LAW FAX. A Publication for Insurance Providers and Adjusters

Transcription

1 FROM THE LAW OFFICES OF Volume XXI, No.1 January 5, 2009 LAW FAX A Publication for Insurance Providers and Adjusters Garan Lucow Miller, P.C West Long Lake Road, Suite 300 Troy, Michigan From the Co-Editors James L. Borin & Simeon R. Orlowski SUPREME COURT RULES THAT NO-FAULT PLAINTIFFS SUSTAINING SUCCESSIVE INJURIES MUST PROVE THAT SERIOUS IMPAIRMENT RESULTED FROM THE ACCIDENT AT ISSUE Beth Andrews - Contributor 1 You have undoubtedly seen claims involving these unlucky souls. During recovery from one injury, they are involved in a second accident. If the injuries are to different body parts, the tortfeasor in the first accident pays for the injuries he inflicted, and the tortfeasor in the second accident pays for those she inflicted. But what if the injuries are indivisible to the same part of the body and impossible to separate as to causation? This was the situation in Benefiel v Auto-Owners Insurance Company, Mich (2008) ( , # ), vacating 277 Mich App 412; 745 NW2d 174 (2007). The Supreme Court did not issue a full opinion, preferring to merely vacate the lower appellate court s opinion and remand the case to the trial court for further proceedings in accordance with its order. Significantly, however, this was a 4 to 3 decision, with Justice Clifford Taylor s vote tipping the scales. The dissent in this case leaves little doubt that outcomes on this and other serious impairment cases 1 Ms. Andrews is a Shareholder in the firms Troy Office and can be reached at (248) or bandrews@garanlucow.com G ARAN LUCOW MILLER, P.C.

2 GARAN LUCOW MILLER S LAW FAX PAGE 2 may well change when newly-elected Judge Diane Hathaway replaces Justice Taylor in January In Benefiel, the plaintiff had successive motor vehicle accidents with injuries so similar that both parties admitted it would be difficult if not impossible to determine which accident caused which injuries. Plaintiff, however, claimed that his injuries from the first accident were healing and would have significantly resolved but for the second accident. Plaintiff settled with the other driver in the first accident and then sued the driver in the second accident, claiming that the second accident resulted in a temporary serious impairment of body function for which he was entitled to noneconomic damages under the no-fault act, MCL (2). Under 3135(7), a serious impairment of body function means an objectively manifested impairment of an important body function that affects the person's general ability to lead his or her normal life. (Emphasis added.) In its decision in Kreiner v Fischer, 471 Mich 109; 683 NW2d 611 (2004), the Supreme Court required a no-fault plaintiff to prove that the impairment has affected the course of his or her life based on a multi-faceted inquiry, comparing the plaintiff's life before and after the accident as well as the significance of any affected aspects on the course of plaintiff's overall life. (Id.; with emphasis.) The primary issue in this case was which life was Mr. Benefiel s normal life : his life before the first accident or his (still-impaired) life immediately before the second, when he was allegedly still recovering from his prior injuries? At common law, where 2 tortfeasors caused an indivisible injury, either one could be held jointly and severally liable for the entire thing. According to the majority in Benefiel, this rule no longer applies in third-party no-fault cases. The trial court granted summary disposition to the defendants based on the fact that the plaintiff s life after the second accident was not substantially different than it had been just before that second accident (i.e., between accidents). Essentially, the trial court held that plaintiff s normal life was that which he lived after the first accident. The Court of Appeals reversed and found a temporary serious impairment as a matter of law, comparing plaintiff s present life with his life before the first accident. In effect, the trial court applied the common law rule, holding that if the injuries were truly indivisible, then plaintiff s life before the first accident was his normal life and the one which should be compared to his present life. The Supreme Court disagreed and vacated the Court of Appeals opinion, remanding the case back to the trial court so it could decide the dispositive motion again, using plaintiff s life before the second accident as a comparison. The Supreme Court s majority opinion stated: A plaintiff who has suffered successive injuries bears the burden of proving that his current injury was caused by the subsequent accident (and not by some independent occurrence). See Richman v City of Berkley, 84 Mich App 258, 263 (1978); M Civ JI and Therefore, the plaintiff must prove that his

3 GARAN LUCOW MILLER S LAW FAX PAGE 3 preexisting impairment is temporary in order to have his preimpairment lifestyle considered as his normal life. It follows that, in this situation, the plaintiff must show either that his preexisting impairment was exacerbated or that his recovery was prolonged as a result of the subsequent accident for which he seeks noneconomic damages. Furthermore, this subsequent impairment must meet the statutory threshold in order for the plaintiff to recover noneconomic damages. In other words, it was part of plaintiff s burden in proving serious impairment in the first place to prove that his injuries from the first accident were only temporary and that he would have recovered but for the second accident. Note, however, that if the injuries are truly indivisible in the first place, plaintiff will not be able to meet this burden, and his threshold claim will necessarily fail. (And this same analysis can be applied to other pre-existing medical conditions not caused by accident.) A dissent authored by Justice Cavanagh and joined by Justices Kelly and Weaver agreed that there was a question of fact on serious impairment (and thus the Court of Appeals should be reversed), but disagreed that the statute imposed such a burden of proof on the plaintiff. In their opinion, the statute does NOT require that the plaintiff prove that the pre-existing injuries were not permanent in order to recover for the second injuries: [I]n a multiple accident scenario, a plaintiff [need not] prove that his preexisting impairment is not permanent in order for his lifestyle before that preexisting impairment to be included in his normal life evaluation... [T]his new lack-ofpermanency element is wholly absent from the statute s text... One s normal life is not limited to the narrow temporal snapshot directly before the accident. Nor is one s normal life limited to his life after a prior permanent injury. Instead, one s normal life includes a broader factual analysis than the majority order suggests in this case. The dissent believed that the majority wrongly conflates the distinct questions of serious impairment and causation, which they considered to be distinct issues: [Serious impairment] involves a totality-of-the-circumstances analysis of many subjective indicia of the injury s effect on the claimant s entire normal life: medical history, work history, and recreational-activity history. This stands in stark contrast to the causation analysis, which is a simple objective evaluation of what factual differences in person A s life are legally attributable to person B s actions. The causation question is very limited in scope and it does not include extensive qualitative analysis. Then (as a harbinger of things to come?), Justice Cavanagh s dissent noted: Finally, I continue to believe that Kreiner was wrongly decided. But I realize that a majority of this Court continues to believe otherwise. Accepting this, I seriously question Kreiner s efficacy as a clarion statement describing what does, or

4 GARAN LUCOW MILLER S LAW FAX PAGE 4 does not, establish a serious impairment. Here, as in other post-kreiner cases, the majority order simply cites Kreiner s rule and then adds an element that was wholly absent from that decision. Kreiner simply does not include a lack-ofpermanency element in its comprehensive serious impairment analysis. Hence, this new element is the latest edition of this Court s changing application of the statute under a fabricated application of Kreiner. I must note that the majority order in this case validates my earliest reservations about Kreiner, a case in which I observed that [t]oday s decision [Kreiner] serves as a chilling reminder that activism comes in all guises, including so-called textualism. Id. at 157 (Cavanagh, J., dissenting; emphasis added). So, for now, you should (1) carefully review any claims where the plaintiff sustained successive accidents involving similar injuries to see if those injuries fit within the factual parameters of the Benefiel case and (2) recognize that all precedents on serious impairment of body function and especially Kreiner will soon be up for grabs.

5 GARAN LUCOW MILLER S LAW FAX PAGE 5 STATUTORY OWNER OF UNINSURED VEHICLE NOT ENTITLED TO PIP BENEFITS Alicia Siefer - Contributor 2 In Amerisure Insurance Co. v Lamson and Auto-Owners Insurance Co. v Department of Community Health, unpublished opinion per curiam of the Court of Appeals, issued November 18, 2008 (Docket No ), the Court of Appeals affirmed the trial court s ruling which held the owner of an uninsured vehicle was disqualified from receiving PIP benefits under MCL (b). James Lamson lived with his cousin, Jennifer Ferree, in Virginia for approximately 6 months in Ferree owned a 1994 Ford Aspire. In August 2005, James quit his job and drove the vehicle from Virginia to Michigan to move into his mother s condominium in Fenton. On August 27, 2005, while driving the vehicle, James got into a severe accident. At the time of the accident, the vehicle was registered in Virginia and had a Virginia license plate. James had been in Michigan for 7 to 10 days before the accident occurred. Sharon Lamson, James s mother, filed an application for PIP benefits with the Michigan Assigned Claims Facility. The Assigned Claims Facility assigned the case to Amerisure. Amerisure filed a complaint for declaratory relief, requesting that the trial court find that James Lamson was not entitled to PIP benefits because he owned an uninsured car at the time of the accident. Amerisure argued in the alternative that if the trial court did find that James was entitled to benefits, then it should also find that Sharon Lamson s insurer, Auto-Owners was responsible to pay those benefits. Lamson counter-claimed against both Amerisure and Auto-Owners, compelling them to pay PIP benefits. During discovery, James Lamson s cousin, Jennifer Feree, mother and father testified as to the ownership of the vehicle. Jennifer testified that James purchased the 1994 Ford Aspire from her, specifically, he purchased the car for $500 in cash to be paid on a weekly basis. She confirmed there was no written agreement for the sale, however, she delivered a certificate of title with her signature. She also indicated she believed that James was going to move back home to Michigan intending to live there. Jennifer admitted that she did not maintain insurance on the vehicle as she did not use it for personal use. James s mother testified that she was unaware that James purchased the vehicle. According to her testimony, James told her he had quit his job and was coming home. When she asked her son how he was getting home, he responded, I m going to drive [Ferree s car]. James s father testified that James could not have purchased the vehicle, as he did not like the car. 2 Ms. Siefer is an Associate in the firm s Troy Office and can be reached at (248) or asiefer@garanlucow.com G ARAN LUCOW MILLER, P.C.

6 GARAN LUCOW MILLER S LAW FAX PAGE 6 Amerisure moved for summary disposition, arguing that because James resided with his mother, Amerisure was not responsible for PIP benefits. Auto-Owners also moved for summary disposition, arguing that James was precluded from recovering PIP benefits because he was the owner of an uninsured vehicle. The trial court granted Amerisure s motion for summary disposition, finding that James resided with his mother, which effectively made Auto-Owners the insurer responsible to pay any benefits that Lamson might be entitled to receive. However, it denied Auto-Owners motion, concluding there still remained a question of fact as to whether James was the owner of the vehicle. Lamson then moved for summary disposition under MCR 2.116(C)(9) and (10), arguing that under Virginia law, no sale occurred between James and Ferree, so he was not the owner of the vehicle. Auto-Owners opposed Lamson s motion. The trial court granted Auto-Owners motion for summary disposition, finding that James Lamson owned the vehicle. On appeal, Lamson raised two arguments. First, she argued that the trial court erred in not 3 applying MCL (1) to this case because Ferree, a nonresident, was the owner of the vehicle. Second, Lamson argued that even if MCL (2)(g)(i) does apply to this case, there is a genuine issue of material fact as to whether he had the right to use the vehicle for more than 30 days. The Michigan Supreme Court has made it clear that to be an owner under MCL (g)(i), a person need not have actually used the vehicle for more than 30 days; rather, the person need only have the right to such use. Twichel v MIC Gen Ins Corp, 469 Mich 524, (2004). The Court of Appeals reasoned that, based upon the evidence presented in this case, James Lamson was the owner of the vehicle because he had the right to use of the vehicle for more than 30 days. Specifically, Ferree testified that she sold the vehicle to James for $500 and delivered a signed certificate of title to him. Further, James quit his job to move from Virginia to Michigan, Ferree did not accompany James to Michigan, and there was no evidence that James intended to return the vehicle to Ferree within 30 days. The court pointed out that Lamson s proffered witnesses do not disprove Ferree s testimony that she sold the vehicle to James, however, this is irrelevant to the test set forth in Twichel, which focuses on whether James had the right to use the vehicle for 30 days or more and not whether he had possession of the vehicle for 30 days. In addition, responding to Lamson s argument that the trial court erred in not applying MCL (1) to this case, the court held that even if Ferree was a non-resident owner of the vehicle, that does not mean that James Lamson, a Michigan resident, could not also be an owner under MCL (2)(g)(i). Accordingly, the Court of Appeals affirmed the trial court s conclusion that as a matter of law, James was an owner of the uninsured vehicle and not entitled to no fault benefits. 3 MCL (1) provides as follows: A nonresident owner or registrant of a motor vehicle or motorcycle not registered in this state shall not operate or permit the motor vehicle or motorcycle to be operated in this state for an aggregate of more than 30 days in any calendar years unless he or she continuously maintains security for the payment of benefits pursuant to this chapter.

7 GARAN LUCOW MILLER S LAW FAX PAGE 7 It is important to note that if a person has a right to possession of a vehicle for more than 30 days, but not actual possession of the vehicle for 30 days, that person can still be deemed an owner under 3102(g)(i). Moreover, this case illustrates the fact that it is possible for there to be more than one owner of a motor vehicle.