Facts – Plaintiff's decedent was a 19 year-old exotic dancer. After leaving work, she was killed when the vehicle she was driving struck a tree. Decedent's blood alcohol level was 0.26, more than twice the legal limit. This wrongful death action was filed, alleging that decedent's intoxication and subsequent death resulted from Defendant's practice of allowing customers to furnish underage dancers with alcoholic beverages.

The Michigan Court of Appeals held that the trial court erred in granting summary disposition for Defendant on the basis of the exclusive remedy provision of the Dramshop Act. That act created a cause of action against a liquor licensee for damage or injury to innocent third-parties proximately caused by the unlawful selling, giving, or furnishing of alcoholic liquor by the licensee to a minor or a visibly intoxicated person. A claim is not precluded merely because the claim involves the unlawful furnishing of alcohol. This matter was remanded for consideration of the Plaintiff's assertion that Defendant breached duties under the common law. In other words, if Plaintiff has set forth a proper claim based on a duty under the common law (i.e. premises liability, negligent supervision or entrustment, inherently dangerous work activity, failure to provide a safe place to work) then summary disposition is improper (Madejski v. Kotmar Ltd., 246 Mich App 441 [2001]).

Recommendations – Application of the above ruling will be especially valuable in a situation where a liquor licensee can be named for defensive purposes (such as the filing of a notice of non-party fault to apportion negligence). An analysis of the legal theory asserted by Plaintiff should also be performed in order to determine whether a dramshop carrier's routine third-party claim for indemnification should be dismissed. In other words, if a dramshop defendant's liability does not arise by virtue of the dramshop statute, no claim for statutory indemnification should be allowed.

Facts – Plaintiff brought suit against Defendants under MERA, alleging liability for response activity costs incurred in cleaning up contamination caused by the leaking of hazardous substances from a storage tank. At trial, the parties hotly contested whether a Type A or Type B cleanup should have been used to remediate the site, and whether the issue of cost should enter into any examination of the appropriate type of cleanup.

The jury found that although Defendants were liable, Plaintiff failed to establish that any response activity costs in excess of $990,000.00 were necessary. Given that Plaintiff had already been reimbursed that amount by the State pursuant to the then-current version of the Michigan Underground Storage Tank Financial Assurance Act (MUSTFA), Plaintiff took nothing on its claim.

The Michigan Court of Appeals held that the issue of cost-effectiveness is properly raised in an action such as the case at hand. To recover its cleanup costs from a party responsible for the pollution, a private party might show that its response activity costs were (1) necessary and were incurred, (2) consistent with MDNR rules.

While remedial action is required, the rules do not mandate that every contaminated site be cleaned to the high degree that a Type A cleanup requires. This court found that there must be a balancing of the goal of adequately remediating a contaminated site, with the goal of minimizing cost of remediation (RCO Engineering, Inc. v ACR Industries, Inc. [On Remand], 246 Mich App 510 [2001]).

Recommendation – Given the foregoing statutory interpretation, it is strongly recommended that the most cost-effective environmental contamination response activity be implemented, consistent with existing requirements. In the event subrogation or reimbursement may be pursued, it would be wise to fully document all governmental and other professional assessments and recommendations.

Facts – This case presents an issue of first impression regarding the interpretation of a provision in an automobile insurance policy that declared a $100,000.00 "per person" liability limit for bodily injury damages and a $300,000.00 "per occurrence" liability limit for bodily injury damages. Two pedestrians were killed by a single car. Wrongful death claims were filed. The driver of the automobile settled with the Personal Representative of the Estates for $300,000.00. The driver's auto insurance company sought to rescind the settlement on the basis of mutual mistake because the policy limited its liability under the facts to $100,000.00 "per person." The trial court disagreed and ruled that the policy language unambiguously stated that the $300,000.00 "per occurrence" policy limit applied to all accidents in which two or more people suffered injury.

In reversing the above ruling, the Michigan Court of Appeals held that an overwhelming majority of jurisdictions have agreed that any contradiction between per person and per occurrence liability limits is resolved by explicit policy language making the per occurrence limit "subject to" the per person limit. Because the policy language in this case was unambiguous, it must be enforced as written (Farm Bureau v. Buckallew, 246 Mich App 607 [2001]).

Recommendations – A plain reading of the insurance contract in effect on the date of loss will presumably demonstrate lack of ambiguity. If not, declaratory relief should be immediately requested.

Facts – Plaintiff visited Defendant's ski facility located in Ontario, Canada, after seeing an advertisement in a Michigan newspaper. Plaintiff was allegedly injured when thrown to the ground as a result of being negligently loaded onto a ski lift operated by Defendant's employees. The trial court granted summary disposition for Defendant on the basis that the court lacked personal jurisdiction over the defendant.

Michigan's long-arm statute pertaining to limited personal jurisdiction over corporations provides for jurisdiction under a variety of scenarios, including the transaction of any business within the state. In this case, it was undisputed that Defendant engaged in advertising in Michigan. In upholding the trial court's dismissal of this action, the Michigan Court of Appeals found that Defendant's contacts with Michigan were not of such nature and quality as to make it subject to the exercise of general personal jurisdiction. A non-resident corporation's advertising in Michigan by itself can constitute the transaction of business where there is both evidence of a clear intent by the corporation to further the ends of its business by targeting Michigan residents for profit, as well as evidence that the corporation's advertising led directly to establishing business relationships with Michigan residents. Although Defendant's advertising constituted a transaction of business in Michigan, it was found that the connection between Plaintiff's cause of action and Defendant's Michigan advertising was so attenuated that it was unreasonable to exercise jurisdiction on that basis. Simply put, the advertising activities did not cause Plaintiff's alleged injuries (Oberlies v. Searchmont Resort, Inc., 246 Mich App 424 [2001]).

Recommendations – When attempting to determine whether an out-of-state corporation should be added as a party defendant, it is crucial that more than a mere random, fortuitous or attenuated contact exist with this state. The fact that a corporate defendant is not physically present in Michigan will not defeat the exercise of personal jurisdiction.

Facts – The evidence presented at trial showed that less than two weeks after the accident, Plaintiff visited a physician referred by her attorney, complaining of pain in the lower back, neck and hip. That physician concluded that Plaintiff's injuries resulted from the accident. The doctor stated that he based this conclusion on Plaintiff's assertion that she had not suffered the same symptoms before the accident. At trial, Plaintiff admitted that she had an extensive history of medical problems preceding the accident. Defense Motion for Directed Verdict was granted by the trial court.

In upholding the lower court ruling, the Michigan Court of Appeals found that given Plaintiff's general failure to inform her treating physicians of her previous injuries and medical treatment, and the physicians' admission that the validity of their medical conclusions was dependent on the accuracy of the history provided by the patient, the medical testimony attributing her injuries to the automobile accident at issue was not reliable. The court concluded that Plaintiff had failed to present substantial evidence from which a jury could conclude that but for the accident, her injuries would not have occurred (Walker, et al. v. Lawrence, Michigan Court of Appeals (Unpublished) decided April 18, 2001, Docket #211931).

Recommendation – Quite often, a Plaintiff will "forget" to disclose pre-accident conditions which are relevant to the issue of causation. Defense counsel should, where possible, establish through the treating physician that any opinion with respect to accident related injury is based upon Plaintiff's history as opposed to an actual review of prior medical records. If Plaintiff's history was materially misleading, the appropriate motion should be filed.

Facts – Plaintiff had a health insurance policy through Blue Cross/Blue Shield of Michigan which covered his medical care. The parties did not dispute Plaintiff's entitlement to uncoordinated personal protection benefits from Defendant in addition to coverage provided by the health insurer. Motions for Summary Disposition were filed, asking the trial court to determine the rate of reimbursement. Because the parties challenged neither the reasonable necessity of Plaintiff's medical care, nor the reasonableness of healthcare provider's charges for theses services, the Court of Appeals focused on the statutory meaning of the term "incurred."

Plaintiff's attorney argued that his client became liable to pay healthcare providers when he accepted their services. Consequently, Plaintiff claimed to have incurred charges for the full amount of services rendered. Defense counsel contended that because Plaintiff bore no liability for the full medical service amounts initially charged by his health care providers (because of the applicability of the Blue Cross schedule of payments), Plaintiff had not incurred the full charges.

The Michigan Court of Appeals concluded that in light of the ordinary meaning of the term "incurred", as well as the public policy behind the No-Fault Act, "incurred charges" (MCLS 500.1307[1][a]), do not encompass any amounts (i) exceeding those that Plaintiff's health insurer actually paid in satisfaction of Plaintiff's medical bills and (ii) for which Plaintiff no longer bears legal responsibility. Plaintiff's reliance on Munson Medical Center v Auto Club Insurance Association (218 Mich App 375 [1996]); and Hofmann v Auto Club Insurance Association (211 Mich App 55 [1995]), was found to be misplaced for reasons as set forth within footnote 3 of this decision (Bombalski v. Perri and Auto Club Insurance Association, Michigan Court of Appeals [For Publication], decided September 25, 2001, Docket #220424).

Recommendation – This case is of significance with respect to the payment of No-Fault first-party benefits under an uncoordinated contract of insurance. In practice, the claims handler should first make an evaluation as to the reasonable necessity of Plaintiff's claimed medical care. A copy of all explanation of benefits forms should then be acquired for review and analysis. Often times (especially where Blue Cross/Blue Shield is involved), a significant reduction in payment for medical services has been made by the healthcare insurer pursuant to contract.

Facts – SPECT Imaging, Inc., brought actions against various No-Fault insurers, alleging in part that Defendants violated the No-Fault Act (MCLS 500.3101 et seq.), by failing to pay for Single Photon Emission Computed Tomography (SPECT) scans performed by Plaintiff, on the brains of the Defendant's insureds for diagnosis of mild traumatic brain injury. The trial court (Wayne County) granted summary disposition for the Plaintiff.

In reversing the lower court, the Michigan Court of Appeals found that the record did not contain evidence to support Plaintiff's assertion that each particular expense stemming from Plaintiff's performance of brain SPECT imaging on Defendant's insureds, was reasonable and necessary. Plaintiff had failed to put forth any evidence addressing the condition of each individual insured, the injuries suffered, or the need for a brain SPECT scan relating to each individual. As such, the Court could not say "with certainty" that brain SPECT scans were reasonably necessary expenses in the treatment of each individual.

In the Court's view, the conflict among expert witnesses, together with dissension in the medical literature created a genuine factual issue sufficient to withstand summary disposition.

It was further ordered that on remand, the trial court must conduct an evidentiary hearing to determine whether expert testimony and evidence relating to SPECT imaging are admissible under MRE 702 and Davis-Frye. The party proffering evidence bears the burden of demonstrating its acceptance in the medical community. The lower court was instructed that in the event it determined that expert testimony and evidence relating to SPECT imaging satisfy evidentiary standards and are therefore admissible at trial, the ensuing determination of whether brain SPECT imaging was a reasonably necessary expense in the treatment of Defendants' insureds pursuant to statute, is a question reserved for the Trier of Fact (SPECT Imaging v. Allstate/ACIA, 246 Mich App 568 [2001]).

Recommendations – When reviewing first-party claims for reimbursement, special attention should be given to those tests or procedures which may be "novel" in their approach to treatment, or which may be of questionable scientific benefit. The burden is on Plaintiff to demonstrate that said procedures have gained general acceptance in the scientific community.

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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