News

ANNE V. McARDLE OBTAINS TWO SEPARATE ORDERS GRANTING SUMMARY DISPOSITION DISMISSING A FOUR-COUNT COMPLAINT FOR DECLARATORY/INJUNCTIVE RELIEF AND FOR BREACH OF FIDUCIARY DUTIES

Yvonne Corbat v Midland County Agricultural and Horticultural Society, Margaret Wegner, Tammi Myers, Don Anger, and Roxanne Wheeler, Midland County Circuit Court. Plaintiff filed a four-count lawsuit asserting that the defendant Midland County enacted and relied upon bylaws that were in violation of state statutes, specifically the Michigan Local Agricultural or Horticultural Societies Act and the Michigan Nonprofit Corporations Act. She sought declaratory and injunctive relief to force Midland County to stop operating under the existing bylaws, and to revise the bylaws. We filed a motion for partial summary disposition, arguing that the bylaws and applicable statutes do not conflict and the bylaws are lawful. The trial court agreed, and dismissed counts I – III of the complaint, leaving only count IV. After the court dismissed counts I – III, the plaintiff focused on count IV and took 14 depositions and requested the production of voluminous records. The court then dismissed count IV, pursuant to our motion for summary disposition, which was a final order dismissing the entire action.

ANNE V. McARDLE OBTAINS TWO SEPARATE ORDERS GRANTING SUMMARY DISPOSITION FOR PIP CLAIMS AND FOR UM/UIM CLAIMS

Jennifer Jochheim v. GEICO , Ingham County Circuit Court. Plaintiff Jennifer Jochheim was a student at MSU, who was struck by a vehicle in a pedestrian cross-walk. She sustained injuries to her right side, but most significantly, she alleged permanent serious disfigurement from gravel that was imbedded in her face, and had to undergo multiple dermatological procedures. Ms. Jochheim was not a Michigan resident, as she resided in Chicago, and her vehicle was insured under a policy issued in Illinois through GEICO, an out of state insurer. We filed a motion for summary disposition regarding PIP, asserting that the GEICO policy was not a Michigan PIP policy, and was not subject to the exceptions stated under MCL 500.3163 for PIP to apply. The court agreed, stating that since plaintiff was a pedestrian, her injuries in Michigan did not arise from her own ownership, operation, maintenance, or use of a motor vehicle as a motor vehicle, thereby defeating application of MCL 500.3163 per the specific statutory language. Regarding the third party claims, we filed a concurrence to the motion for summary disposition filed by the third-party tortfeasor, stating that if the tortfeasor does not have liability, then there is no liability for UM/UIM benefits. The court ruled that plaintiff did not establish a serious impairment because she testified there was no effect on her general ability to lead a normal life. The court ruled that plaintiff did not establish permanent serious disfigurement, because plaintiff testified that the scarring was not permanent, and through treatment, she had essentially corrected any facial scarring.

MIKE GUSS & BRENT SCOTT OBTAIN SUMMARY DISPOSITION IN TRUCKING ACCIDENT CLAIM

Alice Porter-Ives & Gary Ives v H & M Construction, et. al., Crawford County Circuit Court. While in the process of unstrapping cargo from the trailer of her commercial flatbed truck at a construction site, a large duct pipe rolled off the load and struck the plaintiff. Plaintiff filed suit against the general contractor of the project, H & M Construction, asserting that H & M’s Safety Manual required an inspection of the shipment prior to directing the plaintiff to unstrap her load, and had an inspection occurred, the absence of “blocking” would have been discovered. After discovery, we filed a motion for summary disposition on behalf of H & M, arguing that internal policies and procedures cannot be used to establish a legal duty in a negligence claim and there is no basis, beyond speculation and conjecture, to assert that H & M’s conduct fell short of the requisite standard of care. After reviewing the briefs and hearing oral argument, the court agreed with our position, granting summary disposition and dismissing all claims made by plaintiff against our client.

MICHAEL F. SCHMIDT OBTAINS JUDGMENT OF NO INSURANCE COVERAGE IN FAVOR OF INSURER

Harleysville Lake States Insurance Company v Alexander Comparoni and Encompass Insurance Company, Oakland County Circuit Court, we filed a declaratory complaint on behalf of Harleysville Lake States Insurance Company against Alexander Comparoni and Encompass Insurance Company alleging that the Harleysville homeowner policy issued to Comparoni did not provide coverage to Comparoni for a subrogation claim made against him by Encompass Insurance Company for an alleged multi-million dollar fire. We argued that coverage was excluded by multiple exclusions including "property damage" arising out of or in connection with a "business" engaged in by an insured. We obtained a judgment against Comparoni and a default judgment against Encompass that Harleysville had no duty to provide coverage or a defense to Comparoni for the underlying claim.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY DISPOSITION IN PROVIDER SUIT

Summit Physicians Group, et al v Integon National Insurance Company, 15th District Court, Summit Physicians Group, et al filed a provider suit against Integon seeking recovery for medical treatment provided to Jonathan Lamb arising out of a motor vehicle accident in which Lamb was an alleged passenger in a vehicle insured by an Integon policy. We filed a motion for summary disposition on the basis that the policy of insurance issued by Integon for the vehicle in question had been rescinded based upon material misrepresentations in the application and that per Bazzi v Sentinel Ins. Co., 315 Mich App 763 (2016), the so-called "innocent third party" rule was found invalid, and that any claim for no fault benefits by and behalf of Jonathan Lamb including by the plaintiff would be barred by the rescission of the policy. After reviewing our motion and brief, the response brief and our reply brief and having heard oral argument, the trial court agreed with our argument and granted summary disposition holding that the provider's claims were barred by the rescission of the policy.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION ON APPEAL IN THE MICHIGAN COURT OF APPEALS BASED UPON A MISREPRESENTATION IN AN APPLICATION FOR AN INSURANCE POLICY

Angela Jones v Meemic Insurance Company, Michigan Court of Appeals, plaintiff brought suit against Meemic seeking recovery for property damage from a house fire. We filed a motion for summary disposition on the basis that the plaintiff's claim was barred because the policy of insurance was rescinded because of misrepresentations made in the application that the plaintiff was a resident of the home at the time of the application when she had rented the home out to a third party. The trial court denied our motion on the basis that the policy had renewed before the fire and at the time of the renewal the plaintiff had moved back into the home and therefore there was no longer a misrepresentation. We had argued that this was irrelevant because the plaintiff made a misrepresentation at the time of the application and if the plaintiff had not made the misrepresentation the policy never would have been issued and therefore there would have been no policy to renew. We filed an application for leave to appeal to the Michigan Court of Appeals along with a motion for immediate consideration. After briefing by the parties, the Court of Appeals issued its order granting our motion for immediate consideration and ordered that the trial court's order denying our motion for summary disposition was reversed and ordered that summary disposition be entered in favor of Meemic on the basis that our argument was correct that although the representation was no longer false at the time of the renewal and as of the date of loss, this was "of no moment" since plaintiff's eligibility for the renewal hinged on the representations made in the initial application per 21st Century Premier Ins. Co. v Zufelt, 315 Mich App 437 (2016).

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY DISPOSITION IN PROVIDER SUIT FOR NO FAULT BENEFITS ON THE BASIS THAT THE PROVIDER SUIT WAS BARRED BY MISREPRESENTATINOS MADE IN THE APPLICATION FOR THE INSURANCE POLICY BY THE INSURED WHICH BARRED ALL COVERAGE INCLUDING FOR ALLEGED INNOCENT THIRD PARTIES

Omega Rehab Services, LLC v Integon National Insurance Company, 19th District Court, Omega Rehab Services filed suit against Integon National Insurance Company seeking to recover for medical treatment provided to Destiny Gaines arising out of a motor vehicle accident in which Gaines was an alleged passenger in a vehicle insured by Integon. We filed a motion for summary disposition on the basis that the policy of insurance issued by Integon for the vehicle in question had been rescinded based upon material misrepresentations made in the application for the policy and that per Bazzi v Sentinel Ins Co, 315 Mich App 763 (2016), the so-called "innocent third party" rule was found invalid and that any claim for no fault benefits by or on behalf of Destiny Gaines including by any provider would be barred by the rescission of the policy. After reviewing our motion and brief and the plaintiff's response brief and having heard oral argument, the trial court agreed with our argument and granted summary disposition holding that the plaintiff's claim was barred by the rescission of the policy.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY DISPOSITION IN CLAIM FOR FIRST PARTY NO FAULT BENEFITS

McBurrows v Safeco and American Country Insurance, Wayne County Circuit Court. McBurrows sued Safeco and American Country Insurance seeking recovery of uninsured motorist benefits and no fault benefits arising from a motor vehicle accident in which McBurrows was a passenger in a taxi that was involved in a multi vehicle accident. American County insured the taxi and Safeco insured the wife of McBurrows. After discovery we filed a motion for summary disposition on the basis that McBurrows had failed to give notice to Safeco of the no fault claim or bring suit within one year as required by MCL 500.3145 and that there was also no coverage because the policy was void based upon misrepresentations made by the insureds by failing to disclose household residents including the plaintiff. After extensive briefing and oral argument the court granted our motion for summary disposition holding that the plaintiff failed to provide proper notice or suit within one year of the accident and rejected the plaintiff's affidavit which was contrary to his dep testimony regarding the notice issue. The court also ruled that the plaintiff failed to establish that there was an uninsured motor vehicle involved in the accident.

ANNE MCARDLE & BRENT SCOTT OBTAIN SUMMARY DISPOSITION IN UM/UIM CASE BASED ON NO SERIOUS IMPAIRMENT; DALE AND CONNIE FREEBORG -V- MIC GENERAL INSURANCE CORPORATION, GENESEE COUNTY CIRCUIT COURT

Plaintiffs were involved in a motor vehicle accident and claimed injuries to their back, neck, and knees. We filed motions for summary disposition as to each plaintiff. As to Mr. Freeborg, we argued that his claimed impairments have not objectively manifested themselves in any fashion. When reviewing the medical record compilations and objective studies, all opinions and conclusions merely indicated subjective complaints of pain, degenerative conditions, and osteoarthritis, and no treating physician found any traumatic related impairment. As to Connie Freeborg, we first asked the court to rule that the plaintiff's knee injury was not “caused by” the motor vehicle accident as four healthcare experts, including plaintiff's own primary care physician and orthopedic surgeon, all testified or specifically noted in their medical records that plaintiff's right knee condition was not related to the motor vehicle accident. When the court agreed, we then argued that plaintiff’s general ability to lead her normal life had not been affected by any injuries she allegedly sustained in the accident as all her noted activities that have been affected pertained to her knee, which was not related. The court agreed and granted summary disposition as to both plaintiffs.

MIKE GUSS & BRENT SCOTT OBTAIN SUMMARY DISPOSITION IN CONSTRUCTION SITE ACCIDENT CLAIM

Jeffrey Jean v Three Rivers Construction, Saginaw County Circuit Court. While working for a subcontractor at a construction project at the Ryder Center on SVSU’s campus, plaintiff ascended a ladder, striking his head on a beam that allegedly protruded into the plaintiffs path of travel. He filed suit, alleging violation of the common work area doctrine. After discovery, we filed a motion for summary disposition on behalf of the general contractor, Three Rivers Construction, on the basis that there was no proof or evidence that the plaintiff could establish violation of three of the four requirements required to establish common work area liability. After reviewing the briefs and hearing extensive oral argument, the court agreed with our position, granting summary disposition and dismissing any and all claims made by plaintiff.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY DISPOSITION IN PROVIDER SUIT FOR NO FAULT BENEFITS ON THE BASIS THAT THE PROVIDER SUIT WAS BARRED BY MISREPRESENTATINOS MADE IN THE APPLICATION FOR THE INSURANCE POLICY BY THE INSURED WHICH BARRED ALL COVERAGE INCLUDING FOR ALLEGED INNOCENT THIRD PARTIES

Omega Rehab Services, LLC v Integon National Insurance Company, 91th District Court, Omega Rehab Services filed suit against Integon National Insurance Company seeking to recover for medical treatment provided to Destiny Gaines arising out of a motor vehicle accident in which Gaines was an alleged passenger in a vehicle insured by Integon. We filed a motion for summary disposition on the basis that the policy of insurance issued by Integon for the vehicle in question had been rescinded based upon material misrepresentations made in the application for the policy and that per Bazzi v Sentinel Ins Co, ____ Mich App ____ (docket no. 320518, 2016), the so-called "innocent third party" rule was found invalid and that any claim for no fault benefits by or on behalf of Destiny Gaines including by any provider would be barred by the rescission of the policy. After reviewing our motion and brief and the plaintiff's response brief and having heard oral argument, the trial court agreed with our argument and granted summary disposition holding that the plaintiff's claim was barred by the rescission of the policy.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY JUDGMENT IN DECLARATORY ACTION THAT THERE IS NO COVERAGE FOR UNDERLYING WRONGFUL DEATH SUIT

AMCO Insurance Company v Bari J. MacNeill d/b/a MacNeill Contracting and Penny Risteau, Personal Representative of the Estate of Jason Robert Risteau, Deceased, U. S. District Court for the Eastern District of Michigan, Northern Division, we filed a declaratory complaint to obtain a ruling that AMCO Insurance Company did not owe coverage or a defense to Bari J. MacNeill d/b/a MacNeill Contracting for the allegations and claims made against him in an underlying wrongful death suit filed by Penny Risteau, Personal Representative of the Estate of Jason Robert Risteau, Deceased arising out of injuries incurred in a Bump-n-Run event held as part of the Posen Potato Festival in Posen, Michigan. After obtaining discovery information from the underlying suit we filed a motion for summary judgment on the basis that the underlying complaint did not raise claims with respect to Bari J. MacNeill's business, but rather claims regarding his personal, non-business and hobby activities, and further, even if the underlying complaint raised issues regarding MacNeill's business, coverage would be excluded by the mobile equipment exclusion. The trial court granted summary judgment that AMCO Insurance Company owed no coverage for the claims made against Bari J. MacNeill d/b/a MacNeill Contracting in the underlying matter.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION IN AUTO/PEDESTRIAN ACCIDENT

Janet Thurman v Pies, Inc. d/b/a Domino's Pizza, Washtenaw County Circuit Court, claim by plaintiff, Janet Thurman, for alleged multiple serious injuries arising out of a motor vehicle accident in which she was struck by Pies, Inc.'s pizza delivery driver's vehicle while standing in the middle of and attempting to cross Ann Arbor/Saline Road. Discovery included depositions of all of the parties plus multiple investigating officers from the Ann Arbor Police Department and the plaintiff's liability expert, Frederick Greive. After discovery we filed a motion for summary disposition on the basis that the plaintiff had no proof of any negligence on the part of the defendant pizza driver and that the plaintiff's claim was barred by MCL 500.3135 because the plaintiff was more than 50% at fault in causing the accident. The plaintiff's theories were that the defendant was speeding, that he entered the left turn lane too soon, that the plaintiff was plainly visible as she was standing in the left turn lane and that the brakes on the defendant's vehicle were improperly maintained. We argued that based upon the Ann Arbor Police investigation, the depositions of the Ann Arbor investigating officers, and the deposition of the plaintiff's expert, that the accident occurred ninety minutes after sunset, the plaintiff was wearing all dark clothing, she was standing in the travel/turn lane of Ann Arbor/Saline Road facing to the south with her back to southbound traffic, that she failed to use an available crosswalk which was well lit and controlled by a traffic signal and pedestrian control devices, that the defendant was operating his vehicle at or below the speed limit, that the plaintiff admitted that she was standing in the road where cars could legally drive and she was aware that it was against the law for her to be crossing where she was crossing, that the plaintiff was in violation of MCL 257.676b by interfering with the normal flow of vehicular traffic and also in violation of Ann Arbor's ordinance requiring pedestrians to cross roadways at marked crosswalks and there was no evidence that the defendant could have seen the plaintiff in time to avoid impact. After reviewing the briefs filed by the parties and hearing oral argument, the trial court granted summary disposition on the basis that the plaintiff was more than 50% at fault and there was no evidence of any negligence on the part of the defendant.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY DISPOSITION IN COVERAGE CASE

In Safeco Insurance Company of America v Sebastien Lebon, Matthew Kamps and Yreva Muhammad, Personal Representative of the Estate of Robert Muhammad, Deceased, we filed a declaratory action to determine there is no duty to provide coverage or a defense to Lebon or Kamps for the wrongful death suit filed against them arising out of alleged injuries incurred by injuries and death of Robert Muhammad. We argued that pursuant to the policy there was no coverage because there was no "occurrence" and coverage was excluded by the intentional act exclusion. After filing a motion for summary disposition the court entered a declaratory judgment that Safeco had no duty to provide coverage or a defense to Lebon or Kamps for any claims made against them in the underlying action.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN AFFIRMATION FROM THE MICHIGAN COURT OF APPEALS OF SUMMARY DISPOSITION

Erin Naseef v Wallside, Inc., Michigan Court of Appeals docket number 329505 (2017), the plaintiff appealed from the summary disposition we obtained in favor of Wallside, Inc. The plaintiff claimed that she was injured while a repair crew was fixing a window in her home. We filed a motion for summary disposition arguing that Wallside, Inc. had contracted with an independent contractor to perform the work and therefore pursuant to the general rule would not be liable for the alleged negligence of the independent contractor in the performance. The trial court granted our motion. The plaintiff appealed to the Michigan Court of Appeals. After briefing and oral argument, the Court of Appeals has issued an opinion affirming the trial court ruling that the repair person doing the work was an independent contractor and not an employee of Wallside and thus Wallside was not liable for any alleged negligence in the performance.

MIKE GUSS & BRENT SCOTT OBTAIN SUMMARY DISPOSITION FOR GLOBAL ORANGE DEVELOPMENT, LLC, (DBA BIGGBY COFFEE) IN VICARIOUS LIABILITY LAW SUIT; ALFRED CHAMPAGNE -V- GLOBAL ORANGE DEVELOPMENT, LLC, ET. AL., INGHAM COUNTY CIRCUIT COURT

Plaintiff filed suit against Global Orange Development, stemming from an automobile accident that occurred on January 29, 2013. Plaintiff asserted that Global Orange was vicariously liability based on the fact that the Global Orange employee had performed a substantial amount of his work for Global Orange from his home-to such an extent that his home was effectively a second work location. At the close of discovery, we filed a Motion for Summary Disposition pursuant to the “going and coming” rule, asserting that any negligence committed by an employee who is operating a vehicle in transit to or from the workplace does not constitute an act committed within the scope of employment, such that liability can be imputed to the employer. We further argued that gratuitous work from home, which is neither expected nor required by the employer, does not transform an employee’s home into a “secondary work location.” Such a theory would subject employers to endless claims of worker’s compensation and vicarious liability. The Court agreed and granted our motion for summary disposition.

MIKE GUSS & BRENT SCOTT OBTAIN SUMMARY DISPOSITION FOR CITY OF FLINT IN AGE DISCRIMINATION LAW SUIT; DONNA POPLAR -V- CITY OF FLINT, GENESEE COUNTY CIRCUIT COURT

In 2011, the City of Flint was facing a financial emergency. Thus, the State of Michigan appointed an Emergency Financial Manager. On the EFM’s first day in office, he discharged the plaintiff, along with six other employees, and replaced them with his own trusted advisors. Three months after she was fired, plaintiff alleges that she received a phone call from one of EFM’s advisors and she was told that she lost her job on the basis that the EFM wanted to place younger African-Americans in positions of leadership. Following the phone call, plaintiff filed a lawsuit for age discrimination, alleging violation of the ELCRA. Our firm was retained several weeks before trial. After reviewing the deposition testimony, we filed a motion for leave to file a motion for summary disposition, which the court granted. In our dispositive motion, we argued that the alleged phone call constituted inadmissible hearsay as even though the EFM’s advisor was an agent for the city, the statements were outside the course and scope of his alleged agency because he played no role in human resources or personnel related decision-making. We also argued that plaintiff could not establish a prima facie case of age discrimination because she was not “replaced” and could not establish pretext. The court agreed, and granted our motion for summary disposition, dismissing plaintiff’s case in its entirety.

MIKE GUSS AND BRENT SCOTT OBTAIN SUMMARY JUDGMENT FOR THE CITY OF FLINT IN A FEDERAL CIVIL RIGHT CLASS ACTION LAW SUIT; ROBERT GARCEAU, ET. AL. -V- CITY OF FLINT, ET. AL., UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

In late 2011, a large number of sergeants within the police force decided to retire. The former chief of police, relying upon the Personnel Rules and Regulations, decided to “provisionally” appoint 15 sergeants to temporarily fill the sergeant vacancies until a sergeants promotional exam could be created and administered. To compile a listing of the individuals who displayed the greatest potential during their tenure with the Department, the former chief enlisted the help of two captains. When the sergeants test was finally created, 65 officers sat for the written exam, but only 9 officers passed and those 9 were made permanent sergeants. Of the remaining 58 officers, 7 plaintiffs failed and 8 plaintiffs neglected to even appear and take the exam. When the City offered a second examination, 27 officers passed and 26 officers failed. Consequently, the officers with the highest test scores, regardless of their race, including 3 of the plaintiffs, were automatically promoted to “permanent” sergeants. The provisional sergeants who failed the second test or who did not score high enough were all demoted from their provisional sergeant position. Nevertheless, on December 17, 2012, 14 Caucasian officers filed a class action lawsuit against the City, the former chief, and the African American captain, alleging reverse race discrimination in the provisional promotion process. 5 Officers also alleged retaliatory suspensions after the filing of the lawsuit. After 27 depositions were taken, we filed two extensive Motions for Summary Judgment, one pertaining to plaintiffs' reverse race discrimination claim and a second pertaining to plaintiffs' retaliation claims. In a 46 page Opinion and Order, the US District Court granted our Motion for Summary Judgment Regarding Reverse Race Discrimination and partially granted the City’s Motion for Summary Judgment Regarding Retaliation. Only one Plaintiff’s claim of retaliation survived the City’s dispositive motions.

ANNE MCARDLE AND BRENT SCOTT OBTAIN SUMMARY JUDGMENT FOR MIDLAND COUNTY FAIRGROUNDS IN CIVIL RIGHTS LAWSUIT; LLOYD WILKERSON -V- MIDLAND COUNTY AGRICULTURAL AND HORTICULTURAL SOCIETY D/B/A MIDLAND COUNTY FAIRGROUNDS, MIDLAND COUNTY CIRCUIT COURT

Plaintiff was employed as the head of maintenance at the Midland County Fairgrounds and filed an age discrimination claim for violations of the ELCRA after he was terminated. Upon the close of discovery, we filed a motion for summary disposition arguing that plaintiff could not establish a prima facie case of discrimination because he was not “replaced” within the meaning of the law. The court agreed, dismissing plaintiff’s complaint. The court first held that there was no direct evidence of discrimination. The court next held that plaintiff was not “replaced” as plaintiff’s job was “redefined” and plaintiff’s “replacement” did not perform all of the same duties as the plaintiff. Some of plaintiff’s duties were outsourced, and the remaining duties were absorbed by the three remaining crew members. Because no employee performed the same tasks as plaintiff, the court held that a younger employee did not replace the plaintiff and he could not establish a prima facie case of age discrimination. The court also held that even if plaintiff could establish a prima facie case of age discrimination, plaintiff could not show that defendant’s reasoning for his termination was pretextual.

MIKE GUSS AND BRENT SCOTT OBTAIN SUMMARY DISPOSITION FOR TITAN INSURANCE COMPANY IN FIRST-PARTY NO-FAULT SUIT SEEKING BENEFITS FOR AN “INNOCENT THIRD-PARTY”; RITA FOSTER, ET. AL. -V- TITAN INSURANCE COMPANY, ET. AL., GENESEE COUNTY CIRCUIT COURT

In October 2015, Plaintiff, Rita Foster, brought suit against Titan Insurance Company and the Michigan Automobile Insurance Placement Facility, stemming from an automobile collision that occurred on September 5, 2014. Plaintiff sought PIP coverage under an insurance policy that was written issued to Vincent Millender. However, through discovery, it was established that the vehicle was actually owned by Erica Nicole Jett, was garaged at Ms. Jett’s home, and would only be driven by Ms. Jett, all contrary to the application. Accordingly, we filed a Motion for Summary Disposition, arguing that the Court must hold the matter in abeyance pending the outcome of the Court of Appeals decision in Bazzi v. Sentinel Ins. Co. (Court of Appeals Docket No. 320518), a case that was directly on point and awaiting decision in the Court of Appeal. The trial court agreed with us, held the matter in abeyance pending the outcome of Bazzi, and stated that he would reconsider Titan’s dispositive Motion following the Bazzi holding. On June 14th, 2016, the Michigan Court of Appeals issued its Opinion in Bazzi, reversing the so-called “innocent third-party” rule as applied to insurance policies that are procured through a misrepresentation in the application. As such, we re-noticed the motion and argued that pursuant to the Bazzi holding, Titan is entitled to declare the policy void ab initio and rescinded, including denying the payment of benefits to any innocent third-parties, including the plaintiff. Following oral argument on the re-noticed hearing, the trial court agreed and dismissed Titan from the case.

MIKE GUSS & BRENT SCOTT OBTAIN SUMMARY DISPOSITION FOR HURLEY MEDICAL CENTER IN SLIP AND FALL; MARVA WILLIAMS -V- HURLEY MEDICAL CENTER, GENESEE COUNTY CIRCUIT COURT.

Plaintiff brought suit against Hurley Medical Center stemming from a fall that occurred on Hurley’s premises. As Plaintiff entered the main lobby entrance, due to the weather conditions outside, she shuffled her feet on a rubber backed carpet runner in an effort to dry the soles of her shoes. As she shuffled her feet, each scuff created a small ripple in the mat, causing the mat to ripple and slide out from underneath her. Plaintiff filed suit, asserting that the carpeting must have been wet because it was raining outside and should have been securely fastened to the floor. After discovery, we filed a motion for summary disposition arguing that the accident in question does not create liability as the Plaintiff’s claims are barred by governmental immunity. Alternatively, we argued that the allegedly defective condition was open and obvious and devoid of special aspects, the condition was not caused by Hurley’s active negligence, and Hurley did not have notice of the allegedly defective condition. Following oral argument, the trial court agreed with us and granted summary disposition on all four grounds and dismissed Hurley from the case.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAINED SUMMARY DISPOSITION ON A CLAIM FOR INJURY AT A GYMNASTICS CLASS

In Holly Leshinsky v Livonia Ultimate Gymnasticz, plaintiff sued in Wayne County Circuit Court for injuries incurred when she fell from a spotting block which was part of an obstacle course set up for a parkour class as part of family day activities at the defendant's premises. After discovery, we filed a motion for summary disposition that the claim was barred by the release signed by the plaintiff and because the plaintiff's claim was barred by her voluntary participation in the recreational/sporting activity. We argued that per Ritchie-Gamester v City of Berkley, 461 Mich 73 (1999), the plaintiff voluntarily engaged in recreational activity and thus voluntarily subjected herself to the risk inherent in that activity which included falling from the spotting block. The trial court agreed and granted summary disposition.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAINED SUMMARY DISPOSITION ON FIRST PARTY PROPERTY LOSS INSURANCE CLAIM

Monica Ayala v Meemic Insurance Company, plaintiff sought reimbursement for damage to her home from water and sewage. After discovery including the deposition of the plaintiff, we filed a motion for summary disposition on the basis that coverage was excluded based on the plaintiff's testimony and an affidavit from the plumber. We argued that coverage was excluded by the water damage exclusion for water that backs up through sewers or drains, from the exclusion for wear and tear, deterioration, latent defect and mechanical breakdown, and the exclusion for release, discharge, dispersal, seepage, migration or escape of pollutants or contaminants. The plaintiff argued that there were questions of fact as to the cause of the damage. We argued that there could be no question of fact and that under the only facts at issue there was no possible coverage due to the exclusions. The trial court agreed and granted summary disposition dismissing the plaintiff's complaint and claim.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY DISPOSITION ON APPEAL AGAINST CLAIM FOR REIMBURSEMENT OF OVER $850,000 IN NO FAULT BENEFITS PAID

Auto Owners Insurance Company v Integon National Insurance Company, Michigan Court of Appeals docket number 321396 (2015), Auto-Owners sought reimbursement from Integon of $838,610.48 in no fault benefits and $56,470.45 in legal expenses paid by Auto-Owners for catastrophic injuries incurred by Terry Dunn in a single vehicle accident while occupying a vehicle driven by his wife Laura Dunn. Auto-Owners had issued a no fault policy to Terry Dunn’s parents with whom he lived at the time of the accident. Auto-Owners argued that a North Carolina auto policy issued by Integon to Laura Dunn should be required to provide Michigan no fault coverage per MCL 300.3012, claiming that Integon had knowledge that Laura and Terry Dunn were moving to Michigan and required Michigan no fault coverage. The trial court had ruled that Integon had such notice and that Terry Dunn was a “named insured” and thus Integon owed reimbursement to Auto-Owners. We filed an appeal to the Michigan Court of Appeals and the Court of Appeals reversed the trial court and ordered entry of judgment in favor of Integon that Integon did not have notice that Laura and Terry Dunn had relocated to Michigan and did not need to reach the issue whether Terry Dunn was a “named insured”.

MIKE GUSS & BRENT SCOTT OBTAIN SUMMARY DISPOSITION ON MEDICAL PROVIDER CLAIM; PROCARE INJURY & REHAB CENTERS, LLC, (FOR SHER-RON LUSANE) -V- TITAN INSURANCE COMPANY, ROYAL OAK DISTRICT COURT

Procare Injury and Rehab Centers filed a lawsuit against Titan Insurance Company alleging entitlement to No-Fault provider expense benefits arising out of Procare’s alleged treatment to Sher-Ron Lusane who was allegedly involved in a motor vehicle collision. After Mr. and Mrs. Lusane’s EUO, we filed a motion for summary disposition against Procare arguing that Mr. Lusane was the “owner” of an “uninsured motor vehicle” and is excluded from No-fault benefits pursuant to MCL 500.3113(b). Because the underlying injured party is excluded from coverage and barred from bringing a cause of action, Mr. Lusane’s medical service provider, Procare, who stands in the shoes of the injured party, is also excluded from coverage. The trial court agreed with us and granted summary disposition as to all claims by the plaintiff against defendant Titan Insurance Company.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI DEFEAT CLAIMS FOR UTPA PENALTY INTEREST AND SANCTIONS

Joseph G. Nickola, Personal Representative of the Estate of George and Thelma Nickola v MIC General Insurance Corporation, Mich App (2015), a claim for underinsured motorist benefits, following an arbitration award plaintiff sought recovery of sanctions for MIC’s denial of the initial request for arbitration and also sought UTPA penalty interest of 12% totalling in excess of $149,000 for the delay of seven years in proceeding with the arbitration and payment of underinsured motorist benefits, and in addition sought pre-judgment interest. We argued that the plaintiffs had no claim for sanctions because they had waived the claim by failing to present any proofs of the alleged attorney fees and expenses incurred in the trial court for over seven years. The Court of Appeals agreed and held that this claim was waived. In regard to the claim for UTPA penalty interest, we argued that an underinsured motorist claim is not a first party claim but rather in the nature of a third party claim because the plaintiffs have to prove liability of the underinsured motorist, lack of fault on their part, that they have a threshold injury, and if so, the amount of the damages. We argued that this claim was reasonably in dispute and thus there could be no sanctions for any penalty interest for delay in payment. The Court of Appeals agreed with our argument and held that an underinsured motorist claim is in the nature of a third party claim and “fundamentally different” from a typical first party claim. The court thus held that penalty interest could not be awarded if the claim was reasonably in dispute and found that this claim was reasonably in dispute. On the pre-judgment interest issue, the court held that there had been no judgment entered and remanded for entry of a judgment and for the trial court to determine whether pre-judgment interest should be awarded. The court further agreed with our argument that the court could consider the delays in the case caused by the plaintiffs in determining how much pre-judgment interest should be awarded.

MIKE GUSS AND BRENT SCOTT OBTAIN SUMMARY DISPOSITION ON SIX (6) MEDICAL PROVIDER CLAIMS; RENUE THERAPY, LLC, -V- TITAN INSURANCE COMPANY, INGHAM COUNTY CIRCUIT COURT

Renue Therapy, LLC, filed six (6) separate lawsuits against Titan Insurance Company alleging entitlement to No-Fault Provider expense benefits arising out of Renue’s alleged treatment to numerous patients who were allegedly involved in motor vehicle collisions. After deposing the owner of Renue Therapy and the prescribing physician, we filed a motion for summary disposition on each case, arguing that the treatment performed was not reasonably necessary because the prescribing physician testified that she prescribed physical therapy, to be rendered by a licensed physical therapy facility. However, Renue Therapy’s owner testified that he operates a massage therapy clinic, and does not employ a single licensed physical therapist. Each trial court agreed, and all six (6) dispositive motions were granted, dismissing Renue Therapy’s claims in their entirety.

GARY STEC OBTAINS AFFIRMANCE OF INVOLUNTARY DISMISSAL FROM THE MICHIGAN COURT OF APPEALS IN A FIRST PARTY NO-FAULT BENEFITS SUIT SEEKING PENALTY INTEREST AND ATTORNEY FEES

Sefika Ademi v. State Farm Mutual Automobile Insurance Company and Amerisure Insurance Company, Court of Appeals No. 319934.

Suit brought by the widow of a truck driver killed in a motor vehicle accident, seeking no-fault benefits, penalty interest and attorney fees. The widow's claim for survivor's loss benefits was resolved, but the case proceeded to a bench trial on the issue of entitlement to funeral expenses, penalty interest and attorney fees. At the close of proofs, the trial court granted Amerisure's motion for involuntary dismissal, agreeing that funeral benefits were not a first party no-fault benefit at the time of the accident, and agreed that the plaintiff failed to provide reasonable proof of the amount of the replacement services and survivor's loss benefits. Since reasonable proof of the amount of the loss sustained was not provided, the PIP benefits were not "overdue" under MCL 500.3142(2) and the plaintiff was not entitled to penalty interest (MCL 500.3142(3)) nor attorney fees (MCL 50.3148(1)). The Court of Appeals affirmed, in a 14 page Opinion.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION AS TO CLAIM FOR NO FAULT BENEFITS ARISING FROM A MOTOR VEHICLE ACCIDENT ON THE BASIS THAT THERE WAS NO PROOF THAT THE PLAINTIFF HAD A POLICY OF INSURANCE ISSUED BY DEFENDANT

Marco Morones v Nationwide Mutual Insurance Company and Vincent Harden & Associates, LLC, Wayne County Circuit Court, claim by the plaintiff for no fault benefits arising from a motor vehicle accident. After discovery we filed a motion for summary disposition on the basis that the plaintiff had no proof that he had a policy of insurance issued by either defendant. The plaintiff was operating a 1998 Ford Contour at the time of the accident and presented a certificate of insurance for a 1994 Ford station wagon. We proved that the certificate of insurance for the 1994 Ford station wagon was counterfeit and fraudulent and contained a policy number for a policy issued to different individuals which had been used by at least 35 others to submit fraudulent insurance claims. More importantly, we argued that the fraudulent certificate offered no support for the plaintiff because it did not even apply to the vehicle he was driving at the time of the accident for which he also had no insurance. We filed a motion for summary disposition supported by all of the documentation and evidence, and the trial court granted summary disposition as to any and all claims made by the plaintiff.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY DISPOSITION IN CLAIM FOR AN ALLEGED INJURY INCURRED DURING A WINDOW REPAIR

Erin Naseef v Wallside, Inc., Oakland County Circuit Court, the plaintiff filed suit against Wallside, Inc. claiming she was injured while a repair crew was fixing a window in her home. After discovery we filed a motion for summary disposition on the basis that Wallside, Inc. contracted with an independent contractor to perform the work. We argued that the general rule is that the employer of an independent contractor is not liable for any alleged negligence of the independent contractor in the performance and there is no claim of negligent hiring recognized under Michigan law. We further argued that none of the exceptions to the general rule applied. The trial court agreed and granted summary disposition as to any and all claims made by the plaintiff against Wallside, Inc.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN SUMMARY DISPOSITION IN CLAIM FOR ALLEGED DAMAGES TO MOTOR VEHICLES

Marks One Car Rental, Inc. v David Todd and GEICO Indemnity Company, Macomb County Circuit Court. Claim by the plaintiff for alleged damage to two vehicles allegedly stolen from a GEICO insured. Following discovery we filed a motion for summary disposition on behalf of GEICO on the basis that the plaintiff could not sue GEICO because the plaintiff was not a party to the policy of insurance and not a third party beneficiary. In addition, we argued that the claim was also barred because of spoliation of the evidence by the plaintiff’s refusal to allow GEICO to examine or inspect the damaged property. The trial court granted summary disposition in favor of GEICO in a 16 page written opinion holding that the plaintiff could not sue GEICO because the plaintiff was not a party to the policy of insurance, was not a third party beneficiary of the policy, and also had failed to comply with the policy conditions regarding a loss. The court further held that the plaintiff’s claim was dismissed because of spoliation of evidence by the plaintiff’s refusal to allow GEICO to inspect the vehicles.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAINED SUMMARY DISPOSITION AS TO PLAINTIFF’S CONSTRUCTION ACCIDENT CLAIM AND ALSO AS TO CLAIMS FOR CONTRACTUAL INDEMNITY AND BREACH OF CONTRACT TO PROCURE INSURANCE

Ricardo Morales v Fluor Constructors International, Inc., Wayne County Circuit Court, claim by the plaintiff of total disability resulting from an alleged construction accident while working for a subcontractor at a construction project at the Marathon Oil Refinery in Detroit. After discovery we filed a motion for summary disposition on behalf of the defendant Fluor, the general contractor, on the basis that there was no proof or evidence that the plaintiff could establish violation of three of the four requirements to establish common work area liability. The plaintiff filed a motion to file an amended complaint to allege independent negligence on behalf of the general contractor Fluor. We argued there was no basis for the motion to amend and the motion should be denied as futile because there was no evidence to support the allegations. After reviewing the briefs and hearing extensive oral argument, the court granted summary disposition as to any and all claims made by the plaintiff and denied the plaintiff’s motion to amend. In addition, we also filed a motion for summary disposition on behalf of the general contractor, Fluor, against the subcontractor Ideal Contracting, LLC for contractual indemnity and breach of contract to procure insurance. After reviewing the motion and brief and response brief and having heard oral argument the trial court also granted summary disposition in favor of Fluor, that Fluor is entitled to full contractual indemnity from Ideal and in addition Ideal was in breach of the contract to procure insurance.

MICHAEL J. GUSS AND ANNE V. MCARDLE WIN SUMMARY JUDGMENT IN THE U.S. DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN, PURSUANT TO A 27 PAGE WRITTEN OPINION AND ORDER OF THE HON. LAURIE J. MICHELSON

McLeod v City of Flint, David Bender, Marcus Mahan, et al - U.S. District Court, Eastern District of Michigan, Case No. 13-CV-1287. The plaintiff, Curtis McLeod, was one of two suspects arrested in Flint after Officer David Bender observed two individuals wearing t-shirts covering their faces, appearing to be involved with criminal mischief, and who ran as soon as they observed police. Officer Bender gave chase and called for back-up, and two suspects, including Mr. McLeod, were eventually arrested. It was discovered during this time frame that a murder and robbery had been committed in the apartment where the two suspects were originally observed. One of the two suspects was later found guilty of the murder, having tested positive for gun powder residue on his hands. Mr. McLeod was held in jail for 18 months on charges of murder and robbery, but he was later released from jail for lack of evidence linking him to the crimes. Plaintiff sued Officer David Bender, Lieutenant Marcus Mahan, who investigated the murder, the City of Flint, and the Genesee County Prosecutor’s Office. The City of Flint and the Prosecutor’s Office, through separate legal counsel, were dismissed from the case. Michael J. Guss and Anne V. McArdle, representing Officer Bender and Lieutenant Mahan, filed a Motion for Summary Judgment asserting that there was a reasonable belief of probable cause for the arrest and detainment of Mr. McLeod, and that qualified governmental immunity applied. The District Court agreed, explaining that there was at least “arguable probable cause to arrest and detain McLeod”, and the dismissal of plaintiff’s allegations of false imprisonment and violations of 42 USC § 1983 was ordered.

GARY STEC OBTAINS AFFIRMANCE OF SUMMARY DISPOSITION FROM THE MICHIGAN COURT OF APPEALS IN AN AGENCY TERMINATION SUIT

Beckett-Buffum Agency, Inc. v. Allied Property & Casualty Insurance Company, Court of Appeals No. 321273.

Suit brought by insurance agency following termination of its Agency Agreement by Allied, for lack of production, since the agency failed to submit the statutory minimum twenty-five applications for insurance in a twelve month period. The agency alleged that the termination was improper because it satisfied the minimum statutory threshold, claiming that its policy renewals and reinstatements should be countered toward the statutory minimum. The Court of Appeals agreed with the trial court’s granting of summary disposition on the basis that policy renewals and reinstatements do not require a signed application and therefore, would not be counted toward the statutory minimum. The decision was issued June 9, 2015, for publication.

GARY STEC AND DANIEL JAMES OBTAINED DISMISSAL OF CLAIM BY STATE FARM AGAINST AMERISURE INSURANCE COMPANY SEEKING REIMBURSEMENT FOR NO-FAULT BENEFITS PAID

State Farm Mutual Automobile Insurance Company v. Michigan Municipal Risk Management Authority, et al., Kent County Circuit Court Case No. 2014-06579-NF.

State Farm Mutual Automobile Insurance Company filed suit against Amerisure seeking to recover no-fault benefits paid by State Farm to its insured. The accident resulting in injuries to State Farm’s insured occurred nearly twenty minutes after an earlier accident involving Amerisure’s insured, that caused a backup in traffic. State Farm argued that Amerisure’s insured was “involved” in the second accident, given the resulting traffic conditions. Amerisure filed a nominal offer of judgment and following discovery, filed a motion for summary disposition, arguing that its insured was not “involved” in the subsequent accident. Facing the prospect of offer of judgment sanctions, State Farm dismissed its complaint, prior to oral arguments on the motion.

BRENT SCOTT OBTAINS DISMISSAL OF UNINSURED MOTORIST CLAIM

Carolyn Schilling –v- Meemic Insurance Company, et al, Saginaw County Circuit Court Civil Action Number 13-020698-NI, claim by plaintiff for uninsured motorist benefits arising out of a October 8, 2010 auto accident. Litigation was initiated by plaintiff against the tortfeasor, Glyn Carpenter, almost three (3) years after the accident, on August 23, 2013. However, approximately seventeen (17) months after the initial complaint was filed and over four (4) years after the accident occurred, plaintiff amended her complaint and served defendant Meemic Insurance Company, demanding, for the first time, uninsured motorist benefits. We filed a motion for summary disposition on the basis that the clear and unambiguous terms of the insurance contract unequivocally require a complaint, or demand for arbitration, to be filed within (3) years from the date of the accident. Plaintiff attempted to argue that the three (3) year limitation requirement is inapplicable because a disagreement over coverage never arose and a demand for arbitration or suit can only be filed in the event there is a disagreement. In response, we argued that this is a fallacy as the insurer could not disagree with the insured until a request for benefits was made. The trial court agreed with us and granted summary disposition as to all claims by the plaintiff against defendant Meemic Insurance Company.

DALE BURMEISTER, ANNE MCARDLE AND GREG LAVOY WIN TWO DISCRIMINATION AND RETALIATION CASES IN MICHIGAN COURT OF APPEALS

The Michigan Court of Appeals has affirmed the dismissal of a case of alleged gender discrimination, harassment, and retaliation arising out of meetings held with a police officer regarding a uniform infraction and held that an "adverse employment action 'must be more than a mere inconvenience' and 'there must be an objective basis for demonstrating that the employment action is adverse because a plaintiff's subjective impressions are not controlling.'"

The Michigan Court of Appeals also affirmed summary disposition in a second case involving similar and other claims because there was a lack of an adverse employment action, the single actor doctrine applied, any inference of discrimination was refuted as a matter of law, and the conduct alleged did not constitute "sexual violence" or was not "sexual in nature."

State of Michigan Court of Appeals

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN DISMISSAL OF CLAIM FOR PROPERTY DAMAGE INSURANCE BENEFITS

In Suleiman v Depositors Insurance Company, the plaintiff sought recovery of alleged damages incurred to a house insured by a homeowners policy issued by Depositors. After discovery we filed a motion for summary disposition on the basis that the plaintiff did not own the property at the time she applied for the policy of insurance, the plaintiff did not have insurable interest in the property at the time of the application for insurance, the plaintiff failed to comply with the policy terms and conditions because she was not living at the premises as required by the policy, the house could not meet the policy definitions of a “residence premises” which requires that the house be lived in for insurance coverage, and the plaintiff also violated the dwelling condition of the policy, which required that the house be only used for dwelling purposes. We further argued that plaintiff violated the terms and conditions of the policy by failing to cooperate and failed to provide documents requested in the investigation. We also filed discovery motions due to the plaintiff’s failure to comply with discovery. The case was dismissed by the court.

SIXTH CIRCUIT COURT OF APPEALS AFFIRMED SUMMARY DISPOSITION OBTAINED BY MICHAEL F. SCHMIDT IN CLAIM FOR PROPERTY INSURANCE

Nationwide Mutual Fire Insurance Company v Kasey McDermott, U. S. Court of Appeals for the Sixth Circuit, docket number 14-1623 (2015). The Sixth Circuit Court of Appeals affirmed summary judgment granted by the trial court that Nationwide did not have to provide property loss coverage to its insured for property damages alleged in excess of $490,000 from a fire loss. The court addressed only one of multiple coverage defenses holding that the claim was barred by the plaintiff’s failure to comply with the policy condition requiring a notice of a change in use or occupancy of the premises by failing to advise the insurer that the basement of the home had been converted into a marijuana processing facility. The court also affirmed the summary judgment granted by the trial court that the plaintiff had to reimburse Nationwide for payments made after the loss and also that Nationwide was subrogated to the loss payee to recover from the insured the $131,859.29 paid to the loss payee.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN DISMISSAL OF CLAIM BY STATE FARM AGAINST INTEGON NATIONAL INSURANCE SEEKING REIMBURSEMENT FOR NO FAULT BENEFITS PAID

State Farm Mutual Automobile Insurance Company filed suit against Integon National Insurance Company seeking to recover no fault benefits in excess of $500,000 paid by State Farm to an alleged Integon insured. Following discovery we filed a motion for summary disposition that Integon had issued a 7 day policy which had expired before the accident date. State Farm argued that Integon’s policy failed to comply with the cancellation provision provided by MCL 500.3020(1)(b) requiring 10 days written notice of cancellation. We argued that this provision could not apply because the policy was a 7 day policy which expired by its terms and was not cancelled. In response to our motion for summary disposition, State Farm dismissed its complaint.

MICHAEL F. SCHMIDT AND NATE PEPLINSKI OBTAIN AFFIRMANCE OF SUMMARY JUDGMENT FROM U.S. SIXTH CIRCUIT COURT OF APPEALS FOR CLAIM FOR INSURANCE COVERAGE FOR A FIRE LOSS

Hatcher v Nationwide Property & Casualty Insurance Company, U. S. Court of Appeals for the Sixth Circuit, Court of Appeals No. 14-2068. Claim by plaintiff to recover dwelling and content loss in excess of $250,000 from a fire at plaintiff’s home pursuant to the homeowner policy issued by Nationwide. We obtained a summary judgment in the trial court on the basis that there was a material misrepresentation in the application by the plaintiff’s statement that taxes on the property were not delinquent more than two years at the time of the application. We determined through discovery that the property taxes were delinquent for 2010 at the time of the application in 2012. The Sixth Circuit affirmed our summary judgment in a 7 page written opinion. The Sixth Circuit rejected the plaintiff’s argument that taxes are not termed delinquent per the Michigan General Property Tax Act until March 1 of the year after they were due. The court agreed with our argument that the Michigan General Property Tax Act indicates when action may be taken on delinquent taxes but does not define when they are delinquent. The court followed our argument of applying the standard dictionary definition that something is “delinquent” when it is “past due” and “overdue” and that the property taxes were “past due” and thus “delinquent” when they were not paid in 2010.

MICHIGAN COURT OF APPEALS AFFIRMS SUMMARY DISPOSITION OBTAINED BY MICHAEL F. SCHMIDT IN DECLARATORY ACTION THAT HOMEOWNER POLICY DID NOT PROVIDE COVERAGE FOR THREE WRONGFUL DEATH SUITS AGAINST THE INSURED’S SON

Depositors Insurance Company v Dahlia Luera Harris, Personal Representative of the Estate of Anthony Harris, et al, Michigan Court of Appeals docket number 318269 (2015), the Michigan Court of Appeals affirmed summary disposition granted by the Ingham County Circuit Court that Depositors Insurance Company did not have a duty to provide coverage or a defense to its insured’s son in regard to three wrongful death claims resulting from an auto accident when minors attended a party at the insured’s son’s apartment at which alcoholic beverages were provided to minors, and after the party a minor who attended the party, who was intoxicated, was involved in a motor vehicle accident resulting in the deaths of three other minors. The Court of Appeals affirmed on the basis that there was no “occurrence” due to the provision of alcoholic beverages to minors.

MICHAEL F. SCHMIDT AND NATHAN PEPLINSKI OBTAIN SUMMARY JUDGMENT ON INSURANCE COVERAGE CASE FOR CLAIMED HOMEOWNER LOSS IN U. S. DISTRICT COURT

Yvette Williams v Nationwide Mutual Fire Insurance Company, U. S. District Court for the Eastern District of Michigan, Case Number 12-13904. Suit by plaintiff seeking recovery for alleged water damage to her home pursuant to a homeowner policy issued by Nationwide. Plaintiff sought damages in excess of $280,000. Following discovery including the depositions of the plaintiff and several witnesses and multiple discovery motions against the plaintiff resulting in two orders for sanctions, we filed a motion for summary judgment arguing that there was no coverage because the plaintiff failed to supply a timely proof of loss, the plaintiff failed to comply with the condition precedent for coverage to inform Nationwide of the change in use or occupancy in the insured premises, the plaintiff neglected the property, failed to take reasonable steps to protect it after the loss and made misrepresentations in the claim. Following briefs of both parties, and oral argument, the court granted summary judgment to Nationwide in an eleven page written Opinion on the basis that the proof of loss was not submitted as required by the policy.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION THAT THERE WAS NO UNINSURED MOTORIST COVERAGE APPLICABLE TO THE PLAINTIFF’S CLAIM

Tiffany Buchanan V MemberSelect Insurance Company, et al, Wayne County Circuit Court Civil Action Number 14-00099-NI, claim by plaintiff for uninsured motorist benefits arising out of an auto accident in which plaintiff was a passenger in her own vehicle involved in an intersection accident. The plaintiff sued the driver of her vehicle and the driver of the other vehicle involved in the accident along with her own insurer MemberSelect Insurance Company. The claim against MemberSelect Insurance Company sought uninsured motorist benefits. We filed a motion for summary judgment on the basis that the plaintiff’s insured vehicle and the opposite vehicle did not meet the policy definitions of an “uninsured motor vehicle”. The trial court agreed and granted summary disposition as to all claims by the plaintiff for any uninsured motorist benefits.

MICHAEL F. SCHMIDT AND NATHAN PEPLINSKI OBTAIN DECLARATORY JUDGMENT IN U. S. DISTRICT COURT COVERAGE CASE

Liberty Insurance Corporation v Glenn Bowles and Kyle Valentine, U. S. District Court for the Eastern District of Michigan, Case Number 13-13784. We filed a complaint for declaratory judgment that Liberty Insurance Company did not owe coverage or a defense to its insured for allegations made against him in a pending Macomb County Circuit Court case. The defendant/insured filed a motion to dismiss arguing that the U. S. District Court should dismiss the case so it could be decided in Macomb County Circuit Court. We responded with a motion for judgment on the pleadings that there was no duty to provide coverage or a defense. The court heard oral argument and then ordered that additional briefs be filed. The court then issued an eight page written opinion agreeing with all of our arguments that there was no duty to defend or provide coverage, that the facts alleged in the underlying complaint alleged an assault which was not an “occurrence”, that the self-defense exception to the intentional act exclusion was not supported by the facts, that there was no self-defense exception to the policy’s sexual molestation, corporal punishment or physical or mental abuse exclusion and that the self-defense exception to the intentional act exclusion was irrelevant to the determination that there was no “occurrence”. The court granted our motion and entered judgment that Liberty Insurance Corporation had no duty to defend or provide coverage to its insured in the underlying action.

MICHAEL F. SCHMIDT OBTAINS SUMMARY JUDGMENT IN A U. S. DISTRICT COURT CASE FOR CLAIM FOR INSURANCE COVERAGE FOR FIRE LOSS

Hatcher v Nationwide Property & Casualty Insurance Company, U. S. District Court for the Eastern District of Michigan, Civil Action Number 13-13926. Suit by plaintiff to recover dwelling and content loss in excess of $250,000 from a fire at plaintiff’s home pursuant to a homeowner policy issued by Nationwide. After raising multiple policy defenses we requested that the court allow us to file a motion for summary judgment before completion of discovery on the sole issue of whether there had been a material misrepresentation in the application. The court ordered that motion could be filed on the issue whether there was a material misrepresentation by the plaintiff’s statement that the taxes on the property were not delinquent more than two years. We filed the motion and brief, the plaintiff filed a response brief and we filed a reply brief. The plaintiff argued that the taxes were not delinquent for two or more years pursuant to the Michigan General Property Tax Act. We argued that this Act had no relevance to the case and that the phrase “delinquent two or more years” must be interpreted per well settled Michigan law pursuant to the common use, and meaning of the language. The court issued a twelve page written Opinion agreeing with our argument and granting summary judgment to Nationwide as to all claims made by the plaintiff.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION AS TO CLAIM FOR ALLEGED THEFT LOSS

Manal Elia and Fares Elia v Depositors Insurance Company, Macomb County Civil Action Number 13-4271-CK. Suit by plaintiffs alleging a theft loss from their home pursuant to a homeowner policy issued by Depositors Insurance Company. Depositors investigated the claim and noticed the EUOs of the plaintiffs. The EUO of the first plaintiff was not completed due to objection by plaintiffs’ attorney. Depositors then denied the claim. The plaintiffs then filed suit seeking coverage for their alleged loss.

We filed a motion for summary disposition on the basis that there was a misrepresentation in the application and thus the policy was rescinded, that there were false statements made in the claim contrary to a policy condition and that the EUO was improperly terminated. The plaintiffs filed a response brief, we filed a reply brief and the court held oral argument. The court then issued a nine page Opinion and Order granting our summary disposition on the basis that the policy was properly rescinded and there was no need for the court to consider the other two issues raised.

MICHAEL F. SCHMIDT OBTAINS SUMMARY JUDGMENTS IN HOMEOWNER INSURANCE FIRE CLAIM

Nationwide Mutual Fire Insurance Company v Kasey McDermott, United States District Court for the Eastern District of Michigan, Northern Division. Claim by Nationwide insured, Kasey McDermott, for $490,000 in damages resulting from a house fire under a homeowner policy. Nationwide made some initial payments and also paid the mortgagee $131,859.29. It was then discovered from the cause and origin report that the fire was caused by a marijuana manufacturing facility in the basement of the home used to manufacture butane honey oil involving use of multiple cans of butane. We filed a declaratory action to obtain a ruling that there was no coverage. We then deposed the insured, her husband, the investigating deputy from the Bay County Sheriff’s Department and then filed a motion for summary judgment that coverage was barred because there was no accidental direct physical loss to property, coverage would be excluded by the increased hazard exclusion and the intentional acts exclusion, and that there had been a failure to advise of the change in use of the residence premises as required by a policy condition. The court issued a written opinion granting summary judgment to Nationwide that it owed no coverage. The parties then filed cross-motions for summary judgment on the issue of whether Nationwide was entitled to reimbursement from the insured for $5,000 paid to the insured per an advance payment agreement, $2,981.75 paid to the insured prior to Nationwide’s discovery of the cause of the loss, and whether Nationwide was entitled to the return of $131,859.29 paid to the mortgagee pursuant to a standard mortgage clause contained in the policy which included a subrogation provision that if the insurer paid the mortgagee for the loss and subsequently denied payment to the insured, the insurer would become subrogated to all of the rights of the mortgagee. In a written opinion, the trial court granted summary judgment to Nationwide holding that it was entitled to reimbursement of $5,000 paid pursuant to the advance payment agreement, the $2,981.75 paid by mistake before learning the cause of the fire and the $131,859.29 paid to the mortgagee.

MICHAEL F. SCHMIDT OBTAINS SUPREME COURT ORDER DENYING PLAINTIFF-APPELLANT’S APPLICATION FOR LEAVE TO APPEAL

Crawley David McFadden v Titan Insurance Company, Wayne County Circuit Court, Michigan Court of Appeals docket number 316012, Michigan Supreme Court docket number 147554 (2014), claim by McFadden against Titan Insurance Company pursuant to alleged certificate of insurance claimed to be issued to McFadden. We obtained a summary disposition from the trial court as to any and all claims made by the plaintiff on the basis that there was no proof or evidence that the certificate of insurance was issued by or on behalf of Titan Insurance. We also obtained a summary disposition on our counterclaim for abuse of process with sanctions awarded against McFadden. McFadden appealed to the Michigan Court of Appeals which denied his appeal for lack of merit and then denied McFadden’s motion for reconsideration. McFadden then appealed to the Michigan Supreme Court. The Supreme Court has now issued its order denying the Application for Leave to Appeal and further ordering that based upon McFadden’s repeated abuses of the court system with frivolous and vexatious filings, the clerks of the Supreme Court, Court of Appeals and Wayne County Circuit Court are directed not to accept any further filings from McFadden in any non-criminal matter unless McFadden has paid all necessary fees, sanctions assessed by the circuit court, and submitted his filings in full compliance with the court rules.

MICHAEL F. SCHMIDT OBTAINS DISMISSAL OF THIRD PARTY AUTO CASE AS SANCTION FOR PLAINTIFF’S FAILURE TO COMPLY WITH DISCOVERY ORDER

Denishia Lewis v Avis Budget Car Rental, LLC and Alisha Barnes, Wayne Court Circuit Court, claim by Denishia Lewis against Alisha Barnes for injuries allegedly incurred from alleged auto accident. We filed discovery requests on behalf of Alisha Barnes which Lewis did not timely answer. We filed a motion to compel and obtained an order compelling the answers. When the order was not complied with we filed a motion to dismiss for the failure to comply with the court’s discovery order. The court held a hearing on the motion and ordered that the plaintiff appear at a subsequent hearing date. The plaintiff failed to appear and the court then granted our request to dismiss the case with prejudice.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION PER ORDER OF MICHIGAN COURT OF APPEALS ON APPLICATION FOR LEAVE TO APPEAL

James Jackson v Mark David Radzwion, PVS Transportation, Inc., et al, Wayne County Circuit Court, claim by plaintiff for alleged injuries resulting from alleged car/truck accident. After obtaining discovery responses and deposing the plaintiff we filed a motion for summary disposition that the plaintiff’s third party tort action from the alleged accident was barred because the plaintiff was a Michigan resident who had failed to obtain and maintain a no fault insurance policy on his vehicle at the time of the accident. The trial court heard our argument and granted our motion for summary disposition. Thereafter plaintiff filed a motion for reconsideration and several months later the court granted plaintiff’s motion for reconsideration. We responded with an emergency motion to file response briefs and the court held additional oral argument and at the conclusion of the argument ordered that the court’s order granting the plaintiff’s motion for reconsideration was vacated and that the parties were to file additional briefs on the issue. The issue was whether the plaintiff’s admissions in interrogatory answers and at deposition were sufficient to establish that he was a Michigan resident. Several months later the trial court issued another order, once again, granting plaintiff’s motion for reconsideration, holding that there was a genuine issue of material fact regarding the plaintiff’s domicile. We then filed an Application for Leave to Appeal to the Court of Appeals arguing that there was no issue of fact and that the plaintiff’s interrogatory answers and deposition testimony were binding and that the plaintiff could not raise an issue of fact by a subsequently filed affidavit. We then filed a motion for immediate consideration, and in response the Court of Appeals issued an order that the trial court’s order granting plaintiff’s motion for reconsideration was reversed and held that the plaintiff’s deposition testimony and answers to interrogatories established that he was a long time Michigan resident who had insured his vehicle in Georgia and that the plaintiff’s later submitted affidavit that contradicted his deposition testimony should not have been considered. The case was remanded to the circuit court. On remand the trial court granted summary disposition in favor of the defendants Radzwion and PVS Transportation, Inc.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION IN A DECLARATORY ACTION THAT HOMEOWNER POLICY DID NOT PROVIDE COVERAGE FOR WRONGFUL DEATH SUITS AGAINST THE INSURED’S SON

Depositors Insurance Company v Dahlia Luera-Harris, Personal Representative of the Estate of Anthony Harris, et al, Ingham County Circuit Court, declaratory judgment case we filed on behalf of Depositors Insurance Company to argue there was no duty to provide coverage or a defense to Depositors’ insured’s son pursuant to a homeowner policy. The Depositors’ insured’s son had rented an apartment and it was alleged in three underlying wrongful death cases that he and his roommates had held a party at their apartment at which alcoholic beverages were provided to minors. After the party a minor who attended the party was involved in a motor vehicle accident in which three other minors were killed. We filed a motion for summary disposition arguing that there was no coverage or duty to defend because there was no “occurrence” for providing alcoholic beverages to minors, and even if there was an “occurrence”, coverage would be excluded by the motor vehicle liability exclusion, the business exclusion, the controlled substance exclusion and the expected or intended injury exclusion. The plaintiffs in the pending wrongful death cases filed a joint response brief and counter-motion for summary disposition arguing that there should be coverage and a duty to defend as a matter of law. The court held oral argument and issued its opinion granting summary disposition to Depositors Insurance Company and denying summary disposition to the underlying plaintiffs holding that there was no coverage or duty to defend because there was no “occurrence”, and if there was an “occurrence”, coverage would be excluded by the motor vehicle liability exclusion.

SUMMARY DISPOSITION OBTAINED BY MICHAEL F. SCHMIDT IN CLAIM FOR UNINSURED AND UNDERINSURED MOTORISTS BENEFITS

Brandon Davis v Nationwide Insurance Company, et al, Wayne County Circuit Court, claim by plaintiff for uninsured and underinsured motorists benefits arising from a one vehicle accident in which the plaintiff was a passenger and claimed uninsured and underinsured motorists benefits. We responded with a motion and brief for summary disposition on the basis that the vehicle did not meet the policy definition of an uninsured or underinsured motor vehicle and that even if the vehicle met the definitions, various exclusions applied. The court agreed and granted summary disposition that there was no coverage available.

SUCCESSFUL INDEMNITY CLAIM BY MICHAEL F. SCHMIDT

Rodriguez v Dixon, Inc., Wayne County Circuit Court, construction accident case in which we represented Dixon, Inc. and filed a crossclaim against the co-defendant Leidal & Hart Mason Contractors, Inc. for contractual indemnity insurance. The trial court held that L & H owed both contractual indemnity and insurance to Dixon, Inc. and ordered L & H to reimburse Dixon, Inc. for the attorney fees and defense costs incurred in defending against the primary plaintiff’s claim.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION FOR TITAN INSURANCE ON CLAIM BASED ON ALLEGED CERTIFICATE OF INSURANCE

Crawley David McFadden v Titan Insurance Company, Wayne County Circuit Court and Michigan Court of Appeals docket number 316012 (2013), claim by McFadden against Titan Insurance Company pursuant to an alleged certificate of insurance claimed to be issued to McFadden. We responded with a motion for summary disposition on the basis that the certificate of insurance had not been issued by Titan Insurance or any recognized agent of Titan Insurance and that there was no proof or evidence that connected the document to Titan Insurance or that Titan Insurance ever received any consideration for the document. The trial court granted summary disposition in favor of Titan Insurance as to any and all claims made by the plaintiff and granted summary disposition in favor of Titan Insurance on its counterclaim for abuse of process and awarded sanctions against McFadden. The trial court also denied McFadden’s motion for reconsideration. McFadden appealed to the Michigan Court of Appeals which denied his appeal for lack of merit and then denied McFadden’s motion for reconsideration.

SUMMARY JUDGMENT OBTAINED IN DECLARATORY ACTION BY MICHAEL F. SCHMIDT

Liberty Mutual Insurance Company v Kelly McClintic, U. S. District Court for the Eastern District of Michigan, Northern Division. We filed a declaratory complaint to obtain a ruling that Liberty Mutual did not owe coverage or a defense to its insured for an alleged dog bite causing serious injury to a minor child on her premises. After filing a declaratory complaint and obtaining sufficient discovery to support the coverage defenses we filed a motion for summary judgment on the basis that there was no coverage available due to the policy’s business exclusion and based upon an exclusion of liability coverage for any intentional concealment, or misrepresentation of a material fact, fraudulent conduct or false statements made by the insured relating to the insurance. We argued that discovery established that the insured was operating a daycare business out of her home, that the minor child was an attendee of her daycare operation and that the insured had misrepresented on the insurance application that there was no business operated out of the residence and no daycare provided at the insured residence. The defendant responded that she had not continually operated a daycare out of the premises and that she had not prepared the application and had only had signed it. The trial court granted summary judgment in our favor, in a written opinion finding that the insured was operating a daycare business out of her residence, that the minor child was an attendee of the daycare operation and that the business exclusion unequivocally excluded coverage.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION ON PREMISES CLAIM

Mikulenas v Cedar Mill Lounge, Inc., et al, Genesee County Circuit Court, claim by plaintiff Ashley Mikulenas that she was injured when a Michigan Bureau of State Lottery television fell or was knocked from its position and struck her. Following discovery including depositions of the plaintiff and representatives of the defendants, we filed a motion for summary disposition on behalf of Cedar Mill Lounge arguing that Cedar Mill Lounge had no liability because the television monitor was owned, maintained and installed by the State of Michigan, that Cedar Mill Lounge had no notice of any defect or problem with how the television set was installed, that Cedar Mill Lounge was not in possession or control of the television set and that the plaintiff had no proof beyond speculation and conjecture as to how the incident occurred. The trial court granted our motion and dismissed all claims against the defendant Cedar Mill Lounge.

SIXTH CIRCUIT COURT OF APPEALS AFFIRMS SUMMARY JUDGMENT OBTAINED BY MICHAEL F. SCHMIDT ON A CLAIM FOR PROPERTY DAMAGE INSURANCE COVERAGE

Louis V. Telerico and Terri Roeder v Nationwide Mutual Fire Insurance Company, Sixth Circuit Court of Appeals, Docket Number 12-2209, appeal by plaintiffs/appellants, Louis Telerico and Terri Roeder, from summary judgment we obtained on the basis that the policy excluded damages caused by or resulting from any structural defect, and in addition, that the plaintiffs had failed to timely file a proof of loss. The Sixth Circuit Court of Appeals affirmed summary judgment in a nine page opinion on the basis that the plaintiffs had failed to timely file a proof of loss and had failed to comply with the common-law “mailbox rule” to raise a rebuttal presumption that the proof of loss had been received by Nationwide, based on admissions made by plaintiffs at their depositions, which the court held could not be contradicted by an affidavit filed in response to the defendant’s motion for summary judgment. The court further held that the plaintiffs could not claim substantial compliance with the proof of loss requirement due to their failure to timely submit a sworn proof of loss.

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SUMMARY JUDGMENT OBTAINED BY MICHAEL F. SCHMIDT IN U. S. DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN IN A CLAIM FOR PROPERTY INSURANCE COVERAGE FOR ALLEGED WATER DAMAGE DUE TO ALLEGED SNOW LOAD ON ROOF

Louis V. Telerico and Terri Roeder v Nationwide Mutual Fire Insurance Company, U. S. District Court for the Eastern District of Michigan Northern Division, Case Number 2:11-cv-10702, claim by Louis Telerico and Terri Roeder for alleged damage to a home from alleged snow load damage to the roof. Discovery included depositions of both plaintiffs and their expert. Based upon the plaintiffs’ expert’s testimony and additional discovery we filed a motion for summary judgment on the basis that the plaintiffs’ expert testified that the damage was caused by structural defects. We argued that the policy excluded damages caused by or resulting from any structural defect and in addition that although the plaintiff claimed to have timely filed a proof of loss the plaintiffs’ deposition testimony was to the contrary and the testimony could not be corrected by a later filed affidavit and thus the court also held that the proof of loss was not timely filed as required by the policy condition. Summary judgment was granted as to all claims in a 17 page written opinion written by Judge Thomas L. Ludington.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION DEFENDING A CLAIM FOR PROPERTY INSURANCE BENEFITS

Louis V. Telerico as Assignee of Louis Perry v Nationwide Mutual Fire Insurance Company, Wayne County Civil Action Number 11-015705-CK, was a claim on behalf of Louis Perry for alleged property damage arising from an alleged power surge incident of 8/15/03 causing damage to Louis Perry’s property and contents. Perry’s complaint against Nationwide alleged breach of the insurance policy, unjust enrichment and conversion.

We responded with a motion for summary disposition. We argued that the entire claim was barred by the one year limitation period contained in the policy which provided that any action must be started within one year of the date of the loss or damage but that the period of time between notification of the loss or damage and the formal denial of liability did not apply to the one year period allowed for starting the action.

We argued that the claim for unjust enrichment failed to state a claim because there was a contract existing between the parties and there cannot be an implied contract claim when there is an express contract. We argued that the conversion claim fails to state a claim, because there cannot be a conversion claim for breach of contract for a non-specific sum of money and the conversion claim was also barred by the expiration of the three year statute of limitations. The plaintiff filed a response brief and we filed a reply brief and the court held oral argument.

The plaintiff argued that the one year limitation period did not apply because there was no formal denial of liability. We argued that the insurer sent correspondence which denied each and every claim and advised that the payment made was full and final and that this was certainly a formal denial of liability.

The court agreed with all of our arguments and granted summary disposition holding that the one year limitation period applied and that there had been a formal denial of liability five years before the suit was filed. The court further agreed with our argument that there could be no unjust enrichment claim when there was a contract between the parties. The plaintiff agreed to dismiss the conversion claim at oral argument.

NEW SUPREME COURT DECISION, TITAN INSURANCE V HYTEN REGARDING DUTY TO INVESTIGATE AND “EASILY ASCERTAINABLE” RULE FOR MISREPRESENTATION CASES

The Michigan Supreme Court has recently issued an opinion in Titan Insurance v Hyten ____ Mich ____ (2012), in which it overruled cases holding that an insurer could be estopped from asserting rescission of an insurance policy based on a misrepresentation if knowledge of the misrepresentation could have been “easily ascertainable” by the insurer.

The case involved an applicant for an auto policy who failed to disclose that her driver’s license had been suspended. The trial court and Court of Appeals held that the insurer could have easily ascertained this information by checking the record, and thus, the insurer was estopped from raising the misrepresentation as a basis for rescission of the policy.

The Supreme Court reversed and held that the trial court and Court of Appeals were in error as were several prior Court of Appeals opinions which had developed the “easily ascertainable” rule to estop insurers from rescinding policies based on misrepresentations in applications.

We have always taken the position that the easily ascertainable rule should not apply because the insurer should not have any duty to investigate to determine whether representations made by the insured were correct or not. We successfully made this argument in Manier v MIC General Insurance Corp, 281 Mich App 4485, 490 (2008). See also: Hammoud v Metropolitan Insurance Company, 222 Mich App 485, 489 (1987); United Security Ins Co v Commissioner of Insurance, 133 Mich App 38, 45 (1984). We based this argument on the early Michigan Supreme Court decision in Keyes v Pace, 358 Mich 74, 84-85 (1959), where the Supreme Court held that an insurer has no duty to investigate or verify the representations of a potential insured.

The Supreme Court decision in Titan Insurance v Hyten restates this rule and states that all cases to the contrary are overruled and holds that an insurer has no duty to investigate or verify the representations of a potential insured and that an insurer can defend against providing coverage on the basis of fraud in the application notwithstanding that the fraud could have been discovered through further investigation or could have been easily ascertained.

The only problem with the case is that it does not cite the policy language, and states that there are several different fraud theories such as fraudulent misrepresentation, innocent misrepresentation and silent fraud also known as fraudulent concealment. The definition of fraud set forth by the court requires:

  1. A material representation
  2. That was false
  3. The person making it knew it was false or made it recklessly without any knowledge of its truth and as a positive assertion
  4. The statement was made with the intention that it should be acted upon
  5. The representation was acted upon
  6. There was an injury suffered.

The problem with this is that the third element requires knowledge of the falsity. Numerous Michigan appellate cases have held that issues of knowledge are issues of fact which cannot be determined on a motion for summary disposition. See Mina v Gen Star Indemnity Co, 218 Mich App 678, 687 (1996), rev’d in part on other grounds, 455 Mich 866 (1997); Harris v Lapeer Public School Sys, 114 Mich App 107, 116 (1982); Rayis v The Shelby Mut Ins Co of Shelby Ohio, 80 Mich App 387, 392 n3 (1978); Arevalo v Auto Club Ins Ass’n, unpublished opinion per curiam of the Court of Appeals, issued May 18, 2010 (Docket No. 289863); Smith v Farm Bureau Ins Co, unpublished opinion per curiam of the Court of Appeals, issued March 5, 2009 (Docket No. 281034); and Beard v Allstate Indemnity Co, 2011 US Dist Lexis 85490 (ED Mich, 2011).

This fails to recognize the authorities which have held that a misrepresentation need not be intentional to serve as the basis for rescinding an insurance policy, and there is no necessity to prove intent. Handbook on Insurance Coverage Disputes Section 3.01(c); U. S. Fidelity & Guaranty v Black, 412 Mich 99, 120 (1981); Legel v American Community Mut Ins Co, 201 Mich App 617, 618 (1993); Lash v Allstate Ins Co, 210 Mich App 98, 103 (1995); Lake States Ins Co v Wilson, 231 Mich App 327, 331 (1998).

This is a very important issue which unfortunately was not addressed by the Supreme Court in the decision.

We would recommend that all insurers review the conditions of their policy to assure that the misrepresentation/fraud condition does not require fraud or an intentional misstatement but only that there was a false statement. This would then avoid having to prove intent which would arguably be a question of fact.

It is most important that the insurer be able to raise and succeed on the misrepresentation argument on a motion rather than have to try the case.

MICHAEL F. SCHMIDT OBTAINS AFFIRMATION OF SUMMARY DISPOSITION IN WRONGFUL DEATH CONSTRUCTION ACCIDENT CASE

Amy Felty, Personal Representative of the Estate of Leo Felty, Jr., Deceased v Skanska USA Building, Inc., per curiam decision of the Michigan Court of Appeals docket number 297991 (2011), the Court of Appeals affirmed summary disposition granted to the defendant general contractor, Skanska USA Building, Inc. in a lawsuit filed on behalf of the Estate of Leo Felty, Jr. who was killed when he fell from a scaffold on the University of Michigan Museum of Art Project. The Court of Appeals agreed with the trial court that the plaintiff had failed to meet the requisites of the common work area liability test by failing to establish that the absence of a guardrail on the scaffold created a high degree of risk to a significant number of workers, since only two employees of one subcontractor were exposed to the risk which was not known by the general contractor.

MICHAEL F. SCHMIDT OBTAINS SUMMARY JUDGMENT IN INSURANCE COVERAGE CASE IN U.S. DISTRICT COURT

Reed, et al v Netherlands Insurance Company, U.S. District Court for the Eastern District of Michigan, Southern Division.

Claim for insurance coverage by plaintiffs alleging that the defendant insurer owed coverage to the underlying defendant cemetery. We defended Netherlands Insurance Company and argued that the policy did not apply or provide coverage to the claims made in the underlying action against the Netherlands’ insured. We filed a motion for summary judgment raising multiple policy defenses including that the underlying claim that the defendant cemetery had misplaced and lost the plaintiffs’ mother’s body was not covered by the policy including because the claim for coverage occurred outside the policy period, that the claim did not occur until the plaintiffs discovered the alleged negligence, that there was no “bodily injury” or “property damage” as defined by the policy, that there was no “personal and advertising injury” as defined by the policy, that there was no coverage created by the Funeral Homes or Cemetery Endorsement, that coverage was excluded by the Exclusion - Funeral Services Endorsement, and that even if there was coverage, exclusions for “impaired property” and for property damage to that part of any property that must be restored, repaired or replaced, applied to bar coverage. After reviewing our initial motion and brief, a response brief, reply brief and supplemental briefs ordered by the court, the court agreed with our arguments and granted summary judgment by written opinion holding that there was no coverage provided by the policy for any of the claims made against the insured in the underlying suit.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITIONS AGAINST BOTH THE PLAINTIFF AND THE THIRD PARTY PLAINTIFF IN A WAYNE COUNTY CIRCUIT COURT SNOW REMOVAL CASE

Friedman v Professional Ground Services, LLC, et al, Wayne County Circuit Court, claim by the plaintiff for injuries allegedly incurred when he allegedly slipped and fell on black ice in a parking garage in downtown Detroit across from the Wayne County Circuit Court building. Suit was filed against the management company which operated the garage and against our client, Professional Ground Services, who had contracted to provide snow removal services with the management company. The management company also filed a third party complaint seeking indemnity from Professional Ground Services. After discovery we filed a motion for summary disposition against both the plaintiff and the third party plaintiffs arguing that the snow removal contract only applied to the public sidewalk around the outside of the garage and the entranceways to the garage but did not apply to the interior of the garage, where the primary plaintiff’s alleged accident occurred. We deposed the manager of the garage who testified that there had been no request for Professional Ground Services to provide any services to the interior of the garage and there was no reason to provide any such services. The trial court granted summary disposition as to the claims by the primary plaintiff and the third party plaintiffs against Professional Ground Services on the basis that the contract did not apply to the interior of the garage where the accident allegedly occurred.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION DEFENDING A FIRE LOSS CASE

Auto Club Group Insurance Company as Subrogee of Raghunath Kurri and Swathi Pabbathi v ABL Electronic Service, Inc., et al, Oakland County Circuit Court, the court granted summary disposition as to all claims made by the plaintiff in a property damage subrogation claim arising out of a house fire where the claimed damages were in excess of $450,000. The plaintiffs’ cause and origin experts and two electrical engineer experts testified that the fire was caused by the television set’s power cord which they claimed was pinched by the right rear wheel of the TV set and that employees of ABL when servicing the TV had negligently placed the TV’s right wheel on top of the power cord a year and a half before the fire occurred. We deposed the plaintiffs’ experts to establish the basis of their theories and then obtained an exemplar TV to establish that their theories were impossible to have occurred. We filed a motion for summary disposition arguing that the plaintiffs’ experts’ theories were all based upon speculation and conjecture, and could not have possibly occurred. The trial court, Judge Rae Lee Chabot, after reviewing the motion and brief, plaintiffs’ response brief and our reply brief and hearing oral argument ruled that there was no evidence that the power cord could have been under the right rear wheel beyond speculation and conjecture and granted our summary disposition.

MICHAEL F. SCHMIDT OBTAINS SUMMARY JUDGMENT IN U. S. DISTRICT COURT IN REGARD TO PLAINTIFFS’ MULTI-COUNT HANDICAP DISCRIMINATION CLAIM

Robert Benkovich and Kathy Benkovich v Washington Park Village Condominium Association, et al, U. S. District Court for the Eastern District of Michigan, the court granted summary judgment as to all claims made by the plaintiffs in a multi-count complaint alleging violation of the Fair Housing Amendment, malicious acts in violation of 42 USC §3617, violation of the condominium documents, violation of the Michigan Condominium Act, breach of fiduciary duty and violation of the Michigan Persons With Disabilities Act. The plaintiffs sought damages and injunctive relief to compel modifications to their condominium unit and a designated handicapped parking spot. The court agreed with all of our arguments on our motion for summary judgment that the plaintiffs failed to meet their burden of proof to demonstrate that the claimed accommodations were necessary, that there was different treatment for any other condominium resident, that there was any violation of the condominium documents or by-laws, that there was no breach of any fiduciary duty by any of the defendants and the plaintiffs were seeking privileges beyond those permitted to other co-owners.

MICHAEL F. SCHMIDT WINS SUMMARY JUDGMENT DEFEATING A CLAIM BY TRUSTEE IN BANKRUPTCY FOR INSURANCE COVERAGE FOR THE DEBTOR IN THE U. S. BANKRUPTCY COURT

In Re Romeo Montessori School Association, Inc., debtor, Stuart A. Gold, Trustee, plaintiff v Consolidated Insurance Company, defendant, U. S. Bankruptcy Court for the Eastern District of Michigan Southern Division. The plaintiff in this adversary proceeding is the Chapter 7 Bankruptcy Trustee who filed the proceeding seeking a declaratory judgment that Consolidated Insurance Company was required to provide coverage to the debtor for certain claims asserted against the Chapter 7 debtor, Romeo Montessori School Association. We represented Consolidated Insurance Company and after discovery filed a motion for summary judgment on the basis that coverage was excluded by the contractual liability exclusion contained in the policy. The underlying claims were claims by parents of students who had prepaid tuition in excess of $175,000 and filed proofs of claim when Romeo Montessori School filed a voluntary petition for bankruptcy and failed to provide the educational services contracted for the 2009-2010 school year. The Trustee argued first that Consolidated had waived the contractual liability exclusion by failing to raise it in its initial denial letter. We argued that coverage could not be created by waiver and estoppel, that none of the limited exceptions to this rule applied, and that the contractual liability exclusion had been raised in the answer and affirmative defenses filed over a year ago. The court agreed with our argument. The Trustee argued next that the claims were not articulated as claims for breach of contract. The court agreed with our argument in reviewing each of the 48 claims that each of the claims was based on a breach of contract although not described specifically as a breach of contract claim. The Trustee argued next that there were possible other theories of recovery such as conversion, breach of fiduciary duty or a quasi contractual theory such as unjust enrichment. The court agreed with our argument that the substance of the claims was breach of contract which was excluded by the policy, that there was no proof of any other theory of liability and that if an exclusion applies coverage is lost. The court granted summary judgment finding that there was no issue of fact and that there was no coverage owed by Consolidated Insurance Company under the policy.

MICHAEL F. SCHMIDT OBTAINS AFFIRMATION FROM MICHIGAN COURT OF APPEALS OF SUMMARY DISPOSITION IN INSURANCE COVERAGE CASE

Kent Companies, Inc. v Wausau Insurance Companies, Michigan Court of Appeals docket number 292237 (2011). The plaintiff, Kent Companies, Inc., filed suit against Wausau Insurance Companies seeking coverage for damages charged to Kent by the general contractor, Rockford Pepper Construction Company, arising out of the construction of the J. W. Marriott Hotel in downtown Grand Rapids. The claim pertained to the installation of the east entrance to the hotel which included a driveway with brick pavers and snowmelt tubes installed. We obtained a summary disposition and the Court of Appeals affirmed that there was no coverage available for any of the claims. We argued that the claim for coverage for removal and replacement of the insured’s concrete and wire mesh was not covered because there was no ‘occurrence’ and no ‘property damage’. We argued that the claim for removal and replacement of the brick pavers was not covered because of the impaired property exclusion, since the pavers were not damaged and the only expenses were incurred in their removal and replacement. Finally, we argued that there was no coverage for the claim for the removal and replacement of the snowmelt tubes, because the insured was not charged anything for the snowmelt tubes. The Court of Appeals further rejected the insured’s argument that there was an issue of fact as to how the snowmelt tubes were damaged, because the only question was whether they were damaged through the insured’s work which was undisputed.

GARY L. STEC OBTAINED SUMMARY DISPOSITION IN FIVE CONSTRUCTION CASES UNDER FULTZ V. UNION-COMMERCE

Gary L. Stec of our Grand Rapids office has obtained summary disposition in five separate lawsuits under the Supreme Court’s decision in Fultz v. Union-Commerce Assoc., 470 Mich 460 (2004).

1. In The Estate of Gehl v. ABC Contractor, Allegan County Circuit Court, the Estate brought a wrongful death lawsuit against several defendants involved in the construction of the Douglas Elementary School. The Estate argued that our client negligently performed work on the project that led to the death a steel erector. We filed a motion for summary disposition under MCR 2.116(C)(8) and argued that the Estate’s complaint did not state a valid cause of action against our clients since there was no separate and distinct duty owed to the decedent under Fultz, and that no exception existed that would allow the Estate to recover against our client. The trial court agreed, but allowed the Estate leave to amend its complaint. The amended complaint added counts of Third-Party Beneficiary and Nuisance in Fact. We renewed our motion under MCR 2.116(C)(8) and (10), and in a twenty-seven page decision issued on December 21, 2010, the trial court dismissed the Estate’s entire complaint, agreeing that our client did not owe the decedent a “separate and distinct duty” from its contract with the General Contractor. The court also agreed that the decedent was not an intended third-party beneficiary under our client’s contract and that the law of nuisance did not apply to the facts of the case. (The Estate’s pre-suit settlement demand was $8,100,000.00.)

2. In Cunningham v. Peters Construction, Kalamazoo County Circuit Court, the plaintiff brought suit against multiple contractors performing road and sidewalk improvements under contract with the City of Portage, alleging negligence, third-party beneficiary and nuisance, for injuries sustained when he rode his bicycle into an area of excavated sidewalk, sustaining fractures to his hand and injury to his knee. On January 10, 2011, the trial court granted summary disposition on all of the plaintiff’s counts, agreeing that no separate and distinct duty was owed by our client to the plaintiff, that the plaintiff was not a specifically intended beneficiary of the safety provisions of our client’s contract, and that the work being performed was not a nuisance.

3. In Hartwig v. Thornapple Excavating, Montcalm County Circuit Court, the plaintiff brought suit against a general contractor and our client on a hotel construction project, for injuries he sustained when he overturned a forklift on the construction site, sustaining severe crush injuries to his lower extremities. The trial court granted summary disposition under Fultz, agreeing that all of the work being performed by our client on the project was in furtherance of its contractual duties to the general contractor, and that no separate and distinct duty was owed to the plaintiff.

4. In State Farm v. Bartholomew Heating & Cooling, Kalamazoo County Circuit Court, a homeowners insurance carrier brought a subrogation lawsuit against contractors performing work on an addition to its insured’s residence, after a fire completely destroyed their home. The renovation project included installation of a gas fireplace, which State Farm alleged was a direct cause of the fire. The court granted summary disposition for our client under Fultz, agreeing that there existed no separate and distinct duty owed to the homeowner or State Farm, outside of our client’s contract with the general contractor.

5. In Osterman v. IMM, Inc., Oceana County Circuit Court, the plaintiff, an employee of Kurdziel Iron, fell through an opening in a platform adjacent to a cupola in the Kurdziel foundry in Rothbury, Michigan, suffering permanent brain and vision injuries. Suit was brought against our client who was hired to perform work on the cupola, including replacement of the adjoining decking. The trial court granted summary disposition under Fultz, agreeing that our client did not owe the plaintiff a separate and distinct duty outside of its contract with Kurdziel, that the plaintiff was not a third-party beneficiary of that contract, and that the work being performed did not create a nuisance.

SUPREME COURT DENIES APPLICATION FOR LEAVE TO APPEAL OF SUMMARY DISPOSITION OBTAINED BY MICHAEL F. SCHMIDT IN MULTI-VEHICLE AUTO ACCIDENT CASE

David W. Allard, as Trustee of the Bankruptcy Estate of Laura J. Wilamowski v Joseph A. Sova, Clarkston Steel, Inc., State Farm Mutual Automobile Insurance Company, Conrad C. Wilamowski and Mirash Bojaj, Supreme Court Docket Number 141844 and 141862, the Supreme Court denied the plaintiffs’ Application for Leave to Appeal from the Court of Appeals affirmation of summary disposition we obtained in the trial court for defendants Joseph Sova and Clarkston Steel. The plaintiff brought suit against multiple defendants alleging injuries incurred in a multiple-vehicle auto accident. The plaintiff claimed that she had a lumbar laminectomy and total and permanent disability from prior cervical fusions as a result of the accident. The plaintiff claimed that Sova was negligent by failing to stop his truck and having to go on the shoulder to avoid a rearend accident. We argued that defendants, Sova and Clarkston Steel, had no liability and that Sova’s truck was knocked into the median by another vehicle. We further argued that there was no basis to argue that any actions of Sova could have proximately caused any injury to the plaintiff. The plaintiff was an occupant in a vehicle on the opposite side of M-59 which allegedly had to change lanes to avoid a potential accident with the Sova truck, which the plaintiff claimed was coming toward the plaintiff’s lane. The trial court granted summary disposition holding that there was no negligence on the part of Sova and Clarkston Steel. The Court of Appeals affirmed summary disposition holding that the alleged evasive maneuver by the plaintiff’s vehicle was unremarkable and could not be proximately caused by the negligence of the defendants. The Supreme Court has now denied the Application for Leave to Appeal which ends this case.

SIXTH CIRCUIT COURT OF APPEALS AFFIRMS DISMISSAL OF TWO CONSOLIDATED CASES FOR WILLFUL FAILURE TO COOPERATE IN DISCOVERY IN APPEAL HANDLED BY MICHAEL F. SCHMIDT

Tyrone Smith v Nationwide Mutual Fire Insurance Company, Sixth Circuit Court of Appeals, docket number 09-2201, involved an appeal by the plaintiff of the dismissal of the plaintiff’s two consolidated suits, the first for $189,000 in allegedly stolen jewelry and the second a claim for no fault benefits and collision damage to the plaintiff’s Corvette from an alleged auto accident. After several discovery motions and hearings, the U. S. District Court dismissed both of the plaintiff’s suits for failing to respond to discovery requests and failing to comply with the magistrate’s discovery orders. The plaintiff appealed to the Sixth Circuit Court of Appeals, which ruled in a written opinion following oral argument, that the district court properly dismissed both of the plaintiff’s cases and did not abuse its discretion because the plaintiff had exercised bad faith in failing to cooperate in discovery through a pattern of non-compliance, there had been prejudice to Nationwide by compromising Nationwide’s ability to prepare its defense and by the time and money spent in cataloging the deficiencies in the plaintiff’s discovery responses and filing and arguing three discovery related motions, the magistrate had given an express warning in the second written opinion that if the plaintiff did not fulfill the discovery obligations the court would consider dismissing the plaintiff’s case with prejudice and the plaintiff’s failure to pay a $1,000 sanction imposed by the magistrate. As a result, both of the plaintiff’s lawsuits have been dismissed with prejudice.

MACOMB COUNTY CIRCUIT COURT GRANTS DECLARATORY JUDGMENT FINDING NO AUTOMOBILE LIABILITY COVERAGE IN CASE HANDLED BY MICHAEL F. SCHMIDT

MIC General Insurance Company v Michael Baumeister, Gary Rivard, Emilia Braden and Enterprise Leasing Company of Detroit, Macomb County Circuit Court, we filed a declaratory action on behalf of MIC General Insurance Company to obtain a ruling that MIC had no duty to defend or provide coverage to Gary Rivard, MIC’s insured’s grandson, for his use of a motor vehicle rented by his grandmother. The basis of the argument was that both the insured and Rivard testified that Rivard took the vehicle’s keys without permission, thus there was no permissive use and Rivard could not be an insured as required by the policy definition as a person using an insured vehicle with permission. We further argued that since Rivard’s license had been suspended for a number of years before the accident, he could not have a reasonable belief that he could use the vehicle and thus coverage was excluded by the exclusion for using a vehicle without a reasonable belief that the insured was entitled to do so. The trial court granted the motion in a twelve-page written opinion and rejected the underlying plaintiff Baumeister’s arguments that there was an issue of fact as to permissive use and that as an innocent third party the coverage defenses would not apply to him.

SUMMARY DISPOSITION OBTAINED BY MICHAEL F. SCHMIDT ENFORCING INSURERS’ RESCISSION OF AN AUTO INSURANCE POLICY FOR MATERIAL MISREPRESENTATION IN THE APPLICATION

Ardith McCormick v Nationwide Mutual Fire Insurance Company, Oakland County Circuit Court.

Plaintiff brought suit to recover for the theft of her motor vehicle. Nationwide had denied the claim on the basis that its investigation of the theft disclosed that the plaintiff had made several material misrepresentations in the application for the policy, that she failed to disclose two household members who were also drivers. We filed a motion for summary disposition supported by an underwriter’s affidavit that the application contained several material misrepresentations, that had the insurer known the true facts it would not have issued the policy as to the one misrepresentation, and would have charged a higher premium as to the other and thus the policy was appropriately rescinded. The plaintiff argued that the misrepresentations were not material because neither of the household members who were not disclosed were using the vehicle at the time of the loss. We argued in a reply brief that the Michigan appellate cases had rejected this exact argument in numerous cases and that rescission does not depend on the cause of the injury, rather the misrepresentation must be viewed as it relates only to the procurement of the policy of insurance. The trial court agreed with our argument and granted summary disposition to Nationwide that the policy had been appropriately rescinded and that the plaintiff had no claim under the policy.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION IN CLAIM FOR INSURANCE COVERAGE FOR PIZZA DELIVERY

Louis I. White, M.D. and Mary White, Individually and as Assignees of Uncle Andy’s Pizza, Inc., Andy Nannoshi and Mary Morse v Christopher Miller Agency, Inc., Christopher J. Miller, Rebecca Theriault and Nationwide Mutual Insurance Company, Oakland County Circuit Court.

Plaintiffs brought suit as assignees of Uncle Andy’s Pizza and its employees, Andy Nannoshi and Mary Morse, seeking recovery of a $2,000,000 judgment obtained in a claim for injuries allegedly incurred by the plaintiffs in a pizza delivery vehicle versus bicycle accident. After substantial discovery we filed a motion for summary disposition on behalf of the defendant, Nationwide Mutual Insurance Company, arguing that the Nationwide policy excluded automobile liability coverage, the policy contained an endorsement exclusion for food delivery and contained another endorsement exclusion limiting coverage to the designated premises. We further argued that the plaintiffs were judicially estopped from claiming coverage in the case, because they already sought and obtained their full uninsured motorist benefits from their own automobile liability insurer alleging in that claim that Uncle Andy’s Pizza, Inc. and its employees had no insurance. We further argued that any claim of any misrepresentation by the agents was barred by the application signed by Andy Nannoshi which stated that food delivery was not covered and further barred by Nannoshi’s failure to read the policy and raise any questions regarding coverage. After hearing oral argument, the trial court issued a written opinion granting summary disposition to Nationwide. Subsequently, the plaintiffs filed a motion for reconsideration which the trial court also denied by written opinion and order.

COURT OF APPEALS AFFIRMS SUMMARY DISPOSITION OBTAINED BY MICHAEL F. SCHMIDT IN MULTI-VEHICLE AUTO ACCIDENT CASE

David W. Allard, as Trustee of the Bankruptcy Estate of Laura J. Wilamowski v Joseph A. Sova, Clarkston Steel, Inc., State Farm Mutual Automobile Insurance Company, Conrad C. Wilamowski and Mirash Bojaj, Michigan Court of Appeals docket number 285633, the Court of Appeals affirmed summary disposition we obtained in the trial court for defendants Sova and Clarkston Steel. The plaintiff brought suit against multiple defendants alleging injuries incurred in a multi-vehicle accident. The plaintiff claimed that she had a lumbar laminectomy and total and permanent disability from prior cervical fusions as a result of the accident. The plaintiff claimed that Sova was negligent by failing to stop his truck and having to go on the shoulder to avoid a rearend accident. We argued that defendants, Sova and Clarkston Steel, had no liability and that Sova’s truck was knocked into the median by another vehicle. We further argued that there was no basis to argue that any actions of Sova could have proximately caused any injury to the plaintiff. The plaintiff was an occupant in a vehicle on the opposite side of M-59 which allegedly had to change lanes to avoid a potential accident with the Sova truck, which the plaintiff claimed was coming toward the plaintiff’s lane. The Court of Appeals affirmed summary disposition granted by the trial court holding that the alleged evasive maneuver by the plaintiff’s vehicle was unremarkable and could not be proximately caused by the negligence of the defendants.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION ENFORCING INSURANCE POLICY CONDITION REQUIRING PROTECTIVE SAFEGUARDS WHERE INSURED FAILED TO HAVE AN OPERATING FIRE ALARM SYSTEM

Stephanie Dunbar d/b/a Sassy But Classy Hair Salon v AMCO Insurance Company and Steve Paquette, Wayne County Circuit Court. Claim by plaintiff, Stephanie Dunbar d/b/a Sassy But Classy Hair Salon, for fire loss damage to her hair salon business. After discovery we prepared and filed a motion for summary disposition on behalf of the defendants arguing that the claim was barred by plaintiff’s failure to comply with the protective safeguards endorsement in the policy, which provided that in return for a decreased premium, the insured agreed as a condition of the policy that she would maintain an automatic fire alarm system protecting the premises. We determined through discovery that the insured had failed to obtain or maintain an automatic fire alarm system of any type including at the time of the fire. The case was dismissed in response to our motion for summary disposition.

MICHIGAN SUPREME COURT REVERSES KREINER V FISCHER REGARDING THE SERIOUS IMPAIRMENT THRESHOLD

The Michigan Supreme Court has issued its decision in McCormick v. Carrier, ____ Mich ____ (Docket Number 136738, 2010) which reverses Kreiner v. Fischer, 471 Mich 109, 683 NW2d 611 (2004) as wrongly decided.

The opinion is very lengthy and is a 4-3 decision with a lengthy dissent.

MCCORMICK’S CLAIM

McCormick had a truck drive over his left ankle. He was taken to the hospital, x-rays showed a fracture of his left medial malleolus. He was released from the hospital that day and two days later metal hardware was surgically inserted into his ankle to stabilize bone fragments. He was restricted from weight bearing for one month after surgery and then underwent multiple months of physical therapy. The metal hardware was removed in a second surgery ten months after the first. A defense IME 11 months after the accident indicated the plaintiff could return to work but was restricted from prolonged standing or walking. Twelve months after the accident, the specialist who performed the surgeries cleared the plaintiff to return to work without restrictions and noted that he had an excellent range of motion and solid healing.

McCormick then returned to work one year after the accident for several days but had difficulty walking, climbing and crouching because of ankle pain and asked for a restricted job but was directed to cease work. He was then required to undergo a functional capacity evaluation 14 months after the accident which determined that he was unable to perform the range of tasks his job required including stooping, crouching, climbing, sustained standing and heavy lifting due to ankle and shoulder pain, a moderate limp and difficulty bearing weight on the left ankle. Sixteen months after the accident a second defense IME was performed which indicated that the plaintiff complained of ankle and foot pain but there was no objective abnormality to correspond with the subjective complaints and he was thus able to return to work. An MRI 17 months after the accident showed some post-operative scar and degenerative tissue around the left ankle. Another functional capacity evaluation was performed 19 months after the accident which affirmed that the plaintiff could return to work without restriction and was capable of performing the tasks required for his job, although he complained of occasional aching and tightness in the ankle and his range of motion was still not within normal limits. He then returned to work 19 months after the accident to a different job with the same pay and was able to perform the new job since that time.

In his lawsuit McCormick testified that his normal life before the incident was working 60 hours per week as a medium-duty truck loader and a weekend golfer and frequently fishing in the spring and summer from a boat. He admitted he was fishing at his pre-incident levels by the spring and summer of the year after the accident but only golfed once since returning to work. He had not sought any medical treatment for his ankle since a year after the accident when he was approved to return to work without restriction. He testified that his life was “painful, but normal”, although it was “limited” and he continued to experience ankle pain.

The trial court granted summary disposition to the defendant finding no serious impairment. The Court of Appeals affirmed in a 2-1 decision. The Supreme Court reversed, holding that there was a serious impairment as a matter of law.

TEST OF LIABILITY

1. A QUESTION OF LAW OR FACT UNDER MCL 500.3135(2).

According to the statute, the threshold question whether a person suffered a serious impairment of body function should be determined by the court as a matter of law as long there is no factual dispute regarding the “nature and extent of the person’s injuries” that is material to determine whether the threshold standards are met. However, the court noted in a footnote that the Legislature may have unconstitutionally invaded the Court’s exclusive authority by imposing the requirement that the dispute is “material”. The court stated that this was not an issue in the current case but may be reached in a future case. The court further stated that a disputed fact does not need to be outcome determinative in order to be material, but it should be “significant or essential to the issue or matter at hand”.

2. A “SERIOUS IMPAIRMENT OF BODY FUNCTION”.

The court held that each of these prongs’ meaning is clear from the plain and unambiguous statutory language of MCL 500.3135(7) and judicial construction is neither required nor permitted, but that a “dictionary may aid the Court in giving the words and phrases… their common meaning…”

A. AN OBJECTIVELY MANIFESTED IMPAIRMENT

The court stated that the dictionary definitions suggest that the common meaning of “objectively manifested” is “an impairment that is evidenced by actual symptoms or conditions that someone other than the injured person would observe or perceive as impairing a body function. In other words, an “objectively manifested” impairment is commonly understood as one observable or perceivable from actual symptoms or conditions.”

The court further stated that the issue is whether the impairment is objectively manifested, not the injury or its symptoms. The court held that the focus must not be on the injuries themselves, but on how the injuries affect a particular body function. The court noted that the serious impairment threshold is not met by pain and suffering alone but also required injuries that affect the functioning of the body. The court further noted that the plaintiff must introduce evidence establishing that there is a physical basis for the subjective complaints of pain and suffering and that showing an impairment generally requires medical testimony. The court specifically rejected any requirement from Kreiner that there always must be medical documentation, only that medical testimony would generally be required.

The court’s summary of this issue states that there must be “an objectively manifested impairment (observable or perceivable from actual symptoms or conditions).”

B. OF AN IMPORTANT BODY FUNCTION

The court held that the relevant definition of “important” is whether a body function has great “value”, “significance”, or “consequence” which will vary depending on the person. Therefore, “this prong is an inherently subjective inquiry that must be decided on a case-by-case basis, because what may seem to be a trivial body function for most people may be subjectively important to some, depending on the relationship of that function to the person’s life.”

The court specifically disapproved of any construction that this is an objective test.

C. THAT AFFECTS THAT PERSON’S GENERAL ABILITY TO LEAD HIS OR HER NORMAL LIFE

The court held that the definitions of “general” illustrate “that to affect the person’s “general ability” to lead his or her normal life is to influence some of the person’s power or skill, i.e., the person’s capacity, to lead a normal life.” This requires a subjective, person and fact, specific inquiry that must be cited on a case-by-case basis, requiring a comparison of the person’s life before and after the incident.

The court noted there are several important points to note:

(1) The “statute merely requires that a person’s general ability to lead his or her normal life has been affected, not destroyed.” The court should consider not only whether the impairment has led the person to completely cease a pre-incident activity or lifestyle element, but also whether, although a person is able to lead his or her pre-incident normal life, the person’s general ability to do so was nonetheless affected.

(2) The word “general” modifies “ability” not “affect” or “normal life”. Thus, the plain language of the statute only requires that some of the person’s ability to live in his or her normal manner of living has been affected, not that some of the person’s normal manner of living has itself been affected. “There is no quantitative minimum as to the percentage of a person’s normal manner of living that must be affected.”

(3) “The statute does not create an express temporal requirement as to how long an impairment must last in order to have an effect on “the person’s general ability to lead his or her normal life”.” The court specifically rejected any argument from Kreiner that the court should focus on how much the impairment affects a person’s life instead of how much it affects the person’s ability to live his or her life. Further, there should be no implied sense of permanence. The court specifically rejected the Kreiner analysis of the (a) nature and extent of the impairment, (b) the type and length of treatment required, (c) the duration of the impairment, (d) the extent of any residual impairment and (e) the prognosis for potential recovery.

The court’s summary of this factor states that the test is the affect on the person’s general ability to lead his or her normal life (influences some of the plaintiff’s capacity to live in his or her normal manner of living).

APPLICATION TO THE MCCORMICK CASE

The court held that the serious impairment analysis is inherently fact-and-circumstance-specific and must be conducted on a case-by-case basis. The analysis does not lend itself to any bright-line rule or imposition of a list of factors.

As applied in McCormick, the parties did not dispute that McCormick suffered a broken ankle, was completely restricted from weight bearing on his ankle for a month, and underwent two surgeries in a ten month period and multiple months of physical therapy.

There was a dispute as to whether there was a physical basis for his continuing subjective complaints of pain and suffering.

However, the court held that this was not significant or essential to determine whether the serious impairment threshold was met, because the plaintiff did not allege that the residual impairment, to the extent it exists, continues to affect his generally ability to lead his pre-incident normal life.

The court further determined that before the incident McCormick’s normal life consisted of working 60 hours a week as a medium truck loader and frequently fishing in the spring and summer and a weekend golfer. After the incident he was unable to work for at least 14 months and did not return for 19 months and never returned to his original job. He was able to fish at pre-incident level by about 14 months after the accident.

The court determined:

A. AN OBJECTIVELY MANIFESTED IMPAIRMENT

McCormick has shown an objectively manifested impairment of body function. There is no dispute that he suffered a broken ankle and actual symptoms or conditions that someone else would perceive as impairing body functions, with his walking, crouching, climbing and lifting weight.

B. OF AN IMPORTANT BODY FUNCTION

McCormick has shown that the impaired body functions were important to him since he established that he was unable to walk and perform other functions which were of a consequence to his ability to work.

C. THAT AFFECTED THE PERSON’S GENERAL ABILITY TO LEAD HIS OR HER NORMAL LIFE

McCormick has shown that the impairment affected his general ability to lead his normal life because it influenced some of his capacity to live in his normal pre-incident manner of living which consisted of working 60 hours a week and his hobbies of fishing and golfing. At least some of his capacity to live in this manner was affected. Specifically, for a month after the incident he could not bear weight on his left ankle. He underwent two surgeries over a period of ten months and multiple months of physical therapy. His capacity to work, an essential part of his pre-incident normal life, was affected. He was unable to perform functions necessary for his job for at least 14 months and did not return to work for 19 months.

The court concluded that all three prongs were met as a matter of law that plaintiff suffered a serious impairment.

SUMMARY

As can be seen, McCormick should have a substantial affect on third party auto cases regarding the threshold.

The Kreiner factors are now out.

The emphasis is on a subjective case-by-case analysis.

The most important issue is in regard to the removal of any temporal element and that there must be an affect on the plaintiff’s entire life. There only has to be an influence on some of the plaintiff’s capacity to live in his or her normal, pre-incident manner of living.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION IN THIRD PARTY AUTO CASE BASED ON NO SERIOUS IMPAIRMENT

Richardson v Rosario, Oakland County Circuit Court, claim for multiple injuries from a T-bone intersection accident. Plaintiff claimed injuries to her left ankle/Achilles tendon, left knee, low back and neck. Plaintiff had multiple different treaters for these multiple alleged injuries for ten months after the accident. We filed a motion for summary disposition arguing that there was no serious impairment of an important body function. The court granted our motion issuing a twelve page Opinion finding that the functions of the back and the ability to walk were important body functions, and that the plaintiff had objective impairments by a bulging disc confirmed by MRI and bursitis in her knee, but that based on a review of the records and the plaintiff’s deposition testimony the plaintiff’s general ability to lead her normal life, or the course or trajectory of her normal life, had not been affected by the injuries she allegedly sustained and thus granted our motion for summary disposition.

SUMMARY JUDGMENT IN PRODUCT LIABILITY FIRE LOSS CASE OBTAINED BY MICHAEL F. SCHMIDT

Auto Club Group Insurance Company as Subrogee of Andrea and John Nelson v Auto-Glass Aquarium Company, Inc., U. S. District Court for the Eastern District of Michigan Southern Division.

Subrogation claim by the plaintiff, Auto Club Group Insurance Company as Subrogee of Andrea and John Nelson for fire damage to the Nelsons’ house and personal property claimed to be in excess of $235,000. The product liability action was filed against All-Glass Aquarium Company, Inc. alleging that the fire was caused by the failure of a switch in an aquarium hood/light manufactured by All-Glass. We deposed the plaintiffs’ experts and retained our own expert. Based upon the testimony the plaintiffs’ experts and our expert we filed a motion for summary judgment arguing that the product liability claim must fail because there was no proof or evidence beyond speculation and conjecture that the fire was caused by the aquarium hood light. The plaintiffs’ expert claimed that the fire started in the switch and that the switch was entirely consumed in the fire. We showed through the testimony of our expert that the switch was not entirely consumed in the fire, that there was no evidence of any arcing or electrical activity on the remains of the switch, and that there were other potential causes of the fire which had not been eliminated. The trial court issued a lengthy written opinion holding that the plaintiffs’ experts’ opinions did not rise above the speculative level and were insufficient to support the plaintiffs’ claim, that the plaintiffs’ expert could not identify a specific manufacturing defect in the product, had no evidence to support his carbon-tracking theory and did not compare the product at issue to defendant’s own manufacturing standards. Regarding the negligence claim, the court held that the plaintiff did not differentiate the negligence claim from the implied warranty claim which was also thus insufficient. The trial court thus granted summary judgment and dismissed all claims by the plaintiffs against All-Glass Aquarium Company, Inc.

CLAIM FOR INSURANCE COVERAGE UNDER COMMERCIAL GENERAL LIABILITY POLICY FOR DAMAGES INCURRED BY CONTRACTOR IN THE COURSE OF CONSTRUCTION PROJECT DEFEATED BY MICHAEL F. SCHMIDT WHO OBTAINED SUMMARY DISPOSITION FROM THE TRIAL COURT

Kent Companies, Inc. v Wausau Insurance Companies, Kent County Circuit Court. Claim by the insured, Kent Companies, Inc., for recovery of alleged damages charged to Kent by the general contractor, Rockford Pepper Construction Company, arising out of the J. W. Marriott Hotel Project in downtown Grand Rapids. After discovery we filed a motion for summary disposition arguing that there was no coverage for any of the claims under the commercial general liability policy issued by Wausau because there was no “occurrence”, no “property damage”, and that exclusions (k) for your product, exclusion (l) for your work, exclusion (m) for impaired property and exclusion (n) for recall and replacement all applied to exclude coverage. Kent filed a cross-motion for summary disposition arguing that coverage applied and that none of the exclusions applied. After substantial briefing by both parties, the court heard oral argument and granted summary disposition in favor of Wausau that there was no coverage. Kent then filed a rehearing which was also denied.

MICHAEL F. SCHMIDT OBTAINS DISMISSAL OF CLAIM FOR FIRE DAMAGE AND LOSS OF INCOME IN EXCESS OF $500,000

Abdallah Gas & Mini Mart, Inc. v AMCO Insurance Company, Saginaw County Circuit Court, suit for fire damage and loss of income in excess of $500,000 from an alleged fire. After substantial investigation and discovery including cooperation with the U. S. Secret Service and federal agents regarding a Small Business Administration loan scam, we filed a motion to dismiss which was granted dismissing the case with prejudice.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION IN WRONGFUL DEATH CONSTRUCTION ACCIDENT CLAIM AGAINST GENERAL CONTRACTOR

Amy Felty, Personal Representative of the Estate of Leo Felty, Jr., Deceased v Skanska USA Building, Inc., Washtenaw County Circuit Court, claim for the wrongful death of Leo Felty, Jr. who fell about 30 feet from a hydromobile scaffold while working on the University of Michigan Alumni Memorial Hall Museum of Art Renovation Project for Davenport Masonry, Inc. Suit was filed against Skanska USA Building, Inc., the general contractor for the project, who we defended. There had been multiple MIOSHA violations issued against Davenport Masonry, Inc., the employer of the decedent for the accident. After substantial discovery we filed a motion for summary disposition on behalf of Skanska arguing that the plaintiff failed to establish liability of the general contractor and that none of the elements of the common work area exception applied. We argued that there was no evidence that Skanska failed to take reasonable steps within its supervisory and coordinating authority, that there was no evidence of a readily observable and avoidable danger, because the hydromobile scaffold had been fully guarded at all times on the project other than on part of the day of the accident when it was elevated over 30 feet in the air and covered with visqueen and the lack of guarding could not be observed, that there was no evidence of a high degree of risk to a significant number of workers, because the only workers exposed to the hazard were the decedent and his co-worker, and that there was no evidence of a common work area, because the only subcontractor who was exposed to the hazard were employees of Davenport. The trial court agreed with our arguments and granted summary disposition dismissing any and all claims made by the plaintiff against Skanska USA Building, Inc.

DECLARATORY JUDGMENT OBTAINED BY MICHAEL F. SCHMIDT AND ALSO SUMMARY DISPOSITION AS TO THE INSUREDS’ COUNTERCLAIM FOR BAD FAITH AND BREACH OF CONTRACT ARISING OUT OF CLAIM FOR INSURANCE COVERAGE FOR AN UNDERLYING CLAIM RESULTING FROM A FAILED MERGER OF INSURANCE AGENCIES

AMCO Insurance Company v Douglas Williams and Douglas Williams & Associates, Inc., Washtenaw County Circuit Court, declaratory action which we filed on behalf of AMCO Insurance Company to obtain a ruling that AMCO Insurance Company had no duty to defend and provide coverage to Douglas Williams and Douglas Williams & Associates, Inc. for claims made against them in an underlying action resulting from a failed merger of several insurance agencies, and we also defended AMCO against a counterclaim by Douglas Williams and Douglas Williams & Associates, Inc. for breach of contract and bad faith. After discovery, we filed a motion for summary disposition arguing that there was no coverage for the claims made in the underlying action because the allegations in the underlying complaint were incorrect as to when the events occurred and the events actually occurred outside the policy period, that coverage was barred by failure to comply with the policy conditions requiring notice of the underlying suit, the voluntary payment clause and the no action clause, by settling the underlying claim without notice to the insurer, that there was no “personal and advertising injury” as defined by the policy alleged in the underlying action and that coverage was excluded by policy exclusions for acts done with the knowledge that the act would violate the rights of another, for publication of material with knowledge of its falsity, for breach of contract and for violation of laws. The trial court granted our summary disposition in favor of AMCO on all grounds, that there was no duty to defend or provide coverage because all of the events alleged in the underlying action occurred after the policy was cancelled, that the insured’s reliance on dates in the underlying complaint was improper since the underlying information established that these dates were incorrect, and that even if the policy was not cancelled, coverage was barred by breach of the notice condition, the cooperation condition, the voluntary payment condition and the no action clause, and that in addition, all of the exclusions applied. The court also granted our summary disposition for AMCO as to any and all claims made by Douglas Williams and Douglas Williams & Associates, Inc. in the counterclaim for bad faith and breach of contract. The insureds sought reimbursement of over $100,000 in indemnity plus attorney fees in excess of $50,000.

MICHAEL F. SCHMIDT OBTAINS DISMISSAL OF TWO INSURANCE CLAIM SUITS DUE TO PLAINTIFF/INSURED’S FAILURE TO COMPLY WITH DISCOVERY ORDERS

Tyrone Smith v Nationwide Mutual Fire Insurance Company, U. S. District Court for the Eastern District of Michigan, two different lawsuits filed by Tyrone Smith, the first for $189,000 in allegedly stolen jewelry and the second a claim for no fault benefits from an auto accident plus collision damage for the plaintiff’s Corvette. After several discovery motions and hearings in which the federal magistrate ordered the plaintiff to respond to discovery requests, we filed a motion to dismiss for the plaintiff’s failure to comply with the court’s discovery orders, which was granted and both cases were dismissed with prejudice.

MICHIGAN COURT OF APPEALS AFFIRMS SUMMARY DISPOSITION ENFORCING AUTO LIABILITY NOTICE CLAUSE IN APPEAL HANDLED BY MICHAEL F. SCHMIDT

Integon National Insurance Company v Vincent Lecari Berry and Patricia Carol Berry, Michigan Court of Appeals docket number 289320 (2009), appeal by the underlying plaintiff Coze Elissa Long and by the uninsured motorist carrier, Bristol West Insurance Company, of summary disposition granted by the trial court to Integon National Insurance Company. Integon’s insureds were involved in an auto accident but failed to provide notice to Integon of the auto accident, the fact that they were served with a suit, that the fact that the suit was filed or that they had been defaulted.

When Integon received notice from the uninsured motorist carrier after the entry of the default it hired defense counsel to represent the insureds in the underlying action who filed a motion to set aside the default, which the trial court denied. We then filed a declaratory judgment action to have the court rule that since the insureds had failed to provide Integon with notice of the accident and the suit there had been a violation of the notice condition of the policy and pursuant to the Michigan Financial Responsibility Act, MCL 257.520(f)(6), Integon did not owe coverage or a defense. The trial court agreed and granted summary disposition to Integon that it had no duty to defend or provide coverage including it had no duty to even provide the minimum Financial Responsibility limits of $20,000/$40,000 to the innocent third party who had been involved in the accident. The underlying plaintiff and Bristol West, the uninsured motorist carrier, appealed to the Court of Appeals. The Court of Appeals has now issued its decision affirming the summary disposition we obtained for Integon and rejecting all of the arguments raised by the underlying plaintiff and Bristol West.

This is an important decision, because the Court of Appeals held that per MCL 257.520(f) of the Michigan Financial Responsibility Act, an insurer has no duty to provide coverage if the insured has failed to provide notice of the accident and suit and the insurer has been prejudiced. Further, that the issue of prejudice is an issue of fact, but where the insured has been defaulted and the insurer has no ability to contest liability, prejudice is established. The court further held that MCL 257.520(f)(6) relieves the insurer of any liability, not just of liability over the minimum required limits of $20,000/$40,000 and that there is no conflict with the provisions of the No Fault Law. The court further held that in determining the applicable uninsured motorist coverage, such coverage applies per the terms of the policy if there is not a liability policy which was applicable at the time of the accident. Applicable at the time of the accident does not mean that there is an insurance policy in existence, rather there is an insurance policy that actually provides protection for the accident. The Integon policy was in existence, but it did not provide protection because of the violation of the notice condition and MCL 257.520(f)(6), the vehicle was uninsured and thus the uninsured motorist coverage applied.


Jury Returns a Verdict for $138,915 and Costs and Attorney Fees of $26,162 Awarded in Business Dispute and Breach of Settlement Agreement Case Tried by Dale Burmeister

This case arose out of a dispute between the owners of a mailing company. Plaintiff owned 51% of the company and claimed that the equipment, customers, and the name of the entity were misappropriated by the Vice President while Plaintiff was recovering from cancer.

Prior to filing suit, the parties tried to resolve the case with the help of a former Judge. A settlement of $130,000, payable over four years in monthly installments, was reached, but Plaintiff claimed that Defendant reneged on the deal and filed suit for conversion, fraud and misrepresentation, tortuous interference with business relations, breach of fiduciary duty, and breach of the settlement agreement. On the morning of trial, the Court bifurcated the settlement agreement count from the other claims and proceeded to trial. Following a five day trial, the jury returned a verdict of $138,915 and the Court subsequently awards costs and attorney fees of $26,162.


>MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION ENFORCING EXCLUDED DRIVER ENDORSEMENT

Nationwide Mutual Insurance Company v Robert Troup, et al, Oakland County Circuit Court, declaratory action, which we filed on behalf of Nationwide Mutual Fire Insurance Company to obtain a ruling that Nationwide had no duty to defend or provide coverage to its insureds for a claim arising out of an auto accident in Florida, in which the insureds’ vehicle was being operated by their son, who was a named excluded driver on the Nationwide policy. The insureds argued that they were not aware that their son was a named excluded driver and did not authorize Nationwide to exclude him as a driver. We argued that the insureds had received five dec pages and five sets of certificate of insurance naming their son as a named excluded driver in compliance with MCL 500.3009(2), that they were bound by the terms and conditions of their insurance policy whether they read it or not, and that authorization to exclude their son as a driver does not require a signature by the insured, but may be shown by notice such as receiving the dec pages and the certificates of insurance indicating that their son was a named excluded driver. The court granted summary disposition agreeing with our arguments, that Nationwide had no duty to defend or provide coverage to the insureds for the claim arising out of their son’s operation of their vehicle in Florida.


BARRY SUTTON AND JOHN PREW WIN 5 MINUTE DEFENSE VERDICT IN TREESTAND CASE

A jury in Chester County Pennsylvania recently took only five minutes to conclude that treestand was not defective in a product liability, serious injury case involving one of Harvey Kruse’s many national product liability clients. The plaintiff, who had fallen approximately 15 feet from his treestand argued that damage to the treestand platform was the cause of his fall. The defense argued that the physical damage was the result of the fall and not the cause of the fall, and submitted that the incident did not occur as the plaintiff claimed. The victory is the latest in a long line of favorable results for the Harvey Kruse national product liability team.

SIXTH CIRCUIT COURT OF APPEALS AFFIRMS SUMMARY JUDGMENT OBTAINED BY MICHAEL F. SCHMIDT IN INSURANCE POLICY RESCISSION CASE.

Mohammed Huda v Integon National Insurance Company, No. 08-2193(6th Cir, 2009), appeal from summary judgment granted by U. S. District Court Eastern District of Michigan in favor of Integon National Insurance Company that it properly rescinded an automobile insurance policy based on a material misrepresentation made by the insured in the application, by failing to disclose all household members who were of driving age including his son, Mohammed Huda, Jr.  The plaintiff sustained catastrophic injuries including loss of his right eye in an auto accident.  The Sixth Circuit agreed with our argument that under Michigan law an insurer can void a policy when there has been a material misrepresentation in the application.  The insured claimed that he was not asked about other drivers in the household and did not fill out the page requesting this information.  However, we argued that he signed the Applicant’s Certification which indicated that he had answered all of the questions in the application and that all persons of eligible driving age or permit age who lived with him as well as resided in his household had been shown in the policy.  The court also rejected the plaintiff’s argument that Integon should be estopped and held to have waived the rescission by failing to assure that Huda had filled out the entire application including the Undisclosed Driver section.  The court agreed with our argument that waiver and estoppel cannot be established by mere silence and that the plaintiff’s argument was contrary to the Applicant’s Certification.  The court further rejected Huda’s argument that the misrepresentation could have been “ascertained easily” since Huda had disclosed a prior homeowner policy which also listed his wife as a household member.  The court agreed with our argument that this did not establish any knowledge of Huda, Jr. and that the argument was based on Huda’s claim that failure to inform Integon about one driver in his household could be excused by his failure to inform Integon about another driver.  The court also rejected Huda’s argument that the application was ambiguous.

>MICHAEL F. SCHMIDT OBTAINS DISMISSAL OF CLAIM FOR UNDERINSURED MOTORIST BENEFITS BASED ON FORUM NON CONVENIENS.

James Lauder v GMAC Insurance, Oakland County Circuit Court, claim by James Lauder for underinsured motorist benefits.  We successfully obtained a dismissal based on forum non conveniens of the claim for underinsured motorists benefits.  We argued that all of the contacts in the case were with Texas.  The plaintiff was a Texas resident when he was involved in an auto accident in Texas involving another Texas resident.  His auto liability policy including underinsured motorist benefits was issued by Home State County Mutual Insurance Company, a Texas insurer, which operates only in Texas.  Following the accident, the plaintiff treated for several years in Texas.  He then moved to Michigan and began treating with a doctor in Michigan about two years after the accident.  The court agreed that all of the contacts were with Texas other than the plaintiff moving to Michigan two years after the accident and after filing his claim for underinsured motorist benefits.  The court dismissed the case based on forum non conveniens.

MICHAEL F. SCHMIDT DEFEATS CLAIM BY MUNICIPALITY FOR PROPERTY DAMAGE AGAINST VEHICLE OPERATOR

City of Fenton v Robert William Gaffney, Jr., Genesee County District Court 67-4A, claim by the City of Fenton pursuant to a City of Fenton ordinance to collect expenses for environmental clean up following an auto accident. We represented the defendant motor vehicle operator and argued that the claim was improper, because any claim for property damage arising out of a motor vehicle accident was properly made pursuant to the No Fault Law against the motor vehicle owner’s no fault insurer pursuant to MCL 500.3121. The trial court agreed and granted summary disposition holding that the city had improperly sued the motor vehicle operator and not the insurer.


SUMMARY DISPOSITION MOTION FILED BY MICHAEL F. SCHMIDT GRANTED IN CONSOLIDATED CASES BY INSURER AND HOMEOWNER FOR 4.2 MILLION DOLLAR FIRE LOSS

Auto-Owners Insurance Company as Subrogee of William Larkin and Mary Larkin v Kellett Construction Company, Albaugh Masonry Stone and Tile, Inc. and Butcher & Baecker Construction Company and William Larkin and Mary Larkin v Kellett Construction Company, Albaugh Masonry Stone and Tile, Inc. and Butcher & Baecker Construction Company, Oakland County Circuit Court, claim for fire loss to home and contents owned by William Larkin and Mary Larkin insured by Auto-Owners. Auto-Owners claimed damages to the home and contents in the amount of $3,093,117. The Larkins claimed an additional uninsured loss of $1,117,000. We represented Albaugh Masonry Stone and Tile, Inc. a subcontractor on the project who was alleged to have negligently hired a sub-subcontractor, Butcher & Baecker Construction Company, failed to supervise and inspect the work of Butcher & Baecker and failed to provide proper fire protection for the work. We were successful in obtaining a summary disposition in favor of Albaugh Masonry Stone and Tile, Inc. as to any and all claims made against it on the basis that the plaintiffs had no claim against Albaugh for negligent hiring, no claim for common work area or inherently dangerous activities liability, there was no evidence that Albaugh contracted to assume any duties to supervise or inspect the work of Butcher & Baecker, there was no independent negligence by Albaugh, there was no claim for breach of warranty, no third party beneficiary claim and no viable theory of liability. Additionally, the court granted summary disposition in favor of Albaugh as to the crossclaim filed by Kellett Construction Company finding that Kellett had no claim for breach of warranty or indemnity against Albaugh.


DALE BURMEISTER AND JASON MATHERS WIN SOPHISTICATED USER DECISION IN LIVING MESOTHELIOMA CASE

In Krafft v Allied Glove et al., Dale Burmeister and Jason Mathers moved for summary disposition in a living mesothelioma case based on a statute in Michigan that provides that a product manufacturer has no duty to warn or instruct “sophisticated users” of its products. MCL 600.2947(4). A “sophisticated user” is defined by the statute as "a person or entity that, by virtue of training, experience, a profession, or legal obligations, is or is generally expected to be knowledgeable about a product's properties, including a potential for hazard or adverse effect." MCL 600.2945(j). And, although employees not having actual knowledge of a product’s dangers are expressly excluded from this class of sophisticated users under the statute, in situations involving intermediate purchasers of a product, it is the knowledge of the purchaser or employer that must be examined – from either an actual knowledge or an objective point of view -- to determine whether a manufacturer had a duty to warn or instruct.  In this case, the court held that all of plaintiff’s employers could be ‘generally expected” to be knowledgeable about the potential hazards posed by asbestos containing products and granted our motion for summary disposition the week before trial.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION TO ENFORCE HOUSEHOLD EXCLUSION IN AN AUTOMOBILE LIABILITY POLICY.

Randy Robert Begin, as Conservator of The Estate of Lily Begin, a Minor and Madison Begin, a Minor v Nationwide Mutual Fire Insurance Company, Wayne County Circuit, claim by the plaintiffs to seek automobile liability coverage for a claim against their deceased mother as a result of an auto accident, pursuant to the automobile liability policy issued by Nationwide Mutual Fire Insurance Company to Tony Martinez, who had married the minor children’s mother.  We argued on behalf of Nationwide that any coverage for any claim by the minors against their mother arising out of the automobile accident would be limited by the household exclusion with the drop down clause appearing in the Nationwide policy to the Michigan Financial Responsibility limits of $20,000/$40,000.  The plaintiffs argued that the exclusion was ambiguous and unenforceable.  We successfully argued that the exclusion was not ambiguous, and was valid and enforceable and the court granted summary disposition in favor of Nationwide limiting coverage to $20,000/$40,000.

MICHAEL F. SCHMIDT OBTAINS SUMMARY DISPOSITION IN CONSTRUCTION ACCIDENT CASE

Cummings v S. E. Spohn Construction Company v American Erectors, Inc., Genesee County Circuit Court, claim by Sean Cummings that he sustained injuries when a beam was allegedly knocked onto and crushed his feet while working as an employee for American Erectors on a construction project.  The plaintiff received substantial workers’ comp benefits and eventually redeemed his workers’ comp claim for $150,000.  We filed a joint motion for summary disposition with Spohn in support of Spohn as to the primary plaintiff’s claim, arguing that the plaintiff had no claim for negligent hiring of a contractor, or for inherently dangerous activities, and also failed to meet the four part test for common work liability.  The plaintiff argued that employees of Spohn were working in the area and also crossed through the American Erectors’ work area on their way to work and thus there was a common work area.  We argued that there were not a significant number of workers exposed to the hazard, since there were only seven members of the American Erectors’ crew and only three were working on the ground in the area of the accident, and that there was no common work area because there were no other trades working in the area.  The trial court agreed and granted summary disposition in favor of Spohn as to any and all claims made by the plaintiff.

MICHAEL F. SCHMIDT PURSUADES THE MICHIGAN COURT OF APPEALS TO AFFIRM ARBITRATORS’ REJECTION OF COVERAGE AND DEFENSE COSTS ARISING OUT OF A $10 MILLION RECALL CLAIM

Machining Enterprises, Inc. a/k/a Enterprise Auto Systems v Wausau Business Insurance Company, Michigan Court of Appeals, we recently obtained affirmance by the Michigan Court of Appeals of an arbitration award that our client, Wausau Business Insurance Company, had no duty to provide coverage or a defense for underlying claims made against Machining Enterprises, Inc. based on a General Motors recall in which MEI sought in excess of $10,000,000 from Wausau for indemnification and defense costs.  MEI argued on appeal that the arbitrators had committed an error of law in refusing to follow the Supreme Court decision in American Bumper v Hartford Fire Insurance, 452 Mich 440 (1996), that the arbitrator refused to hear evidence and that the defense arbitrator and judge should have been disqualified.  We successfully argued that the arbitrators committed no error of law and correctly applied every rule of Michigan insurance law including these set forth by the Supreme Court in the American Bumper case, that the arbitrators did not exclude any evidence, and that there was no basis to disqualify the trial judge or the defense arbitrator.

IN A PUBLISHED OPINION THE COURT OF APPEALS AGREES WITH MICHAEL F. SCHMIDT THAT A HOUSEHOLD EXCLUSION IN AN AUTO POLICY LIMITS COVERAGE OF THE INSURED TO THE MICHIGAN FINANCIAL RESPONSIBILITY ACT LIMITS OF $20,000/$40,000

In Manier v MIC General Insurance Corporation, 281 Mich App 485 (2008), the Court of Appeals has issued a published opinion which affirms the summary disposition we obtained from the Washtenaw County Circuit Court.  This is a very important decision because it is the first published and hence first precedentially binding decision of any Michigan appellate court enforcing a household exclusion in an automobile liability policy which limits liability coverage for any claim by the insured or any family member to the Michigan Financial Responsibility Law limits of $20,000/$40,000.  The decision reduced the coverage available under the policy from $100,000/$300,000 to $20,000/$40,000.  This is a very important decision, because it now allows insurers to enforce such exclusions in Michigan.

CHRIS SCOTT WINS WRONGFUL DEATH RENTAL CAR EXCLUSION INSURANCE COVERAGE DISPUTE IN THE MICHIGAN COURT OF APPEALS

In Farm Bureau v GMAC, Farm Bureau filed a declaratory judgment action asserting no coverage in an underlying wrongful death case due to its insured not having proper permission from the owner of the vehicle.  The Farm Bureau insured was driving a vehicle that had been rented by another relative so that the family could go down south for a funeral.  During the trip, the family member that signed the rental agreement became ill and the Farm Bureau insured took over driving the rental vehicle with permission from the renter.  While driving, he had a heart attack and the vehicle rolled over.  Farm Bureau filed a declaratory action denying coverage while asserting reliance on the car rental agreement indicating there was no permissive use to any person not authorized as a driver under the rental agreement.  The trial court granted summary disposition in favor of Farm Bureau relying upon an unpublished case where different insurance policy language was at issue.  The Court of Appeals reversed, holding that the Farm Bureau exclusion was ambiguous and not enforceable, thereby effectively saving our client its policy limits.

MICHAEL F. SCHMIDT GETS $350,000 ARBITRATION AWARD VACATED

Dailey v Nationwide Insurance, Wayne County Circuit Court, We were retained to file a motion to vacate a $350,000 arbitration award in a claim for property damage pursuant to a homeowner policy.  We argued that the arbitration award should be vacated because the arbitrator failed to follow controlling legal principles in awarding damages on theories which were not supported by law including defamation, intentional infliction of emotional distress and violation of the Michigan Consumer Protection Act.  The trial court agreed and granted our motion and vacated the arbitration award and also appointed a new arbitrator.

MEL KARFIS AND BARRY SUTTON OBTAIN 25 MINUTE DEFENSE JURY VERDICT IN MARYLAND TREESTAND PRODUCT LIABILITY TRIAL

In Frank v. Summit Treestands, LLC., Frederick County, Maryland, Mel Karfis and Barry Sutton recently obtained a lightning fast defense verdict on behalf of their treestand manufacturing client.  Plaintiff sought over $750,000.00 for serious spinal, chest and lung injury suffered when he fell 20 to 25 feet from his treestand.  He maintained that the cause was the result of a failure of the metal frame of the treestand and that his failure to use his harness in the matter intended was a foreseeable misuse of the product.  In a case which stressed the importance of warnings and safety videos, Barry and Mel, together with engineer-designer and safety pioneer Ron Woller, their experts, George Saunders (mechanical engineering) and L.J. Smith (renowned hunting safety expert), established that the metal deformation was the result of and not the cause of the fall, and that the plaintiff’s injuries were solely caused by his own decision to disregard repeated warnings to always wear his full body safety harness.  Deliberating only 25 minutes, the jury found that the product was not defective and was reasonably safe for its intended uses.  The case is important for the entire treestand industry because it pioneered the importance of safety videos (now co-packaged with every treestand) in the courtroom.  Mel and Barry, and another partner, John Prew, have developed a national practice defending treestand manufacturers throughout the United States.

SUMMARY DISPOSITION MOTION FILED BY MICHAEL F. SCHMIDT GRANTED IN CONSTRUCTION ACCIDENT CASE BECAUSE IT DID NOT OCCUR IN A COMMON WORK AREA

Ferchak v George W. Auch Company, Genesee County Circuit Court, claim for injuries incurred by the plaintiff in a construction accident when he fell from the top of a pallet of cinder blocks from which he was working.  The plaintiff claimed that the accident resulted in a serious ankle injury which has prevented him from returning to work in construction.  We represented George W. Auch Company, the general contractor for the project.  Following discovery we filed a motion for summary disposition on the basis that the accident did not occur in a common work area and that the plaintiff was more than 50% at fault which barred his claim for non-economic damages.  We argued specifically that the area where the plaintiff was working, the top of the pallet of cinder blocks was not a common work area where any other employees or trades worked, and the plaintiff was more than 50% at fault for working from this area without any fall protection.  The trial court agreed and granted our summary disposition. 

MICHAEL F. SCHMIDT SUCCESSFULLY ENFORCES EXCLUSION IN POLICY FOR INSURED’S OWN PROPERTY LEADING TO DISMISSAL OF ALL CLAIMS

A & K Services v AMCO Insurance Company and Voss Insurance Agency, 28th District Court, claim for insurance coverage for a vehicle purchased by the insured which was allegedly stolen from its premises.  Following discovery we moved for summary disposition on the basis that the policy excluded coverage for the insured’s own property, that there was no liability coverage because the claim was a first party claim, and that there was no claim against the agent for violation of the Michigan Consumer Protection Act.  The trial court agreed and granted summary disposition as to all claims made by the plaintiff against both defendants.

COURT AGREES WITH MICHAEL F. SCHMIDT THAT INSURANCE POLICY PROPERLY CANCELLED

Gaugi Properties v AMCO Insurance, St. Clair County Circuit Court, claim by insured for alleged water damage in excess of $200,000 to the insured’s building.  We filed a motion for summary disposition on behalf of AMCO on the basis that the policy was cancelled prior to the loss.  Plaintiff argued that AMCO was estopped from raising the defense because it was not raised in the reservation of rights and denial letters, and because AMCO was aware that the address where the premium notices and cancellation notice were sent was not the insured’s appropriate address.  We obtained summary disposition with the court finding that the cancellation was effective, that the application listed the primary, mailing, billing address, which is where AMCO sent the notices, and that AMCO was not estopped from raising the defense.

MICHAEL F. SCHMIDT PREVAILS IN COVERAGE DISPUTE DUE TO LACK OF PROPER NOTICE

Integon Insurance Company v Berry, Wayne County Circuit Court, Declaratory action filed to obtain a determination that Integon Insurance Company had no duty to provide coverage or a defense to the insureds in an underlying claim against the insureds arising out of a motor vehicle accident.  We argued that the insureds had failed to provide notice of the accident, failed to provide notice of the underlying suit resulting in a default being entered against the insureds and failed to provide notice of the default.  We were successful in obtaining a summary disposition that Integon had no duty to provide coverage or a defense to the insureds in the underlying action due to the lack of notice which was to the prejudice of Integon.

COLLEEN JOLICOEUR EARNS LL.M. IN LABOR AND EMPLOYMENT LAW

Harvey Kruse, P.C. would like to congratulate Colleen T. Jolicoeur for earning her LL.M. in Labor and Employment Law from Wayne State University Law School in May 2008.  Ms. Jolicoeur is an associate in the firm’s Troy branch.  Ms. Jolicoeur focuses her practice in the areas of Employee Benefits, Employment Law, Environmental Law, Insurance Defense, and Products Liability. 

MATERIAL MISREPRESENTATIONS IN INSURANCE POLICY APPLICATION LEAD U.S. DISTRICT COURT TO ACCEPT MICHAEL F. SCHMIDT’S ARGUMENT THAT COVERAGE SHOULD BE RESCINDED IN CASE INVOLVING CATASTROPHIC INJURIES INCLUDNG LOSS OF AN EYE

Mohammed Huda v. Integon National Insurance Company, United States District Court for the Eastern District of Michigan, claim for no-fault benefits and uninsured motorist benefits by the plaintiff arising from a motor vehicle accident in which the insured sustained catastrophic injuries including loss of  his right eye.  We defended the case on the basis that the plaintiff/insured made a material misrepresentation in the application for the policy by failing to disclose all of the household members who were of driving age including his son Mohammed Huda, Jr.  We argued that this served as the basis for rescission of the policy.  The Detroit Medical Center intervened as a plaintiff to support the plaintiff’s claim.  On cross-motions for summary judgment filed by all of the parties, the court agreed with our motion and ruled that the policy was properly rescinded from its inception based on the material misrepresentation in the application. 

MICHAEL F. SCHMIDT WINS WORKER’S COMPENSATION INSURANCE DISPUTE

AM Polis, Inc. and Polis Audish v Jeffrey H. Kaplan Agency, Inc. and Amanda M. Stephen, Wayne County Circuit Court, claim by the plaintiff and the plaintiff’s corporation for workers’ compensation insurance.  Plaintiffs alleged that they applied for and requested a policy of workers’ compensation insurance from the defendant insurance agency.  They further argued that they cancelled existing coverage in reliance upon obtaining such coverage.  Following discovery we moved for summary disposition on the basis that the defendants were direct agents of Nationwide, that none of the exceptions to the general rule of no liability as set forth by the Supreme Court decision in Hartes v Farmers Insurance Exchange, 461 Mich 1 (1999) applied, that the plaintiff had a duty to read his policy and raise any questions regarding coverage within a reasonable time, that discovery disclosed that the plaintiff did not cancel any other coverage in reliance on the Nationwide policy and that the plaintiff never requested workers’ compensation coverage.  The court granted our motion for summary disposition dismissing the plaintiffs’ complaint with prejudice.

CRIMINAL ACT EXCLUSION SUCCESSFULLY ARGUED BY MICHAEL F. SCHMIDT IN INSURANCE COVERAGE LITIGATION

Schomer v MIC General Insurance Corporation, Oakland County Circuit Court. This case was a declaratory action filed by the MIC insured and joined by the underlying plaintiff against MIC to determine whether the criminal act exclusion in the MIC policy excluded coverage and to determine whether the motor vehicle’s operator had permissive use. The MIC insured, Jean Schomer, allowed her granddaughter to use her vehicle. Her granddaughter in turn allowed her boyfriend, who did not have a valid operator’s license, to use the vehicle, contrary to the grandmother’s instructions. While on the way to see his parole officer, the boyfriend decided to stop at a grocery store parking lot to attempt to steal a purse from a customer. He failed in the attempt and then fled the scene. The attempted theft was reported, and as he was driving eastbound on 696 he was spotted by a police officer who began chasing him. He fled eastbound on 696 and then exited onto southbound I-75 and was driving on the shoulder to avoid traffic when he struck the underlying plaintiff’s vehicle causing it to turn over and injuring its occupants. He then continued driving over a hill, down an embankment, over a cement wall and onto southbound I-75 where he continued fleeing until his car failed and he ran from the scene. He turned himself in the next day. He then pled nolo contendre to third-degree fleeing and eluding. He was sentenced and imprisoned. The policy excluded coverage for bodily injury or property damage which may reasonably be expected to result from the intentional act of an insured or which is in fact intended by an insured or which is a criminal act. The exclusion only applied to damages in excess of the minimum limits provided by the Financial Responsibility Law. We deposed the boyfriend in prison and he admitted all of the elements of third degree fleeing and eluding. We then filed a motion for summary disposition to enforce the policy exclusion in excess of the Financial Responsibility limits. The insured and the underlying plaintiff argued that the exclusion was contrary to public policy as held by several recent Michigan Court of Appeals decisions and was also ambiguous and unenforceable. We argued that the exclusion was not ambiguous, that there was no issue of fact, that the vehicle’s operator admitted all of the elements of third-degree fleeing and eluding at the time of the accident, that the accident occurred during the course of the fleeing and eluding, and that the exclusion was not contrary to public policy or the No Fault Act or Financial Responsibility Act because it was only enforceable in excess of the Financial Responsibility limits. We also argued that regardless of whether coverage for any criminal act in the use of a motor vehicle was excluded, this was not a valid public policy defense because normal traffic offenses are only civil infractions and are not criminal acts, and moreover, the legislature has determined that the only necessary liability coverage is $20,000/$40,000 and that any coverage in excess of this amount is subject to contract limitation. The court agreed with our argument and granted summary disposition enforcing the exclusion which reduced the available coverage from $100,000/$300,000 to $20,000/$40,000.

FRANK PORRETTA WINS INSURANCE CANCELLATION CASE BEFORE JUDGE COLOMBO IN WAYNE COUNTY CIRCUIT COURT

In E & O Taxi v Insurance Services of Detroit, a taxicab company, which had financed the $150,000 annual premium on its commercial insurance policy, alleged that it had made all installment payments to its agent, which had failed to convey the payments to the premium finance company or to our client, the insurance carrier.  The premium finance company sent out a “Notice of Intent to Cancel” and then sent out a “Notice of Cancellation” as required by statute, and requested that the carrier cancel the policy.  The taxicab company claimed the carrier had breached duties to notify it that the premium had not been received and to notify it of the cancellation.  The Court disagreed and granted Frank Porretta’s motion for summary disposition, finding that the cancellation and notices complied with MCL §500.1511, and the carrier owed no additional duties to the insured, relying on Doshi v Michigan Basic Property Ins Ass’n,  229 Mich App 595, 603, 582 NW2d 542, 546 (1998).

MICHAEL F. SCHMIDT PREVAILS IN FIRST PARTY INSURANCE COVERAGE DISPUTE AMONG CARRIERS OVER A FIRE ON PROPERTY OWNED BY GM GRAND

Northland Insurance Co. as Subrogee of GM Grand v Century Surety Company and Adel Abbas Hashim, Wayne County Circuit Court, claim for $148,000 in property damage from a fire to property owned by GM Grand and insured by Northland Insurance Co. Northland filed suit as subrogee of GM Grand against Century Surety Company and Adel Abbas Hashim seeking coverage for the loss under the policy of insurance issued by Century Surety Company to the tenant Hashim and seeking recovery against Hashim for the damages pursuant to the lease. We were successful in obtaining summary disposition from Judge Wendy Baxter for both Century Surety and Hashim, on the basis that the Century Surety policy did not provide first party property coverage to GM Grand and that although GM Grand was an additional insured on the Century Surety policy, the policy did not provide any property coverage for GM Grand’s loss and also did not provide any liability coverage to Adel Abbas Hashim for the claims made by Northland. The court further ruled that Adel Abbas Hashim had no liability to GM Grand under the lease, because although the lease stated that the tenant assumed the entire risk of loss for damage to all or any part of the property, a separate lease provision required the landlord to insure the property. There had been a case evaluation award in favor of the plaintiff in the amount of $25,000.

MICHAEL F. SCHMIDT WINS COLLAPSING WALL INSURANCE COVERAGE LITIGATION

Northstar Petroleum, Inc. v L & M Masonry Enterprises and Allied Insurance, Oakland County Circuit Court. The plaintiffs, Northstar Petroleum, Inc., Atlantis Development Corporation and Atlantis Management Co., brought suit against L & M Masonry Enterprises, Inc. and Allied Insurance seeking to recover approximately $300,000 in damages for the collapse of a wall which was part of a construction project for a shopping center. The wall collapsed due to high winds and as a result adjacent walls also had to be torn down and replaced. The plaintiffs were the owners and general contractor for the project and brought suit against L & M, the masonry subcontractor, and Allied Insurance. The claims against Allied were based on the contract documents which required L & M to obtain a policy of insurance naming the plaintiffs as insureds and also to obtain insurance providing liability coverage for L & M. We filed a motion for summary disposition on behalf of Allied arguing that the plaintiffs were not insureds under the policy issued by Allied to L & M, and even if they were insureds, the policy was a commercial general liability policy which did not provide any first party coverage. We also argued that there was no coverage available to L & M for any of the claims made by the plaintiffs because all of the damage was to L & M’s own work or was incurred in repair and replacement of L & M’s work, and thus there was no “occurrence”, no “property damage” and coverage was also excluded by the business risk exclusions. The plaintiffs entered a default against L & M in the amount of $288,000 and we obtained an order of dismissal as to any and all claims against Allied determining that Allied provided no coverage to the plaintiffs, and also had no duty to provide any coverage or defense to L & M for any of the claims made by the plaintiffs.

MICHIGAN COURT OF APPEALS OVERTURNS TRIAL COURT AND RULES FOR MICHAEL F. SCHMIDT IN CONTRACTUAL INDEMNITY CASE

In Empire Fire & Marine Insurance Co. v Minuteman International, Empire Fire filed suit as subrogee of General RV Center, Inc. to recover in excess of $5.5 million in damages as a result of a fire at the General RV Center, Inc. facility in Wixom, Michigan.  Empire Fire alleged that a floor scrubber manufactured by Minuteman International, Inc. caused the fire.  We represented Minuteman and filed a third party complaint against Lester Electrical, the manufacturer of a battery charger which was a component part of the floor scrubber, on the basis that the defect which the plaintiff alleged in the floor scrubber was in the battery charger.  The plaintiff’s complaint was eventually dismissed for a $12,000 settlement, and we then sought contractual indemnity for all of the defense costs and attorney fees incurred in defending the claim from Lester Electrical pursuant to an indemnity contract.  The trial court denied our motion for summary disposition and granted summary disposition to Lester Electrical.  In Empire Fire & Marine Insurance Co. as Subrogee of General RV Center, Inc. v Minuteman International, Inc., unpublished per curiam decision of the Michigan Court of Appeals docket number 274660 (2008), the Court of Appeals reversed the trial court and ordered summary disposition in favor of Minuteman for full contractual indemnity from Lester Electrical.  The court held that the plaintiff did not have to make allegations against Lester Electrical in order for Minuteman to obtain contractual indemnity, because the evidence established factual support to enforce the contractual indemnity agreement.

MICHAEL F. SCHMIDT PREVAILS IN MULTI-VEHICLE ACCIDENT LITIGATION

David W. Allard, As Trustee of The Bankruptcy Estate of Laura J. Wilamowski v Joseph A. Sova,  State Farm Mutual Automobile Insurance Company, Clarkston Steel, Inc., Conrad C. Wilamowski and Mirash Bojaj, Oakland Court Circuit Court, Judge Fred M. Mester, plaintiff brought suit against multiple defendants alleging injuries incurred in a multi-vehicle accident.  The plaintiff claimed that she had a lumbar laminectomy and total and permanent disability from prior cervical fusions as a result of the accident.  We argued that the defendants, Sova and Clarkston Steel, had no liability and that Sova’s truck was knocked into the median by another vehicle, where it stopped.  The trial court agreed and granted summary disposition holding that there was no evidence of anything other than an “accident” and no negligence on the part of the defendants.

>INSURANCE DISPUTE IN CATASTROPHIC INJURY CASE WON BY MICHAEL F. SCHMIDT

Jaclyn Allen v Nationwide Mutual Fire Insurance Company and Auto-Owners Insurance Company, Washtenaw County Circuit Court, involved a claim for no fault benefits for catastrophic injuries to the plaintiff.  The issue was whether the plaintiff was a resident of her parents’ household and thus entitled to no fault benefits under the Nationwide policy issued to her parents or was a resident of her grandmother’s household and thus entitled to no fault benefits from her grandmother’s insurer Auto-Owners.  Auto-Owners argued that the plaintiff had indicated on her vehicle registration and driver’s license that she was a resident of her parents’ household.  We argued that pursuant to the affidavits of the witnesses, including the plaintiff, her parents, her grandmother and other family members and neighbors, that the plaintiff was a resident of her grandmother’s household.  We argued further that Auto-Owners’ argument regarding the driver’s license and vehicle registration did not raise any genuine issue of material fact.  The court, Judge Archie C. Brown, agreed and ordered summary disposition in favor of the plaintiff and against Auto-Owners, and dismissed all claims against Nationwide.

IN A PUBLISHED DECISION THE MICHIGAN COURT OF APPPEALS AFFIRMS SUMMARY DISPOSTION FOR DALE BURMEISTER IN A CASE RAISING CONSTITUTIONAL AND REAL PROPERTY ISSUES IN A DISPUTE BETWEEN A CABLE OPERATOR AND A LARGE LANDOWNER

In Heydon v MediaOne, the Michigan Court of Appeals has affirmed in a published decision a variety of dispositive rulings involving a dispute between a large landowner and a cable television operator. The four major questions before the Court where 1) whether the Cable Communications Policy Act of 1984 violates the takings clause in the United States Constitution; 2) whether the Cable Communications Policy Act of 1984 prohibits “piggy-backing” on private easements; 3) whether prescriptive easements may be assigned; and 4) whether a public utility that apportions a prescriptive easement for use by a cable operator to string its wire imposes a new burden on the existing easement. On all four issues, the Court of Appeals ruled in favor of Dale’s client. Click here to view the opinion of the Court.

MICHAEL F. SCHMIDT PERSUADES A FEDERAL COURT TO GRANT SUMMARY JUDGMENT IN HOMEOWNER MISREPRESENTATION CASE

In Lacresia Nolan v Nationwide Mutual Fire Insurance Company, plaintiff filed suit seeking recovery for fire damage to her home insured by Nationwide for $161,000.  After completing discovery we moved for summary judgment on the basis that the policy of insurance was rescinded from its inception due to the plaintiff/insured’s misrepresentations in the application for insurance.  The plaintiff argued that Nationwide had to prove an intentional misrepresentation, that Nationwide undertook to inspect the premises and should have ascertained that they were vacant, and that the plaintiff advised the agent that she was not residing in the premises and only intended to move in the future contrary to the written application, thus estopping Nationwide from raising a misrepresentation in the application and that Nationwide knew the premises would be vacant because they were being remodeled or under construction.  The court rejected all of these arguments holding that the misrepresentation did not have to be intentional, that Nationwide had no duty to investigate to determine if the representations in the application were correct, that the plaintiff/insured did not provide oral information to the agent contrary to all of the misrepresentations in the application and thus Nationwide was not estopped from raising the defense of the application and the fact that the home was allegedly being remodeled or under construction was irrelevant to the misrepresentations.  The court granted summary judgment to Nationwide dismissing all of the claims.

MICHAEL F. SCHMIDT VICTORIOUS IN TREE STAND CASE IN FEDERAL COURT FOR BASS PRO SHOP

Hilaski v Bass Pro Shop, U. S. District Court for the Western District of Michigan, claim by the plaintiff for injuries including a fractured ankle resulting in surgery and internal fixation from falling from a tree stand which he claimed was improperly designed, manufactured and sold. We filed a motion for summary judgment on the basis that there was no proof or evidence that the tree stand was sold by Bass Pro Shop, that the claim was based on speculation and conjecture, and that even if the tree stand was sold by Bass Pro Shop, there was no proof of any negligence by Bass Pro Shop in the sale of the tree stand, no evidence of any express warranty, and no evidence of any breach of an express warranty. In response to our motion for judgment, the case was dismissed.

MICHAEL F. SCHMIDT WINS MOTION FOR SUMMARY JUDGMENT IN CONSTRUCTION ACCIDENT CASE REMOVED TO FEDERAL COURT

Thomas Craig v Walsh Construction Company of Illinois, U. S. District Court for the Eastern District of Michigan, plaintiff brought suit against Walsh Construction Company of Illinois as general contractor for injuries from a construction accident. Craig fell approximately 25 feet from shoring which was being dismantled by his employer’s work crew. The plaintiff claimed permanent disability from his work as a carpenter from alleged multiple injuries from the fall. There was a comp lien of approximately $200,000. We removed the case to U. S. District Court, to complete discovery and filed a motion for summary judgment on the basis that the plaintiff’s claim against Walsh as general contractor was barred because there was no common work area. We obtained a summary judgment from Judge Arthur Tarnow on the basis that there was no evidence of a common work area.

JIM SUKKAR WINS LEMON LAW TRIAL IN KALAMAZOO

Jim Sukkar obtained a defense verdict in a two day jury trial in the Kalamazoo Circuit Court.  Jim represented a foreign auto manufacturer sued for breach of express and implied warranty arising out of the sale of a new motor vehicle.  The Plaintiff, Ronald Leggitt, claimed that as a result of a faulty oil pump, oil was discharged from the engine of his 18 month old vehicle.  Plaintiff’s expert, a certified mechanic testified that based upon the wear observed he believed that the oil pump malfunctioned causing increased oil pressure which resulted in loss of oil through the oil filter port.  Jim presented the dealer mechanic who inspected the vehicle the day after the occurrence as well as the manufacturer’s regional parts and service manager.  The mechanic observed that the oil was expelled through the oil filter port.  However, the aftermarket oil filter which was not installed by an authorized dealer was misaligned and improperly installed. The parts and service manager determined that the warranty did not apply under these circumstances.  The jury found that the condition that gave rise to the engine failure was not the responsibility of the manufacturer.

MICHAEL F. SCHMIDT PERSAUDES COURT TO REFORM INSURANCE POLICY AND DENY ENHANCED COVERAGE AS A MATTER OF LAW

Manier v MIC General Insurance Corporation, Washtenaw County Circuit Court.  Plaintiff filed suit seeking a declaratory judgment that MIC had improperly rescinded and reformed an auto liability insurance policy based on a misrepresentation in the application. The minor plaintiffs were all severely injured in an auto accident and sought recovery under the MIC policy issued to William D. Manier for the policy limits of $100,000/$300,000. We succeeded on a motion for summary disposition on the basis that the policy of insurance issued to Manier’s parents was reformed due to an intentional misrepresentation made by Manier’s mother that Manier resided with his parents and that his vehicles were garaged there. MIC discovered this misrepresentation after an accident involving one of Manier’s vehicles in which his three children were injured. We successfully argued that under the reformed policy the children were “family members”, and thus pursuant to the household exclusion, any liability coverage available to them would be limited to the Michigan financial responsibility limits of $20,000/$40,000.

MICHAEL F. SCHMIDT WINS $10 MILLION INSURANCE COVERAGE ARBITRATION

Machining Enterprises, Inc. v Wausau Business Insurance Company, Oakland County Circuit Court number 04-056494-CK, claim by Machining Enterprises, Inc. for insurance coverage for underlying claims made against Machining Enterprises, Inc. (“MEI”) based on a General Motors recall, in which MEI sought in excess of $10,000,000 for indemnification and defense costs.  After the case pended in Oakland County Circuit Court for a year, the case was sent to binding arbitration.  After a week long arbitration hearing, the arbitrators ruled in a 2-1 written decision that Wausau had no duty to provide coverage or a defense to MEI for the underlying claims, that there was no “occurrence”, that there was no “property damage”, that coverage was barred by the “work/product” exclusions (k), (l), (m) and (n), that the only damage referred to was to MEI’s own product and for repair and replacement of MEI’s own product, that there was never any claim for “property damage” as defined by the policy, that MEI’s conduct in regard to Wausau’s investigation showed that MEI did not believe that the claims were covered and that MEI breached its obligation to cooperate and provide notice to Wausau regarding the underlying claims.  Following entry of the arbitration award, Wausau filed a motion to enter judgment on the award and MEI filed a motion to vacate the award.  After the parties submitted briefs and argued the motions, Judge Goldsmith entered his opinion and order granting Wausau’s motion to enter judgment on the arbitration award and denying MEI’s motion to vacate the arbitration award, holding that the arbitration panel correctly cited and applied controlling principles of insurance law and that the arbitrators did not refuse to hear material evidence submitted by MEI.

JIM SUKKAR VICTORIOUS IN SEVEN DAY TRIAL

Jim Sukkar prevailed in a seven day jury trial before Judge Robert Ziolkowski of the Wayne County Circuit Court.  Sukkar represented a truck driver and a trucking company in a lawsuit filed by Jill and Donald Yanick arising out of a January, 2005 incident where the Plaintiffs alleged scrap flew from Defendants’ truck and struck the vehicle driven by Jill Yanick, and as a result Mrs. Yanick slammed on her brakes and, in an attempt to avoid flying debris, twisted her body which resulted in a herniated disc at L5-S1 which required surgery.  It was the Defendant’s position that Mrs. Yanick’s condition was pre-existing and of a degenerative nature. Jim presented a biomechanic who testified as to the low level of force involved in bringing a vehicle to a stop.  Mrs. Yanick had surgery in 1989 for herniated discs at the L2-3 and L3-4 levels.  It was noted that the L5-S1 disc was degenerating at that time.  Mrs. Yanick’s surgeon disabled her from working as a nurse and testified that her condition was caused by the subject accident.  The jury did not agree and found that Mrs. Yanick was not injured.

MICHAEL F. SCHMIDT WINS UNDERINSURED HEART ATTACK DEATH CASE AND SAVES CLIENT $250,000

Jimmy Kasmikha, as Personal Representative of the Estate of Selma Kasmikha, Deceased v Integon National Insurance Company, Oakland County Circuit Court, plaintiff filed a claim for underinsured motorist benefits seeking the underinsured motorist limits of $250,000 as a result of an auto accident with an alleged underinsured motorist which allegedly resulted in a heart attack and death of Selma Kasmikha.  The plaintiff initially sued the underinsured motorist, who settled for the policy limits of $100,000.  The plaintiff then filed the underinsured motorist claim against Integon.  We filed a motion for summary disposition arguing that the underinsured motorist claim was barred by the release entered in the underlying action which released the underlying tortfeasor and “all other persons, firms, corporations, liable or who might be claimed to be liable. . .”  The plaintiff responded that Integon had approved the underlying settlement, and that the parties to the underlying case did not intend to release the underinsured motorist claim.  The plaintiff and the insurer of the underlying defendant submitted a reformed release indicating that their intent was specifically not to release the underinsured motorist claim.  In addition, the plaintiff filed a cross-motion for summary disposition arguing that there was no issue of fact, and that the underinsured motorist was responsible for the accident and the experts had established that the decedent’s heart attack was a result of the auto accident.  We responded that there were issues of fact regarding who caused the accident and whether the heart attack was a result of the auto accident, but more importantly, that Integon was a third party beneficiary of the underlying release and that Integon’s rights became vested as soon as the release was executed and thereafter the plaintiff and the underinsured motorist and his insurer had no right to make any modification of the release to the detriment of Integon.  The trial court agreed with all of our arguments and granted summary disposition in favor of Integon. 

MICHAEL F. SCHMIDT WINS SUMMARY DISPOSITION IN BREACH OF CONTRACT AND BAD FAITH ACTION

Latta v Nationwide Property & Casualty Insurance Company and Kimberly Byrne, claim for bad faith and breach of contract seeking to enforce an alleged settlement agreement of an underlying claim by Chad Latta against a Nationwide insured, Glenwood Apartments, for an alleged premises injury claim. The plaintiff’s claim in the underlying action was for $200,000. The plaintiff made numerous offers, Nationwide made two counter-offers, but the plaintiff did not accept either of Nationwide’s counter-offers and continued making additional offers until the statute of limitations expired with no agreement being made. We obtained a summary disposition on behalf of Nationwide and the Nationwide claim rep, Kimberly Byrne, on the basis that the plaintiff had no claim for bad faith against the insurer of a defendant, and that the plaintiff’s claim to enforce the settlement failed because the plaintiff failed to prove an offer and acceptance.

MIKE GUSS AND CHRIS SCOTT WIN DEFENSE VERDICT
IN PARAMEDIC MALPRACTICE DEATH CASE

Mike and Chris won a defense verdict in a two week paramedic malpractice wrongful death case, wherein the decedent’s survivors alleged that the decedent, after having sustained a fall and a C2 odontoid fracture, was mishandled by the paramedic and EMS crew, resulting in a shift and/or displacement of an odontoid fracture.  The fracture allegedly compressed the spinal cord, resulting in a pulmonary and cardio arrest, and resultant brain damage.  Decedent was removed from life support several days later. 

Plaintiffs alleged conscious pain and suffering on behalf of the decedent and the loss of love and society for 11 children and 44 grandchildren. 

The trial proofs concerned the testimony of approximately 9 lay witnesses and 7 medical treaters and experts.  The defendant’s case was based upon an assertion that the scene witnesses (decedent’s family members) fabricated their version of events, and it was asserted that their version of events was not consistent with EMS and initial hospital triage documentation. 

The jury returned a verdict for defendant in approximately an hour and five minutes.  The defendant will be entitled to approximately $60,000 to $80,000 in case evaluation sanctions.

DENNIS GOEBEL AND MEL KARFIS PREVAIL IN DEATH CASE
IN MICHIGAN COURT OF APPEALS

This is a wrongful death product liability case in which Vernon Wingard was caught between the end of a conveyor and fixed barrier guarding.  He was crushed to death.  The Estate claimed that the conveyor was negligently designed, was defective and was unreasonably dangerous.  The case was defended on the basis that the customer was offered but did not order the manufacturer’s suggested light curtain guarding.  Subsequent to issuance of the purchase order the customer directed a third-party to install end of the line barrier guarding.  The case was tried and the jury returned a verdict of “no cause for action”.  Plaintiff took an appeal alleging that sufficient evidence had been submitted and that the Court should have directed a verdict in favor of the Plaintiff.  The Court of Appeals upheld the Trial Jury’s verdict of no cause for action.

DENNIS GOEBEL AND MEL KARFIS WIN PRODUCTS CASE
IN FEDERAL COURT

United States District Judge David Lawson has granted a Motion for Summary Judgment filed by Dennis and Mel in this product liability case in which the quadriplegic Plaintiff claimed that his use of an allegedly defective ROHO air cushion caused a stage 1 pressure sore which did not heal and which became a stage 4 open wound. The Plaintiff alleged that the air cushion was defectively designed and manufactured such that in June 2001 there was a catastrophic loss of air from the cushion. The loss of air allegedly caused the Plaintiff to “bottom out” resulting in a pressure sore on his buttocks. The Plaintiff claimed that the loss of air was due to a change in ambient temperature, his left pelvic obliquity, shifting weight during the course of the day, the cushion allowed capillary occlusion to occur and/or that the air valve may have leaked. The Defendant denied that the cushion was negligently designed and/or manufactured. The Plaintiff used the Defendant’s cushion for several years before the incident and for two years afterward. There were no prior instances of catastrophic air loss. In addition, pressure sores can develop in quadriplegic patients even when they are most vigilant about their pressure relief regimen. The Court granted Summary Judgment because the Plaintiff failed to produce evidence of causation. The Court found that the Plaintiff did no more than describe possibilities and therefore amounted to speculation.

LARRY DAVIDSON WINS A SLIP AND FALL
AND TWO FOOD POISONING CASES FOR BRAVOKILO

In the past few months, Larry Davidson has won three cases for Bravokilo, Inc., the operator of many Burger King restaurants in Michigan, without even having to appear for oral arguments.  Two of the cases were pending in Washtenaw County Circuit Court and the third was filed in Saginaw District Court. Two of the cases alleged food poisoning, and the third was a premises liability action:

In Reid v. Bravokilo, Inc., the plaintiff brought a premises liability action in Washtenaw County Circuit Court, alleging that he fell on a step within the restaurant.  After the plaintiff testified at deposition regarding the facts and circumstances of the incident, a motion for summary disposition was filed on the basis that the condition of the premises was open and obvious.  Plaintiff’s counsel did not respond to that motion and the court granted summary disposition without requiring oral argument.

In McKissic v. Bravokilo, Inc., the plaintiff alleged that she suffered food poisoning after  consuming food from a Burger King restaurant.  After obtaining the testimony of the plaintiff under oath, we filed a motion for summary disposition. The primary argument was that the food purchased from Burger King could not have been the source of the bacteria because the incubation period between the time of consumption and the presence of symptoms was insufficient according to the prevailing view of the medical community.  The plaintiff initially responded to the motion, but then agreed to dismiss the matter with prejudice on the day before the scheduled hearing date.

In Mahony v. Bravokilo, Inc., the plaintiff filed an action in the Saginaw District Court, alleging food poisoning.  We ultimately convinced the attorney for the plaintiff to dismiss the action with prejudice after establishing that the restaurant in question was not operated by Bravokilo, Inc.

DALE BURMEISTER WINS ANOTHER FEDERAL CABLE COMMUNICATIONS ACT CASE
IN WASHTENAW COUNTY CIRCUIT COURT

An electrical utility company acquired a prescriptive easement to run electrical lines across a parcel of property but the property owner challenged the right of a cable operator to piggyback on that easement to string its television and internet wire.  Judge Morris ruled, however, that the cable company’s wire did not impose an additional burden on the prescriptive easement and held that adding the cable to existing utility poles did not run afoul of the Constitution.

DENNIS GOEBEL AND MEL KARFIS WIN FOUR-WEEK FEDERAL JURY TRIAL
IN AIRPLANE CRASH CASE

Randall Torno and his wife filed a products liability action in the Federal Court in Detroit alleging that he sustained an L1 burst fracture and paraplegia as a result of an experimental aircraft crash in which Mr. Torno claimed that an RE Phelon engine ignition component failed causing his aircraft to lose power and crash in Monroe County, Michigan in June 2001.  Mr. Torno was an engineer who built an experimental aircraft which utilized a 50 horsepower two-cycle engine.  He claimed that an RE Phelon trigger coil was used in the ignition system, that the coil failed, causing the engine to overheat, burn a hole in one of the pistons, that there was a loss of power and that the aircraft crashed resulting in his permanent injuries.  The case was defended on the basis that the trigger coil did not fail, but that Mr. Torno’s alterations to the engine and its components resulted in a lean fuel mixture causing the engine to overheat and burn a hole in one piston.  As a result of the crash, Mr. Torno sustained an L1 burst fracture of his vertebrae.  He sustained a permanent loss of use of his lower extremities as well as affecting internal organs effected by the paraplegia.  In addition, Mr. Torno was an engineer who earned $75,000 a year and claimed reduction and earning capacity, future attendance services and other economic damages.  After a four week trial the jury returned a verdict that RE Phelon Company was not negligent, i.e., no cause for action. 

DALE BURMEISTER AWARDED $10,000 IN CONTEMPT OF COURT SANCTIONS
IN TRADEMARK DISPUTE

Following a full evidentiary hearing in federal court, Judge Cook awarded nearly $10,000 in contempt of court sanctions for violations of a permanent injunction Dale had obtained involving Subway trademarks and trade dress.  Defendant also agreed at the hearing to remove or  paint over various marks, copyrighted menu items, and decorative touches that had a tendency to mislead the public into believing that the restaurant was a franchised operation.

BILL RIVARD WINS NO CAUSE VERDICT
IN ACCOUNTING MALPRACTICE SUIT

Bill Rivard recently received a defense verdict for our client in an accounting malpractice suit following a jury trial in Oakland County Circuit Court.  Plaintiffs, husband and wife, for whom defendant had prepared tax returns for more than 20 years, claimed that in February of March, 2004, one or the other of them brought defendant $499,000 in W2Gs for slot machine winnings for the year 2003.  The parties disagreed on the date the documentation was brought to defendant, and whether plaintiffs brought any documentation of losses.  Defendant testified he advised plaintiffs he needed documentation of losses to complete the return and waited.  About one year after leaving their documents with defendant, plaintiffs demanded return of the documentation they provided him, and there was a dispute regarding whether defendant complied with their request by making their documentation available to them.  Plaintiffs claimed damages for late filing fees and interest allegedly payable to the state and federal governments, and accounting fees for having to have an accountant reconstruct their documentation from IRS “transcripts.”  Defendant argued that even the documentation of losses plaintiffs presented at trial, which was the documentation they allegedly provided in 2004, was insufficient to prepare an accurate return, since records of losses were only for partial  casino play while using a so-called “players club” card.  Bill had plaintiff’s expert accountant barred from testifying to state penalty and interest when he established by voir dire of the expert that no assessment had issued, the first of several steps required for the state treasurer to establish liability under by Michigan statutes, and because the accountant had never represented a client through the administrative steps for assessment, appeal, etc., provided by Michigan statutes.  Plaintiffs’ claim for accounting malpractice was dismissed by the court because defendant was not a certified public accountant.  The jury returned verdicts for defendant on plaintiffs’ claims for breach of contract, fraud, and claim and delivery.  An appeal was not filed.

DENNIS GOEBEL WINS INTERLOCUTORY APPEAL IN PRODUCTS CASE
ON IMPORTANT ISSUE INVOLVING NON-PARTY FAULT OF AN EMPLOYER

In Sandusky v McNally Electric, Inc., we filed a notice of non-party fault of the employer in a products liability case.  Plaintiff then amended the complaint and added the employer as a direct defendant. At the end of discovery, the employer filed a motion for summary disposition which was “opposed” by the plaintiff. The trial court granted summary disposition in favor of the employer finding that there was no evidence of intentional act. Thereafter, plaintiff moved to strike our notice of non-party fault alleging that the employer owed no duty to the employee and in addition, that since the court granted summary disposition for the employer that it precluded our notice of non-party fault.  We took an interlocutory appeal which was accepted by the Court of Appeals.  Briefs were submitted to the Court of Appeals which decided the issue without oral argument.  The Court of Appeals found that the plain language of the comparative fault statutes, MCL 600.2957 and 600.6304, allows the employer to be identified as a non-party at fault. Further, it held that there is no conflict with the Worker’s Disability Compensation Act, MCL 418.101. The Court of Appeals ruled that the trial court erred in both concluding that a duty is required in order to assess fault against the non-party and that there was no duty owed to plaintiff by the employer in the case.

DALE BURMEISTER PREVAILS IN THE MICHIGAN COURT OF APPEALS
IN FEDERAL CABLE COMMUNICATIONS ACT CASE

In Heydon v MediaOne, a dispute arose over attaching or “piggybacking on” utility pole easements running across private property in the Ann Arbor area.  A variety of claims and defenses were involved in the litigation, including a constitutional challenge to the Federal Cable Communications Act of 1984, whether attaching a coaxial cable to existing electric utility poles unreasonably increased the burden on the easement, whether an unrecorded right of way agreement could be assigned, and the like.  The Michigan Court of Appeals ruled as a matter of law that the attachment of a cable television wire to poles within an electric company’s easement does not materially increase the burden on the servient estate.  It went on to find that because our client’s intended use of the easement would not have violated the terms of the servitude or unreasonably increase the burden on the servient estate, Detroit Edison was entitled to partially assign an interest in its utility easement to MediaOne.  Finally, it concluded that reasonable access of the easement by our client did not and would not in the future constitute trespass.  A motion for rehearing in the Court of Appeals has also now been denied.

DENNIS GOEBEL AND MEL KARFIS WIN PRODUCTS LIABILITY
AMPUTATION CASE IN FEDERAL COURT

This was a product liability lawsuit in which forty-eight year old James Cobbs was employed by Jay Dee Contractors.  Jay Dee Contractors is involved in underground tunneling.  It uses a tunneling machine to bore a hole in the ground and then lines the hole with cement grout.  Jay Dee Contractors purchased a grout pump machine from Schwing America Inc.  On May 23, 2002 Mr. Cobbs was cleaning the grout pump at the end of the day.  He had the hoses off and portions of the machine exposed letting it run while he sprayed water on the interior of the machine. He claims that he was looking for a shutoff switch and as he leaned against the machine his right hand was sucked into an inlet and he sustained amputations of the tips of three fingers of the right hand.  He claimed that the machine was defective because it did not have an interlock device and that the Defendant failed to properly warn of the dangers.  Mr. Cobb claimed that he was not able to return to work and had psychological injuries in addition to the amputation injuries.  Forty-eight months after the accident Mr. Cobbs had still not returned to work.  On February 13, 2006, Judge Duggan issued a written opinion granting our summary judgment for Schwing America, Inc.  Judge Duggan found that pursuant to MCL 600.2947(7), misuse did occur by Mr. Cobbs intentionally reaching twelve inches into the machine while it was operating and therefore granted the motion on the basis of misuse.  Judge Duggan also found that the Plaintiff failed to satisfy the six elements of the Michigan Risk Utility Test.

MICHAEL F. SCHMIDT PREVAILS
IN CONSTRUCTION ACCIDENT CASE

Steven Nickell and Hayley Nickell v Howard Structural Steel, Inc., et al, Wayne County Circuit Court, claim by Steven Nickell, an ironworker, for construction accident injuries sustained in a fall on a construction project. The injuries included an acetabular fracture, lower back injuries and an alleged closed head injury and neuropsychological problems. We represented Howard Structural Steel, the structural steel contractor who contracted with Nickell’s employer, American Erectors, to do the erection. We filed a motion for summary disposition arguing that the plaintiff’s claim against Howard for failing to provide guardrails on the job failed to state a claim because the subcontractor, American Erectors, had contracted to provide 100% fall protection, pursuant to Fultz v Union-Commerce Associates, 470 Mich 460 (2004), even if Howard had a contractual duty to deliver guardrails, this did not create a negligence claim, and further the American Erectors’ foreman testified that even if guardrails had been delivered he would not have installed them at the time of the accident. The case evaluation award against Howard was zero dollars and the case was dismissed.

BARRY SUTTON PREVAILS IN SERIOUS IMPAIRMENT CASE
IN THE COURT OF APPEALS

Register v. Sledge, Michigan Court of Appeals.  In this case in which Plaintiff claimed closed head injury, neck and back problems, and seizures arising out of a rear end collision, the Court of Appeals affirmed the trial court’s grant of summary disposition.  Although the plaintiff had submitted three affidavits of treating physicians, each concluding that she suffered from a serious neurological injury or serious impairment, the Court found that the affidavits were conclusory and not supported by the records.  In doing so, the Court affirmed the importance of looking beyond the conclusory statements within an affidavit, and noted that a court must conduct a careful review of the facts underlying those opinions before relying upon them.  Additionally, the Court held that the plaintiff had failed to provide sufficient evidence to support any claim that her general ability to lead a normal life had been materially altered.  The Court therefore concluded that summary disposition was merited under Kreiner.

MICHAEL F. SCHMIDT WINS “DISTRACTED CUSTOMER” INJURY CASE
IN COURT OF APPEALS

Miller v Bass Pro Shop, Court of Appeals affirmed our summary disposition. The plaintiff tripped and fell over the base of a display sign at the Bass Pro Shop. She claimed that she was distracted by taxidermy mounts displayed by the store. The plaintiff argued that there should be a “distracted customer” exception to the open and obvious defense. The Court of Appeals affirmed our summary disposition and ruled that there is no “distracted customer” exception to the open and obvious defense, that the only exception is the “special aspects analysis” and that the plaintiff’s claim did not meet this analysis and thus was rejected by the court. The court further held that despite the huge debate that exists in the jurisprudence of the state over what constitutes open and obvious and the subtleties that the Supreme Court defines as fitting within that rule, “this case appears to be at the opposite end of the spectrum.”

ABSOLUTE INTOXICATION STATUTE VICTORY
RECORDED BY BARRY SUTTON

Krause v. Wadle, Oakland County, Michigan.  In this social host case, the plaintiff, a minor and former model, suffered serious internal injuries which required numerous surgeries and left extensive scarring.  The plaintiff sought to hold the individuals liable for supplying alcohol to her on a claim that their actions produced her intoxication and subsequent automobile accident.  Her demand was $250,000.  We filed a motion for summary disposition on the basis that the claim was barred under the absolute intoxication statute.  After briefing, the plaintiff agreed to relief requested, and an order granting the motion was entered.

BARRY SUTTON PREVAILS IN COVERAGE CASE INVOLVING AN EXCLUSION BARRING COVERAGE
WHEN A VEHICLE IS BEING USED TO TRANSPORT FOR A FEE

Rollin v. Nationwide Mutual Fire Insurance Co., Wayne County, Michigan.  In this insurance coverage dispute, the plaintiff suffered serious injuries while she was working within an ambulance while that vehicle was transporting a patient to the hospital.  She sought uninsured motorist benefits.  The trial court granted summary disposition in favor of our client under the exclusion which barred coverage when a vehicle is being used to transport a person for a fee.  The court reasoned that the patient was being transported to the hospital for a fee, and that the plain language of the exclusion applied.

HARVEY KRUSE PUBLISHES REPORT OF OVER 200 COURTROOM VICTORIES IN 2003-2005

During the past several years, Harvey Kruse has recorded 211 victories in courtroom battles that are cataloged in a comprehensive report issued last year.  They  include 26 appellate wins, 13 trial and arbitration successes, 139 motions for summary judgment or disposition in which we were victorious, and various other administrative and miscellaneous proceedings in which we prevailed.  Click here for a complete copy of the report.

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