Author(s): John J. Gillooly, Rosalind Rochkind, Thomas R. Paxton

From the Editor by
John J. Gillooly

School’s In – Liability Claims to Follow Shortly after the school bells begin to ring in another year later this month, liability claims are, unfortunately, soon to follow. As tort reform continues to reduce the number of product liability, medical malpractice and auto negligence cases, plaintiff attorneys have set their sights on public entities. Public entities are often viewed as “deep pockets”, with endless resources and little willingness to proceed to trial.

To combat the ever-increasing number of claims and the costs associated with defending these claims, please consider these helpful hints:

  • If your claim arises under federal law, make sure the case is properly removed to federal court. Federal judges know federal law. Federal dockets are far less crowded than the average state court docket. A reduced docket means that your case will proceed more quickly, resulting in savings to you.
  • Insist on a comprehensive litigation plan and budget within 30 days of a new suit being filed. The preparation of a plan can help focus the attention of your legal team and your employees. This focus almost always results in a meaningful strategy to resolve the new case in the most effective and efficient manner possible.
  • The handling of a lawsuit does not end with the filing of a litigation plan. Every 30-45 days, you should be provided with a comprehensive written update on the status of each and every matter in litigation. These monthly reports help keep your entire team focused.
  • Use a variety of techniques to investigate those bringing claims against you. With the exploding popularity of the internet, we are able to find a wealth of information on those who are suing you.

These are only a few ideas that can help you and your organization successfully defend a lawsuit. Garan Lucow Miller has many more great ideas that can work for you. Give us a call at 313.446.5501.

BREAKING NEWS!!

The Michigan Supreme Court recently ruled that the Michigan Municipal Liability and Property Pool owes no coverage for claims arising from a city’s discharge of sewage into a creek because under the plain language of the insurance policy, sewage is a pollutant and therefore falls within the policy’s pollution exclusion. Further, the Pool was not estopped from enforcing the exclusion in this case, because even though it covered some sewage backup claims, it did so under a timely reservation of rights. City of Grosse Pointe Park v Michigan Municipal Liability and Property Pool, ___ Mich ___ (2005).

Appealing Possibilities by Rosalind Rochkind

When the trial court denies your motion to dismiss the claim against you, when do you have the right to appeal – right then, without asking permission to do so, and without first going through trial? The answer depends on whether you are in state or federal court, whether you are a governmental entity or an individual defendant, and whether you are seeking that dismissal based on immunity. However, all governmental defendants have appeal possibilities regarding their motions for summary disposition and summary judgment which are not available to other parties.

  • Both the state and federal courts allow some governmental defendants to seek an immediate appeal in some cases in which an assertion of immunity has been denied.
  • In federal court, individual defendants have a right to appeal from a denial of their assertion of qualified immunity in a case brought under 42 USC §1983.
  • The appeal of right is limited to the individual defendants, and is not available to governmental entities, who do not possess a “qualified immunity” defense.
  • The appeal of right is available only where the individuals wish to present an issue of law to the appellate courts, and are willing to assume the truth of the facts as presented by the plaintiff.
  • On appeal, the Court will consider whether the facts presented by the plaintiff, if true, implicate the deprivation of a constitutional right and, if so, whether that right was clearly established on the date of its alleged deprivation.
  • In the Michigan state court, both the individual defendants and the governmental entity have a right to seek review of an order denying immunity.
  • As in the federal court, the defendants must be willing to assume the truth of the facts as presented by the plaintiff.
  • In both the state and federal courts, once an ”immunity” appeal has been taken, the trial court should enter a stay of proceedings, at least as to the parties on appeal.
  • Trial courts in both the state and federal system have been known to deny the stay, and resort may then be had to the appellate court.

Maybe It’s Time to Review Your Employee Handbook! by Thomas Paxton

More and more, the courts are looking to employee handbooks to settle disputes between employers and their employees. Many employers have spent good money reviewing, revising and fine-tuning their handbooks. After all that work, some are shocked to find that they cannot enforce their policies in court.

In the late 1980′s and early 1990′s, many employers issued handbooks with an introduction that reminded employees that the handbook was not a “contract for employment” or that it was not “legally binding”, but merely reflected guidelines. This was to emphasize the fact that there were no promises other than at-will employment.

In the recent case of Hicks v EPI Printers, Inc, ____ Mich App _____ (approved for publication 6/23/05, CA #251832), the Michigan Court of Appeals explored the ability of an employee handbook to shorten the period an employee could file a claim of sexual harassment and to

compel arbitration of those claims. The court examined in detail the language used in the employers handbook. The handbook said it “provides answers to most of the questions . . . concerning benefit programs, company policies and procedures, our responsibilities to you and your responsibilities to [us].” The employer also required employees who received this handbook to sign a receipt indicating that they specifically understood they were aware of the “at-will” status and that they were agreeing to settle disputes by arbitration filed within one year of the dispute.

The court compared this language to that used by an employer in a prior case, Heurtebise v Reliable Business Computers, Inc., 452 Mich 405, 413 (1996), where the court refused to enforce an arbitration provision because the handbook language clearly stated: “It is important to recognize and clarify that the Policies specified herein do not create any employment or personal contract, express or implied . . .” The Hicks court found that there was no similar contractual disclaimer in the plaintiff’s handbook and enforced the arbitration provision, which had a one year provision in which employees had to request arbitration. Since the plaintiff did not timely request an arbitration, the court dismissed her claims.

The Hicks case should remind all employers to review their handbook language periodically and with a careful eye. Remember, this is the opportunity the employers have of creating employees’ expectations of their ongoing relationships. Employers should be careful that they get what they actually wished for.

HEADS UP!

A bicyclist who was injured when he hit a three-inch hole in defendant-city’s paved road presented sufficient evidence to create a material dispute whether defendant had notice of the condition. The hole and accompanying area of “distressed asphalt” surrounded a manhole cover. The plaintiff alleged the City failed to maintain the road in reasonable repair for the safety of public travel as required by MCL 691.1402. Defendant sought dismissal on two different grounds and the Court rejected both.’

First, the city argued that there was not sufficient evidence that it had notice of the alleged defect. Plaintiff’s expert testified that the condition would have been present for many months, if not years, prior to the incident. Therefore, the Court held that the plaintiff had presented at least a material question of fact regarding notice.

Second, the city argued that the highway exception involves safety for vehicular traffic rather than bicycle use. The Court of Appeals also rejected this argument in its unpublished opinion (No. 260831) on July 12, 2005.

The Court of Appeals recently held that a Gradall hydraulic excavator is a motor vehicle for the purposes of the motor vehicle exception to governmental immunity. Wesche v Mecosta County Road Commission, ___ Mich App ___ (2005). The Gradall, a wheeled motorized vehicle operated by a driver, generally resembles a truck and moves like a truck. The significant difference between it and a truck is that mounted on the back of the Gradall is a unit that operates a hydraulic excavation tool. While its primary purpose is not transportation, it can be driven along the roadways just as a truck and it transports both its attached excavation unit and the driver.

Another significant ruling coming out of the Wesche opinion is that loss of consortium claims are not included in the motor vehicle exception to governmental immunity. The Court reasoned that loss of consortium is a derivative claim and recovery is contingent upon the injured spouse’s recovery of damages for the injury. The Court stated that ”loss of consortium claims do not encompass bodily injury or property damage, but rather, other damages deriving from the spouse’s injury.” Therefore, such damages are not within the motor vehicle exception, which states: “Governmental agencies shall be liable for bodily injury and property damage resulting from the negligent operation by any officer, agent, or employee of the governmental agency, of a motor vehicle…”