Facts – This action arose out of an automobile accident in which Plaintiff's vehicle was rear-ended. Plaintiff filed a third-party negligence action against the other driver. Plaintiff received PIP benefits from the Defendant, State Farm (his insurer) and filed a first-party action after Defendant stopped paying benefits. In the third-party suit, the jury returned a No Cause verdict, finding that Plaintiff was not injured.

State Farm moved for summary disposition in the first-party action, asserting that the issue of whether Plaintiff was injured as a result of the accident had been fully adjudicated in the third-party case, and should be given collateral estoppel effect to bar this action. The Trial Court disagreed and denied the motion.

In upholding the Trial Court's decision, the Michigan Court of Appeals held that in order for a party to estop an adversary from re-litigating an issue, that party must also have been a party, or a privy to a party in the previous action. In other words, the estoppel is mutual if the one taking advantage of the earlier adjudication would have been bound by it if it had gone against him. Mutuality of estoppel remains the law in this state with limited exceptions not applicable here (Monat v State Farm Insurance Company, Michigan Court of Appeals Unpublished Decision dated February 15, 2002, Docket Number 222690).

Recommendation – Regardless of the above decision, the testimony and evidence which led to the jury's finding of no injury in the third-party claim, should be utilized by Defense counsel in the first-party case at the time of trial. Every effort should be made to coordinate discovery. The matters can be bifurcated for trial purposes. Justice Wilder's dissenting Opinion in this case presents in this author's view, a more logical analysis. Collateral Estoppel can be used defensively, and is intended to relieve parties of multiple litigation, conserve judicial decisions, prevent inconsistent decisions and encourage reliance on adjudication.

Facts – Defendant asserted that Plaintiff was bound to cover a claim, further asserting that a verbal insurance binder provided temporary uninsured motorist coverage. The Court briefly discussed the Property and Casualty Guaranty Association Act (MCLS 500.7901 et seq.) regarding payment of obligations of insolvent insurers which constitute "covered claims." The Court also discussed the validity of a verbal insurance binder. Of significance, it reiterated the long-standing proposition that an independent agent is an agent of the insured and not the insurer. Without evidence of a written or verbal insurance binder from an authorized agent, a temporary binder providing uninsured motorist coverage did not exist at the time of the accident (Michigan Property and Casualty Guaranty Association v Schmidt, Michigan Court of Appeals Unpublished Decision dated January 22, 2002, Docket Number 224601).

Recommendation – An initial claim evaluation should always include a determination that coverage was in effect on the date of loss. A claim representative should verify that the policy was properly written, by a duly authorized agent, and that no "irregularities" exist.

Facts – Plaintiffs filed a tort action against Defendants, alleging that an assistant coach was liable for using his full effort in a soccer scrimmage against their 11 year-old minor son. It was further alleged that the head coach was negligent for failing to properly supervise the scrimmage and for allowing the assistant coach to play at his full potential. Plaintiff's son tore his anterior cruciate ligament when the assistant coach either collided with or kicked the boy in the knee.

In upholding the Trial Court's grant of summary disposition in favor of Defendants, the Court of Appeals held that participants in recreational activities are not liable for every mishap that results in injury. Michigan has joined the majority of jurisdictions who have adopted "reckless misconduct" as a minimum standard of care for co-participants in recreational activities. In other words, participants in recreational activities do not expect to sue or be sued for mere carelessness.

One who is properly charged with recklessness or wantonness is not simply more careless than one who is only guilty of negligence. His conduct must be such as to put him in a class with the willful doer of wrong. Likewise, the Court refused to adopt the position that a breach of game rules regarding safety should be actionable (Behar, et al. v Fox and Rubin, et al., Michigan Court of Appeals, Approved for Publication January 18, 2002, Docket Number 225294).

Recommendations – When evaluating a claim which arises from participation in a recreational activity (such as soccer), one must determine whether the Defendant acted in a reckless or intentional fashion. If not, a motion for summary disposition may be appropriate.

Facts – Plaintiff was injured while a participant in a moto-cross race. Plaintiff's action alleged in part that Defendant's failure to remove a tree stump amounted to willful and wanton misconduct. It was Plaintiff's further claim that comparative negligence could not be assessed against Plaintiff's damage award because such defense was not available in a claim based on willful and wanton misconduct.

The Court of Appeals disagreed. It stressed that in Michigan, comparative fault statutes apply to acts, omissions and conduct (including intentional conduct) which are a proximate cause of damages sustained by a party. Allocation of liability must be made among all persons who contributed to the accrual of a Plaintiff's damages (regardless of the theory) (Lamp v Reynolds, et al., Michigan Court of Appeals Published Decision dated February 5, 2002, Docket Number 223346).

Recommendation – This case contains a good analysis of elements necessary to sustain a claim for willful and wanton misconduct. Regardless of the theory, the Defense should always make a determination as to whether a Plaintiff's own actions caused or contributed to the claimed injury.

Facts – Plaintiff claimed uninsured motorist coverage under her husband's commercial automobile insurance policy. While driving a car owned by her employer, Plaintiff was involved in an automobile accident with an uninsured motorist. Plaintiff's employer did not carry UM coverage on the automobile she was driving. Her claim was filed against Citizens, who insured the husband's landscaping business (a sole proprietorship). It was claimed that Plaintiff was an insured under that policy's UM endorsement.

Citizens argued that according to its policy, uninsured motorist coverage applied only for covered autos as described in the declaration. The vehicle which Plaintiff was driving was not a vehicle listed in the policy.

The Michigan Court of Appeals indicated that this was an issue of first impression concerning UM coverage under Michigan's No-Fault insurance system. It adopted the Plaintiff's argument that under the terms of the policy, UM protection is provided to an "insured." Historically, UM protection was considered "portable." Consequently, UM protection covered bodily injury to the insured whenever the claim involved an uninsured motorist, whether the claimant was in the covered auto, in another vehicle, or injured as a pedestrian. This law evolved prior to No-Fault insurance and was based on Michigan's statute that mandated uninsured motorist coverage unless rejected in writing (which was repealed in 1973 after Michigan adopted No-Fault insurance). Now that the statutory mandate no longer exists, this rational no longer applies and UM protection is generally a matter of contract. As such, the Court looked to the provisions of the policy at issue to determine the extent of coverage.

In reaching its conclusion, the Court noted that this particular policy appeared to be typical of the standard policy developed by the insurance industry when uninsured motorist coverage was statutorily mandated and portable. Reading the definitions and exclusions applicable to the uninsured motorist coverage of the policy, the Court found that it unambiguously provided coverage in circumstances beyond those involving the covered auto, including the accident at issue. It was felt that if Defendant had intended to limit uninsured motorist liability to circumstances involving the covered auto, it could have used limiting language. In any event, the Court felt that the policy must be interpreted in Plaintiff's favor (Stoddard v Citizens Insurance Company, Michigan Court of Appeals Published Decision dated January 29, 2002, Docket Number 225493).

Recommendation – When analyzing an insured's claim for uninsured motorist benefits, one must carefully review all relevant aspects of the applicable policy (including endorsements). If necessary, a legal opinion should be requested prior to the grant or denial of coverage.

Facts – Plaintiff (a treating medical facility) filed this action against Defendant insurer as a result of Defendant's denial of Plaintiff's request for payment of rehabilitation services rendered to Defendant's insured who was injured in a pedestrian/motor vehicle accident. Defendant ultimately entered into a stipulated order granting Plaintiff's motion on the issue of Defendant's liability. Thereafter, Plaintiff filed a motion for No-Fault penalty interest and attorney fees. The Trial Court denied the motion, holding that Plaintiff was not entitled to No-Fault penalties because Plaintiff was not the injured party.

In reversing the Trial Court's Opinion, the Michigan Court of Appeals held that because Plaintiff submitted a claim for PIP benefits for the benefit of the insured, Plaintiff was entitled to payment within 30 days of Defendant's receipt of reasonable proof of the medical services provided, and of the cost of such services. Consequently, Plaintiff was entitled to attempt enforcement of the penalty interest provision of the No-Fault Act. The Court also relied on §3112 of the No-Fault code which indicates in pertinent part that "benefits are payable to or for the benefit of an injured person." (Lakeland Neurocare Centers v State Farm Mutual Automobile Insurance Company, as assignee of Michigan Department of State-Assigned Claims Facility, Michigan Court of Appeals Published Decision dated February 15, 2002, Docket Number 224245).

Recommendation – According to the Court's rational, any health care provider with an interest in being reimbursed can commence a first-party claim. This decision did not indicate whether the insured had other health care coverage which might apply. In any event, whenever a valid claim for first-party benefits is asserted, all properly payable amounts should be discharged so as to eliminate any argument that an unreasonable refusal to pay benefits occurred.

Facts – As Plaintiff exited Defendant's office, he did not realize or recognize that there was one step from the office floor to the ground level. Failing to anticipate the step, he fell, injuring his left knee. The step and the ground floor level were both made of concrete and were painted the same gray color. Plaintiff argued that the step was indistinguishable from the floor and constituted a dangerous condition.

This case had been remanded back to the Court of Appeals from the Michigan Supreme Court for reconsideration in light of Lugo v Ameritech Corp. Inc.,(464 Mich 512, [2001]). In Lugo, the Supreme Court reiterated the general rule that a premises possessor is not required to protect an invitee from open and obvious dangers. However, if special aspects of a condition make even an open and obvious risk unreasonably dangerous, the premises possessor has a duty to undertake reasonable precautions to protect invitees from that risk.

Here, the Court of Appeals felt that based upon the evidence and testimony obtained, there was a material factual dispute regarding whether the step constituted an open and obvious danger (Wolfrom v Hillcrest Memorial Gardens Association, Michigan Court of Appeals Unpublished Decision dated February 12, 2002, Docket Number 204746).

Recommendation – When investigating a premises liability claim, one must always make a determination as to whether the allegedly defective condition was observable, and if so, whether the risk of harm remained unreasonable nonetheless. Where possible, the defect should be thoroughly photographed for later use.

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