Post on Contract Clause and State Legislation to Force Insurers to Cover Losses Under Commercial Insurance Policies due to COVID19 Pandemic
Lawyer’s Weekly Chronicles Appellate Court Victory by Law Offices of Carson J. Tucker
The lawyer’s weekly recently published an article on the Menard v Imig case in which I successfully represented the Macomb County governmental defendants in the Court of Appeals, briefing and arguing this case addressing governmental immunity and the highway defect exception under the Governmental Tort Liability Act.
Macomb County Road Department Not Liable
Former Employee’s Alleged Criminal Activities Relevant to Determine “Wage Earning Capacity” for Purposes of Assessing Entitlement to Workers Compensation Benefits
In a case I brought to the Michigan Supreme Court, which remanded in Omian v Chrysler, 495 Mich. 859 (2013), to the Court of Appeals for consideration of my appeal, the Michigan Court of Appeals has now reversed the decision I originally appealed. In Omian v. Chrysler.COA.Published, the Court of Appeals agreed that evidence of a former employee’s ability to engage in a financially lucrative criminal enterprise generally allows consideration of that employee’s ability to “continue to earn wages” despite his or her claim that a work-related injury entitles him to wage-loss benefits. I argued that an ability to earn wages, any wages, even those gained through nefarious criminal activities, should be admissible to demonstrate that the claimant is not entitled to be paid wage-loss benefits based on a claimed disabling injury – an injury he or she claims is preventing him from earning wages in other legal and gainful employment.
Although the Court did not agree with all of my arguments, it reversed the case on the main principal espoused and directs the administrative tribunal to consider the evidence.
Insurance Coverage Not Available to Employer Mistakenly Listed as Insured on State-Required Workers Compensation Forms
The Michigan Court of Appeals ruled on Tuesday, February 17, 2015, that insurance coverage was not available to an employer (Delphi) merely because the insurers had errantly listed the employer on forms required to be filed with the state to notify it of the existence of workers’ compensation insurance.
Delphi had multiple subsidiaries, some of which had been and were insured by policies issued by the insurers for workers compensation claims coverage. However, Delphi itself was self-insured, and did not therefore require or purchase workers compensation insurance from an insurance carrier. The insurance companies had mistakenly listed Delphi, generally, rather than the insured subsidiaries, on the forms required by the state of Michigan to list and certify the existence of workers compensation insurance coverage for employers.
When Delphi entered bankruptcy reorganization in 2005, because it was self insured, insurance coverage for underlying workers compensation claims filed by employees were assumed by the state’s “self insured security fund” under Michigan law. MCL 418.537(1). However, the state objected in the bankruptcy proceedings, and claimed that the insurers’ listing of “Delphi”, rather than the insured subsidiaries on the state-required notice forms bound the insurers to cover the claims, rather than the state of Michigan’s self-insured security fund.
When Delphi’s obligations were eventually discharged in bankruptcy, the insurers filed an adversary proceeding in the bankruptcy court (essentially the equivalent of a declaratory judgment action) asking the court to rule on the underlying issues regarding errant listing of the employer, Delphi, on the Michigan state workers compensation insurance notice forms. While this was pending the director of Michigan’s Workers Compensation Agency scheduled a “Rule 5” hearing to determine whether the insurers were liable for the Delphi claims under the policies that had been issued to the subsidiary companies.
The bankruptcy court stayed the Rule 5 proceeding. It determined it had jurisdiction to consider the underlying issue. However, the Second Circuit Court of Appeals ruled that while the bankruptcy court had jurisdiction to consider the scope of coverage in the underlying insurance policies, it did not have jurisdiction to consider whether the insurers were nonetheless liable for filing the inaccurate forms in Michigan.
The insurers then filed a declaratory judgment action in the Michigan Court of Claims seeking determination of its coverage obligations under the policies for the Delphi claims. The insurers argued that the policies controlled the obligation of coverage and not the errant listing of the wrong employer on the state-required forms. The Court of Claims agreed and the state appealed.
The Court of Appeals affirmed, holding that the inaccurate designation of Delphi on the state-required notice forms did not trump the contractual language in the insurance policies themselves, which underwrote and insured only the subsidiary company’s workers compensation obligations. Liability for the workers’ compensation claims filed and/or to be filed by Delphi were not covered by the insurers’ policies, which had insured only the subsidiary companies.
This is an interesting and somewhat procedurally complex case, which addresses significant liabilities that, according to the holding, will be borne by the state of Michigan, rather than by the insurers.
However, the holding and the rationale is rather unremarkable. The underlying insurance contracts control the coverage obligations vis-à-vis the listed insureds, not another party that was not underwritten for such coverage.
Read the case here: Ace American, et al. v. Workers Compensation Agency Director, et al.
Court of Appeals Issues Ruling On Independent Contractor Case
The Michigan Court of Appeals issued its opinion in a case I briefed (92675_Moore_Appellant’s_Brief_313422.214.171.1243.1838) and argued in the Court of Appeals last summer, ruling consistent with the Supreme Court’s recent disposition of workers compensation insurance coverage for subcontractors holding themselves out to be employers, while claiming to be employees.
The facts involved a workers compensation claimant who was hired to do a four-hour roofing job by the putative “employer”. The claimant ran an independent roofing business, had other workers doing roofing work at another location, purchased workers compensation insurance, and otherwise held himself out to be a roofer doing roofing work. He injured his foot while performing the four-hour job and sought workers compensation benefits from the company that had hired him to do that job. Several iterations of a decision were rendered by the workers compensation board and the appellate commission. The Court of Appeals granted my application for leave to appeal, and then, plaintiff’s cross-application on a wage-loss calculation issue (a very interesting issue in its own right but which is likely rendered moot by this finding that the claimant was not in fact an employee).
The coverage case involved several underlying insurance companies potentially covering the claim depending on the employment status of the claimant. What is remarkable, among other interesting procedural twists and turns, is that two Judges on the panel I argued the case before were on opposite sides of the underlying issue in a Court of Appeals conflict panel opinion issued after the Court of Appeals convened a special conflict panel to address whether the language of MCL 418.161(1)(n) (pre-2011 amendments) was conjunctive or disjunctive, requiring satisfaction of all or only one of the “elements” listed to remove or, divest, a claimant of “employee” status under the Workers Disability Compensation Act.
That conflict panel decision by the Court of Appeals actually ruled against the arguments I forwarded in my brief, but as I predicted in the brief, and at oral argument, the Supreme Court was considering the conflict panel’s decision and was likely to overrule it, which they did, as I explained in this post: Supreme Court Overrules Court of Appeals Decision Defining Employees for Purposes of Workers Compensation Entitlement
Thus, at oral argument, I made a full frontal assault on the conflict panel’s decision reading the statutory language as conjunctive (much to the satisfaction of Judge Borrello, who the Supreme Court ultimately sided with), and, as well, in my arguments section of the brief.
The Court also used my argument to counter the Appellate Commission’s unique (if not strained) reading of the meaning of the introductory phrase of the statute “in relation to this service” (my emphasis). In its decision, the appellate commission reasoned that the phrase contained in MCL 418.161(1)(n) referred not to roofing in general, but roofing on behalf of the putative employer. The Commission had stated that plaintiff did not maintain a separate business of roofing for this employer, nor was he hired by this employer in his capacity as a roofing contractor with a crew of workers. Rather, the Commission had stated plaintiff was hired by the putative employer as an individual worker.
As I argued in my brief, this reasoning was flawed because the statutory phrase “in relation to this service” refers to roofing in general. And, the Court of Appeals cites to the case I referred to, Reed v. Yackell, 473 Mich 520, 537 (2005), in which the Supreme Court had used the precise example factually relevant in this case, to wit, a roofer doing roofing work! In other words, the Court of Appeals went on to reason, the phrase “in relation to this service” refers to the type of services performed, not the identity of the party receiving the services.
It was one of the more active panels that I have been before and they were extremely engaged in the issue and the outcome. Read the decision here: Moore Opinion
If you have any questions about this case and its impact on general liability and workers’ compensation insurance coverage determinations please call Carson J. Tucker, (734) 218-3605.
Employee Driving Company Truck to Job Site Not “In the Course and Scope of Employment” Under Workers Disability Compensation Act
The Court of Appeals (in a 2-1 majority opinion) issued a significant case yesterday, albeit unpublished, holding that an employee driving a company vehicle to a job site location in another part of the state was not “in the course and scope of his employment” when injured in a traffic accident while en route to the job site.
The Court of Appeals opinion is here: Little, et al. v. Kappen Tree Service, et al. COA (1).
The Court of Appeals cites the general rule that ordinarily injuries received while employees are traveling to and from work are not compensable by the employer’s workers’ compensation insurance coverage because such injuries do not “arise out of and in the course of” employment within the meaning of the Michigan Workers Disability Compensation Act (WDCA), MCL 418.101, et seq. MCL 418.301 requires for an injury to be compensable it must both “arise out of” and occur “in the course of employment”.
The Court of Appeals reasons that the employee faced no special risks other than those faced by the ordinary commuter to and from work.
Judge Hoekstra dissents. He reasons that the employee was performing a “dual purpose” and therefore an exception to the “going to and coming from” exclusion applied. The “dual purpose” was the employee bringing another employee to the job site so that employee could drive another vehicle home the day of the accident. Judge Hoekstra would have found that the employee was “in the course and scope of his employment” and therefore covered by workers compensation, rather than no-fault automobile liability insurance.
This is an important case given the many disputes between no-fault automobile liability insurers and employers and their workers’ compensation insurers when an accident occurs in a vehicle while the employee is traveling to or from work, or driving his or her vehicle during the work day.
If anyone has questions regarding this decision, please contact Carson J. Tucker, JD, MSEL at (734) 218-3605.
Equitable Tolling of Medical Malpractice Claim Waiting Period on Supreme Court’s Mini-Oral Argument Calendar
The Michigan Supreme Court has ordered mini-oral argument to be held in two cases addressing a very significant issue dealing with whether trial courts can disregard the notice waiting period required before filing a complaint in a medical malpractice action, either by disregard of the defect or allowing amendment of the complaint under MCL 600.2301.
Here is the Court’s order, Furr v. McLeod Order, which the Court consolidated with another case addressing the same basic issue, Tyra v. Organ Procurement Agency of Michigan, et al., MOAA Order.
I previously wrote about these cases as they were making their way up through the Court of Appeals. Those prior posts are below:
Equitable Amendment of Complaint Allowed in Med Mal Action
Court of Appeals Impanels Conflict Panel to Consider Whether Trial Courts Can Allow Defective Medical Malpractice Claims to Go Forward
Michigan Supreme Court Reverses Court of Appeals Decision Forcing Workers Compensation Agencies to Remain Open at Certain Locations
The Michigan Supreme Court has reversed the Court of Appeals decision that held the Director of the Michigan Administrative Hearing System and the Director of the Department of Licensing and Regulatory Affairs were required to maintain local offices for litigation of Workers’ Compensation Agency hearings. Read the opinion here:
In September 2012, the Director of the MAHRS had announced new efforts to reorganize, including closing the Flint office that previously handled workers’ compensation claims and transferring those claims to an office in Dimondale, approximately 70 miles away.
The Plaintiff in the underlying case injured his back while at his job in Flint. He filed a workers’ compensation claim. Because of the reorganization, he was required to litigate his claim in Dimondale, rather than in the now-closed Flint office.
He filed a writ of mandamus in Circuit Court to compel the Directors to maintain the Genesee County (Flint) hearing site. The circuit court issued the writ and the Directors appealed. The Court of Appeals (M. J. KELLY, P.J., and FORT HOOD, J. (CAVANAGH, J., dissenting)), affirmed, holding that the trial court had not abused its discretion. 304 Mich App 719 (2014).
In a unanimous opinion released November 18, 2014, the Supreme Court reversed, holding the trial court abused its discretion by issuing a writ of mandamus compelling the Directors to hold workers compensation hearings in Flint.
MCL 418.851 provides that a workers’ compensation hearing must be held at the locality where the injury occurred. The Supreme Court reasoned Defendants, in their official capacities as administrators of the workers’ compensation hearing system, interpreted the term “locality” as meaning a district or a definite region. This interpretation was entitled to respectful consideration. Because it did not conflict with the Legislature’s intent, there were no cogent reasons to overrule it.
The Court continued, reasoning that in accordance with the Directors’ interpretation of the statute, they divided the state into 11 reasonably located hearing districts, and workers’ compensation claims were assigned from definite regions of the state to one of those hearing district offices depending on where the injury occurred.
Nothing in the Worker’s Disability Compensation Act, MCL 418.101 et seq., requires that there be a hearing site in every county. While the hearing should be held at a place convenient for parties and their witnesses, it was not unreasonable to conclude that the locality where the injury occurred in this case was Dimondale given the injury occurred in Genesee County and that county falls within the Dimondale district.
The Court concluded although having the hearing in the latter rather than in the former venue would doubtlessly be less convenient for plaintiff, this would not constitute an unreasonable inconvenience. Accordingly, plaintiff did not have a clear legal right to a hearing in Genesee county, and the Directors did not have a clear legal obligation to hold the hearing there.
I previously wrote about this case in an earlier blog here:
Court of Appeals Rules Workers Compensation Hearings Must Be Held in “Locality” Where Injury Occurred Forcing Directors of Administrative Hearing Systems to Reopen Closed Offices Throughout the State
Special Appellate Counsel for Emergency Appeals in State and Federal Court of Appeals and Supreme Court
It is the eve of trial. The trial court judge, bent on forcing you into an unsavory settlement with opposing counsel, has granted opposing counsel’s motion in limine to exclude your proposed evidence from the jury’s consideration. This is a key part of your client’s case and without it your client may be facing 100 percent of the responsibility for the damages alleged as a result of the significant allegations in the underlying lawsuit. Sound familiar?
Is there a way to even the playing field, or, even better, to have the trial court’s errant legal rulings on the motion corrected? Or, do you simply capitulate?
There is still hope. And it can be done, even during the trial.
Carson J. Tucker specializes in prosecuting high-stakes, last-minute emergency appeals seeking interlocutory review of suspect legal rulings. After all, if the trial court is wrong, or even if the Court of Appeals agrees to take a closer look, this can significantly alter the posture of the parties to the lawsuit.
I am experienced and adept at navigating through the Michigan Court of Appeals and Supreme Court to shepherd the appeal in the most expeditious fashion possible so that it can be reviewed and ruled upon as soon as possible.
In most cases, these actions have stopped the trial from immediately proceeding. In many of the cases handled by Mr. Tucker, these actions have even resulted in the creation of precedent from the Michigan Court of Appeals and Michigan Supreme Court that changes the entire make-up of the pending lawsuit. In the least, this type of action can properly re-orient the parties positions and attitudes with respect to settlement demands.
With adept and efficient appellate counsel ready to assist at a moment’s notice, your case can be quickly analyzed by objective review of the facts of the case, the strengths and weaknesses of the legal issues being addressed, and the potential for success at the appellate level. It’s never too late to act until your case is submitted!
I have real stories and experiences to share from lawsuits in which our clients and the other law firms we have assisted have been able to save thousands of dollars in litigation costs and, more importantly, in damages awards or forced verdicts because I have been able to step in and make new law, or at least bring the parties together to discuss realistic settlement options.
Please do not hesitate to contact me if you are contemplating an appeal, any appeal.
Mention of a Non-Party in Affirmative Defense Insufficient to Toll Statute of Limitations as to that Non-Party
In a published decision, the Michigan Court of Appeals has held that mention of a potentially responsible non-party at fault in a class action suit was insufficient as a notice of non-party at fault within the meaning of Michigan Court Rule (MCR) 2.112(K), and therefore insufficient to “toll” the statute of limitations to allow amendment of the plaintiffs’ complaint to add that party to the lawsuit.
The issue in this case arose when the trial court judge allowed amendment of the complaint in the underlying class action to occur to add a defendant, Consumers Energy (Consumers), even after the statute of limitations as to Consumers had run.
The Court allowed the amendment on the basis that the statute of limitations could be extended because the original defendant named Consumers as a potentially responsible nonparty in an affirmative defense in its answer (which was filed 2 (technically 3) days before the statute of limitations would have expired as to Consumers). However, the original Defendant never filed a notice of fault of nonparties as required by MCR 2.112(K).
Consumers was added to the lawsuit via an amended complaint, with the trial court ruling that despite the failure to comply with MCR 2.112(K), the affirmative defense was sufficient to allow the filing of the amended complaint and toll the statute of limitations. The original Defendant Michigan Petroleum clearly had notice and knew or should have known that Consumers was likely to be a potential defendant and could have filed a proper “notice of nonparty at fault”.
On August 4, 2009 a fire occurred at a building owned by the defendant Michigan Petroleum Technologies (Michigan Petroleum) and destroyed the building. The fire was very large and involved noxious fumes and smoke. An investigator from Consumers performed a site investigation at the location of the fire on August 5, 2009. A subsequent investigation performed by Consumers and an independent engineer hired by them concluded that Consumers was not to blame for the fire.
Within a few weeks of the fire, Consumers received letters from two separate law firms, implying that Consumers was responsible and would be named as a defendant in a lawsuit by either Michigan Petroleum or the insurance company that insured the building. Neither the building owner (Michigan Petroleum), nor the insurance company that insured the building filed any claim or lawsuit against Consumers.
On June 20, 2012, a personal injury class action lawsuit was filed in Genessee County Circuit Court naming only Michigan Petroleum as a defendant and seeking damages in tort, among other claims including nuisance (all of the claims in the underlying lawsuit are subject to the three-year statute of limitations in the revised judicature act (RJA), MCL 500.5805(10)).
Michigan Petroleum did not file a notice of non-party at fault within the 30 days provided by MCL 600.2957(2).
On August 2, 2012 (two days before the expiration of the statute of limitations as against Consumers), Michigan Petroleum filed an answer.
On October 8, 2012, after the three-year statute of limitations had run as to Consumers, the circuit court entered a “stipulated order” allowing, inter alia, the plaintiffs to “add” Consumers as a defendant in the lawsuit.
An “amended” complaint was served on Consumers on October 19, 2012, alleging causes of action in nuisance and negligence, all governed by the three-year statute of limitations as pronounced in the RJA.
The legal issue then briefed and argued in early 2013 was whether the naming of a party by a defendant in an affirmative defense under MCR 2.111(F) has the same legal effect as the filing of a “notice of nonparty fault” under MCR 2.112(K). The significance is that MCR 2.112(K) then allows for “tolling” of the statute of limitations pursuant to MCL 600.2957(2).
The trial court did not squarely address that issue. Rather, the trial court found since there were no cases stating that an affirmative defense is insufficient, the naming of the potential nonparty at fault (Consumers) in the affirmative defense was “sufficient” to activate the “tolling” provision of MCL 600.2957(2) and therefore the trial court denied Consumers’ motion to dismiss.
The COA had originally denied leave to appeal. The Supreme Court remanded as on leave granted.
This is a published opinion which (1) clarifies the specificity with which one must name a “non-party at fault” for purposes of comparative fault allocation as against that party; and, more importantly, (2) rejects the trial court’s reasoning that mere mentioning of a potentially responsible party in the defendant’s affirmative defense is sufficient to put that party on notice and subject it to a lawsuit even after the statute of limitations has expired as to that party.
Read the opinion here: Taylor.et.al.v.MPT.et.al.OPN
Effective appellate representation demands different skills than those required by litigation attorneys. Appellate attorneys are adept at analyzing the intricacies of each case from an objective and critical perspective. From reviewing and preparing the lower court record, identifying errors for appeal, and developing a strategy to raise those issues that will be addressed by appellate courts, appellate attorneys are capable of handling the most complex appeals from the application stage to oral advocacy before the highest courts. Our research abilities and knowledge of current issues in nearly all major subject-matter areas of the law provide our clients with efficient and immediate assistance with complex and high-exposure cases.
We are also experienced at navigating through all appellate courts to shepherd the appeal in the most expeditious fashion possible so that it can be reviewed and quickly ruled upon.
Below are some of the recent significant cases prosecuted by the Appeals and Legal Research Group.
- Omian v. Chrysler, LLC, Michigan Court of Appeals Docket No. 310743, remanded by Supreme Court as on leave granted, Supreme Court No. 146908, oral argument presented July 16, 2014 by Carson J. Tucker for Chrsyler, LLC
- Moore v. Nolff’s Construction and Travelers Ins., Michigan Court of Appeals Docket No. 313478 and 313440 (consolidated), application and cross-application granted and oral argument in Court of Appeals presented July 2014 by Carson J. Tucker for Nolff’s Construction and Travelers Insurance
- Arbuckle v. GM, Michigan Court of Appeals Docket No. 310611, oral argument in Court of Appeals presented May 2014 by Carson J. Tucker for GM
- Yono v. MDOT, ___ Mich. App. ___ (201_), amicus curiae brief filed for Michigan Municipal League and Michigan Townships Association on June 16, 2014, after remand by Carson J. Tucker
- Estate of Truett v. Wayne County, Unpublished Opinion of the Michigan Court of Appeals, dated May 6, 2014 (Docket No. 313638), briefed and argued by Carson J. Tucker for Wayne County
- Omian v. Chrysler Group, LLC, 495 Mich. 859 (2013), application filed by Carson J. Tucker, Supreme Court remand to Court of Appeals on leave granted, oral argument to be held in July 2014
- Ghanam v. John Does, 303 Mich. App. 522 (2013), application to appeal filed in Supreme Court by Carson J. Tucker
- State Farm v. MMRMA, ___ Mich App ___ (2013), amicus curiae for Oakland County in support of MMRMA application, by Carson J. Tucker
- Hannay v MDOT, ___ Mich ___ 201_), application granted, amicus curiae filed for Michigan Townships Association, Macomb County, Oakland County and Wayne County, et al., by Carson J. Tucker
- Yono v. MDOT, ___ Mich ___ (201_), oral argument on application granted, amicus curiae for Oakland, Macomb and Wayne County filed by Carson J. Tucker in support of the state’s application
- Huddleston v. Trinity Health, et al., 495 Mich. 976 (2014), oral argument on application granted, amicus curiae with Lawrence Garcia, Esq., for MDTC
- Ashley, LLC v Pittsfield Twp., 494 Mich 875 (2013), application granted, for Pittsfield Township by Carson J. Tucker (resolved by settlement)
- Bailey v. Schaaf, ___ Mich ___ (2013), amicus curiae for MDTC by Carson J. Tucker
- Atkins v. SMART, 492 Mich 707 (2012), oral argument on application, Court of Appeals case reversed by opinion, Carson J. Tucker
- Hagerty v Manistee, 493 Mich 933 (2013), amicus curiae for Michigan Municipal League, et al., by Carson J. Tucker
- McMurtrie v Eaton Corp, 490 Mich 976 (2011)
- Findley v DaimlerChrysler Corp., 490 Mich 928 (2011)
- Brewer v. AD.Transport Express, Inc, 486 Mich 50 (2010)
- Stokes v Chrysler, 481 Mich 266 (2008)
- Brackett v Focus Hope, Inc, 482 Mich 269 (2008)
- Rakestraw v Gen Dynamics, 469 Mich 220 (2003)