Facts – Plaintiff was the owner of commercial property which was destroyed by fire. He filed a property loss claim with Defendant who denied coverage on the basis that the insurance policy had lapsed for non-payment of renewal premium. Although Plaintiffs had issued a check in payment of the past due premium, the agent failed to forward the payment to Defendant.

In upholding the Trial Court’s grant of Summary Disposition, the Court of Appeals discussed statutory cancellation requirements (MCL 500.3010). In essence, once an insurance policy is in force, it continues in effect until it is cancelled or it expires. While the policy is in effect, it cannot be cancelled without a notice of cancellation pursuant to statute. However, after the period of coverage expires, the policy is no longer in effect and a notice of cancellation is not required.

Defendant’s policy renewal certificate required that payment be received by the Defendant before a certain date. It was undisputed that Defendant did not receive payment by that date. In this particular case, the insurance agent was not a representative of the Defendant and was not authorized to bind it. Therefore, the independent insurance agent could not have bound the Defendant under any theory of agency, actual or otherwise. Watts v Michigan Basic Property Insurance Association, et al, Michigan Court of Appeals Unpublished Decision dated November 25, 2003, Docket No. 241774.

Recommendation – Where an insured fails to timely pay a renewal premium, coverage most probably will be deemed to have lapsed. It is very important that the actual policy language be reviewed along with any endorsements in effect on the date of loss.

Facts – Plaintiff was seriously injured in an automobile accident and claimed that on the basis of an occupational therapy report, significant home modifications were required. An architect was requested to prepare plans and to estimate the cost. Plaintiff paid the architect’s bill and forwarded it to Defendant for reimbursement. Defendant had its own expert evaluate the home and on the basis of that evaluation, claimed that Plaintiff’s requests were unreasonable. It also denied reimbursement of the architect’s bill.

Jury trial resulted in a finding that Plaintiff had incurred allowable expenses (architect’s bill) and that the modifications to Plaintiff’s home were reasonably necessary. The Judgment provided in part that the home modification award be overseen by the Trial Court as expenses were incurred, that no-fault interest on the home modification amount be paid and that attorney fees be taxed.

The Supreme Court held that Plaintiff was not entitled to Judgment interest on the proposed home modifications for the reason that interest is not allowed on future damages. Additionally, the Court felt that Defendant was not obligated to pay the amount of future home modification expenses to the Trial Court for distribution because the expenses had not yet been incurred. Furthermore, no-fault penalty interest is only paid on overdue benefits. Generally, benefits are payable as the loss accrues. Because Plaintiff had not sustained a loss associated with the actual home modifications, those benefits were not yet overdue and interest was not payable. Likewise, statutory attorney fees are payable only on overdue benefits for which the insurer has unreasonably refused to pay or unreasonably delayed in paying. In this case, claims for the modification expenses were not yet overdue because they were not yet incurred. Plaintiff was entitled only to those reasonable attorney fees that were attributable to the architect’s fee. Proudfoot v State Farm Mutual Insurance Company, Michigan Supreme Court Opinion dated December 23, 2003, Docket No. 123502.

Recommendation – This case should serve as a reminder that Section 3107 of the No-Fault Code must be read literally. In other words, an insurer is responsible for allowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery or rehabilitation.

Facts – Plaintiff suffered from pre-existing conditions of hip dysplasia and degenerative disease of the spine. She was involved in two automotive accidents within a one-month period. This action arose out of the second incident. The Trial Court granted Defendant’s Motion for Summary Disposition, finding that Plaintiff failed to establish that the second accident was a proximate cause of her injuries.

Plaintiff was impaired before the accident, and doctors indicated that the only remedy for her hip condition was hip replacement. She was walking with the assistance of a cane and she had not returned to work at the time of the second accident. Although Defendant took the Plaintiff as she was, with a susceptibility to aggravation of a pre-existing condition, Plaintiff was required to show proximate cause (which she failed to do). Berishaj v Unger, Michigan Court of Appeals Unpublished Decision dated December 2, 2003, Docket No. 241327.

Recommendation – As illustrated above, it is very important that pre-accident records be reviewed so as to determine Plaintiff’s existing state of health. Where there has been no appreciable aggravation, a Motion for Summary Disposition based upon lack of proximate cause and/or threshold injury should be filed.

Facts – Plaintiff appealed as of right from an Order granting Summary Disposition to Defendant. The Trial Court had determined that Plaintiff suffered a medically identifiable injury (fractured fibula). Further, the injury did affect an important body function (there were restrictions on his activities for approximately seven weeks). Plaintiff’s injury did not, however, overcome the threshold because the injury did not seriously affect his general ability to lead his normal life. Here, Plaintiff’s ability to work was only affected for three weeks. Since the accident, Plaintiff had worked both as a painter’s helper and siding houses. The duration of the restriction on work was minimal and did not meet the threshold for serious impairment.

Although Plaintiff also claimed that he could no longer participate in recreational sports, that was seen as only one aspect of his life, and those restrictions were self-imposed. Taylor v Perry, Michigan Court of Appeals Unpublished Decision dated December 2, 2003, Docket No. 241867.

Recommendation – Factors in determining whether an injury impairs an important body function include the extent of injury, treatment required, duration of the disability, extent of residual impairment, and prognosis for eventual recovery. While a serious effect from the injury is not required, it cannot be simply "any" effect. It must be an effect on one’s general ability to lead his or her normal life. The extent of the injury is determined by comparing one’s lifestyle before and after the injury.

Facts – Plaintiff filed suit against Defendant seeking payment of PIP benefits for injuries allegedly sustained in the accident. The parties reached an agreement that provided that Defendant would pay a fixed sum in settlement, while reserving the right to file a Motion for Summary Disposition to determine Plaintiff’s entitlement to future benefits. Defendant agreed that if it did not prevail on its Motion, it would continue paying Plaintiff benefits for such time as reasonable proof of claimant’s continuing disability was presented to Defendant. Defendant did not prevail on its Motion.

Plaintiff filed a third-party action. The Jury returned a verdict of no cause of action, concluding that Plaintiff was not injured as a result of Defendant’s negligence. As a result of the Jury’s verdict, PIP benefits were terminated.

Subsequently, Plaintiff filed the instant lawsuit, seeking PIP benefits, and also filed a Motion to Compel Defendant to pay PIP benefits.

In upholding the Trial Court’s denial of that Motion, the Michigan Court of Appeals held that Plaintiff was precluded from asserting that he was injured in the first-party case because that issue had been decided against him in the third-party case. Collateral estoppel precludes the re-litigation of an issue in a subsequent, different cause of action between the same parties or their privies when the prior action culminated in a valid final Judgment and the issue was actually and necessarily litigated in that action. Bretz v Titan Insurance Company, Michigan Court of Appeals Unpublished Decision dated December 4, 2003, Docket No. 241043.

Recommendation – Although there appears to be a difference of opinion within the Michigan Court of Appeals as to whether the doctrine of collateral estoppel will preclude re-litigation of certain issues (even though the issue arises between non-identical parties), it may be well worth the effort to file a similar Motion for Summary Disposition in the event similar favorable findings are made in the ancillary action.

Facts – Defendant’s insured (Muma) parked his car in the outside right lane of a road which had been closed off for parking during a local festival. Plaintiff drove his motorcycle into the back end of Muma’s vehicle and he and his passenger were injured. The Trial Court ruled that Muma’s vehicle was not unreasonably parked and granted Judgment for Defendant.

In upholding the Trial Court’s ruling, the Court of Appeals discussed the general proposition that if a vehicle is parked on the road in an area designated for parking, it is not unreasonably parked even though it may be illegally parked. Muma had parked on the road in what was normally a through lane for traffic that had been temporarily closed and designated for parking. He was parked in a safe and prudent manner and the parking area was marked by traffic cones. The police had the situation under control and had evidently determined that it was safe. As such, the vehicle was not unreasonably parked. Kennett v Horace Mann Insurance Company, Michigan Court of Appeals Unpublished Decision dated November 25, 2003, Docket No. 241673.

Recommendation – As illustrated above, a thorough examination of the facts and circumstances which existed at the time of the casualty, can be of great assistance in the event a Motion for Summary Disposition is eventually filed.

Facts – Plaintiff was diagnosed with upper thoracic myalgia after one of her treating physicians noted muscle spasms in the upper back five days after the accident. Another physician noted trigger points in other areas of her body. The Court of Appeals felt that the Trial Court should have found that there was a factual dispute regarding whether Plaintiff suffered an objectively manifested impairment. However, the Trial Court did properly conclude that the injuries caused no significant effect on Plaintiff’s general ability to lead her normal life. Plaintiff missed only a week of school and work. She was able to ski shortly after the accident even though she could not ski competitively. There were no restrictions placed on her activities at home. Harrison v Barnowsky, et al, Michigan Court of Appeals Unpublished Decision dated November 25, 2003, Docket No. 242018.

Recommendation – The Michigan Court of Appeals remains willing to evaluate serious impairment of body function claims (especially those involving soft tissue injuries) by looking to whether there was any significant effect on Plaintiff’s general ability to lead his or her normal life. A Motion for Summary Disposition based upon lack of serious impairment of body function should be filed where appropriate.

Facts – Plaintiff was an invitee inasmuch as she was on Defendant’s premises which were held open for a commercial purpose. The Court of Appeals held that different floor levels in a building are such a common occurrence that the landowner does not owe a duty to make ordinary steps foolproof or to protect invitees from any harm they present unless special aspects of the steps make the risk of harm unreasonable. The fact that Plaintiff did not see the step before she fell was irrelevant. If the condition creates a risk of harm solely because the Plaintiff failed to notice it, the open and obvious doctrine eliminates liability if Plaintiff should have discovered it and realized its danger. Ordinary steps do not pose an unreasonable risk of harm despite the absence of warning or the failure to mark the steps with a contrasting color. In this case, the only special aspect of the step was that Defendant had attempted to make it more noticeable by painting the edge of the step with a contrasting color and posting a warning sign. Plaintiff simply failed to notice the step despite the precautions which were sufficient to draw the attention of an average person upon casual inspection. Stratton v Somerset Pontiac-GMC, Inc., Michigan Court of Appeals Unpublished Decision dated December 2, 2003, Docket No. 242298.

Recommendation – The Court of Appeals remains reluctant to create premises liability where a condition is open and obvious and does not involve an unreasonable risk of harm. Motions for Summary Disposition should strongly be considered in cases of this type.

Facts – Plaintiff testified at her deposition that she parked that morning at Defendant’s premises, went into a nearby store, made a purchase and returned to her car. At that point, Plaintiff stated that she was aware of the slippery character of the parking lot, and that she had seen ice, both snow-covered and not, elsewhere in the parking lot. After putting her purse in her car, Plaintiff decided to pay a social visit upon her mother, who was working at a travel agency located on Defendant’s premises. After visiting for some time with her mother, Plaintiff left, walked about five feet toward her car, slipped and fell on a patch of snow-covered ice in the parking lot and injured herself.

In upholding the Trial Court’s grant of Defendant’s Motion for Summary Disposition, the Court of Appeals discussed its prior decisions which found that a similar awareness of snow, ice, or snow-covered ice reasonably supported a finding that the hazard was open and obvious [Joyce v Rubin, 249 Mich App 231 (2002); Corey v Davenport College of Business (on remand), 251 Mich App 1 (2002)]. The Court did not feel that this condition contained those "special aspects" which would render it unreasonably dangerous and thus impose a duty on the landowner. There was no evidence that a snow-covered patch of ice was especially unusual for Michigan in winter, or that it posed an extremely high risk of severe harm. In addition, Plaintiff could have avoided the condition by simply postponing her "social visit". McFarlin v Ross Properties, et al, Michigan Court of Appeals Unpublished Decision dated December 2, 2003, Docket No. 242416.

Recommendation – Where the Plaintiff has prior knowledge of a potentially slippery condition, the Court of Appeals has been reluctant to allow recovery. While each case must be evaluated on its own merit, most "slip and fall" cases will give rise to an "open and obvious" defense argument.

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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