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Home Owners gets relief from PIP judgment based on jurisdictional argument

When Charles Moody was injured in a car wreck, there was a dispute over whether he was domiciled with his father and step-mother, Home Owners' insureds,  or with his mother who was insured with a different carrier. Both Moody and his treatment providers separately sued Home Owners in District Court seeking overdue PIP benefits.  Since the jurisdiction of the District Court is limited to $25,000.00, maximum, Moody took the position that he would be satisfied with that amount, even though the damages claimed exceeded that amount.  The providers' claims added up to less than $25,000.00.

Home Owners asked the judge to remove Moody's claim to Circuit Court, because the total amount in controversy exceeded $25,000.00.  It also moved to consolidate Moody's providers' claims with his claim.  The judge consolidated the cases but held that they were not "merged" and each District Court Plaintiff was entitled to collect up to $25,000.00 but no more. Ultimately the jury held that Home Owners was the proper insured, based on Moody's domicile, and judgment was entered in favor of the plaintiffs.

The insurer appealed and the Court of Appeals overturned the judgment. It held that even though the providers' had an independent right under the no fault act to pursue an action for their services, their claims were "derivative" and therefore merged with Moody's.  In addition, Moody's claims clearly exceeded $25,000.00, even though he was willing to live with that ceiling.  Therefore, the action should have been removed to Circuit Court.  The judges also held that it was error for the injury victim's attorney to inform jurors that Home Owners might ulitimately be reimbursed by the Catastrophic Claims Association.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
Fax: 231-929-7262