Facts – Decedent was using a treadmill when he fell off and allegedly struck his head, sustaining fatal injuries. The Trial Court dismissed Plaintiff’s gross negligence claim. In upholding that dismissal, the Michigan Court of Appeals discussed the evolution of the concept of gross negligence in this State.

At common law, Plaintiff had to show that Defendant knew or should have known of the Plaintiff’s precedent negligence, and by Defendant’s subsequent negligence, caused injury to the Plaintiff (Last Clear Chance doctrine). This common law definition was rejected by the Supreme Court in Jennings v Southwood, 446 Mich 125 (1994), in the context of the Emergency Medical Services Act.

Because the underlying purposes are the same, the Court in this case adopted the statutory definition of gross negligence as defined in the Government Tort Liability Act (GTLA). It also noted that the terms "gross negligence" and "willful and wanton misconduct" are separate concepts. Willful and wanton misconduct is established if the conduct alleged shows an intent to harm or, if not that, such indifference to whether harm will result as to be the equivalent of a willingness that it does. Xu, et al v Gay, Michigan Court of Appeals Published Decision dated June 24, 2003, Docket No. 237520

Recommendation – The Court of Appeals has now eliminated any doubt as to whether the term "gross negligence" applies to claims for personal injury. The issue of whether an insured was grossly negligent may actually be a red herring. There are no degrees of negligence.

Facts – Decedent was riding a motorcycle southbound on US-31. In anticipation of moving into the left lane, he looked over his left shoulder. When he looked ahead, he saw that traffic had slowed to a stop or near stop. Decedent laid the motorcycle down in the road in an attempt to avoid striking the vehicle in front of him. The motorcycle did not come into contact with the vehicle, but instead struck a guardrail.

Motions for Summary Disposition were filed by various insurers. The Trial Court found that one of the motor vehicles was involved in the accident because it had stalled on the road. Thus, it found that Plaintiff was entitled to recover first-party benefits.

The Michigan Court of Appeals held that a motorcycle is not a motor vehicle under the No-Fault Act. A cyclist may collect PIP benefits if he is injured in an accident involving a motor vehicle, but the motor vehicle must actively contribute to the accident. In this case, the vehicle was simply the last in a line of vehicles that had stopped or slowed nearly to a stop. It did not engage in maneuvers that prevented Decedent from stopping, nor was there any evidence that another vehicle in the line did so. Any connection between Decedent’s injuries and the use of the vehicle in front of him was merely fortuitous. Elder, et al v Pioneer State Mutual Insurance Company, et al, Michigan Court of Appeals Unpublished Decision dated June 17, 2003, Docket No. 237977.

Recommendation – When investigating a claim involving a motorcyclist, one must make an initial determination as to whether there was motor vehicle involvement. As illustrated in this case, there must be more than an incidental connection.

Facts – This Appeal involved the issue of whether Plaintiff suffered a "serious impairment of body function" as defined by MCL 500.3135(7). The Michigan Supreme Court (in lieu of granting leave to appeal), vacated the previous decision in Kreiner v Fisher, 251 Mich App 513 (2002) and remanded the matter for further proceedings consistent with its Order. The Supreme Court remand Order provided in part that: "Although a serious effect is not required, any effect does not suffice either. Instead, the effect must be on one’s general ability to lead his normal life."

After due consideration, the Court of Appeals again reversed the Trial Court’s grant of Defendant’s Motion for Summary Disposition. It found that one’s general ability to lead his or her normal life can be affected by an injury that impacts the person’s ability to work at a job, where the job plays a significant role in that individual’s normal life. Employment, or one’s livelihood, for a vast majority of people, constitutes an extremely important and major part of a person’s life. For many, life in general revolves around a job and work.

In this case, there was documentary evidence presented by Plaintiff that his ability to walk, undertake certain physical movements, and engage in recreational hunting was limited by injury. The Court further determined that a "serious effect" on one’s general ability to lead his or her normal life is not required. Kreiner v Fisher, Michigan Court of Appeals Published Decision dated June 3, 2003, Docket No. 225640.

Recommendation – The Michigan Supreme Court may have been sending a message (through its Order vacating the prior decision) as to whether it felt that Mr. Kreiner had met the no-fault threshold. We will continue to monitor this case. An eventual reversal by the Michigan Supreme Court would be very beneficial to the defense of these types of claims.

Facts – The two minor daughters of Plaintiff’s insured suffered injury while passengers in a vehicle driven by their day care provider who was insured by the Defendant. Both insurers claimed that the other was first in order or priority to pay PIP benefits.

The Court of Appeals held that the day care provider’s driving of the children to school would not fall within the scope of Section 3114(2) because it occurred incidentally to the vehicle’s primary use as a personal vehicle and the transportation of children to and from school was only a small part of the day care business. In this Court’s view, the legislature intended Section 31142(2) to apply in "commercial" situations. Farmers Insurance Exchange v AAA of Michigan, Michigan Court of Appeals Published Decision dated June 3, 2003, Docket No. 232188.

Recommendation – This Opinion indicates that the mere fact that the day care provider charged a fee for transporting the children, does not itself mean that she operated a vehicle in the business of transporting passengers. According to this decision, it would be very difficult to find that a private individual’s insurer would be first in order of priority under Section 3114(2) of the No-Fault Act.

Facts – This case involves a dispute over the interpretation of Sections 3107 and 3157 of the Michigan No-Fault Act. Plaintiffs are 49 individual medical providers, two guardians of catastrophically injured automobile accident victims, and an organization made up of health care providers and health care patients whose principal objective is to act as a spokesperson for and to protect the legal rights of both groups. Defendants are either no-fault insurance companies who have issued policies to Michigan motorists, or the review companies employed by one or more of Defendant insurance companies to review medical bills arising out of automobile accidents.

Plaintiffs brought this action for Declaratory Judgment and injunctive relief, alleging that Defendants violated the provisions of Section 3107 which requires that insurers pay "all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery or rehabilitation." Plaintiffs claim that Defendant insurance companies had been unlawfully failing to pay the full and "reasonable" amount of their insured’s medical bills. It was Plaintiffs’ claim that in determining whether a fee is reasonable, Section 3157 requires Defendants to compare their insured’s health care provider fees for services with that providers’ fees for comparable services provided to an uninsured patient. Defendants argued that a customary fee for a particular provider is not necessarily a reasonable one. Further, it argued that Defendants were permitted to evaluate a medical invoice for reasonableness as a matter of law. The Trial Court rejected Plaintiffs’ argument and held that under the Act, Defendants were entitled to review any medical charges and pay only those charges determined to be reasonable. The Court further found that the "reasonableness" language in Section 3157 did not refer to the amount that the medical provider established as the "customary" charge for their services, as such a conclusion would allow unilateral decisions by health care providers regarding what constitutes reasonable medical expenses and directly conflicts with the legislature’s purpose in enacting the no-fault system and Section 3107 in particular.

In upholding the Trial Court’s decision, the Court of Appeals found that the "customary charge" limitation in Section 3157 and the "reasonableness" language in Section 3107 constituted separate and distinct limitations on the amount health care providers may charge, and what insurers must pay with respect to automobile accident victims covered by no-fault insurance. A trier of fact will ultimately determine whether a charge is reasonable. Plaintiffs may challenge Defendants’ failure to fully reimburse them for medical bills as a violation of the Act, but they have the burden of establishing the reasonableness of the charges in order to impose liability on the insurer. Advocacy Organization for Patients and Providers, et al v Auto Club Insurance Association, et al, Michigan Court of Appeals Published Decision dated July 3, 2003, Docket No. 231804.

Recommendation – The significance of this decision is that the Court has again recognized that the basic goal of the no-fault insurance system is to provide individuals injured in motor vehicle accidents with assured, adequate and prompt reparation for certain economic losses at the lowest cost to the individual and the system. In this case, ACIA and ReviewWorks based their payments on a survey of charges by other health care providers for the same services. This type of sampling was not considered to be prohibited by statute for determining the reasonableness of charges for the same service. A continued effort should be made to scrutinize medical bills submitted and weed out those which are clearly "unreasonable" in amount.

Facts – This case concerns the proper interpretation of MCL 600.5856, which sets forth requirements for the tolling of the Statute of Limitations.

From a factual standpoint, Plaintiff filed his Complaint one day before the three-year Statute of Limitations expired. Three unsuccessful attempts to serve the Defendant were made. A Second Summons was issued and Defendant was eventually served. Defendant moved for Summary Disposition, arguing that the Statute of Limitations barred Plaintiff’s claim because Plaintiff did not serve Defendant or place the Summons with an officer for service before the limitations expired as required by statute. The Circuit Court agreed and granted Defendant’s Motion for Summary Disposition. On Appeal, the Court of Appeals reversed, relying on the prior Supreme Court case of Buscaino v Rhodes, 385 Mich 474 (1971).

In upholding the original Trial Court ruling, the Supreme Court utilized a common sense, plain reading of Section 5856 regarding tolling. That section provides that the Statute of Limitations is tolled only if: (1) The Complaint is filed and a copy of the Summons and Complaint are served on Defendant, (2) Jurisdiction is otherwise acquired over Defendant, (3) The Complaint is filed and a copy of the Summons and Complaint in good faith are placed in the hands of an officer for immediate service (but no longer than 90 days after the Summons and Complaint are received by the officer), or (4) If, during the applicable notice period under MCL 600.2912(b), a claim would be barred by the Statute of Limitations, but only for the number of days equal to that in the applicable notice period after notice is given in compliance with Section 2912b.

In other words, if one does not perform the actions specified by Section 5856, the Statute of Limitations is not tolled and therefore the period of limitations continues to run after the Complaint has been filed.

The Court’s prior holding in Buscaino, supra was specifically overruled. This case will apply retroactively only to those cases in which this issue has been raised and preserved.

In all other cases, this Opinion will apply prospectively, effective September 1, 2003. Gladych v New Family Homes, Inc., Michigan Supreme Court Decision dated July 1, 2003, Docket No. 119948.

Recommendation – This decision is significant inasmuch as it clearly indicates that the mere filing of a Complaint is insufficient to toll the Statute of Limitations. If the requirements in Section 5856 are not met, the period of limitations continues to run. As such, one of the first areas which should be examined when a new lawsuit is received, is whether the Statute of Limitations may have expired. If so, a Motion for Summary Disposition should be immediately filed by defense counsel.

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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