Facts – Defendants Vaughan and Giovanni were playing in a drop hockey game, meaning the game was not officiated and checking was not allowed. Both players were wearing full protective gear and during one point in the game, both players were skating toward the puck when Vaughan made contact with Giovanni. As a result, Giovanni lost his balance and crashed into the boards and sustained a broken collar bone. Vaughan had acknowledged that he intentionally made contact with Giovanni, stating that he pushed Giovanni on the shoulder to cause him to concentrate on keeping his balance rather than pursuing the puck. Giovanni filed suit against Vaughan alleging assault and battery and gross negligence. Allstate then filed the instant declaratory action seeking judgment that the homeowners policy relieved it of the duty to defend or indemnify, in the underlying suit.

Allstate moved for summary disposition pursuant to MCR 2.116(C)(10), arguing that it had no duty to defend or indemnify Vaughan because the incident that resulted in the injury to Giovanni did not rise from an occurrence, i.e. did not constitute an accident, because it fell under the policy’s Intentional Act Exclusion. Vaughan also moved for summary disposition arguing that Allstate was obligated to defend and indemnify him in the underlying action. He contended the evidence showed that the incident constituted an accident and although the contact was intended, the consequences were unintended, and reasonable minds could not disagree that he would not have expected injury to Giovanni. The Trial Court denied Allstate’s motion, and granted Vaughan’s motion. The Trial Court concluded reasonable minds could find that Vaughan did not intend to injure Giovanni.

On Appeal, the Court noted in order to determine whether an insurance policy provides coverage, the inquiry is two-prong, and the Court must consider both the act and the consequences. Vaughan’s deposition testimony established he intentionally made contact with Giovanni while they both pursued the puck down the ice. Clearly, Vaughan had intended to push Giovanni. The critical question was whether Vaughan could have reasonably expected the injury to Giovanni. The Trial Court concluded the injury could not have reasonably been anticipated and the Court of Appeals agreed. An injury may reasonably be expected if, applying an objective "reasonable person" standard, it "was the natural, foreseeable, expected, and anticipated result of the intentional or criminal conduct".

The Court of Appeals found that a reasonable person, aware of all the facts and circumstances, could not have found the injury was an expected result of a contact between the two individuals. It was undisputed that contact, including rough contact, occurs in hockey. In addition, both parties were experienced hockey players and were wearing full protective gear. A reasonable person could not expect incidental contact, even if intentional, to be anything but part of the game. Therefore, a reasonable person could not anticipate an injury would occur where, as in this case, both players were experienced players and were wearing the proper protective equipment. Allstate v Vaughan, Michigan Court of Appeals Unpublished Decision, Dated October 31, 2006, Docket Number 268908.

Recommendation – While an act may be intended, the insurer must also look to the consequences and whether they were reasonably and foreseeably intended. An injury may reasonably be expected if, applying an objective reasonable person standard, the injury was a natural, foreseeable, expected or anticipated result of the intentional act. Where a reasonable person could not expect or anticipate injury, coverage will be afforded.

Facts – In March 2004, Plaintiff Cote was walking to a store when he was allegedly struck by a truck. In September 2004, Plaintiff claimed PIP benefits against Farmers Insurance Company, the insurer of the truck. In the alternative, he claimed he was entitled to PIP benefits under the no-fault policy issued to New Horizons by Auto Owners Insurance Company. At the time of the incident, Cote was a member of the Fairweather Lodge which is a community mental health program for brain damaged and mentally challenged individuals. The Fairweather Lodge Program was managed by Pathways, a community mental health authority. New Horizons was originally a program within Pathways which was spun off to a separate for-profit corporation. New Horizons owned and maintained the building occupied by Fairweather Lodge and provided janitorial and carpet cleaning services to the general public.

In June 2005, both Auto Owners and Farmers moved for summary disposition pursuant to MCR 2.116(C)(10). Farmers argued that New Horizons was so intertwined with Pathways that the Trial Court should disregard the separate existence of New Horizons for determining whether Cote was a resident ward of New Horizons. Auto Owners contended that whether Cote was a resident ward of New Horizons should be determined solely by Cote’s relationship to New Horizons. Auto Owners further argued that this relationship did not support the conclusion that Cote was a resident ward of New Horizons. The Trial Court agreed with Farmers and determined the services provided by Pathways could be considered in determining whether Cote was a resident ward of New Horizons for purposes of the provision of PIP benefits. The Trial Court then concluded Cote was a resident of New Horizons under the terms of the policy and, therefore, that New Horizons insurer, Auto Owners was responsible for payment of PIP benefits.

On Appeal, Auto Owners argued that the Trial Court erred when it determined that Cote was a resident relative of New Horizons as that term is defined under the policy issued by Auto Owners. In addition, Auto Owners contended the Trial Court erred when it disregarded the separate legal existence of News Horizons and Pathways in order to conclude that Cote was a ward of New Horizons. Under the terms of the policy issued by Auto Owners, the term "relative" was defined as "a person who resides with and is related to the named insured by blood, marriage, or adoption," but also included "a ward or foster child who resides with the named insured". Therefore, in order for Cote to be entitled to benefits under the Auto Owners policy, he must have been a relative of New Horizons at the time of the accident. He would only be entitled to PIP benefits under New Horizons policy if he were a ward of New Horizons. Given the facts, New Horizons did not exercise any control over "day-to-day activities". The Court noted the primary relationship between New Horizons and Cote was one of landlord and tenant. Therefore, Cote could not be deemed a ward of New Horizons.

The Court of Appeals further disagreed with Farmers and held that although it was clear that Pathways had some influence over the operations of New Horizons, the Court did not agree that it amounted to complete dominion over New Horizons’ affairs. As a result, Cote was not a relative of New Horizons and, as a result, was not insured under the policy issued to New Horizons by Auto Owners. Because Cote did not have a no-fault policy of his own, and he was not covered under the no-fault policy of a spouse or relative, he was required to seek PIP benefits from the insurer of the owner or registrant of the motor vehicle involved in the accident, which was Farmers.

As a result, the Court of Appeals reversed the decision of the Trial Court and vacated the Trial Court’s August 5, 2005 Order granting Farmers’ motion for summary disposition and denying Auto Owners’ motion for summary disposition. Majer v Lloyd-Lee, Michigan Court of Appeals Unpublished Decision Dated November 2, 2006, Docket Number 264796.

Recommendation – When determining whether an individual is a relative ward of a housing entity, one must determine whether that housing entity exercised control over the individual’s day-to-day activities. If the relationship is one of landlord/tenant, the individual cannot be deemed a ward of the housing entity.

Facts – Plaintiff’s claims arose from an automobile accident which occurred on March 16, 2002. At that time, she was a restrained back seat passenger who contended that she was thrown forward and back during the impact, at which time she struck her right shoulder against the back seat and her head and face went inside the rear portion of the front passenger seat. The initial complaint was filed in December 2002, asserting unspecified injuries resulting in a "serious and permanent impairment of an important body functions" (sic). In July 2003, Plaintiff amended her complaint, re-asserting her previously alleged neck and back injuries, in addition to a closed head injury.

Before Trial, Defendant’s filed a motion seeking to preclude Plaintiff from offering expert testimony. Plaintiff planned to assert a closed head injury and offer opinion testimony pertaining to her head injury through a doctoral level psychologist. In addition, Defendants argued that Plaintiff had failed to list either a licensed allopathic or osteopathic physician to meet the threshold requirements for testimony regarding the alleged closed head injury relying on MCL 500.3135(2)(a)(ii). Following argument, the Trial Court precluded evidence by Plaintiff’s psychologist.

On appeal, Plaintiff contended that the Trial Court erred in refusing to permit a Ph.D. psychologist to opine and "provide evidence of the existence of a closed head injury." The Court of Appeals, in reliance on Churchman v Rickerson, 240 Mich App 223 (2000), held contrary to the determination of the Trial Court and argument of defense counsel, that the statutory provision of MCL 500.3135(7) does not provide the exclusive manner or means by which a Plaintiff can establish a closed head injury and existence of a factual dispute. Rather, it simply is an exception that permits a party to automatically create a question for a jury through provisional testimony by a physician that a serious neurologically based injury might exist. Cockle v Thomas, Michigan Court of Appeals Unpublished Decision Dated October 24 2006, Docket Number 261884.

Recommendation – Fortunately, this is an unpublished Opinion and has no precedential effect! This Opinion appears to be in direct contravention to the plain wording of MCL 500.3135(2)(a)(ii). We suspect that the Michigan Supreme Court may take a different position on appeal.

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