This newsletter has been compiled utilizing the latest reported Michigan Court of Appeals and Supreme Court Decisions. Case citations (if published at the time this newsletter is distributed) will reference the specific reporter, volume and page number. Unpublished Decisions (or those which have not been published as of the date of newsletter distribution) will be cited by Appellate Slip Opinion number. Copies of all Decisions summarized within this newsletter are available for your review upon request. Questions and comments are welcomed.

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Facts – Plaintiff sustained severe injuries in an automobile accident, rendering her a quadriplegic and dependant on others for basic activities such as eating and bathing. During the first month after Plaintiff returned home from the hospital, personnel from an outside agency came to Plaintiff’s home to provide care for her. Thereafter, Plaintiff’s husband and his daughters acted as Plaintiff’s primary caregivers.

Eventually, Plaintiff decided to file a lawsuit seeking back pay for attendant care services after reading an article about a woman who received a $5,000,000 settlement from another insurance company who had paid the woman a lower rate for attendant care services because professional care workers were not involved. Plaintiff also decided to seek reimbursement from Defendant for two vans that her husband had purchased after the accident. The complaint was filed in December 2001 (over 6 years after the accident had occurred). Plaintiff set forth multiple legal theories including violation of the Michigan Consumer Protection Act and failure to pay benefits under the No-Fault Act.

With regard to the claim involving the MCPA, Plaintiff argued in part that Defendant’s representations regarding the existence of a rate schedule that allowed compensation of only $10 an hour for family members were false and constituted unfair and deceptive practice. Defendant argued in part that the claim ultimately sought benefits under the No-Fault Act and that the one-year limitation period found in MCL 500.3135(1) therefore barred the claim. Defendant contended that this was simply a No-Fault claim relabeled as an MCPA claim.

In reversing the trial court’s denial of Defendant’s motion for summary disposition, the Court of Appeals agreed that Plaintiff’s claim for relief requested payment of No-Fault benefits. Accordingly, Plaintiff was not entitled to recovery because of the one-year statute of limitations. All of Plaintiff’s losses were incurred more than one year before she filed her complaint. Grant v. AAA Michigan Wisconsin, Inc., a/k/a Auto Club Group, Michigan Court of Appeals Published Decision Dated June 2, 2005, Docket Number 249720.

Recommendation – More often than not, the Courts will look behind the technical label that a Plaintiff attaches to a cause of action, in order to determine the substance of the claim asserted. In this case, the Court of Appeals was unwilling to allow the Michigan Consumer Protection Act to supercede the statute of limitations found in the Michigan No-Fault Act, where No-Fault benefits were claimed. Keep in mind that the one-year limitation period is generally not tolled where a claim for benefits is not denied. Although a formal denial of benefits need not always be in writing, something more than a verbal denial by a single adjuster is usually required.

Facts – Plaintiff’s truck began rolling down a hill and he gave chase. During the chase, Plaintiff stepped in a pot hole and fell to the ground, sustaining an ankle injury. When Defendant refused to pay PIP benefits, Plaintiff filed suit.

In upholding the trial court’s grant of summary disposition, the Michigan Court of Appeals indicated that in order to be eligible for PIP benefits, the injury must be closely related to the vehicle’s function as a means of transportation. Plaintiff’s injury was not closely related to his truck’s function as a means of transportation. Only an incidental or fortuitous connection existed between the injury and the vehicle. Such an injury was not foreseeably identifiable with the normal use of a motor vehicle as a motor vehicle. Cullors v. Auto Club Insurance Association, Michigan Court of Appeals Unpublished Decision Dated May 17, 2005, Docket Number 252295.

Recommendation – This appears to be yet another example of "creative" pleading on behalf of the Plaintiff Bar. A tough stance should be taken with respect to any analysis regarding whether a particular injury is closely related to a vehicle’s function as a means of transportation.

Facts – Plaintiff (a six year old), sustained a 5 cm zigzag laceration to his forehead that required stitches. Litigation was commenced, claiming permanent serious disfigurement. Defendant’s Motion for Summary Disposition was granted by the Trial Court. The judge noted that he had met with the Plaintiff during a settlement conference. The scar was not noticeable from across the desk.

In upholding the lower court’s decision, the Michigan Court of Appeals indicated that the issue of whether a person has suffered a permanent serious disfigurement is a question of law for the court if there is no factual dispute concerning the nature and extent of injuries, or if there is a factual dispute concerning the nature and extent of injuries, the dispute is not material to whether Plaintiff has suffered permanent serious disfigurement. Whether a scar is serious is a question to be answered by resorting to common knowledge and experience.

Although the scar was a permanent disfigurement, it was not considered to be serious in nature. Mausolf v. Bumgardner, Michigan Court of Appeals Unpublished Decision Dated May 19, 2005, Docket Number 260029.

Recommendation – Although facial scaring might be considered more serious than a scar located on another part of the body, the condition must still rise to the level of a permanent serious disfigurement in order to be actionable. In this case, photographs were of key importance in the Court’s Decision.

Facts – Plaintiff was one of approximately six (6) county employed EMT’s who responded to an emergency call on Defendant’s premises. Two individuals (a guest and a hotel manager) had fallen on Defendant’s parking lot, sustaining injury. Upon arrival, Plaintiff also fell, allegedly sustaining injury. Plaintiff was the only EMT who had any problem negotiating the area at issue.

The trial court granted Defendant’s Motion for Summary Disposition, finding that the condition was open and obvious. The Court of Appeals reversed that decision, finding that:

(1)     A special relationship exists between an innkeeper and his or her guests, mandating a heightened standard of care. Because Defendant held its property open to the general public for commercial purposes, Plaintiff was classified as an invitee, even though there was no direct commercial gain to the Defendant;

(2)     Even though the icy condition in the parking lot was open and obvious, the fact that Defendant allegedly created the situation and failed to take immediate remedial action, is a "special aspect" rendering the condition unreasonably dangerous. As such, a question of fact existed for jury determination.

McKim v. Forward Lodging, Inc., d/b/a Quality Inn Forward Conference Center, 266 Mich App 373 (2005).

Recommendation – This decision appears to be directly contradictory to the Michigan Supreme Court’s holding in Lugo v. Ameritech Corp., 464 Mich 510 (2001). In essence, this panel has created an exception to the "special aspects" doctrine which appears to be based upon knowledge by a property owner of a potentially dangerous condition existing on the premises. An Application for Leave to the Michigan Supreme Court has been filed. We will keep you updated on the results of that appeal.

Facts – Plaintiff’s Estate obtained a jury verdict against Defendant Farmer, which exceeded the limits of the underlying Citizens Insurance Company policy. The Defendant, believing that the case could have settled for the policy limits but for Citizens’ bad faith in pursuing settlement negotiations, assigned to Plaintiff’s Estate, his cause of action against Citizens’ bad faith failure to settle. As part of the agreement, Plaintiff agreed not to sue to collect the excess judgment as long as Defendant cooperated in the suit against Citizens.

After the bad faith action was filed, Citizens moved for summary disposition arguing that the covenant not to sue released the underlying claim and thus Citizens should also be released. The Trial Court disagreed.

The Michigan Supreme Court held that there is a material difference between a covenant not to sue and a release. A release immediately discharges an existing claim or right. In contrast, a covenant not to sue is merely an agreement not to sue on an existing claim. It does not extinguish a claim or a cause of action. The difference primarily affects third parties, rather than the parties to the agreement. J & J Farmer Leasing, Inc., et al. v. Citizens Insurance Company of America, ______ Mich ______ (2005).

Recommendation – Although this situation does not arise with much frequency, it is important to note the distinction between a covenant not to sue and a release. In general, the release of a principal also releases the surety.

In our February 2004 (Volume IV – Issue 2) newsletter, we discussed an unpublished decision by the Michigan Court of Appeals which held that long-term disability wage loss benefits received through an employer’s self-funded plan are not "other health and accident coverage" subject to coordination under MCL 500.3109a.

The Michigan Supreme Court has recently reversed that decision and has held that a self-funded long-term disability plan does constitute "other health and accident coverage" that is subject to coordination under § 3109a of the No-Fault Act (MCL 500.3109a).

The central question in determining whether coverage is "other health and accident coverage" subject to coordination under the No-Fault Act is not whether an insurance company actually provided the coverage, but rather whether the coverage is typically provided by an insurance company. (Reversed May 3, 2005) Jarrad v. Integon National Insurance Company, 472 Mich 207 (2005).

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