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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 Unpublished Decisions (or those which have not been published as of the date of newsletter distribution) will be cited by Appellate Slip Opinion number.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 – This litigation arises out of an automobile accident. Plaintiff claimed to have suffered various injuries constituting a serious impairment of body function. Defendant eventually filed a motion for summary disposition arguing to the contrary. In support of its motion, Defendant attached the Affidavit of the surgeon who performed Plaintiff’s back surgery. In his Affidavit, the doctor retracted his earlier opinion that the accident caused Plaintiff’s clinical presentation. Instead, he indicated that after having reviewed Plaintiff’s pre-accident records and radiology films, he was convinced that there was absolutely no change between the CT taken before the accident and the CT scan taken after the accident. The doctor stated that there was no evidence that the automobile accident even aggravated the pre-existing condition.

The trial Court granted Defendant’s motion in part, based upon the treating surgeon’s Affidavit. Plaintiff’s counsel contended that the defense violated the law by having an ex-parte meeting with the surgeon. As such, it was Plaintiff’s contention that the Affidavit was illegally obtained and non-admissible. The trial Court apparently disagreed and denied Plaintiff’s motion for reconsideration as well.

The Michigan Court of Appeals concluded that the Defendant’s ex-parte communication with Plaintiff’s physician was not done in compliance with the law. In Michigan, medical privilege may be informally waived by the patient by either failing to timely assert privilege after certain discovery requests, or by bringing an action against any defendant to recover for personal injuries where the patient produces a treating physician as a witness. Once the physician-patient privilege has been waived, a defense counsel may properly conduct an ex-parte interview with a Plaintiff’s treating physician.

In contrast to Michigan Law, under HIPPA the Plaintiff’s physician may only disclose protective health information under certain strict circumstances. Because Defendant’s trial counsel did not comply with those requirements, the doctor’s disclosures, including his Affidavit, were obtained in violation of HIPPA.

Given the lower court record, the Court of Appeals could not conclude that the trial Court’s refusal to disregard the affidavit was without justification or excuse. However, whether and in what manner the violation should be sanctioned is a matter committed to the sound discretion of the Court. Therefore, the trial Court did not abuse its discretion by refusing to disregard the Affidavit and levy sanctions against Defendant’s trial counsel. Belote v. Strange, Michigan Court of Appeals Unpublished Decision Dated October 25, 2005, Docket Number 262591.

Recommendation – As can be seen from the above decision, with the passage of HIPPA, it would be ill-advised to conduct ex parte communications with a treating physician, without the express permission of the patient. Failure to comply with federal regulations will in all probability result in very severe penalties.

Facts – Michael J’s Adult Daycare owned a van that was insured by Progressive. That van was equipped to transport one wheelchair bound passenger and five or six other passengers. As a part of its business, it would drive clients to and from their home to Defendant’s premises and it would also use the van if it took clients on field trips.

Michael J’s was required to have one million dollars in insurance liability coverage on the van that it used for such transportation. A wheelchair bound passenger in the Michael J’s van was injured when she somehow slumped out of her wheelchair. That passenger resided with her daughter who had No-Fault coverage through Plaintiff, State Farm. Plaintiff initially paid the benefits under the No-Fault Act and then submitted the expenses to Defendant for reimbursement claiming that Defendant held a higher priority under the No-Fault Statute to pay for such benefits. Defendant denied reimbursement.

The Trial Court eventually determined that Defendant was in a higher priority for payment under the statute.

The Court of Appeals believed that the dispositive question was whether the van owned by Michael J’s Adult Daycare in which the passenger was injured, was a "motor vehicle operated in the business of transporting passengers" as defined within MCL 500.3114(2). It determined that the legislature had created what amounts to a business household in §3114(2) and (3) so that the responsibility of providing benefits would be spread equitably among all insurers of motor vehicles. In the present case, Michael J’s Adult Daycare owned a van specifically equipped to handle transportation of wheelchair-bound and other passengers. It had purchased the van for that specific and primary purpose and Defendant provided insurance to the commercial entity for that vehicle. While transporting passengers was not the primary purpose of Michael J’s Adult Daycare, it was a significant component. Based on the legislative intent that MCL 500.3114(2) creates a "household" and applies to commercial situations, along with the fact that the transportation component of Michael J’s business was important enough for the business to purchase a vehicle that was used primarily for transporting clients, the court held that MCL 500.3114(2) applied in this situation and defendant had a higher priority to pay No-Fault benefits. State Farm Mutual Insurance Company v. Progressive Mutual Insurance Company, Michigan Court of Appeals Unpublished Decision Dated September 29, 2005 Docket Number 262833.

Recommendation – The Court determined that it was the intent of the legislature to place the burden of providing No-Fault benefits on the insurer of these types of motor vehicles, rather than on the insurer of the injured individuals. This scheme allows for predictability; coverage in the "commercial setting" will not depend on whether the injured individual is covered under another policy. When investigating a claim arising out of a commercial setting, one should specifically determine whether an alternate source of first party coverage may exist under the priority provisions of §3114.

Facts – Plaintiff filed suit against the owners and operator of a vehicle which had crossed into her lane of travel and allegedly caused Plaintiff injury. The Complaint set forth a claim for serious impairment of body function and economic damages beyond the personal protection benefits required by the No-Fault Act. The Trial Court granted Defendant’s Motion for Summary Disposition, finding no evidence of an objective manifestation of injury. The entire case was dismissed.

The Michigan Court of Appeals reversed in part, holding that a question of fact existed as to economic loss. Further, that claims for economic damages beginning three years after the date of the accident are actionable before those three years have passed (Cochran v. Myers, 146 Mich App 729 [1985]). Plaintiff had presented an Affidavit from her treating physician which indicated that her disability would continue indefinitely into the future. Netter v. E & P Enterprises, Inc., et al., Michigan Court of Appeals Unpublished Decision Dated October 27, 2005 Docket Number 263345.

Recommendation – It is important to remember that even though a claimant may not have suffered a serious impairment of body function or a permanent serious disfigurement as required by MCL 500.3135, a claim for excess economic loss will survive on the showing of automobile accident related impairment. That potential element of damage must be taken into consideration when evaluating a claim.

Facts – Plaintiff went to Defendant’s apartment complex to visit her daughter. As she was leaving, she tripped on a raised portion of sidewalk and fell to the ground. Her lawsuit alleged that Defendant negligently failed to maintain the premises in a reasonably safe condition, failed to warn of the unsafe condition, and breached an implied warranty of habitability by failing to maintain the premises in a reasonably safe condition as required by MCL 554.139.

The Trial Court granted summary disposition on the ground that the condition was open and obvious and that there were no special aspects which made the condition unreasonably dangerous.

In upholding the lower court’s decision, the Michigan Court of Appeals agreed that an average person of ordinary intelligence would have discovered the condition upon casual inspection. In addition, Plaintiff did not provide evidence to show at what point Defendant became aware of the existence of the alleged defect in the sidewalk. No evidence showed that the defect was reported to the Defendant prior to the accident. As such, the Trial Court correctly granted summary disposition of Plaintiff’s claim based on breach of statutory duty because no evidence created a question of fact as to whether Defendant failed to maintain the premises in reasonable repair. Johnson v. P.M. Group, Inc., et al., Michigan Court of Appeals Unpublished Decision Dated November 1, 2005, Docket No. 263167.

Recommendation – As illustrated above, it is very important to determine whether the premises owner had notice of the alleged defect, prior to an accident. If so, the premises may not have been fit for its intended use. The lease document should also be carefully examined so as to determine what if any covenants apply to the lessor.

Facts – Plaintiff slipped and fell on an ice-covered parking lot at Defendant’s gasoline station as he walked from the pump where he had fueled his semi-truck, to the station’s convenience store. There had been an unusually severe and uniform ice storm which covered the entire area surrounding Defendant’s station. The sole employee on duty began receiving complaints from customers about the extremely icy conditions in the parking lot, well before Plaintiff slipped and fell.

Plaintiff was required by his employer to fuel his truck at the beginning of the day. He was a regular customer of this particular station, visiting it almost every weekday. Plaintiff was aware that the parking lot was icy. After fueling his vehicle, he intended to purchase coffee and washer fluid from the convenience store, but slipped on the ice, fell and sustained injuries.

The Trial Court Denied Defendant’s motions for summary disposition, for directed verdict, and for judgment notwithstanding the verdict. It found the existence of the "special aspect" of unavoidability.

In upholding the Trial Court’s decision, the Court of Appeals found that because Plaintiff was required to fuel his truck first thing in the morning, and because he was out of washer fluid (and the weather was bad), there did exist "special aspects" which created a question of fact for jury determination. Defendant had argued that the condition was effectively avoidable because Plaintiff could have gone to a different service station to make his purchases. The Court of Appeals did not feel that there was any merit to that argument. Rather, it found that there clearly was no alternative, ice-free path, from the gasoline pumps, to the service station. As such, the ice was effectively unavoidable.

The Court of Appeals went even further. It indicated that even if the record showed that Plaintiff was aware of a realistic, safe alternative location to purchase his fuel, coffee, and windshield washer fluid, where Defendant has invited the public onto its premises for commercial purposes, the Court will not absolve a Defendant of its duty of care on that basis. To do so would be "disingenuous". Robertson v. Blue Water Oil Company, ______ Mich App ______ (2005).

Recommendation – This was a 2-1 decision. The dissent relied upon Lugo v. Ameritech, 464 Mich 512 (2001) and its progeny for the proposition that the icy condition of the premises was not effectively avoidable. Judge Kelly’s dissenting opinion is more in line with the currently existing case law generated by the Michigan Supreme Court. We will continue to monitor this decision in the event an application for leave to appeal to the Michigan Supreme Court is filed. There is no question but that this decision shifts the focus from an examination of the premises to an examination of the personal circumstances of the Plaintiff.

Facts – Plaintiff slipped and fell in the parking lot of his apartment complex. Defendant had contracted with a snow plowing service. Defendant’s Motion for Summary Disposition was granted by the Trial Court on the basis that the condition that Plaintiff encountered was open and obvious.

In affirming the lower court’s decision, the Michigan Court of Appeals held that as a general rule (and absent special circumstances) the hazards presented by snow and ice are open and obvious, and do not impose a duty on the property owner to warn of or remove the hazard. It further held that in determining whether a negligence action based on a contract and brought by a third party to the contract may lie, the threshold question is whether the Defendant owed a duty to the Plaintiff that is separate and distinct from the Defendant’s contractual obligations. If no independent duty exists, there can be no tort action based on contract. Accordingly, the snow removal contractor owed no duty to Plaintiff that was separate and distinct from his contractual obligations to the owner of the property. Therefore, the Trial Court did not err by granting summary disposition as to the snow removal company as well.  Teufel v. Watkins, 267 Mich App 425 (2005).

Recommendation – It is hard to reconcile this decision with that of Robertson, analyzed above. However, when investigating an accident of this type on behalf of a third-party contractor, keep in mind that if no independent duty exists to the injured person, there can be no tort action based on that contract. A full and thorough examination of all contractual obligations should be made in every circumstance.

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