TOV Injury and Safety Blog

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."

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.

Insurer sues to "double-dip" Catastrophic claim fund; loses

Old Republic Insurance Company is registered to sell no fault insurance in Michigan.  It is, therefore, obligated to contribute to the catastrophic claims fund (MCCA) and entitled to reimbursement for PIP payments in excess of $300,000.00.  It insured a truck owned by Pepsi Cola under a self-insurance agreement that included, in essence, a $500,000.00 "deductible."  The truck was involved in a collision with a motorcyclist, causing the biker more than a half-million dollars in medical expense.  Even though it had spent nothing, because of Pepsi's deductible, the insurer sued the MCCA for "reimbursement" of the medical expense "incurred" by the cyclist. 

The Court held that this claim was nonsense and that if the insurer were actually paid by the MCCA, it would owe that money back to the MCCA by reason of a third-party's (Pepsi's) payment.  The Court held that it would not compel the MCCA to pay a bill under circumstances where the payee was obligated to immediately tender reimbursement.

USAA penalized for unreasonable delay in paying no fault PIP medical benefits

USAA, the company that advertises its "special relationship" with military families and claims to provide them with enhanced service, was penalized again this week for unreasonably delaying payment of no fault personal injury protection (PIP) benefits.  The insured, Rana Reyes, who suffered from depression, became distressed in 2008 when her boyfriend changed his Facebook status to "single."  She accompanied the love interest to the bar, where she became intoxicated and highly emotional.  As they were driving home from the bar, she became angry when her companion would not reciprocate her expressions of love and announced she was leaving the car. She opened the door and fell out at 35-40 miles per hour.  Her head was struck by the rear passenger wheel, causing a severe head injury.

Court holds that where joint custody exists, child is domiciled in both homes for purpose of no fault coverage

Josalyn Lawrence suffered fatal injuries in a car accident.  Her mother's car was insured with Farm Bureau and her father's car was insured with the Grange Insurance Company. The parents were divorced and the court had awarded them joint legal custody of Josalyn.  She stayed with her mother most week days but maintained a bedroom and possessions at her father's home and spent most every other weekend with him. 

Farm Bureau paid Josalyn's PIP benefits (medical and a small burial expense) and the Grange refused to reimburse one-half of these expenses.  The Grange argued that Josalyn's sole domicile was with her mother and that its policy dictated that the insurer for her "principal domicile" was solely responsible for PIP benefits.  The trial court and the Court of Appeals rejected this argument, holding that Josalyn was domiciled with both parents for purposes of the no fault act.  The Court of Appeals also noted that Grange's attempt to define a "principal" domicile excusing it from shared PIP responsibility was illegal and not controlling. 

It would be interesting to evaluate whether the courts would also give the family the benefit of any uninsured or underinsured motorist coverage that they may have purchased; or, whether the insurers will be allowed to enforce a "primary domicile" provision to refuse to pay these coverages where the benefit of a shared domicile would inure to the premium-paying family.

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.

Geico loses battle over insurance priorities

Tamkia Gordon disclosed to Geico that she was planning a move to Mississippi, that she traveled between Michigan and Mississipi frequently, and that she planned to move the registration of her vehicle to Mississippi and "garage" her car there.  On that basis, Geico provided Tamika Gordon with No Fault coverage on her vehicle through a Mississippi policy with an accompanying Michigan no fault certificate.  Gordon incurred two small claims in Michigan involving the car, which Geico paid.  When the policy was renewed, however, in 2007, Geico did not include the Michigan Certification and three days later Gordon was involved in a motor vehicle collision. Geico refused to pay her medical and sought the Court's permission to invalidate her coverage entirerly, claiming that she obtained it under false pretenses.

Chrysler Insurance Company No Fault policy is voided and reformed by court due to illegal attempt to shift PIP obligations

Titan wins battle with State Farm over who must pay motorcyclists' medical expenses

Troy Hughes suffered catastrophic injuries in a car-motorcycle collision.  He did not have medical coverage for bike injuries, but he did have auto no fault PIP coverage  with Titan Insurance on a car.  State Farm had insured the pickup involved in the collision, but it never confirmed that the man who insured the pickup did not actually own it:  it was insured by David Curtiss, father of the registered owner, Bradley Curtiss.  The driver of the pickup, Courtney Van Eck, had married Bradley five days earlier (and the parties disputed whether or not she lived in David Curtiss's home).  State Farm paid the first $1,000.000.00 of PIP benefits and then stopped payments entirely, claiming that Titan was higher in priority and should be paying.  Titan paid an additional $200,000.00 in benefits before suing State Farm to secure a ruling that it was higher in priority among insurers, as the insurer of the owner of the truck. 

Families seeking $30.00 per hour round-the-clock "life skills" attendant care services lose appeal

Pamela Armisted and the guardians of five other severely brain-injured families sued State Farm Mutual to recover attendant care benefits that State Farm deemed excessive.  State Farm paid the families for 24-hour care, apparently, however, it refused to pay them $30.00 per hour based on the market cost of "life skills trainers."  After extensive discovery which resulted in the court sanctioning State Farm for misconduct, a 20-day trial was held.  The jury ultimately accepted State Farm's argument that if the families had actually provided such extensive care, they should have generated extensive documentation to confirm it.  On that basis, the jury ruled that the families were not entitled to the higher per-hour payment rate.

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.

Couple allowed to sue insurance agent for value of expensive ring

Barbara and Steven Lemberg sought replacement value insurance coverage for an engagement ring with an appraised value of .....get this....$107,000.00. They consulted with their insurance agent, Kenneth Korotkin, who procured the insurance.  When the ring was lost, however, the coverage through Chubb Insurance was limited to $36,776.00.  The couple sued their agent for procuring inadequate coverage.  A four-day trial was held in Oakland County, after which the jury awarded the Lembergs the difference in value between the actual replacement value and the replacement value insured throught Korotkin.  Korotkin's insurers appealed the verdict, alleging that Korotkin owed no duty to the Lembergs. 

Titan Insurance not allowed to escape the consequences of its own sloppy work

Nicole Falls called the KC Insurance Agency to obtain insurance on her car.  She spoke to an agent for several minutes to make appropriate application, and then stopped at the agency to pay the initial payment.  She was handed and signed a one-page application, prepared by the agency, which disclosed that she was married.  She was not given the second page which would have identified her husband as a secondary driver in the household.  Thirty minutes later, her husband was involved in a fatal collision.

Titan immediately claimed fraud and material misrepresentation.  It attempted to avoid paying the Falls' expenses and attempted to reduce the couple's liability coverage (payable to the family of the decedent in the motor vehicle collision) from the $100,000/$300,000 purchased, to the state minimum of $20,000/$40,000. Titan claimed that if Nicole had properly disclosed her husband's name as a household driver, it would have charged an additional annual premium of $57.00 more ($1,095 rather than $1,038).

Fired builder cannot demand direct payment from fire insurer

Sparkle Builders I, Ltd. sued George and Brenda Boines and Farmers Insurance Exchange, arguing that the insurer should make direct payment to Sparkle for the profit it would have earned in remediating the Boines' fire-damaged home.  The Boines had retained Sparkle to make repairs and had fully paid the builders to make temporary repairs and "board up" the home.  The Boines were apparently dissatisfied with Sparkle's work and refused to retain them to make permanent repairs.  The builders then attempted to seize their insurance payments from Farmers in order to recoup the profit the builders "would have earned" under the contract. 

The Court denied them this remedy, noting that the "irrevocable assignment" of insurance proceeds in the builder's contract applied only to money actually due for repairs effected and the assignment was terminated when the contract was revoked.

Court of Appeals addresses issue of undue influence in life insurance dispute

Willis Tomlin was in very poor health when he allegedly decided to change the beneficiary of his life insurance to include his ten-year live-in girlfriend.  Willis' mother had been the sole beneficiary, and according to his girlfriend, Willis chose to revise the policy to name the girlfriend and Willis' daughter as equal beneficiaries.  She arranged for Willis to be evaluated by the hospital social worker and a notary public before executing the change of beneficiary form.  Willis' mother argued that Willis lacked the capacity to execute the document and that in any event his girlfriend exercised undue influence in securing the signature.

The Court noted that both the social worker and the notary testified that Willis knew what he was doing and that he was voluntarily consenting to the change.  It also noted that the girlfriend was not present at the time of execution, even though she had arranged it.  Given these facts, the court held that the girlfriend had overcome the presumption of undue influence arising out of her involvement in the execution of the form given her identification as a beneficiary, despite the evidence regarding Willis' weak and dependant state.

AAA loses PIP dispute arising out of "pre-existing condition."

Beth Baker, the mother of David Baker, sought no fault medical benefits on behalf of her son and ward, David Baker.  She claimed that a motor vehicle-related closed head injury rendered David's hospitalization necessary in response to self harm and attempted suicide.  AAA argued that because David had severe pre-existing mental problems, his closed head injury was not a cause of the need for hospitalization. 

Court denies medical provider's attempt to intervene in No Fault PIP action

Carolyn Nicholson is the mother and guardian of her daughter, Jeanne, who suffered a severe and incapacitating head injury in a motor vehicle collision.  She was forced to sue Citizens Insurance Company to secure PIP Medical benefits for her daughter.  After the case had been pending for some time, the parties agreed on a settlement that included the payment of fees and costs to Nicholson's attorneys.  At that stage, Willowbrook Rehabilitation Services sought to join the case to secure full payment for its services and to deny Nicholson's attorneys fees based on Willowbrook services.

State Farm loses PIP priority dispute

State Farm insured a motorcycle that was registered to Edward Shreve.  It was operated by Kenneth Curler who had allegedly purchased the bike, although Shreve remained the registered owner.  When Curler was hurt in a collision with an uninsured motor vehicle, Titan Insurance Company paid Curler's PIP benefits through the Assigned Claims Plan.   Titan then sought reimbursement from State Farm, arguing that as the insurer of the registrant of the bike, State Farm was obligated to pay PIP bnenefits.  The Court of Appeals agreed, concluding that despite the attempted sale, State Farm's insured remained the registered owner of the bike.

Attention brought to immunity issue involving generic drugs

In most states, a drug manufacturer may be sued if a drug it patents is sold with inadequate warnings and instructions to consumers.  The FDA approves drug warnings and labeling, but the manufacturer remains liable if the language proves inadequate in practice.  Well, actually the manufacturer remains liable in all states except Michigan where "tort reformers" gave manufacturers immunity for all drug claims involving FDA-approved drugs (even if the approval was later withdrawn or originally achieved by fraud or falsified data).

Last year, the U.S. Supreme Court majority granted immunity to generic drug manufacturers for "failing to warn," with the conservative majority holding that since generic manufacturers were merely copying the drug and labeling from patented drugs, they owed no duty to consumers to provide further information.  This immunity grant created an unlikely situation. Consider this example:  Diana Levine, a professional musician who lost a hand when an injection of anti-nausea drug in the ER caused gangrene, collected $5.8 million dollars in damages against Wyeth, the drug manufacturer.  Debbie Schork suffered the identical injury in similar circumstances, however, her claim was dismissed without compensation, because the ER nurse injected her with a generic version of the drug.

Since 80 percent of prescriptions filled in the U.S. are now filled with generics; since many health insurers now require the use of generics and the law allows pharmacies to substitute generics for prescribed medications, there is little or no justification for granting generic manufacturers immunity for inadequate warnings and instructions.  The ultimate goal of a legal system should be to render justice that is uniform, predictable, and consistent.  The situation existing with regard to pharmaceutical manufacturers enjoys none of these characteristics.

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. 

Woman who fell on leaf-covered sidewalk while entering restaurant cannot sue

In an opinion issued this week, the Court of Appeals held that "a leaf-concealed sidewalk lip was an open and obvious danger" relieving the owner of the restaurant of any duty to alleviate the danger by sweeping leaves or eliminating the "lip."  The Court continued:  "Casual observation would alert the average individual of the potential danger posed from slipping on the leaves or tripping over something hidden under the leaves."  Judge Kirsten Kelly was one of the signatories to the opinion.  She should just frankly announce that she doesn't believe in injured persons receiving compensation, regardless of the cause or the prior law. 

Now, Michigan landowners not only owe no duty to remove or improve "open and obvious" hazards:  they also owe no duty to alleviate hazards in locations where they "potentially" exist.  A visitor's failure to appreciate that there is a "potential" hazard constitutes comparative fault that should reduce the visitor's compensation.  The hazard, itself, does not thereby become "open and obvious," relieving the landlord's duty to address it.    The "open and obvious" exception to a landowner's duty to make his property safe for invitees has literally swallowed the duty itself when what invitees should have recognized as "potential" hazards become "open and obvious" hazards.  The case is Anne Clogg v. JNL Ventures, Inc., doing business as Shield's of Warren.

MEEMIC loses PIP dispute seeking reimbursement

In a memorandum opinion, the Court of Appeals ruled the MEEMIC Insurance Services was not entitled to reimbursement of PIP services it had paid.  MEEMIC had sued Rolling Frito-Lay Sales Limited Partnership under the section of the no fault act that allows reimbursement of PIP expenses where a tort (negligence) action is successfully pursued in another state. The Court ruled that the reimbursement statute did not apply but did not provide sufficient factual explanation to explain why.

Another Underinsured Motorist policy is interpreted to deny the insured benefits

Joseph P. Esmer was killed and several people were hurt when Caitlin Grubb lost control of her vehicle on a wintry US-2 in Mackinaw County.  Esmer's Estate sued HomeOwners Insurance Company, a subsidiary of AutoOwners, claiming that it owed Underinsured Motorist Coverage to Esmer.  Grubb had purchased liability insurance in the amount of $500,000 per person and $500,000.00 per occurrence.  The latter limit was then divided among the various claimants giving $270,000 dollars to the various injured parties and $230,000 to the Esmer Estate.

Michigan Insurance Company loses appeal over PIP payments to corporate "ward" in assisted living

Lawrence Stubbe, a pedestrian, suffered more than $700,000.00 in medical expenses after he was struck by a car.  The insurer of the car, Michigan Insurance Company, was required to pay Stubbe's no fault PIP benefits (including medical) as the insurer of the car that hit Stubbe, because he did not own a car or have his own PIP coverage.  Michigan sued National Liability & Fire Insurance, the auto insurer of Stubbe's assisted living facility, arguing that Stubbe was a "ward" of Quality AFC Homes, Inc., and therefore covered under Quality's PIP coverage.

Westfield Insurance Company avoids underinsured motorist obligation through deceptive coverage

Mark Robbins drove a wrecker for Ken's Service in Antrim County.  He was dispatched to pull a police cruiser out of the ditch and was operating the wrecker's boom controls to extract the cruiser when he was struck by a negligent motorist.  His "substantial" accident injuries left him "crippled for life" but the at-fault driver carried only $100,000.00 of liability coverage.  Robbins and his employer thought that Robbins would have additional coverage (up to $1,000,000.00) through the Underinsured Motorist Coverage (UIM) that Ken's Service purchased from Westfield Insurance Company.  Unfortunately, they hadn't read the fine print.

Court addresses another PIP dispute generated by a young person's scrambled domicile

Alfronia Carter was hurt in a car accident while driving a vehicle owned by Chrylser and insured by Chrysler's in-house no fault insurer.  His parents owned a vehicle insured by American International Insurance Company.  Both insurers refused to cover Alfronia's legitimate Personal Injury Protection (PIP) benefits, so he applied for benefits through the Assigned Claims Plan and Allstate was assigned to pay.  When none of the insurers recognized the duty to pay Carter's wages, services and medical expenses, he filed suit and the trial court ultimately concluded that AIG owed PIP benefits to the Plaintiff.  AIG appealed that outcome.

Insurer need not provide coverage where plaintiff's claims are reduced to fraud counts

JoAnn Wreford sued the developer of her condominium after the unit was subjected to flooding.  She joined several arguments in her complaint, including claims sounding in fraud and silent fraud.  The Court dismissed several of the counts, leaving for trial only claims that the developer had induced her to purchase condominium through fraudulently misrepresenting the suitability and drainage of the property.  The developer's insurer, Frankenmuth Mutual, then sought summary disposition, arguing that the remaining legal counts were intentional misconduct excluded from coverage.  The Court agreed that the allegations, if proven, did not constitute an "occurrence" under the policy and allowed Frankenmuth to withdraw from representing the developer.

AutoOwners avoids paying its insureds for injuries excluded in umbrella policy

April Leikert was badly hurt when her husband struck the rear-end of a Ford Expedition with their Harley-Davidson.  April was a passenger and was violently thrown from the bike.  The couple had purchased a liability policy on the bike through Progressive and an umbrella liability policy on Howard through AutoOwners.  Progressive paid over its $250,000.00 in coverage to April, but AutoOwners claimed that its umbrella policy did not apply to injuries to April.  It filed a Declaratory Judgment action against the Howards, arguing that it owed no coverage for April's damages.

Pioneer State compelled to pay mold loss after mismanaging claims procedure

Barbara Pearson's cottage in Iosco County was damaged when a pipe broke and the furnace malfunctioned.  She alleged that the insurer re-started the furnace without adequately addressing the leaked water, resulting in a pervasive mold problem.  The insurer was not satisfied with the Proof of Loss Pearson filed and demanded supplemental proofs.  When those were provided it demanded a supplemental, signed proof of loss.  When that was filed, Pioneer's counsel refused to authorize a settlement of the claim because the [amended] Proof of Loss was not "timely" filed (within 60 days).  Pearson sued, and ultimately the Court of Appeals upheld her claim, although the judges' reasoning differed.  Two judges deemed the insurer at fault in failing to adequately document to Pearson the deficiencies in her original Proof of Loss and supporting data. The third judge concluded that regardless of Pioneer's conduct, the insured had "substantially complied" with the policy terms, rendering her claim enforceable.

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.

Insured eligible under two Underinsured Motorist Coverages; sues and Farm Bureau must pay.

Kimberly Beddingfield was a passenger in a car insured by Farm Bureau when a collision caused by an underinsured driver caused her very severe jaw and cervical injuries.  As an occupant of the Farm Bureau-insured vehicle, she was entitled to Underinsured Motorist Coverage (UIM) equal to $500,000.00.  Under her own State Farm policy, she was entitled to $100,000.00 of UIM coverage.  Nevertheless, both companies declined to pay and Beddingfield was forced to sue.

Insurer's duty to defend is evaluated, along with ruling on coverage and exclusions

Emir Ibrahimovic sued his former attorney, David Zimmerman, and the Medmarc Casualty Insurance Company, alleging that Zimmerman committed malpractice and that MedMarc, Zimmerman's insurer, should provide coverage.  Zimmerman had assisted Ibrahimovic in an earlier matter and according to the Plaintiff, he committed malpractice in enticing Ibrahimovic to hire another attorney, with whom Zimmerman shared office space, to represent him in a car accident claim.  The insurer denied coverage, relying on an exclusion that applied to partner liability or joint ventures. 

State Farm gets temporary reprieve on paying attorneys fees on PIP claim

Charles Carignan lost a leg in a car-motorcycle collision.  His doctor initially ordered 24-hour attendant care for the man while he adapted to his new condition and a Occupational Therapis recommended housing modifications.  State Farm thought it new better and declined to pay the attendant care or the entire home changes.  Carignan sued and the jury found in his favor, awarding about $11,000.00 in PIP benefits.  The jury expressly concluded that some of the payments were "overdue" (meaning that they weren't paid within 30 days of reasonable proof.  The trial court then awarded over $100,000.00 in attorney's fees after confirming that the attorney's work justified that amount.

Jury will have to decide implied consent issue where kids use RV during party

Sandra Williams' daughter hosted a party at Williams' property on the lake.  There were allowed access to the boats and other "toys" and used the RV to haul gas from the garage to the boats.  One of the kids eventually ran over another kid with the RV, causing injuries that resulted in partial amputation of a leg.  Williams defended the claim by arguing that she never consented to the operation of the RV by the drunken boy.  She did acknowledge that she had granted her children access to "the  boats and toys;" that the keys were in the RV; and that she had consented to her son the use of the RV to tote gas.  There was a dispute between the son and the kid who caused the injury over whether the son had allowed access to the RV by party-goers.

"Activist" judges restrict No Fault Act causation when pedestrian hurt by snowmobiler blinded by car

The consumer-friendly aspect of Michigan's No Fault Act was its provision of medical coverage and three years of wage loss (and minimal domestic services) to all persons who suffered injury as a result of the "use, ownership or maintenance" of a motor vehicle.  When the Act was adopted in the 1970s, interpreting jurists emphasized that it represented a policy choice to provide broad, minimal compensation for all injury victims without requiring proof of fault or retention of an attorney. Judicial opinions applying the Act pointed out that the statutory language did not require the normal proof of legal or "proximate" causation:  the injured person simply needed to prove that there was a causal nexus between use of motor vehicle and the alleged injury. Use of a vehicle must be "a significant contributing factor."

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.

Auto Owners avoids PIP obligations when injury victim's attorney doesn't advise and prepare

Keith Phillips was riding his motorcycle when he was struck by a car insured with AutoOwners.  Since AutoOwners' insured vehicle was the only car involved in the collision, AutoOwners was obligated to pay all of Phillips Personal Injury Protection benefits (i.e.,  three years of wage loss and home services and unlimited medical).  Phillips incurred substantial medical mileage and prescription expenses which AutoOwners had not paid:  he filed a lawsuit to compel payment.  When the insurer's attorneys deposed him, however, he had not calculated the amount of mileage owed or the prescription total; he presented no proof to confirm that the insurer had been billed for the various expenses.  His attorneys did not mark his receipts and records as exhibits and did not present them to the trial court when AutoOwners sought summary disposition.  As a result, the court granted AutoOwners' requested dismissal and the bills will remain unpaid.

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 holds lower court must conduct trial on the merits to assess fault by three motorists

The family of Edilee Kail Roberts sued three separate drivers after Edilee was killed in a car-motorcycle collision.  Roberts was north bound on her bike on M-37 near Newaygo when a truck driven by Travis Adams crossed the centerline and killed her.  Adams argued that he was forced to cross into the northbound lane when the van in front of him stopped abruptly in the southbound lane.  The van driver argued she did not slow or stop abruptly and the driver of the truck in front of her argued that he did not stop abruptly after missing a driveway he had intended to enter. 

Motorcyclist who suffers injury in second collision can sue for PIP benefits if first collision caused seizure that caused second collision

Ian McPherson was in a motor vehicle collision while occupying a car driven by his brother and insured by Progressive Michigan.  He suffered a seizure the following day, which his two physicians attributed to a mixture of genetic and traumatic causes. A year later, he was operating his uninsured motorcycle when he suffered a second seizure; in the succeeding crash, he suffered catastrophic injuries that rendered him a ventilator-dependant quadriplegiac.

Insurer must properly calculate PIP wage loss to seek reimbursement of Social Security Disabilty

Auto-Owners paid three years of Personal Injury Protection (PIP) wage loss to Mary Lou Fox after she was hurt in a car accident.  She also collected a limited amount of Long Term Disability (LTD) from her employer and was awarded Social Security Disability (SSD) retroactively (after the fact).  The PIP insurer was entitled to credit both forms of disability payments against its wage loss payment, and during the three year period it did take a credit for LTD paid.  The LTD insurer also claimed a credit for any SSD awarded.  When the Social Security Administration retroactively awarded  Ms. Fox SSD of $27,000.00, both insurers claimed the right to set-off that entire amount against wage loss already paid.  Auto Owners sued Fox to secure a judgment for overpayment of benefits and the judge allowed it a judgment for the full amount of SSD paid,  without calculating the amount of SSD that Fox was required to re-pay the LTD insurer.  The Court of Appeals overturned this award and sent the case back to the lower court for re-calculation.  It noted that while Fox was required to re-pay the "duplication" or "over-payment" of benefits, Auto Owners was also obligated to assure that she received the full amount of wage loss due under the law.  To calculate the overpayment correctly, Auto Owners and the court were obligated to take into account the amount of the SSD payment which Fox was required to re-pay the LTD insurer, since ultimately, she did not "receive" that payment.

Domicile of "young adult in transition" is subject matter of PIP dispute; court stresses flexible approach.

Andrew Lucio was forced to sue two no fault insurers, AAA and the Great Lakes Casualty Insurance Company, when each claimed that the other owed PIP benefits to Lucio after a motor vehicle collision.  Lucio's parents were divorced and he was shuffled between their homes through high school.  By his final year of high school, he turned 18 and chose to return to Saginaw to attend school.  To do so, he moved in with an unrelated woman who lived near the high school he wanted to attend.  Both she and Lucio's mother allowed Lucio to use their cars and disclosed him as a driver to their respective insurers.

Insurer that lost declaratory judgment action over insurance coverage cannot pursue indemnification in subsequent action

A worker was injured on a construction site controlled by the Olver C. Deluca Company.  Deluca demanded that Secura, an insurer for a sub-contractor, defend the worker's injury claim, but it refused.  Deluca then defended the claim on its own and sought reimbursement from Secura.  The Court in that case ruled that Secura owed a duty of defense and required it to re-pay Deluca.  Secura then filed suit against Farm Bureau, Deluca's insurer, seeking reimbursement or indemnification. 

Dispute between two insurers over duty to pay PIP benefits is resolved.

Jerald Sours was injured in a car accident.  He was occupying an uninsured vehicle owned and operated by Nakeysha Vond.  While Ms. Vond was "uninsured" (and therefore could not collect any PIP benefits for her own injuries), her father--with whom she lived--owned a vehicle that was insured with Westfield Insurance Company.  Westfield denied liability for Sours' PIP expenses (wages, services and medical) and Titan Insurance Co. was forced to pay them under the Assigned Claims Plan.  Titan then sued Westfield for reimbursement, arguing that Westfield was the insurer "first in line" to pay PIP benefits to a passenger injured in a car operated by Vond under the statutory language of the no fault act.

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. 

Bar not legally responsible for returning lost car keys to drunken patron

Devon Allison was at the Mo-Doggie's Bar and Grill in Genessee County with friends.  They were served to the point of visible intoxication and asked to leave.   Allison left her keys at the bar, where they were found by an employee.  She returned some time later, obtained her keys from the bartender and was then killed in a fatal car crash.  Her family sued the bar, arguing that it was negligent in returning car keys to a person known to be visibly intoxicated.

The Court dismissed the family's case.  It held that a statute which precludes a visibly intoxicated person from suing the bar that served him or her to intoxication also precludes this lawsuit.  Even though returning the keys may have been negligent, the court deemed the negligence so inherent to the illegal sale of alcohol--and the legislature's limitation on liabilty for an illegal sale--that the family's action was not allowed.

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.