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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 Unpublished Decisions (or those which have not been published as of the date of newsletter distribution) will be cited by Appellate Slip Opinion number.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 – Defendant entered into a five-year employment agreement with Plaintiff. That agreement contained an arbitration provision. Defendant ultimately filed a demand for arbitration with the American Arbitration Association. Although Plaintiff initially consented to that procedure, it later revoked its agreement to arbitrate. Nonetheless, the arbitrator decided that the arbitration hearing would proceed as scheduled. It was his opinion that the arbitration provision that was agreed to in the employment agreement, could not be revoked unilaterally.

Plaintiff filed a declaratory judgment action and requested that the Court invalidate the pending arbitration and find that the arbitration provision in the employment agreement was unilaterally revocable because it lacked the prerequisite language to be a statutory agreement (which is non-revocable).

The Circuit Court denied Plaintiff’s request. The arbitration proceeded as scheduled and a substantial award was made to the defendant. The Trial Court granted Defendant’s motion for summary disposition requesting enforcement of the award. The Court of Appeals reversed, holding that the Trial Court had erred in enforcing the common-law arbitration agreement that Plaintiff had revoked before the award was announced.

The Michigan Supreme Court held that this state has long recognized that a distinction exists between statutory and common law arbitration. Statutory arbitration is provided for in MCL 600.5001 et seq. In order for an agreement to qualify for statutory arbitration, it must meet certain requirements. The agreement must be in writing and it must state that a judgment of any Circuit Court may be rendered upon the award made pursuant to such agreement. The party may not unilaterally revoke a statutory arbitration agreement.

When the parties’ agreement to arbitrate does not comply with the requirements of the above statute, the parties are said to have agreed to a common law arbitration. Common- law arbitration is characterized by its unilateral revocation rule. This rule allows one party to terminate arbitration at any time before the arbitrator renders an award.

The Supreme Court further held that the MAA did not pre-empt common-law arbitration in Michigan. In common-law arbitration, Plaintiff has the right to withdraw from the arbitration process at any time until the arbitrator makes an award. Wold v Strat, 474 Mich 223 (2006).

Recommendation – Statutory arbitration is a more formal procedure which requires the parties to comply with certain rules and regulations. Common-law arbitration is less formal and would allow the parties to structure the proceeding in a manner which might be more compatible with the facts and circumstances in dispute. However, as illustrated by the above opinion, common-law arbitration does allow for unilateral revocation by any one party. That fact should be taken into consideration before agreements are formalized.

Facts – Plaintiff was injured in a traffic accident while delivering goods for his employer. He filed claims for both Workers’ Disability Compensation benefits and for no-fault benefits. Eventually, both claims resulted in litigation. Because the accident was work related, the PIP insurer was entitled to set-off a portion of the no-fault benefits that Plaintiff received from the Workers’ Compensation carrier. Because of the set-off, Plaintiff’s no-fault action was stayed pending resolution of the Workers’ Compensation claim. Defendant insurer joined in the Workers’ Compensation proceeding.

In the Workers’ Compensation claim for disability benefits, the parties actually litigated, and the magistrate necessarily determined the nature, extent, and duration of Plaintiff’s alleged injuries and disabilities. The magistrate’s decision evaluated Plaintiff’s injuries, determined the period for which he was entitled to benefits, and determined that the last date of disability for any of Plaintiff’s injuries arising from the accident, was November 17, 2003.

Plaintiff did not exercise his statutory right to appeal the magistrate’s decision. Rather, Plaintiff resumed litigation of the no-fault action in the Trial Court, asserting claims for additional benefits. The first-party insurer responded by moving for summary disposition on the basis of collateral estoppel, arguing that the factual issues on which Plaintiff’s claim for no-fault benefits were predicated, had already been decided in the Workers’ Compensation proceeding. The Trial Court granted the insurer’s motion.

In affirming that decision, the Court of Appeals held that the doctrine of collateral estoppel is intended to relieve parties of the costs and vexation of multiple lawsuits, conserve judicial resources, and encourage reliance on adjudication by preventing inconsistent decisions. Collateral estoppel may apply to administrative determinations where they are adjudicatory in nature and provide a right to appeal, and the Legislature intended to make the decision final absent an appeal.

Based on its review of the record in this case, the Court found that all requirements of collateral estoppel were satisfied. Abouhashim v Northland Ins, Michigan Court of Appeals Unpublished Decision Dated April 18, 2006, Docket Number 264932.

Recommendation – An inquiry should always be made as to whether Workers’ Compensation benefits were paid as a result of automobile accident related injuries. In this case, Plaintiff also argued that under the no-fault act, he was able to bring subsequent claims for any worsening medical condition related to injuries he received in this accident. The Court took no position on any new claims that may arise related to injuries that Plaintiff sustained in the accident and which Plaintiff may be able to support with new evidence that was not used in adjudicating Plaintiff’s Workers’ Compensation claim. As such, the issue of entitlement to future benefits was not addressed.

Facts – Plaintiff slipped and fell on Defendant’s property as he attempted to enter Defendant’s bowling alley from the parking lot. The jury returned a substantial verdict in Plaintiff’s favor. The Trial Court granted Defendant’s motion for directed verdict of no cause for action.

In affirming the lower court’s decision, the Michigan Court of Appeals considered three recent orders of the Michigan Supreme Court which had held that various Defendants were entitled to summary disposition on the open and obvious question, even though there were no factors in those cases, other than the snow covered surfaces themselves, that would have forewarned the Plaintiffs regarding their slipperiness. On the basis of those precedents, this Court held that as a matter of law, that, by its very nature, a snow covered surface presents an open and obvious danger because of the high probability that it may be slippery. Ververis v Hartfield Lanes, 271 Mich App 61 (2006).

Recommendation – Obviously, this decision is important in that it reaffirms the fact that Michigan residents should be on notice that snow and ice can be present during the winter months and that a heightened degree of caution should be utilized.

Facts – Plaintiff was injured when he fell while attempting to walk inside Defendant’s gas station to pay for gas. He claimed that he fell because the sidewalk was cluttered, which made it difficult to see that someone was exiting from the only operational glass door, just as he was approaching it, which caused him to jump back, encounter a height differential between the sidewalk and the parking lot, and slip and fall on ice and snow. Defendant was granted summary disposition on the ground that the allegedly dangerous conditions were open and obvious and no special aspects existed that made the conditions unreasonably dangerous.

In affirming the Trial Court’s grant of summary disposition, the Michigan Court of Appeals held that the allegedly dangerous conditions at issue were in fact, open and obvious. A "cluttered sidewalk" was reasonably discoverable, as was the "blocked store entrance", snow and ice, height differential between the sidewalk and parking lot, the customer exiting the store through the only operational door, and that door swinging open. Further, the configuration of the door and sidewalk did not create a uniquely high likelihood of harm. Jeffery v Speedway Superamerica, LLC, Michigan Court of Appeals Unpublished Decision Dated April 20, 2006, Docket Number 259213.

Recommendation – This case was handled by our office. Through discovery, it became clear that the condition at issue was relatively common and that the sole proximate cause of this occurrence was Plaintiff’s inattentiveness. Again, investigation should focus on the existence of "special aspects" in order to determine whether an exception to the open and obvious doctrine may be present.

Facts – Plaintiffs and Defendants entered into an a contract for the sale and purchase of Defendant’s home. Prior to the execution of the contract, Defendants delivered to Plaintiffs, a seller disclosure statement. The disclosure statement made certain representations, notably that no evidence of water had been observed in the home’s basement, that the roof was replaced in 1993, that Defendants were unaware of any firing ranges in proximity to the property, and that Defendant’s were unaware of any major damage to the property from fire, wind, flood, or landslides. Prior to closing, Plaintiffs had various independent inspections performed, none of which indicated any relevant problems with or conditions of the property. The parties thereafter closed on the contract and title was transferred to Plaintiffs. Subsequently, Plaintiffs experienced various problems relating to the information disclosed.

The Trial Court granted Defendants’ motion for summary disposition, holding that the Seller Disclosure Act (MCL 565.951 et seq.) does not expressly authorize a cause of action for violation of its provisions. The Court of Appeals agreed, indicating that the Act does however, provide a remedy for violations of the duty it imposes (the failure to timely disclose). This remedy (termination of an otherwise binding purchase agreement) is only available prior to the transfer of title.

In the event that disclosures are fraudulently made, the common law allows for a cause of action for fraudulent misrepresentation as an avenue of relief. Mjoseth v Ellis, Michigan Court of Appeals Unpublished Decision Dated April 18, 2006, Docket Number 257840.

Recommendation – Although the SDA allows for seller liability in a civil action alleging fraud or violation of the Act brought by a purchaser on the basis of misrepresentation or omissions in a disclosure statement, there are limitations. The Legislature has clearly intended that common law causes of action in fraud operate as the SDA enforcement mechanism. A factual basis for fraud or misrepresentation must be present and any investigation in that regard should be geared toward the proofs necessary to establish those causes of action.

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