Facts – This case arises from efforts by an insurance company to enforce its plan’s subrogation provision. The subrogation provision requires those insured by CHPO to cooperate with it in its efforts to recover amounts paid on the insured’s behalf. Although the subrogation provision states no explicit obligation to reimburse the insurer for monies received from tortfeasors, CHPO said that such a duty should be found in the subrogation provision.

Defendant argued that the Federal Court did not have jurisdiction to entertain this action, or in the alternative, that CHPO had no right to proceeds recovered from third-party tortfeasors.

In reversing the District Court’s decision, the 6^th Circuit Court of Appeals held that ERISA does not provide jurisdiction for fiduciaries seeking to enforce a contract’s reimbursement provisions through money damages. CHPO’s claim could not be considered to be a subrogation action, nor was it a claim for restitution. The lawsuit was essentially a claim in contract to impose personal liability on the Defendant. Community Health Plan of Ohio v Mosser, United States Court of Appeals for the 6^th Circuit, Opinion dated October 21, 2003, Docket No. 01-4095.

Recommendation – If faced with a situation where an ERISA carrier seeks to enforce a lien, a close examination of the basis for that lien should be made, including an analysis of the subrogation provision upon which such claim is based.

Facts – Cass and Schoenlein were riding motorcycles, following a van driven by Schaening. Schaening activated her left turn signal and slowed to make a turn. Her van never stopped moving. At the same time, four motorcycles were traveling in the opposite direction. Cass waved at the oncoming motorcyclists. As he was doing so, he failed to notice that Schaening had slowed her van and was waiting to turn left. Cass swerved to the right and struck Schoenlein’s motorcycle, then hitting the rear of Schaening’s van. The impact caused Cass’ motorcycle to careen into northbound traffic, striking one of the oncoming motorcycles. That cyclist (Fry) was thrown from his motorcycle and sustained serious injuries.

Fry’s insurer paid PIP benefits and then filed suit for recoupment on the ground that Schaening’s van was involved in the accident. The Trial Court ultimately determined that the van was involved in the accident because it was on the road, and because the impact of Cass’ motorcycle against it, caused him to veer into oncoming traffic.

In upholding the lower Court’s decision, the Court of Appeals found that a motorcyclist may collect PIP benefits if he is injured in an accident where a motor vehicle is "involved" [MCL 500.3114(5)]. The term "involved in the accident" has previously been determined to include a situation where a motor vehicle is moving at the time of the accident and actively contributes to either the accident or injuries at issue. The showing of a mere "but for" connection is not enough. Physical contact is not required nor is fault a relevant consideration. The fact that Schaening may have appropriately decelerated is irrelevant. This action directly caused Cass to swerve to avoid hitting the van. The motor vehicle need not be the proximate cause of the accident. The chain of events that resulted in Fry’s injuries was already set in motion when Schaening’s van decelerated. State Farm v Fry and GEICO General Insurance Company, Michigan Court of Appeals Unpublished Decision dated September 30, 2003, Docket No. 240645.

Recommendation – The Court seemed to distinguish prior case law involving parked and/or stopped vehicles. Where a vehicle only passively contributes to the accident, it is not "involved" by statute. In this case however, Schaening’s van had been traveling at a normal rate of speed and then slowed to make a left turn. It is suggested that a thorough examination of facts and circumstances leading up to the collision be made as quickly as possible and that an analysis be performed so as to determine whether the insured vehicle may well have been "involved".

Facts – As Plaintiff crossed the front walkway of Defendant’s store, she slipped on a patch of ice and fractured her left leg and ankle. Defendant’s Motion for Summary Disposition based upon the open and obvious doctrine was granted.

In upholding the Trial Court’s decision, the Court of Appeals indicated that when deciding a case based on premises liability, a two-step analysis is to be applied. First of all, one must determine whether the invitee had actual knowledge of the condition. If not, the question becomes whether the danger was so obvious that the invitee might reasonably be expected to have discovered it. In applying the objective prong of the test, the Court determines whether an average person of ordinary intelligence would have discerned the risk upon casual inspection. In this case, Plaintiff testified that she had previously slipped and fallen due to conditions similar to those she encountered on the date of the accident. At the time of the incident, she noted that the walkway was "slipperier" than she first thought and attempted to walk carefully. She was aware of the icy conditions and the potential danger of slipping before she fell. As such, the average person with ordinary intelligence would not only have seen the condition of the sidewalk, but would have discovered the risk of slipping on it. Therefore, no reasonable jury could have concluded that these icy conditions did not constitute an open and obvious hazard.

In addition, the Court found that the condition did not contain those "special aspects giving rise to a uniquely high likelihood of harm under the circumstances" as described within Lugo v Ameritech Corp, Inc., 464 Mich 512 (2001). In that case, the Supreme Court stated that special aspects occur when the dangerous condition is effectively unavoidable, or where the open and obvious condition imposes an unreasonably high risk of severe harm. In the present case, there was no evidence of either. Despite the open invitation to do business with Office Max, Plaintiff was not forced to encounter the open and obvious hazard in front of the store. Even if no safe path to the entrance existed, she could have shopped on a different day or with a retailer at a safer location. Buckenmeyer v Office Max, Inc., et al, Michigan Court of Appeals, Unpublished Decision dated October 21, 2003, Docket No. 242953.

Recommendation – This case is a very good example of the type of analysis which most Courts will make when confronted with an "open and obvious" type situation. Certainly, Plaintiff’s prior experiences with snow and ice will be relevant to show notice of a potentially hazardous condition.

Facts – Plaintiff suffered a fractured leg at the home of her son, when her son’s unrestrained 180 pound Great Dane dog bolted through a doorway, caught his head in her purse strap and dragged her backwards down two steps onto a concrete patio. Plaintiff had been to her son’s home on many occasions and testified that she knew that the dog would run outside if the door was open. After inching the door open and announcing her presence, the dog put its head through the door opening. When Plaintiff bent over to pet the dog, it forced itself through the opening and dashed outside.

The Trial Court granted Defendant’s Motion for Summary Disposition, citing Plaintiff’s prior knowledge of the dog’s propensities. The Court also determined that a person of average intelligence would certainly appreciate the danger of opening the door to someone’s house when they see a 180 pound unrestrained dog, clearly visible on the inside.

In upholding the Trial Court’s grant of Summary Disposition, the Court of Appeals held that Plaintiff had failed to demonstrate a genuine issue of material fact regarding whether Defendant knew or should have known that the dog posed an unreasonable risk of harm. It was undisputed that the animal had a gentle disposition and never exhibited any vicious inclinations. Plaintiff had never complained to the Defendant regarding the dog’s behavior. Even Plaintiff characterized this as a "freakish accident". It was simply not foreseeable that the dog would become entangled in Plaintiff’s purse strap. Accordingly, Plaintiff also failed to make a prima facie case of negligent failure to restrain or control the dog. Additionally, Plaintiff was also properly denied permission to amend her pleadings to allege a common law strict liability claim. Myers v Myers, Michigan Court of Appeals Unpublished Decision dated October 21, 2003, Docket No. 241298.

Recommendation – As illustrated above, it is important to conduct a preliminary investigation with respect to the claimant’s knowledge of the premises as well as the alleged dangerous condition. Where the Plaintiff is a family member/frequent visitor, the Courts should impose a much higher burden given that individual’s familiarity with the premises.

Facts – Plaintiff filed an action against the Defendants claiming that they negligently conducted an insurance investigation on him and stalked him. Plaintiff had suffered a minor concussion in an automobile accident. He eventually filed a third-party action claiming closed head injury. The automobile insurer felt that the amount of the mediation award was excessive, particularly in light of two medical evaluations previously performed. Defendants were hired to perform a credit report background and activities check, as well as conduct surveillance.

The first surveillance effort was compromised when Plaintiff discovered that he was being followed, and confronted the investigator. It appears as if Plaintiff also became aware of a second surveillance, and called the local authorities. In the meantime, an evaluating psychiatrist recommended that any investigative surveillance of Plaintiff be terminated because of its potential to provoke additional symptoms. A fourth surveillance occurred a few weeks thereafter which appears to have also been discovered by Plaintiff.

Plaintiff filed suit against Citizens Insurance Company and Defendant’s private investigators. The Trial Court granted its Summary Disposition on all claims except the claim of negligence against Citizens and the claims of stalking and negligence against the investigators. Citizens subsequently settled and was dismissed.

The Court of Appeals held that the civil stalking statute (MCL 600.2954) creates a civil cause of action for victims of stalking as defined by criminal stalking statute (MCL 750.411h). Stalking is defined as the "willful course of conduct involving repeated or continuing harassment of another individual that would cause a reasonable person to feel terrorized, frightened, intimidated, threatened, harassed or molested and that actually causes the victim to feel terrorized, frightened, intimidated, threatened, harassed or molested." The term "harassment" is defined as "conduct directed toward a victim that includes, but is not limited to, repeated or continued unconsented contact that would cause a reasonable individual to suffer emotional distress and that actually causes the victim to suffer emotional distress. Harassment does not include constitutionally protected activity or conduct that serves a legitimate purpose."

The Trial Court found that the surveillance initially served a legitimate purpose, but that a genuine issue of material fact as to its legitimacy arose when the second and fourth surveillance activities continued after Plaintiff discovered that he was followed. Once a standard of conduct is established, the reasonableness of an actor’s conduct under the standard is a question for the fact finder, not the Court. The Court of Appeals agreed. However, the Court could find no authority supporting the existence of any common law duty owed by the Defendants. As such, Plaintiff’s negligence claim was properly dismissed. Nastal v Henderson & Associates Investigations, Inc., Nathaniel Stovall and Andrew Conley, Michigan Court of Appeals Unpublished Decision dated October 23, 2003, Docket No. 241200.

Recommendation – This is an unusual case, especially in light of the fact that surveillance was discovered by Plaintiff on various occasions. It is suggested that when surveillance is to be utilized, the private investigators be directed to immediately break off contact in the event they are discovered. An attempt should then be made to determine whether continued surveillance might subject the insurer to a claim for "stalking" or intentional infliction of emotional distress.

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.

Previous/Next