Insurance companies on the usual roll: win 9 of 10 cases in Michigan
Over the month of March, insurers enjoyed their usual run of success before Michigan's very special-interest dominated, insurance-oriented appelate courts. The run began with Odeh v. Auto Club, where a young man who suffered incomplete quadriplegia in a car accident was denied the right to pursue attendant care and case management services. He claimed that the Auto Club adjuster hid from him the right to collect for services provided by his family; the court deemed that fact irrelevant and limited him to benefits incurred within the past 12 months. His family had cared for him for a dozen years. The Appellate Court pointed out that the Supreme Court had rejected any form of extension of the "one year back rule" becasuse "the Legislature has made it so." While the Court has equitable powers to remedy unfairness, the judges reserved this power for "unusual circumstances."
In Madison v. AAA of Michigan, the court overturned a $41,000.00 judgment for an insured involved in a dispute over PIP No Fault benefits. The insured had filed suit in District Court, apparently seeking a quicker, less-expensive resolution, and had limited the post-verdict judgment to $25,000.00 (the jurisdicitional limit of the Court) but the higher court ruled that the District Court lacked jurisdiction to manage the claim because more than $25,000.00 in damages was proven. and therefore "in controversy." It didn't matter that the insured/plaintiff agreed to limit the recovery to the Court's jurisdictional limit.
In Micou v. Progressive Michigan, the appellate court upheld summary disposition for the insurance company, where the company agreed to extend Micou's policy if he secured a check from his church and mailed it on Monday. When it turned out that the church's office was closed on Monday--and he had the misfortune of being injured in a car accident that day--the Court held that his coverage lapsed by his failure to make payment on the day promised.
Dorian Carter's verdict against Liberty Mutual was thrown out by the Court of Appeals, after she secured a jury verdict that she was entitled to No Fault benefits. The insurer argued that it should have been entitled to a special jury instruction on "fraudulent claims" which the trial court had concluded was not called for. Even though the Court has repeatedly held that a jury verdict will not be over-turned for instructional errors that do not arise to the level of substantial error, the Court of Appeals panel threw out Carter's verdict.
The Court noted that the bulk of Carter's claim was for replacement services and attendant care, and that there were flaws in the documentation she submitted. It appeared that the case manager and attendants submitted billings that were contradicted by the insurer's investigation or their own testimony. Since the policy "does not require the insured intentionally made fraudulent statements or engaged in fraudulent conduct" the Court held that the insurer could argue that the errors and mis-statements of the case manager and service provider could be used to support a defense that Carter's claims were excessive and fraudulent.
Interestingly, the insurer also asked the Court to rule that Plaintiff's treater should not have been allowed to testify, because he belatedly replaced a treating doctor whom the insurer had compelled to withdraw from all PIP treatment paid by it. Liberty Mutual did not disclose this "agreement" to Carter or her attorneys until after the expert disclosure deadline, and the Court held that it constituted good cause for the Plaintiff to add a new physician expert. It's nice to know that at least some under-handed insurance conduct is not tolerated.
Liberty Mutual also argued that Carter should not have been able to ask the investigating officer about the at-fault driver's intoxication. This claim was also rejected.
In Dave Cole Decorators v. Westfield, the Court summarily dismissed the plaintiff's claim that its own insurer owed it a duty of defense after it was sued over a defective paint job. The Court upheld the dismissal, concluding the paint failure was not an "occurrence" under Westfield's insurance policy.
The end of the week continued with more of the same.