Facts – In this case, Plaintiff’s minor, who was accompanied by his mother, father, grandfather and step-grandmother was allegedly injured when he fell into a septic tank at Famous Dave’s BBQ Restaurant.  At the time, the minor fell into, and was completely submerged in raw sewage.  He was pulled from the tank by his mother and father with assistance of his grandfather.  Both parents and grandparents brought claims for negligent infliction of emotional distress.  Following Defendant’s Motion for Summary Disposition regarding each bystander liability claim, the Trial Court dismissed their cause of action.

In upholding the Trial Court’s grant of Summary Disposition, the Court noted that to establish a claim for bystander liability, (1) the injury threatened or inflicted on the third person must be a serious one, of a nature to cause severe mental disturbance to the plaintiff; (2) the shock must result in actual physical harm; (3) the plaintiff must be a member of the immediate family, or at least a parent, child, husband or wife; and (4) the plaintiff must actually be present at the time of the accident or at least suffer shock fairly contemporaneous with the accident.

The Court of Appeals agreed that the actual physical harm element of the Plaintiffs’ claim for bystander liability was not met.  The minor’s mother testified she suffered nervousness, sleep deprivation, fatigue, nightmares, and inability to perform household chores after witnessing the accident.  However she admitted she did not suffer physical problems other than fatigue and did not seek medical help.  The minor’s father also testified he suffered from sleep deprivation and fatigue, but he also admitted that he did not suffer any physical injury.  In addition, the minor’s grandparents did not offer any medical evidence to support their claims.  Specifically, the minor’s grandfather denied suffering any physical injuries or requiring medical treatment as a result of witnessing the incident.  The step-grandmother testified she had problems sleeping, for which she spoke to a doctor.  But she did not seek psychiatric or psychological help or request medication.

As a result, Plaintiffs could not establish that they suffered actual physical harm as a result of witnessing the incident.  York v Big Ten Ribs, Inc., Michigan Court of Appeals Unpublished Decision dated October 26, 2006, Docket No. 270592.

Recommendation – This case was handled by our office and illustrates the fact that an individual must establish actual physical harm to recover for a claim of bystander liability.  Sleep deprivation and fatigue do not rise to the level of actual physical harm. In addition, lack of medical treatment may also establish the fact Plaintiffs suffered no physical harm.

Facts – The four individual Plaintiffs were involved in a motor vehicle accident while traveling in a car owned by another individual and insured by Defendant, Founders Insurance Company.  At that time, two individuals resided with one relative, while the other two individual Plaintiffs resided with a separate relative.  In any event, both relatives were insured at the time of the accident by Defendant, Farm Bureau.  Plaintiffs claimed that under the No-Fault Act, they were entitled to personal injury (PIP) benefits through their relatives’ Farm Bureau policies.  Following commencement of the action, Farm Bureau sent Plaintiffs a Request to Admit that they unlawfully entered and remained in the United States and were subject to deportation at any time.  Subsequent to those Admissions, Farm Bureau moved for Summary Disposition claiming that because Plaintiffs were illegal aliens, they were precluded as a matter of law from establishing they were domiciled in the household of their insured relatives under MCL 500.3114(1).  However, the Trial Court denied said Motion.

In upholding the Trial Court’s denial of Summary Disposition, the Court of Appeals rejected Farm Bureau’s argument that an illegal alien cannot be domiciled in the household of a Michigan insured because they are subject to apprehension and deportation.  The Court held that: Farm Bureau’s argument was a direct contravention of Workman v DAIIE, 404 Mich 477, 495 (1979).  The question was Plaintiffs’ intent to remain in the State, despite the risk of being apprehended and deported.  The Court held their status as illegal aliens did not establish as a matter of law, they lack the intent to remain.

In addition, Farm Bureaus’ argument Plaintiffs engaged in "wrongful conduct" by entering the United States illegally was not an appropriate argument in this case.  The wrongful conduct rule only applies if a sufficient causal nexus exists between Plaintiffs’ illegal conduct, and Plaintiffs’ asserted damages. Plaintiffs’ injury must have been suffered while, and as a proximate result of committing the illegal act.  In this case, Plaintiffs’ illegal presence in the United States was not a proximate cause of their involvement in the automobile accident resulting in injuries.  Cervantes v Farmers Insurance Exchange, Michigan Court of Appeals Decision for Publication dated October 12, 2006, Docket No. 259850; 259851. We will continue to monitor this decision.

Recommendation – This case is interesting from the standpoint that an illegal alien is entitled to Michigan No-Fault PIP benefits if their intent is to be domiciled in a residence where coverage is afforded. 

Facts – In this case, Plaintiff filed suit to recover No-Fault benefits as a result of a 2001 motor vehicle accident wherein Plaintiff was rendered a paraplegic.  Following a Jury Trial, the Trial Court entered a Judgment for Plaintiff, awarding $179,539.00 in No-Fault benefits, and $1,908.00 in No-Fault interest.  The Court subsequently awarded Attorney fees in the amount of $73,369.00. One issue of contention at Trial was the reasonableness of Plaintiff’s proposed home modifications. During Trial, the Court allowed Plaintiff to introduce evidence concerning the claims handling history.  Pursuant to MRE 401, evidence is relevant if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence".

The issue for the Jury was to determine the reasonable cost for modifications of Plaintiff’s home, and whether they were reasonably necessary to accommodate Plaintiff’s care, recovery and rehabilitation.  Auto Owners and Plaintiff disagreed whether the expenses were reasonable and/or reasonably necessary.

The Court of Appeals affirmed the Trial Court and held that evidence of Defendant’s claim handling history was probative to show reasonableness.  The factual evidence that Auto Owners acted unreasonably with respect to Plaintiff’s past claims was probative of whether the plan it was now offering was a reasonable one.  Nickell v Auto Owners Insurance Company, Court of Appeals Unpublished Decision dated September 28, 2006, Docket No. 259944.

Recommendation – A claim adjuster should be cognizant of the fact that their claims handling history may be admissible should the matter proceed to Trial. This history is relevant to show the reasonableness or lack thereof of Defendant’s handling of a claim. 

Facts – Plaintiff claimed First-Party PIP benefits following his assertion he injured his lower back while fueling his vehicle. Because State Farm failed to make full payments within 30 days,  Plaintiff filed the current action. As a result, he claimed he was entitled to overdue benefits and attorney fees pursuant to MCL 500.3148.  State Farm maintained the injuries were caused by a pre-existing degenerative condition rather than the fueling incident as alleged by Plaintiff.

At Case Evaluation, the Panel found in favor of Plaintiff in the amount of $55,000.00.  Both parties rejected and the case proceeded to Trial.  At the conclusion of Trial, the Court entered a Judgment of no cause of action in favor of State Farm.  State Farm sought Case Evaluation sanctions pursuant to MCR 2.403, which were denied by the Trial Court for "good cause".

On Appeal, the Court of Appeals held that pursuant to MCR 2.403, the losing party must pay the prevailing parties actual costs.  If applicable, the decision to award Case Evaluation sanctions is a matter of law and is not discretionary.  Therefore, the case was remanded to the Trial Court to determine actual costs.  Allard v State Farm Insurance Company, 271 Mich App 394 (2006).

Recommendation – This case reiterates that the prevailing party is entitled to actual costs should the matter proceed to Trial pursuant to MCR 2.403(O)(1).  If necessary, Plaintiff should be reminded that Case Evaluation sanctions must be awarded to the insurer if it prevails.

Facts – Plaintiff and his partner, Mr. Meece worked for a sub-contractor of Comcast Cable. On a previous occasion, Mr. Meece went to Defendant’s home where he observed the Defendant’s dog which was "very aggressive".  On that occasion, Mr. Meece was forced to call the Defendant from his truck and ask her to restrain the dog.

On the day of this incident, Mr. Meece and Plaintiff went to Defendant’s home for a follow-up service call.  At that time, they did not observe the dog.  In any event, they installed a new cable converter and informed Defendant it would take approximately 45 minutes for the necessary information to download.  They then left the Defendant’s residence for another service call. Later that day, they called Defendant and was informed the new converter box was not working. Mr. Meece and Plaintiff returned to the Defendant’s home. Upon arrival, both men observed the dog in the front yard barking and growling.  According to both men, the dog was tied to a long leash that ran through a breezeway from the back of the Defendant’s house into the front yard.  At that time, the dog’s leash was caught in the front door of the breezeway which restricted its movement.  Both individuals were able to make it to the front porch, although the dog was constantly barking and snarling.  The men entered Defendant’s home and further diagnostic tests indicated the cable line was in need of replacement.  Plaintiff testified he asked the Defendant to make sure the dog could not get into the back yard where they needed to access the cable line.   Plaintiff and Mr. Meece then went to their truck to obtain further tools and went into the back yard to examine the cable line and cable box.  Then, as both men began walking toward the front yard to get additional supplies, Plaintiff testified that the front door of the breezeway shot open allowing the chain to become untangled and allow the dog more freedom.  Because they did not know the exact length of the dog’s leash, both individuals became concerned and ran for safety.  Mr. Meece testified he ran toward the front yard and felt the dog come in contact with his tool belt.  However, he successfully eluded the dog.  Plaintiff ran toward the side yard wherein he tripped or slipped on the soft, muddy ground.  As a result, he suffered a ruptured Achilles tendon which required surgery.  Plaintiff brought an action asserting claims of common law strict liability and negligence.

The Trial Court granted Defendant’s Motion for Summary Disposition, ruling that Plaintiff had failed to establish a sufficient record to support his claims.

Under common law, a dog owner is strictly liable for damage done by the dog only if he or she knows or has reason to know of the dog’s vicious nature.  Specifically, strict liability attaches when (1) is the possessor of an animal, (2) one has scienter of the animal’s abnormal dangerous propensities, and (3) the harm results from the dangerous propensity that was known or should have been known.  Whether a domestic animal has exhibited ill temper or aggressive behavior sufficient to apprise the owner of an unusually or abnormally violent disposition is generally a question of the finder of fact.  However, if reasonable minds could not differ, then the question becomes one of law for the Court.  In this case, while the evidence indicated the Defendant’s dog was barking, snarling and jumping toward two individuals, the evidence did not establish that the dog was abnormally vicious or that the dog had unusually dangerous propensities of which the Defendant knew or should have known. The Court held that the mere fact that a dog barks, growls, jumps, or approaches strangers in a somewhat threatening way is common canine behavior. As such, this behavior will ordinarily be insufficient to show that the dog is abnormally dangerous or unusually vicious. Therefore, Plaintiff’s strict liability claim was properly granted in favor of Defendant.

Michigan law also recognizes that the owner of a domestic animal who does not have knowledge of the animal’s dangerous propensities may be held liable for negligently failing to restrain the animal or prevent harm by the animal. In this case, the evidence showed the Defendant had closed the front door of the breezeway on the dog’s leash. However, it was also suggested that the back door of the breezeway was propped open to allow the dog access into the back yard. Therefore, the Court of Appeals found sufficient allegations in which reasonable minds could conclude the Defendant was negligent in failing to properly control or restrain her dog. Therefore, such questions are for the trier of fact and could not be resolved by the Trial Court on Motion for Summary Disposition. Accordingly, the Court of Appeals reversed the Trial Court’s grant of Summary Disposition regarding Plaintiff’s negligence claim.

In addition, Defendant argued the open and obvious danger doctrine barred Plaintiff’s action because Plaintiff should have observed the soft, muddy ground on which he slipped or tripped. However, Plaintiff’s claim was based upon Defendant’s failure to reasonably control the dog, not the alleged hazard presented by the muddy condition of the ground. The Court noted that the doctrine applied to an action based on a premises liability, not ordinary negligence. Therefore, the Court of Appeals held open and obvious doctrine was inapplicable to Plaintiff’s ordinary negligence claim. Hiner v Mojica, 271 Mich App 604 (2006).

Recommendation – Under the common law, a dog owner is strictly liable for the damage done by the dog only if he or she knows or has reason to know of the dog’s vicious nature. A dog’s general propensity to barking, snarling, and jumping does not establish that the dog is abnormally vicious or that the dog had unusual dangerous propensities for which the Defendant knew or should have known.

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