Facts – Plaintiffs filed this action after the estate received a jury award in excess of $3 million against the Farmer parties for the wrongful death of Plaintiff’s decedent. Citizens was the insurer of the Defendants in the underlying case and provided a defense. Subsequently, Citizens paid its policy limit of $750,000 plus related costs, fees and interest, leaving the Farmer parties liable for the balance of the judgment.

Thereafter, both the Plaintiff (judgment holder) and Defendants in the underlying suit joined together and entered an agreement pursuant to which Plaintiffs would initiate a joint lawsuit against Citizens on the basis of bad faith failure to settle the wrongful death action. The remainder of the original judgment would be paid out of any proceeds from the suit against Citizens.

Citizens filed its Motion for Summary Disposition, claiming that the agreement between the parties functioned as a release by the estate of the judgment against the underlying Defendants. It reasoned that because the estate gave up any action to collect from the Farmer parties the unpaid portion of the judgment, the estate could not recover from Citizens because the insured would not actually suffer a loss for which the Defendant could be held liable.

The Court of Appeals disagreed. It found that this particular situation could be distinguished from the prior Supreme Court holding in Frankenmuth v Keeley, 436 Mich 372 (1990). In Keeley, the Supreme Court provided a shield to guard insurers found liable for bad faith failure to settle from paying a judgment balance that the insured could not have paid fully. The Court of Appeals believed that Keeley requires an insurer found liable for bad faith failure to settle, to pay an excess judgment to the extent the insured would have been able to pay, regardless of the insured’s obtainment of a release. In other words, it did not feel that an insurer should benefit from its insured’s maneuvering to protect itself from financial ruin. J & J Farmer Leasing, Inc., et al v Citizens Insurance Company of America, 260 Mich App 607 (2004).

Recommendation – This decision is significant from the standpoint that it appears to promote collusion between parties to the underlying action for purposes of seeking recovery of an excess verdict on the basis of "bad faith". We will continue to monitor this result.

Facts – Plaintiff’s insurance policy through Defendant contained underinsured motorist coverage. The insurance policy was accompanied by written endorsements changing specific terms. The latest amendment contained language indicating that no claimant may bring a legal action against the company more than one year after the date of the accident.

Plaintiff was injured in an automobile accident. He notified the Defendant shortly thereafter, and received no-fault benefits. Plaintiff also presented a residual bodily injury claim against the at-fault driver’s insurance company. Approximately one and one half years after the accident, Plaintiff notified Defendant of his claim for underinsured motorist benefits which was rejected on the basis that the claimant was tardy because no legal action could be brought within the policy’s limitation clause requiring that such an action be made within one year after the occurrence.

In upholding that particular policy clause, the Court of Appeals found that the relevant contractual language was not ambiguous, and clearly barred actions for underinsured motorist benefits brought after one year from the accident that gave rise to those claims. Hellebuyck v Farm Bureau General Insurance Company of Michigan, 262 Mich App 250 (2004).

Recommendation – Whenever a claim for benefits is presented, the applicable insurance policy, including endorsements in effect at the time of loss, should be reviewed so as to determine whether the claim may be barred pursuant to the terms of the policy itself.

Facts – Plaintiff drove to a local K-Mart store to buy some bags of garden soil. He parked his car 15 feet away from the outdoor display area and began carrying the bags of dirt to the truck. As he picked up one bag of soil, he slipped on wet dirt, tripped over another bag of dirt or caught his foot in a pallet and fell. His hip broke when it struck a pallet.

In upholding the Trial Court’s grant of Summary Disposition, the Court of Appeals held that although Plaintiff lifted the bag of soil to carry it to his car, there was no evidence that the act of lifting or carrying the bag caused him to fall. Additionally, Plaintiff was not in the process of lifting the bag into the vehicle, but rather, had only taken a step or two in the direction of the car when he fell. Nothing in connection with the automobile caused Plaintiff’s injury. Kimmer v Auto Club Insurance Company, Michigan Court of Appeals Unpublished Decision dated February 24, 2004, Docket No. 243502.

Recommendation – When investigating a claim of this type, keep in mind that accidental bodily injury does not arise out of the ownership, operation, maintenance or use of a parked vehicle as a motor vehicle unless certain requirements are met. In addition, the injury must have a causal relationship to the parked motor vehicle that is more than incidental, fortuitous, or "but for".

Facts – Plaintiff sustained non-displaced fractures of the C7 and T1 vertebrae. She spent one night in the hospital and wore a soft brace for a short time. The Trial Court granted Defendants’ Motion for Summary Disposition based upon lack of serious impairment of body function.

In upholding the Trial Court’s decision, the Michigan Court of Appeals indicated that in determining whether the impairment of an important body function is serious, the Court should consider factors such as the extent of the injury, the treatment required, the duration of the disability, and the extent of residual impairment and prognosis for eventual recovery. A Court may compare the Plaintiff’s lifestyle before and after the injury. The undisputed evidence was that after the accident, Plaintiff wore a soft cervical collar for approximately one month and took prescription pain medication for a short time. She had several follow-up consultations with physicians but required virtually no further treatment. After one month she resumed normal activities. Plaintiff stated that she felt pain in her neck from time to time. The Court noted that lingering pain in and of itself, does not create an issue of fact as to whether an injury has resulted in a serious impairment of body function. Plaintiff had no physician impose restrictions on her activities. She acknowledged that she was able to engage in any activities she wished without restrictions. No evidence showed that Plaintiff’s general ability to lead her normal life was adversely affected by her injury from this accident. Craig v Smeader, et al, Michigan Court of Appeals Unpublished Decision dated February 12, 2004, Docket No. 243513.

Recommendation – As always, a thorough, detailed inquiry as to Plaintiff’s pre- and post-accident activities should be made in order to assist in determining whether any particular injury has affected the person’s general ability to lead his or her normal life.

Facts – In his deposition, Plaintiff explained how his injuries changed his life. He testified that he was in a great deal of pain and his injuries interfered with the movement of his neck. He stated that he had not had a good night’s sleep in a long time, that his bicep twitched sometimes for a week straight, and that his neck pain also interfered with his ability to exercise. The Court found that these particular impairments did not interfere with Plaintiff’s general ability to lead his normal life. Plaintiff performed the same work that he did before the collision, and acknowledged that he was not under any limitations or restrictions in his work as a deputy sheriff. Plaintiff could perform all of the household tasks that he could do before the collision and had continued to take vacations. Plaintiff continued to exercise although not as much as he could have done before the accident.

In upholding the Trial Court’s grant of Summary Disposition, the Court of Appeals found that the limitations of which Plaintiff complained, were not significant enough to prove a claim that Plaintiff could no longer live his normal life. Flynn v Opperman, et al, Michigan Court of Appeals Unpublished Decision dated February 3, 2004, Docket No. 242017.

Recommendation – When investigating a claim of this type, keep in mind that actions speak louder than words. Although a Plaintiff may claim limitation, look at his/her post-accident activities, including continued employment.

Facts – As Plaintiff walked her dogs on the sidewalk, she approached an area where the cement had been removed, filled with gravel and partially covered by a broken piece of plywood. As she crossed, Plaintiff walked slowly, taking care to avoid the broken board. Before completely crossing the gravel however, Plaintiff fell forward and injured her elbow. She alleged that Defendants created an unreasonably dangerous defective condition.

In analyzing this claim, the Court found that Plaintiff was not an invitee because she did not enter the property in response to an invitation to conduct commercial business on the property. Consequently, she was considered a licensee, having entered the property with the owner’s consent to the public’s customary use of the sidewalk.

The Court then found that the open and obvious doctrine applies to negate the duty normally owed by an landowner to a licensee. In other words, the duty to warn of unreasonably dangerous conditions that are open and obvious does not extend to a licensee. Whether a danger is open and obvious depends on whether an average user with ordinary intelligence would have been able to discover the danger and the risk presented upon casual inspection. Plaintiff testified that she saw tire tracks in the stones. An average user of ordinary intelligence would know that gravel stones roll or shift when pressure is applied to them and that stones of this type are not uniform in size or shape and do not interlock. Nehring v Moore Home Builders, Inc., et al, Michigan Court of Appeals Unpublished Decision dated February 19, 2004, Docket No. 245694.

Recommendation – In order to prevail on a claim for negligence, Plaintiff must establish that Defendant owed a duty which was breached. It is extremely important to determine the status of an individual entering land (invitee, licensee or trespasser) before determining the level of duty owed.

Facts – Plaintiff was rendered a paraplegic after diving into a four-foot-deep above ground swimming pool at Defendants’ home. At his deposition, Plaintiff testified that he began his dive by quickly traveling across a two-tiered deck located immediately adjacent to the pool, then diving head-first into the water. Plaintiff, who had been drinking that night, apparently misjudged the diameter of the pool when making the dive and, as a result, struck his head at the far end of the pool. Plaintiff thereafter floated to the surface of the water, face-down and unable to move his legs.

Nearly three years later, Plaintiff filed suit alleging that Defendants were liable for his injury as a result of their failure to warn or otherwise protect him from the dangers associated with the pool.

The evidence revealed that Plaintiff was familiar with this particular structure. He testified that he could see the outline of the pool while standing on the deck. He estimated that it was round, and between 15-20 feet in diameter with a depth of five feet or so. He also acknowledged that he knew before entering the pool that a person could get hurt diving into a pool with these dimensions. Plaintiff even admitted that he adjusted his dive to account for the shallowness of the water. Further, Plaintiff stated that he was aware before the dive, that if he traveled across the deck quickly enough, he could be propelled all the way across the pool and strike the opposite side.

The Court of Appeals reiterated the fact that shallow water is normally readily apparent or discoverable upon casual inspection. The potential for injury associated with diving into such observably shallow water is a common and generally recognized danger. Sanders v Bellinger, Michigan Court of Appeals Unpublished Decision dated February 12, 2004, Docket No. 245825.

Recommendation – As can be seen above, the Appellate Courts will utilize the open and obvious danger doctrine under a variety of circumstances if the facts and circumstances so warrant.