TOV Injury and Safety Blog

Consumer cannot sue banks for fraud: pleadings lack sufficient particularity

Robert S. Zuk  attempted to sue US Bank Home Mortgage and others, alleging fraud.  Unfortunately for Zuk, fraud claims must be pleaded with great particularity, and in the  context of the recent banking/mortgage boondoggle, even the banks don't know what actions they took, what liens they held, who owns title to properties and who has enforcement rights.  Since many of the transactions were based on fudged records and included the conglomeration of thousands of debts into separate securities transactions, the banks have achieved fraud protection by their very mis-management.  Zuk's case was dismissed by Michigan's Court of Appeals because he couldn't meet the high threshold of fraud pleading.

Insurance company owes nothing to renter after fire: court holds he did not "substantially comply" with proof of loss

Jevon Johnson's apartment was gutted by fire in April of 2010.  He had renter's insurance with MemberSelect Insurance Company.  The insurer's contract required that Johnson file a proof of loss within sixty days; it also demanded that he appear for a sworn statement with "copies of police and fire reports, any photographs of the apartment, anhy lease agreements, various financial records, telephone records, any original documents relating to the purchase of destroyed personal property, a detailed contents estimate and all records supporting additional living expenses."

With profits down, Pfizer announces it will re-focus on research.

For years, apologists for the pharmaceutical industry have attempted to justify outrageous industry profits by arguing that they were necessary to support industry research that ultimately benefits consumers with new medications.  Last week's announcement by Pfizer that it now would re-focus on research in response to dwindling profits demonstrates how ill-founded the prior claim was.

Since Pfizer lost its monopoly on Lipitor last fall [parenthetically the best-selling drug in history], its profits have already dropped by 19% and company executives are announcing a radical shift.  Instead of buying up small competitors, Pfizer now plans to divest its animal health and infant nutrition subsidiaries, and instead focus its research efforts on only "the most promising" areas of pharmaceutical research.  One executive was quoted to the effect that "...we were spending huge amounts of money...we weren't producing the drugs we needed..." 

The Company also announced that it would spend less on research and development at the same time that it improved its focus on developing market-worthy new medicines.  Critics called this a risky and counter-intuitive strategy. In any event, it is yet another acknowledgement that enormous profits were not being directed to effective research in human medicine.

Academic research by University of Texas, University of Illinois and Nowrthwestern University demonstrates malpractice "reforms" did not increase doctor supply

A recent study by three highly-respected Universities demonstrated that the wholesale "reforms" [anti-victim limitations on medical negligence recoveries] adopted in the State of Texas had NO impact on the supply of doctors in the state.  The study concluded that the supply of physicians operating in the state was relatively "inelastic" and not influenced by steps taken to protect doctors from negligence claims.

The authors concluded that their research was consistent with prior multi-state studies showing that there is no relationship between "tort reform" and physician supply.  Even though special interest-Republican "reforms...dramatically changed the malpractice environment..." in Texas, they did not have any impact on the number of doctors in practice--even in poorer rural areas or high-risk specialties.  

The authors also found that the "reforms" did not influence health care costs in the state.  On the contrary, studies in Texas have shown that the major influence on health care costs in Texas is "fee for service" medicine and physician-ownership of ancillary services they can charge to provide.  Lastly, the authors noted that  insurance companies have fought "tooth and nail" to eliminate public access to reliable claims data which the National Association of Insurance Commissioners has attempted to create:  without this data, the authors indicated it would have been  impossible to ascertain the true impact of "reforms" such as those undertaken in Texas.

The authors explicitly pointed out that there was no factual support for "reformers' " claims that the lack of a cap on malpractice awards deterred doctors from practicing in Texas or that adopting a cap had increased the number of practicing doctors.  Supply was not stunted before reform and did not measurably improve after--even in so-called "high risk" specialties.  Neither did it influence health care costs by eliminating or limiting the practice of "defensive medicine."  The article is entitled "Does Tort Reform Affect Physician Supply?  Evidence From Texas."  It can be downloaded at http://ssrn.com/abstract=2047433.

Looks like everyone is hunting for bear.

Timothy and Noah Baxter hired Dennis Geurink and Outdoor Adventures to take them on a bear-hunting trip to Russia.  They were disappointed by their "outdoor adventure" and sued for $22,000.00 in damages.  The Defendants made an offer of $1,000.00 to settle the claim, which the Baxters rejected.  Later the Baxters offered to settle for $10,000.00 and the Defendants rejected.  After a bench trial (before the judge without a jury) the Defendants achieved a judgment that they owed nothing and sought sanctions of $46,000.00 in costs and fees. 

Republicans propose legislation that would grant immunity to ER and delivery doctors

This week, Republican legislators in Michigan proposed a special interest "tort reform" bill that would excuse doctors for negligence in the ER or in delivering babies.  Five bills have been proposed and they include provisions that would require the sitting judge to dismiss any case that evidenced the exercise of professional judgment--whether "good" or "bad."  The case would be dismissed, apparently, if the doctor had to think about what to do, even if his or her subsequent judgment was faulty and caused injury. 

Reportedly the bills also grant doctors immunity for their actions or decisions in the ER or delivery suite, even if the actions or decisions are negligent [unreasonable].  Given the influence of insurance and health care special interests on Republican legislators, it is likely some form of these bills will pass, despite the fact that no "malpractice crisis" exists to warrant denial of compensation to innocent malpractice victims.  Apparenly only drunk doctors will be held responsible for their mistakes in Michigan.

Court holds that statute of limitations ran while case was on appeal

A Traverse City couple sued the sellers from whom they bought their home after learning that the sellers experienced an undisclosed insect infestation.  They dropped fraud and contract claims at the suggestion of their lawyers and achieved a verdict for innocent misrepresentation.  This appears from the outside to have been a reasonable trial tactic at the time. The sellers appealed, however, and the Court of Appeals ruled that terms of The Seller's Disclosure Act invalidated their innocent misrepresentation claim.  Therefore, the verdict was overturned, the plaintiffs claims were dismissed, and the couple sued their attorneys for malpractice.

"Black ice, although not actually visible upon casual inspection, was an open and obvious danger."

The Court of Appeals majority reversed the trial judge and dismissed elderly plaintiff Patricia Dombrowski's injury claim against the Laurel Chapel where her granddaughter was getting married.  Dombrowski claimed that she fell on a patch of ice created by an "unnatural accumulation" of ice at the bottom of an awning. She claimed that the ice was not visible to the naked eye and that she did not see it before she fell.  The Republicans on the Michigan Supreme Court have reinterpreted the "open and obvious" doctrine to immunize property owners from any duty to correct hazards that are "visible on casual inspection."  In the past, owners owed no duty to warn of obvious dangers, but might still owe a duty to correct unreasonable hazards.  Under the new doctrine, however, if the court concludes that a danger is "obvious" on casual inspection, the property owner owes absolutely no duty to correct the hazard--unless it presents the equivalent of a "thirty foot deep unguarded pit."

Woman can't sue for fall over desk mat in dentist's hallway; limited vision is admissible

Verlena Sexton-Walker fell in the hallway of the Great Expressions Dental Center office.  The hallway was well lit and Sexton-Walker watched a dental assistant step on, and then over, a plastic desk mat that had been left in the hallway.  Unfortunatelly when Sexton-Walker attempted to walk over it, she stumbled and fell suffering injury.  She brought a claim against the dentists' insurer.  We can presume that the dentists' expressions weren't so great when they were told of the claim, since their insurer declined it.

Pioneer State Mutual leaves daughter-in-law holding the bag

Tammy Sue Long borrowed the in-laws' car for the day.  She was involved in a bad car accident, causing injury to Janice and Brian Kammers.  No problem because her parents had purchased $300,000.00 in liability coverage on the vehicle, right?  Wrong.  Pioneer's fine print limits its liability coverage to $20,000.00 if the vehicle is operated by anyone other than the "named insureds" and family members living with them.   Citing this provision of the policy, the Court of Appeals ruled this week that Tammy Sue Long was entitled to only $20,000.00 in liability protection.  The Court noted that under prior rulings of the Republican State Supreme Court Majority, while it is illegal for an insurer to deny coverage to a non-owner, it may limit coverage to the 1974 state minimum--$20,000.00 per injury--and this is not a violation of public policy.  Regardless of the premium paid by the insureds or the fact that they permitted the use of the vehicle by the driver. 

The Court did not address an additional question:  since the Longs remained responsible for the full amount of damages caused by a permitted operator, why didn't the higher coverage limits they purchased apply to the Kammers' injuries?  Maybe the answer is just "because the insurance company says so."  That seems to be the rule of law in Michigan.

New test may detect chronic traumatic encephalopathy before symptoms appear

The New York Times reported this week on a new medical study involving boxers and chronic traumatic encephalopathy (CTE).  CTE has gained prominence as professional football players' autopsies continue to demonstrate evidence of brain injury that was previously considered a product only of blows to the head suffered by professional boxers.   Indeed, the disease was formerly known as dementia pugilistica.  Today, as one after another NFL player is prematurely struck down by memory problems, depression, and intellectual dysfunction, the disease is gaining notoriety among a completely different population.  The suicide of 62-year old Ray Easterling, former Atlanta Falcon, after years of premature dementia, is only the most recent example.  The disease has gained additional notoriety as returning Mideast war veterans have experienced a high rate of post traumatic stress syndrome, CTE and suicide.

Homeowner cannot sue court-appointed receiver for negligence

Mark and Randa Mangano became embroiled in a dispute with their attorney.  Apparently they had financial trouble, generally, and the attorney sued them for fees.  The Manganos had moved from their home in Canton Township to Tennessee, when a judgment for the attorney was entered against them.  The Court appointed a receiver to take custody of the Canton residence and the current tenants moved out.  The Manganos filed for bankruptcy and the Tennessee-area bankruptcy referee assumed control of the home.  In the meantime, the home had suffered frozen pipes and water damage.

Court holds insured cannot sue agent for failing to provide adequate coverage

Continental Rental, Inc. sued Moulthorp-Clift, Inc., Continental's insurance agent, arguing that Moulthorp breached their insurance contract and was professionally negligent in failing to provide employment practices liability insurance (EPLI) coverage for Continental.  Continental was sued by an employee alleging violation of his civil rights.  The owner of Continental argued that he had an express agreement with the owner of Moulthorp to provide all coverages that the Continental business reasonably required.  The agent denied any such conversation. The trial court dismissed Continental's lawsuit on summary disposition and Continental appealed.

Court addresses negligent physician credentialling claim; holds hospital not responsible for continuing to credential doctor with 17 prior lawsuits

Jesuben Englelhardt sued the St. John Health System after Dr. Rajesh C. Bhagat negligently performed surgery on Ehgelhardt's hand.  Bhagat struck a nerve causing permanent problems with Englehardt's hand.  Bhagat settled the claim by paying his insurance limits, apparently, and Englehardt continued the action against St. John.  He argued that St. John should have acted in response to Bhagat's 17 prior lawsuits to investigate Bhagat's competence. 

Engelhardt presented a credentialling expert who testified that if the Hospital had reviewed Bhagat's history, it would either have denied him surgical privileges or insisted that he be mentored.  The expert also affirmed that this process would have prevented Engelhardt's injuries, particularly since three of the prior claims involved surgeries similar to Engelhardt's.

Successful lawsuit unravels in litigation over litigation-funding loan

The ugliest aspect of modern litigation was on display as the Court of Appeals considered the allegations made by Nancy Shanks against her attorneys, Morgan & Meyers, PLC.  Shanks was rear-ended in an auto accident and claimed that she suffered a head injury, back and neck pain and exacerbation of pre-existing depression.  After hiring the defendants to pursue her legal claim, within seven months she obtained loans from Cambridge Management Group, LLC, in a total amount of $125,000.00, bearing 4.99% interest PER MONTH, compounded monthly.  (She had managed to spend her first $100,000.00 loan between July and December.)

Ultimately, the attorneys achieved a default judgment against the auto negligence defendants who failed to answer the negligence complaint, and in October of 2008, the claim was settled, while on appeal, for $625,000.00.  By normal standards, this represented an unusually good recovery for a claimant with potentially very defensible injuries.  Nevertheless, an argument ensued over the debt owed to CMG, which claimed liens totalling $325,819.00 for loaning Shanks $125,000.00 for an average of about 10 months.  The lien claim was settled, however, Shanks then sued her attorneys arguing that they had breached a fiduciary duty to her by facilitating her loans with the litigation-funding company.

Court reconsiders; again grants immunity to Hotel for obviously unsafe speakers' podium

Norma Chesser sued the Radisson Plaza Hotel in Kalamazoo months after she fell off the stage immediately after giving a short speech.  Chesser was returning to her seat and was forced to walk between other speakers' chairs and the edge of the stage.  She did not realize that one of the speakers had apparently pushed a chair back, narrowing the walkable edge of the stage, and she stepped into oblivion, suffering injuries.  Earlier this spring the Court of Appeals reversed the trial judge and dismissed her injury claim. The Court held that the Radisson was immune from injury claims because the danger presented by the stage was "open and obvious."

The panel of the Court then granted reconsideration and it appeared that this absurd public policy decision would be reversed.  Today, the Court issued its new opinion and the only thing changed was the rationale by which the "open and obvious" decision was justified.  Where the earlier opinion had suggested that Chasser should have interrupted the program rather than attempting to make her way back to her seat, this opinion focuses on the broader, less absurd--and less human--aspect of the case.

The Court recognized that Ms. Chasser raised "important and reasonable concerns" but that they are "essentially policy issues" foreclosed by the "Enger Majority" of the Michigan Supreme Court and therefore must be directed to the state legislature.  It doesn't matter that industry standards were violated in the stage design or that the Hotel employees admitted negligence.  It doesn't matter that no reasonable person in Chasser's position would have interrupted the program to force the Hotel to re-arrange the stage.  Since the danger was "open and obvious," the users bear all of the risks and the creator of the danger owes no duty to make repairs.

Merck pleads guilty to misbranding Vioxx

This week Merck & Co. pleaded guilty to mis-branding Vioxx in order to settle criminal charges that it sold Vioxx for unapproved uses and made false statements about its cardiovascular safety.  Merck had previously paid $4.85 billion dollars to some 50,000 patients who suffered strokes or heart attacks and blamed them on Vioxx.  Merck will also pay more than 300 million dollars in criminal fines.

Unfortunately, none of these reparations will benefit Michigan residents:  As part of "tort reform," Republican legislators adopted the nation's only statute granting complete immunity to any product that had been approved for sale by the FDA.  Even where, as here, the FDA approval is procured by fraud or the manufacturer evades the limitations on sale of the product, the immunity stands.  Recently the Republican majority of Michigan's Supreme Court upheld this immunity even with regard to expenses wrongfully incurred by the State as a result of a drugmaker's misdeeds.

Verdict for women raped in prison will go primarily to lawsuit lender due to 88% return

The Detroit Free Press reported on a travesty of justice this week.  Eight women sued the State of Michigan and won a 5 million dollar verdict arising out of having endured prison rapes.  The State appealed.  While the case was on appeal, the women borrowed $635,000.00 from MONEY FOR LAWSUITS, a company that makes loans at outrageous rates to individuals who are likely to achieve verdicts or settlements from a wrongdoer.  Eventually, the State agreed to compromise the judgment and agreed to pay the women $3.5 million dollars.  This week, a judge ruled that the company is owed $3.1 million dollars of the settlement.  The contract Money For Loans prepared calls for 4.25% interest compounded monthly, according to the Free Press, resulting in an 88% return.  Even competitors in the lawsuit funding industry objected to the terms of the contract demanded by Money For Lawsuits.  Mark Bello of Lawsuit Financial claims his company will never demand more than fifty percent of an injury victim's recovery.

One former Feiger attorney explained that in two recent cases where he had achieved substantial verdicts, his clients owed "four or five times" what they had been loaned because of unethical--but perhaps legal--interest demands. To date, our firm has been successful in persuading our clients to avoid these "litigation funding" firms.  Unfortunately, many injury victims face extensive medical billings (often in the hundreds of thousands of dollars) and are unable to work:  they are ripe for abuse at the hands of someone with money and the ability to "invest" it for a few months or years.

Homeowner improperly foreclosed upon loses "third strike."

Like many others, Donald Bond admitted he was in default on his mortgage. Nevertheless, when U.S. Bank commenced foreclosure on his property, it did not even have a legal interest in Bond's mortgage.  It acquired an interest on October 13 of 2008, but had sued for foreclosure in District Court in September of 2008.  Bond fought the Bank's eviction action, claiming that the bank lacked the legal right to pursue foreclosure, however, the trial judge mistakenly ruled that the mortgagee's interest in the property was not a proper defense to an eviction action. 

Bond did not appeal that result, but instead brought a separate action to enforce his legal rights.  Unfortunately, the court in the later action ruled that under existing law the decision in the eviction action determined Bond's rights and he could not "re-litigate" the issue.  Even though the prior decision was mistaken, his rights were foreclosed by his failure to appeal that ruling.

Michigan Supreme Court overturns Court of Appeals; dismisses motorcyclist's claim against Road Commission

Joseph Paletta sued the Oakland County Road Commission.  He lost control of his bike on loose gravel and suffered serious injuries.  He presented testimony from a man living near the area where he was injured, attesting to the fact that the witness had complained on a number of occasions that the Road Commission scattered loose gravel in the road when it turned in and out of a gravel storage area.  The witness claimed that the Road Commission failed to take any action in response to his complaints and continued to create a nuisance on the asphalt roadway. 

Supreme Court's conservative majority dismisses dental malpractice claim

Rodney Hanna sued his dentist, whom he claimed improperly capped two teeth.  Hanna claimed that among other problems, the dentist, Dario Merlos, DDS, had failed to perform root canals under the crowns he placed.  Hanna sent a detailed letter to Merlos, informing him of the claims of malpractice and then retained an attorney to sue.  The attorney filed a Complaint in Circuit Court which alluded to the attached Affidavit of Merit, but no one could locate the attachment.

The dentist's insurer sought summary disposition, arguing that Hanna's letter wasn't an adequate Notice of Intent to Sue and that the case must be dismissed because the Affidavit of Merit was not properly filed with Hanna's Complaint.  The trial court dismissed the claim, however, the Court of Appeals reversed.  It held that Hanna's letter of specific complaints was adequate to meet the Notice of Intent requirements.  It also held that since Hanna's attorney promptly filed a copy of his Affidavit of Merit when its absence in the court file was brought to his attention, "the interests of justice" did not justify permanent dismissal of his claim. 

This week the four insurance-oriented Justices on the Michigan Supreme Court summarily overturned the Court of Appeals' decision. It held that since there was no proof that the original Affidavit of Merit had been filed with the Complaint, the action must be dismissed (and cannot be filed again later).  It did not address "the interests of justice" as those interests don't particularly interest or influence the current Supreme Court majority.

Court holds violent acts "aren't foreseeable result of illegally serving alcohol" and "willful ignorance" of illegal consumption does not constitute "actual knowledge."

In one of the most disappointing examples of political, activist, result-oriented, injudicious decision-making we have witnessed in 30-plus years of lawyering, the Court of Appeals held in Uplinger v. Howe, et al., that homeowners who hosted an alcohol-laced party for "75-100" guests after their son's junior prom owed no responsibility for grave injuries suffered by one of the attendees.  The 19-year old plaintiff suffered a severe head injury after he was beaten by an intoxicated 24-year-old wielding a baseball bat.  The two "boys" had been involved in a verbal altercation earlier in the night--in the Defendants' polebarn--and the attacker, Jeffrey Howe, returned with companions and weapons to attack the plaintiff, Uplinger.

Child cannot sue Meijer for second-degree burns suffered as a result of leak from pre-cooked deli chicken

Meijer's deli serves pre-cooked whole chickens which are maintained at a temperature above 140 degrees to prevent the growth of bacteria.  11-year-old Bailey Malthaner accompanied her mother to the grocery store after having a tooth removed and was seated in the main compartment of her mother's shopping cart.  When her mother purchased the chicken in an enclosed plastic container, Bailey asked if she could hold it.  Almost immediately she started to scream and mom discovered that hot grease was leaking from the plastic container and burning Bailey's leg.

Federal Court allows injured workers to sue employer, insurer and "independent" [IME] doctors for fraud

A group of Cassens Transport Company employees who had been injured on the job sued Dr. Saul Margules, Cassens, and Cassens' self-insured claims manager, Crawford & Company, alleging that the three conspired to deny benefits to injured workers.  The suit alleged that Crawford consistently retained unqualified and biased physicians to render fraudulent reports disputing the workers' injuries or medical condition.

Gas station buyer may amend complaint to allege violation of duty of fair dealing

The Court of Appeals overturned a dismissal and reinstated Hassen Harp's claim against Equilon Enterprises, LLC, d/b/a Shell Oil Products, US.  Harp had agreed to purchase the station he leased from Shell, pursuant to the Shell standard contract under which he was obligated to buy gas from Shell for ten years.  Harp alleged, however, that immediately after he executed the purchase documents, Shell changed its pricing and gas distribution policies and took other "unsavory" actions which severely denegrated the value of the station. 

Injury at amusement park results in money verdict--but for the amusement park and against victim.

Marilyn Lukas attended the Carnival at the Taylor Summer Fest with her husband and kids.  As they were walking down the midway near the "Beer Bust," a softball struck her in the face, broke her nose, lacerated her cheek and took some of the pleasure out of the family's outing.  Lukas sued the operator of the Beer Bust game and the operator of the carnival, alleging poor design and management of the ball-throwing game.  To make a long story short, the Carnival operator argued that Lukas couldn't prove that the Beer Bust was the source of the ball that struck her, and the jury concluded that the operator wasn't responsible for Lukas' injury. 

The Carnival operator then sued the Beer Bust operator to recover its defense costs of $117,000.00.  The lower court entered a judgment for that amount, based on the Beer Bust operator's indemnity contract with the Carnival (agreeing to hold the Carnival harmless for any claims arising out of the Beer Bust's activities).    The Court of Appeals reversed, holding that given the jury's verdict in the case brought by Lukas, the indemnity contract language was ambiguous in attempting to shift the defense expenses to the Carnival.  We guess there was "due process" here, but it is hard to see this result as a common sense example of a "system of justice."   Do you think this is what most people think they are buying when taxpayers fund the operation of a court system?  Certainly insurance companies are getting their money's worth.

Woman cannot collect damages from insurer where it did not explain one-year delay in fire loss adjustment

Sherrill Travier's home in Lincoln Park burned.  Police identified it as a possible arson but the investigation was inconclusive and no evidence tied Travier to an arson claim.  Nevertheless, the Auto Club, her homeowner's insurer simply ignored her indemnity claim.  It simply did not respond to her Proof of Loss or her attorney's letters.  When she filed suit prior to the one-year limitation period, the Auto Club "neither admitted nor denied" her claim, alleging lack of information.  Ultimately, the insurer issued full payment for the claim approximately one year after the fire. 

Officers and police agency are immune from errors resulting in arrest of wrong woman

Paula Ann Milligan was arrested for multiple fraud counts and humiliated when her arrest was televised by a local station.  All charges were dropped a week later when police authorities realized that they had mis-identified Milligan after a clerk failed to cross-check her identifying information with the information contained on the original arrest warrant.  The arrested Milligan had a single traffic ticket in her history that put her name in the "system:"  when it came up, the clerk simply issued the new warrant despite the fact that the age, physical description and address didn't match.  The day after charges were dropped, the local TV station twice aired video of Milligan's arrest and placed it on the station's website.  It was gradually removed at the Milligan's attorney's demand.

Insurer must honor its obligations to innocent co-insured despite fraud by another insured in claiming fire-damaged contents

Roxanne Hicks was denied any insurance proceeds after her home burned because her husband had mis-stated some of the contents damaged in the dwelling. The Supreme Court recently ruled that Hicks, an innocent victim of the fire and the husband's fraud, was not prohibited from collecting for her losses.  Her sympathetic story is explained in a prior decision at 490 Mich 888.  On remand to the Court of Appeals, the insurer, the Auto Club, argued that an exclusion in its policy allowed it to refuse to compensate even an innocent co-insured after fraud by a claimant.

Speaker who fell off the back of crowded stage cannot sue Hotel

Norma Chesser was one of several speakers at an event held at the Radisson Plaza Hotel at Kalamazoo Center.  After concluding her talk, she left the podium to return to her seat and "disappeared" off the back of the stage, injuring her shoulder.  She sued the Hotel, alleging that the stage arrangement, positioning speakers in close proximity to a fall hazard without any railing, was unreasonable.  Her attorneys presented the court with industry standards that had been violated by the arrangement and with admissions by hotel employees recognizing the continuing unsafe condition.

Lawn company has no coverage for error in applying pesticide

Looking Good Lawns sued its insurer, Secura, after it mistakenly applied a non-selective herbicide to several lawns under its care.  It argued that a herbicide endorsement in the policy required the insuer to cover the expenses incurred in repairing the customers' lawns, however, Secura argued that the herbicide endorsement did not "trump" two exclusions in the policy.  The Court agreed with the insurer that  exclusions that denied coverage for the insured's own work and for damages caused on the property where work was being performed both would control over the herbicide endorsement, eliminating any coverage.

Church loses dispute with insurer over errors made by insurance agent

The Evangelical Presbyterian Church sued American Fidelity Assurance Company  (AFA) after AFA refused to cover medical expenses through the Church's health insurance.  The Church self-insured basic health expense coverage and then purchased "stop-loss" coverage through an insurer to pick up the balance of health-related expenses.  In the year at issue, however, the agent working as a go-between filed an inaccuarate summary of which employees presented greater expense risk. The "stop loss" insurer required full disclosure of all employees who had incurred significant expenses in the past year or who had particular potentially expensive diagnoses, and two such employees were omitted.

Court holds title insurer did not violate contract, despite two-year delay in clearing title

Michigan Properties, LLC sued two title insurance companies, arguing that they had breached their obligations to provide clear title to property the Plaintiff had purchased.  The Court held that the title insurers had not promised to clear the subject title at the time of the closing and had ultimately fulfilled their duty to clear the title, even though it took them two years to accomplish the task. 

Court upholds dismissal of woman's claim of illegal conversion/seizure of car and cash

Michigan First Credit Union sued Barbara Smith after she publicly claimed that the Credit Union had illegally seized her car annd $40,000.00 from her Credit Union account.  The Credit Union sued for defamation after Smith publicly protested in front of the Credit Union's office, and Smith counter-sued for conversion, arguing that the credit union illegally repossessed her car and seized the cash in her account.  A succession of judges and courts were forced to rule on the complicated and highly-emotionally charged series of transactions, and Smith's claims of unfair treatment within the court system.  Ultimately her counter-claim was dismissed on procedural grounds, at least in part because she was acting without benefit of counsel.

Trial judge errs in dismissing malpractice claim after doctor's insurer's bankruptcy claim

The Estate of Samuel Alexander sued Trillium Hospital and Dr. Ramana Chennubholta, arguing that a misdiagnosis in the Emergency Room resulted in Alexander's death from pancreatitis.  Not long before trial, the doctor's insurer was declared insolvent and filed bankruptcy.  The trial court responded to the automatic bankruptcy stay by treating the case as "administratively closed"  and did not re-set the case for trial when the bankruptcy was closed.

Claim arising from trip over pallet in Big Lots Store is dismissed

Lois LaFontaine turned an aisle while shopping at the Oakland County Big Lot store and her shin struck a pallet protruding into the aisle.  She fell and allegedly suffered injury.  The Court dismissed her injury claim, finding that the pallet was an "open and obvious" hazard which the store owed no duty to remedy.  The Court also held that the case arose from a "condition" on the premises, and therefore a claim for negligence against the store employees for leaving the pallet in a "camouflaged" location was untenable.

Michigan Supreme Court reverses Court of Appeals' holding that contract immunity does not apply to protect defendant from its own negligence.

In June, the Court of Appeals ruled that a contractor was not immune from negligence simply because it signed a contract with the City of Royal Oak that imposed certain safety requirements.  The two concurring Court of Appeals judges determined that the injured party, Frederick Price, had pleaded a duty owed by the contractor to him that was "separate and distinct" from the contractual duties it assumed to the City. 

Newspaper derides claim that "tort reform" resulted in savings to consumers

The editors of the Henderson Daily News in Texas published an article this month repudiating claims that adopting aggressive "tort reforms" had resulted in benefits to consumers.  The Editors pointed out that limiting victims of medical malpractice to $250,000.00, as Texas did in 2003, was touted as a means of lowering the cost of medical care and health insurance.  It was also suggested that it would make Texas a more hospitable location for doctors.  The outcome after almost nine years? Well, not so good.  Texas did not obtain a competitive advantage over other states by reason of tort reform. 

Court reverses another summary disposition wrongly based on "contract immunity."

Richard Burns lost his home in a fire caused by a defective wood stove.  He and his insurer, USAA, sued JCS Fireplace and a contractor, arguing that the negligent installation of the wood stove made the contractor, JCS (and their insurers) liable for the resulting fire damage.  The trial court dismissed the negligence case, citing the Republican Supreme Court's much-criticized "contract immunity" holding. 

Court "harmonizes" policy coverages and exclusions by eliminating coverage despite lack of evidence.

Lawrence and Laura Williams suffered water and mold damage in their basement when a storm knocked their power out.  They argued that the damage--some $38,000.00 worth--should be covered under their homeowners' insurance policy with Home-Owners Insurance Company (a subsidiary of Auto Owners).  Their policy covers related damage if it results from a storm-related power outage, so they thought they were set.  The insurer pointed to another exclusion, however, that limited coverage to $5,000.00 if the damage was caused by a non-operating sump pump.  The insurer argued that this provision "trumped" the coverage provision and the Court of Appeals agreed. 

The Williams also objected that there was no direct proof to support the insurer's claim that the damage was caused by the sump pump stopping.  The Court essentially held that no such direct proof was required.

Mortgage holder who forecloses after fire cannot also grab insurance proceeds

In a rare win for consumers in Michigan's courts, the Court of Appeals followed old precedent and ruled that Wells Fargo Bank, N.A. could not grab the $38,000.00 in insurance money owed by State Farm on a fire policy.  Wells Fargo had already foreclosed on the property and sold it for $64,000.00.  In doing so, under existing Michigan law, Wells Fargo extinguished its right to keep the insurance proceeds payable after the fire.  We'll see how long this decision holds up, once Wells Fargo appeals to the current insurance-beholden Republican majority on Michigan's Supreme Court.  They have shown no reluctance to overturn longstanding precedent where it will benefit their campaign benefactors.

Injury victims "0 for 3" on the day: Summary judgment granted to insurers in all cases, including dob bite.

Brian Stacey, a minor, suffered serious scarring when he was bit by a neighbor's pit bull.  He sued the Colonial Acres Associates, LLC, and Newbury Management Co., the operators of the trailer park where he lived, alleging that they bore some of the responsibility for his injury.  Through his parents, Stacey argued that the Defendants had violated their own rules by allowing the pit bull to live in the trailer park for years, despite the prohibition of several breeds of dogs known to have a propensity for biting or violent behavior.

Michigan Court reinstates case involving allegations of fraud and misuse of corporate identity

The Woodridge Hills Association sued Dougals Walter Williams and his corporation, alleging that Williams defrauded them and then hid from creditors behind a new corporate entity.   The Plaintiffs argued that Williams, a licensed builder, performed shoddy work in replacing their condominium roof, and then avoided financial responsibility by creating a new corporate entity.  The Plaintiffs argued that Williams transferred the assets of his corporate alter ego, Redford Roofing, into a new solely-owned corporation, D.W. Williams, LLC, and then put Redford into bankruptcy to avoid creditors.  The trial court dismissed the Plaintiff's attempts to "pierce the corporate veil" and to hold the second company liable as a "successor in liability."  The Court of Appeals reversed, holding that the Plaintiff had created a question of fact to be resolved at trial and not on summary disposition.

U.S. Supreme Court rules that claims against telemarketers can be pursued in state or federal court system

It was a surprise to no one this week when the U.S. Supreme Court ruled unanimously that Congress meant what it said when it passed the Telephone Consumer Protection Act, allowing abused citizens to file suit against the makers of nuisance telephone calls.   The Defendant in Mims v. Arrow Financial Services had argued that the legislation did not allow suit to be brought in a federal court.  The Court's opinion held that there was "nothing in the text, structure, purpose or legislative history" of the act to warrant the Defendant's argument.

Landlord's statutory duties to maintain property aren't applicable to injury cases?

Monica Martin fell and injured herself at her apartment after tripping over defective floor tiling at the top of a flight of stairs.   Under state law, apartment owners are required to "keep [rental] premises in reasonable repair" and to comply with health and safety laws.   Martin cited the violation of this and related laws by The Fourmidable Group, Inc., as a foundation for her lawsuit against the lessor for negligence.  No one contested the defective condition of the tile. Nevertheless, the Court summarily dismissed her claim and she appealed. 

Consumers are 0 for 2 in uninsured/underinsured motorist claims this week: policy language from amended policy is enforced based on "mailbox rule."

Michael Hegyl sued the Auto Club to collect Underinsured Motorist Coverage that he had purchased with his No Fault Coverage.  Hegyl was badly hurt when a driver who had fallen asleep at the wheel rear-ended his Jeep.  He settled his claim against the at-fault for the at-fault's liability limits of $20,000.00 and then attempted to recover the remainder of his damages from the Auto Club.  The Auto Club rejected his claim, relying on language in its UM/UIM policy that waived the coverage if an insured settled the underlying injury claim without the insurer's written consent.

Establishment attacks on middle class continue in Washington D.C.

In two unrelated developments this week, America's middle class took additional punches from the Republican majority in Congress and on the Supreme Court.  One involved the abusive practices of credit card companies, while the other involved steps to emasculate the Whistleblower Protection Act by the Chamber of Commerce.

Justice Antonin Scalia wrote the opinion for a Supreme Court majority that upheld a "credit relief" company's ability to avoid a class action lawsuit.  Three Oakland, California consumers sought the latter status in order to make economically viable their effort to seek justice arising out of CompuCredit Corporation of Atlanta's despicable small-print charges.  In essence, the company offered consumers a $300.00 credit card, but then, in the fine print, charged them annual service fees totalling $257.00 ($29.00 initial fee; $6.50 monthly fee and $150.00 annual fee--plus any interest charges the consumers actually incurred--presumably at a typically usurious rate of 19-30 percent).  The Court held that Congress' recent Credit Repair Organizations Act--even though it was clearly intended to end similar practices--did not authorize the abused consumers to file a legal action if there was a mandatory arbitration provision also buried in the transgressor's fine print.

In the other situation, the National Journal reported on a Chamber of Commerce campaign that has successfully moved legislation through the Republican-controlled House of Representatives.  The proposed law would require whistleblowers to report their observations internally, rather than directly to legal authorities.  Critics of the bill have adroitly identified the obvious motivation and impact of the bill:  employees with inside information of illegal activity will be squelched before their revelations can reach law enforcement.  Potential whistleblowers will be intimidated, placed at risk and potentially "bought off" if necessary, before fraud and misbehavior see the light of day.  At a minimum, the companies will gain time to "cover their tracks" before the legal authorities are alerted to illegal behavior.

The Chamber of Commerce is, in our humble opinion, the single most despicable influence in American public life.  While it once represented Main Street America and may have played a beneficial role in domestic public policy, in twenty-first century America, it is simply the most powerful tool of the "one-percenters" who dominate public policy with excessive profits and are squeezing the middle class out of existence with their overwhelming financial power.

Risperdal maker faces additional exposure (in hundreds of millions of dollars) for illegal marketing

In 2010, a Court in Louisiana awarded the State 257.7 million dollars against Johnson & Johnson, for its illegal marketing of the drug. In 2011, a South Carolina judge ordered the company to pay $327 million dollars because of its illegal marketing efforts in that state.  Two weeks ago, the company agreed to a one billion dollar civil settlement with the federal government over the latter's claim that Risperdal was marketed illegally.  This week a trial started in Texas over that state's claim that Johnson & Johnson owed more than one billion dollars in false marketing damages.    Risperdal is an antipsychotic drug that was never approved by the FDA for treatment of children or the elderly.  Despite that limited approval, courts and experts have determined that the manufacturer lied about the drug's efficacy and encouraged physicians to prescribe it for unsafe and unproven purposes.  Cases are also pending in seven additional states.  Cases in two states are on appeal, including a 330 million dollar judgment in Louisiana. There are also approximately 500 individual injury claims pending against the company.

Risperdal was once the company's best selling dru, generating sales in excess of 24 billion dollars from 2003 to 2007 when it lost patent protection. Profit margins were apparently pretty good, as the South Carolina judge concluded that Johnson & Johnson's profit on the drug was 97 percent of total sales.  Other competing manufacturers have paida total of2.66 billion dollars to resolve similar government marketing claims.

The Texas allegations against the manufacturer include claims that it paid $340,000.00 to Texas state mental health employees to promote the drug.  They also include claims that sales representatives were making marketing calls on doctors who only treat children--despite the company's claim that it did not market the drug for use with children or the elderly.  The Complaint filed in Texas includes specific facts that seem unlikely to be false, for example the allegation that the company's sales representatives called on one child psychiatrist a total of 96 times.

Michigan citizens won't be recovering any of their hundreds of thousands of mis-used tax dollars from the companies who defrauded our taxpayers:  Michigan Republicans passed the only law in the nation that grants immunity to drug manufacturers if their product was approved by the FDA.  They can safely lie, cheat, steal or bribe in our jurisdiction, apparently.

Michigan Supreme Court Republican majority reverses Court of Appeals; dismisses injury claim against mining firm

Under a unique agreement, the State Department of Transportation leased land from O-N Minerals Company underlying M-134 in the U.P., and built a reinforced crossing site for the Minerals company to use when crossing the highway.  The O-N vehicles crossing the highway included very heavy and tracked vehicles and they severely damaged M-134 at the crossing site.  Debra K. McCue was very badly hurt when she attempted to bike across the site during a DALMAC bike tour and her husband brought a wrongful death survival claim against O-N.  He claimed that O-N was negligent in tearing up the crossing site, failing to repair it and failing to notify the State of the damage it had caused.  The Court of Appeals agreed with McCue and rejected O-N's effort to dismiss the claim.  On appeal, the four insurance-oriented Michigan Supreme Court Justices overturned the lower court's decision and dismissed McCue's claim. 

Progressive sells illegal policy and then avoids PIP responsibility because written notice was not received

In a bizarre decision signed by Henry Saad and Peter O'Connell, the Court of Appeals upheld the dismissal of a PIP claim brought by Amerisure Insurance Company against Progressive Michigan Insurance Company.  Progressive sold an auto policy that did not comply with Michigan law because it did not contain Personal Injury Protection benefits.  Under Michigan law, it remained liable for those benefits provided by statute.  Amerisure paid the PIP benefits owing to the injury victim and then sought reimbursement from Progressive. Progressive's adjuster denied any obligation, citing the policy's [illegal] exclusion of PIP coverage.  The policy also did not contain the standard Michigan language requiring that an insurer receive written notice of PIP claims within one year.