Trial. One did not. Plaintiffs opposed the Motion for fees arguing that the hourly rates were excessive, and that the third expert’s fee should not be recoverable because he did not testify at Trial.

The Court of Appeals found that, per statute, no expert witness shall be paid, or receive as compensation in any given case for his services, a sum in excess of the ordinary witness fees provided by law, unless the Court before whom such witness is to appear, or has appeared, awards a larger sum, which sum may be taxed as part of the taxable costs of the case.

Because the record did not indicate that the Trial Court thoroughly considered and weighed the reasonableness of Defendant’s expert witness fees, the reduction in award for such fees constituted an abuse of discretion. In addition, the Trial Court made a mistake of law in refusing to award expert fees for a witness who did not testify at Trial. The case was remanded for the Trial Court to make detailed findings with respect to fees. (Sanders v DaimlerChrysler Corporation, Michigan Court of Appeals Unpublished Decision dated June 28, 2002, multiple Docket Numbers).

Recommendation – The Trial Court has discretion as to the amount of expert witness fees to be taxed as a cost of litigation. When faced with a situation where the bill seems excessive, a party should place an objection and request a hearing with respect to those items of costs which should be reduced or which may not be recoverable.

Facts – On two occasions, the adult Plaintiffs failed to appear for properly noticed depositions. On the first scheduled date, Plaintiffs appeared at their counsel’s office in Flint, Michigan, rather than at the designated site in Saginaw. On the second scheduled date, Plaintiffs were out of town. On each occasion, defense counsel was informed that Plaintiffs’ counsel was in Court on an unrelated matter.

At the hearing on Defendant’s Motion to Dismiss Plaintiffs’ Complaint for failure to provide discovery, defense counsel stated that he had received no advance notice that either Plaintiffs or their counsel would be unable to appear as scheduled. The Trial Court actually called those Courts in which Plaintiffs’ counsel represented that he had appeared on the deposition dates. The information obtained from those Courts was "inconsistent" with the representations made by Plaintiffs’ attorney. Based upon the totality of the circumstances, the Trial Court found that Plaintiffs’ failure to attend the depositions was willful, wanton and flagrant and dismissed the matter with prejudice.

In upholding that decision, the Michigan Court of Appeals stated that, although dismissal is a drastic sanction that should be imposed only when a party willfully and flagrantly refuses to facilitate discovery, the Trial Court did not abuse its discretion. To be willful, a failure need only be conscious or intentional. The record reflected that the Trial Court gave careful consideration to other options. It was determined that Defendant was prejudiced in that she was unable to conduct meaningful discovery prior to the close of the discovery period. (Dice v Chase, Michigan Court of Appeals Unpublished Decision dated July 2, 2002, Docket Number 229643).

Recommendation – This claim was defended by Mike Hutchinson from our office. For further particulars, please give us a call. From a practical standpoint, a Motion to Compel Discovery should be filed whenever it appears that a delay in acquiring information may prejudice the defense. Although the Trial Courts will usually accommodate special circumstances, they most likely will not tolerate "gamesmanship".

Facts – Defendant mailed a notice of cancellation for non-payment of insurance premium, approximately two weeks before the cancellation effective date. The insured did not make the required payment. Plaintiff was injured in an automobile accident while a passenger in the insured’s vehicle. Defendant declined to provide coverage because the policy had been cancelled.

Plaintiff presented evidence that the insured did not personally receive the notice of cancellation until after the accident. Both the Trial Court and Court of Appeals held that Plaintiff was entitled to actual notice (that is, personal receipt of the notice of cancellation).

In reversing the lower Court Decisions, the Michigan Supreme Court held that the plain language of MCL 500.3020(1)(b) which allows cancellation by a simple first-class mailing, precludes a conclusion that an insured must receive some type of actual notice (i.e., be aware of the issuance of a notice of cancellation by the insurer). Rather, the statute provides by its clear language that an insurance policy may be cancelled at any time by the insurer with no less than 10 days written notice. Such a mailing does not require proof of service or even a delivery receipt.

The Court held that such first-class mailing must be done early enough to, with reasonable certainty, provide delivery to the insured at least 10 days before the cancellation date. In that regard, the case was remanded back to the Circuit Court to resolve the issue as to whether the date of mailing was reasonably calculated to cause the notice to be delivered to the insured’s address at least 10 days before the time it was specified to become effective. (Nowell v Titan Insurance Company, Michigan Supreme Court Decision filed July 9, 2002, Docket Number 119013).

Recommendation – This case is a significant departure from prior Decisions which in essence indicated that there was a rebuttable presumption of proper mailing under the statute. In other words, the presumption could be rebutted by evidence that the notice did not arrive in a timely manner (interruption in mail service, stolen mail, etc.). Whenever this issue arises, it will be very important to secure copies of the cancellation notice as well as any other documentation which would verify the date of mailing. The burden of proving that the mailing was not reasonably calculated to be delivered so as to arrive at the insured’s address at least 10 days before the date specified is on the Plaintiff. Ask opposing counsel to supply you with that proof.

Facts – Plaintiff was injured in an automobile accident while driving a car insured by State Farm. That policy provided coverage for benefits as required by the No-Fault Act. Plaintiff submitted a claim for PIP and Uninsured Motorist benefits. He provided State Farm with what was acknowledged to have been reasonable proof of the fact and of the amount of the loss sustained (as required by Section 3142(2) of the No-Fault Act). The insurer declined to make payment until an EUO was given.

The Michigan Supreme Court ruled that although the No-Fault Act contains no reference to either allowing or prohibiting EUOs, that particular procedure can be a useful discovery tool. As such, the Court concluded that an EUO which contravenes the requirements of the No-Fault Act by imposing some greater obligation upon one or another of the parties is, to that extent, invalid. However, an EUO provision designed only to ensure that the insurer is provided with information relating to proof of the fact and of the amount of loss sustained (i.e., the statutorily required information on the part of the insured), would not run afoul of the statute. The Court further held that the parties to the insuring agreement cannot contract to vitiate the duty to pay benefits in a timely fashion as required by statute. Once reasonable proof of the fact and of the amount of loss sustained was received, benefits were payable. (Cruz v State Farm, Michigan Supreme Court Decision filed July 17, 2002, Docket Number 117505).

Recommendation – This Decision has not eliminated EUOs for use in adjusting a claim. However, the claim representative (or retained defense counsel) should ensure that the Examination Under Oath is conducted to assist in the evaluation of the claim, and not to abrogate statutorily mandated duties.

Facts – Defendant was at a Christmas party where he had been drinking alcohol for 6-7 hours. He called his wife to pick him up because he was concerned about his ability to drive home. After his wife arrived, Defendant changed his mind and decided to drive himself home. On the way, he ran a stop sign and collided with an ambulance. The ambulance insurer paid for the damage to the vehicle and then started this action seeking reimbursement from the Defendant.

The Trial Court rejected Defendant’s claim that he was immune from tort liability under Section 3135(3) of the No-Fault Code, concluding that his conduct was willful and wanton and, therefore, amounted to intentional conduct for purposes of the intentional harm exception to immunity from tort provided in Section 3135(3)(a).

The Michigan Court of Appeals held that although willful and wanton misconduct is in the same class as intentional wrongdoing, because Section 3135 uses the phrase "intentionally caused harm", the phrase "willful and wanton" may be substituted for "intentional" only to the extent that it has the same meaning as "intentional." To the extent that "willful and wanton" is read to include conduct less than intentional, such as recklessness, then prior decisions have improperly interpreted the statute and cannot stand.

While the evidence established that Defendant exercised poor judgment in deciding to drive after consuming an immoderate amount of alcohol over several hours, particularly in light of the fact that he had made arrangements for his wife to pick him up and thereafter abandoned that plan, there is no indication that Defendant intended to cause the harm which occurred. Therefore, while Defendant’s conduct might be regarded as sufficiently reckless to come within a broad definition of "willful and wanton", it does not come within the narrower construction of "willful and wanton" which must be utilized in this case – a construction that equates with "intentional", as required by the language of the statute. (American Alternative Insurance Company v Farmers Insurance Exchange, et al, Michigan Court of Appeals Published Decision dated June 25, 2002, Docket Number 227917).

Recommendation – The Court in this Opinion does not appear to have ruled out the fact that the behavior in some intoxicated Defendants may be so reckless as to constitute willful and wanton misconduct. The decision on whether to file a Motion for Partial Summary Disposition to strike these types of claims must be made on a case-by-case basis.

Facts – Decedent was killed when his vehicle left the roadway and struck a tractor-trailer rig parked on the shoulder of westbound I-96. It was undisputed that Hunt owned the tractor-trailer and that Crenshaw had been operating the tractor-trailer in the course of his employment with Hunt. Crenshaw’s employment was terminated. Subsequently, Plaintiff’s Estate filed a Complaint against Crenshaw and Hunt, alleging negligence on behalf of Crenshaw and vicarious liability on the part of Hunt. The employer filed an Answer on its own behalf denying Crenshaw’s negligence and causation. Crenshaw failed to personally file an Answer or appear as required. Thereafter, Hunt’s attorney purported to file an Answer on behalf of Crenshaw. Crenshaw repeatedly failed to appear for depositions. The Trial Court ultimately entered an Order of Default against Crenshaw.

Plaintiff then moved for Partial Summary Disposition regarding the liability of Hunt. Plaintiff argued that the Default that was entered against Crenshaw settled the question of Hunt’s liability and therefore the employer could not contest the issues of negligence and causation at Trial. Plaintiff also argued that Hunt was precluded from presenting the affirmative defense of comparative negligence.

In reversing the Decision of both the Trial Court and Court of Appeals, the Michigan Supreme Court held that when the employee failed to participate in this litigation, he was not acting within the scope of employment. Rather, Crenshaw was acting on behalf of himself, only. Because his non-participation was not in the course of his employment, extending liability to the employer for Crenshaw’s non-participation is beyond the scope of vicarious liability. In addition, a traditional rule of Default provides that the Default of one party is not an admission of liability on the part of a non-Defaulting co-party. Thus, the Default entered against Crenshaw does not establish a liability on the part of Hunt. The entry of the Default would act to bar Crenshaw from contesting the issue of his negligence because of his failure to properly participate in the litigation. Unlike Crenshaw, however, Hunt did participate in the litigation and there would be nothing inconsistent in allowing the employer to contest the alleged negligence of Crenshaw, even though Crenshaw himself would not be allowed to do so in light of the Default entered against him. (Rogers v Hunt and Crenshaw, Michigan Supreme Court Decision filed July 23, 2002, Docket Number 118766).

Recommendation – Although the holding of this case arose from a fairly unusual set of circumstances, the issue could have been easily avoided. If Crenshaw was an insured under the employer’s No-Fault policy at the time of the accident, a defense should have initially been provided. If for some reason a question arose as to whether Crenshaw should have been excluded from coverage, an action for Declaratory Judgment could then be filed. By utilizing that procedure, you will avoid the possibility of Default as well as its potentially severe consequences.

Facts – Plaintiff was struck from the rear while waiting for a traffic light to change. She suffered injuries to her neck and back. She did have objective findings of injury in the cervical spine. However, she was not prevented from living a normal life.

Plaintiff did not experience severe pain until a subsequent incident which occurred at her Karate class. Several medical treatments after the accident were attributable to asthma and not auto-related injuries. Plaintiff missed 2-3 days of work after the accident and refrained from engaging in physical activity for one week. Two weeks after the accident she was again participating in her Karate class, was working, exercising and leading a normal life. She remained very active and continued to work, travel and exercise.

Her prognosis for recovery was very favorable. Although she had pain in her neck when turning her head while driving and sitting for long periods of time, nothing indicated that her general ability to lead a normal life had been significantly altered by any injury received as a result of this accident. (Spivack v Koeppen, Michigan Court of Appeals Unpublished Decision dated June 25, 2002, Docket Number 229408).

Recommendation – The Court of Appeals has again indicated that the statutory threshold is designed to eliminate suits based on clearly minor injuries, and those that do not seriously affect the ability of the body to function. Unless there is an outcome-determinative genuine factual dispute, the issue of whether a threshold injury exists is a question of law for the Trial Court. A Motion for Summary Disposition should be filed whenever feasible.

Facts – Plaintiff’s decedent was killed in an automobile accident during the course of his employment. It was undisputed that no survivor loss benefits for contributions of tangible things of economic value were payable because there was a complete setoff under Section 3109 for benefits received from Worker’s Compensation and Social Security. At issue was whether Defendant was liable for the payment of survivor loss benefits for replacement services in the amount of $20.00 per day under Section 3108, and a funeral benefit under Section 3107(1)(a). The Trial Court agreed with Defendant that it was not responsible for those benefits due to the setoff provisions of Section 3109. The Court of Appeals disagreed.

The Court indicated that this question appeared to be one of first impression, and one which was not explicitly answered by the statute itself. In summary, it held that the Section 3109 setoff does not apply to the replacement services or funeral benefit provisions under the No-Fault Act. Section 3109(1) provides for a setoff against personal protection insurance benefits otherwise payable for the injury. (Wood v Auto-Owners Insurance Company, Michigan Court of Appeals Published Decision dated June 25, 2002, Docket Number 229404).

Recommendation – In this case, the Court found that because the Section 3109 setoff amount exceeded the economic loss benefit ceiling contained in Section 3108(1), the economic loss benefit was reduced to zero. Because the Section 3109 setoff did not apply to the replacement services benefit, that benefit was $600.00 per month (30 days x $20.00 per day). The total monthly survivor loss benefit was therefore calculated at $600.00. For a more detailed review of the arguments regarding methods of calculation, please contact us for a copy of this Decision.

Parties may be deemed to have waived the right to Jury Trial by their conduct.

Facts – Plaintiff had filed a timely Demand for Jury Trial. Defendant failed to answer and a Default Judgment was entered. During the next 16 months, at five separate proceedings, evidence was presented to the Court on the issue of damages. During this time, neither party objected to the proceedings, and both actively and vigorously participated in presenting their cases to the Court. The Trial Court awarded Plaintiff an additional sum of money plus interest. The Court denied Plaintiff’s Motion for Reconsideration.

Plaintiff contended that, because he never explicitly withdrew his original Demand for Jury Trial, the Court erred in proceeding with a Bench Trial on the issue of damages. The Court of Appeals disagreed.

The right to a Jury Trial in a civil action is permissive, not absolute. There are specific Court Rules which set forth the procedures to be followed by a party making a Demand for Jury Trial in a civil case. Defendant’s default on the issue of liability did not extinguish either party’s right to a Jury Trial on the issue of damages. Michigan Court Rules also indicate that once a proper Demand for Jury Trial has been made, an agreement of the parties to have all or some of the issues tried by the Court must be expressed in writing or on the record. This Court interpreted the phrase "on the record" to also encompass an expression of agreement implied by the conduct of the parties. (Lasser v George, Michigan Court of Appeals Published Decision dated July 2, 2002, Docket Number 226920).

Recommendation – As illustrated above, the parties to a lawsuit must be very careful in requesting relief from the Trial Court. The Opinion does not indicate what type of "separate proceedings" were held at which evidence was presented on the issue of damages. It seems unlikely however that neither party realized that the Judge was being asked to render a final opinion on that issue.

Facts – During Trial, Defendant admitted that his negligence was the sole cause of the accident, and the Jury was instructed that it was to decide only whether Plaintiff was entitled to non-economic damages. The Jury deliberated for just over one hour and returned a verdict finding that Plaintiff had sustained an injury resulting in serious impairment of body function, that Defendant’s negligence was the proximate cause of the Plaintiff’s injury, and that Plaintiff was not entitled to damages. Plaintiff argued that the Jury’s verdict was inconsistent and moved for additur or alternatively for a new Trial. The Trial Court granted Plaintiff’s Motion for Additur and assessed damages in the amount of $4,500.00.

In reversing the Trial Court, the Michigan Court of Appeals held that Court Rules regarding the grant of a new Trial and for additur are very specific. MCR 2.611(E)(1) only permits additur with the written consent of the non-moving party. If the non-moving party does not consent, the only relief available to the moving party is for the Trial Court to grant the Motion for New Trial filed in the alternative. In this case, Defendant did not consent to the Trial Court’s additur award, and therefore it was invalid. Secondly, the conditional additur award must be the lowest amount the evidence will support, necessitating some specific findings by the Trial Court to support the award. The Trial Court made no such findings in this case. Lastly, the Trial Court’s statement that the verdict was "inconsistent" is not a ground codified in MCR 2.611(A)(1) for granting a new Trial. As such, the Jury verdict should not have been disturbed. (Beseler v Lacey, Michigan Court of Appeals Unpublished Decision dated July 9, 2002, Docket Number 223079).

Recommendation – Although Trial Courts have discretion in most matters, there are times when the Court must make specific findings to support its rulings. When faced with an adverse decision, an attorney must request that the presiding Judge specifically indicate the underlying basis for his or her ruling.

Should you have any questions or comments regarding this or any of our newsletters, please feel free to contact us by voice 989.799.3033, e-mail jtc@saginaw-law.com or write to Collison & Collison, P.C., 5811 Colony Drive, North, P.O. Box 6010, Saginaw, MI 48608-6010.

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