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Volume XXIII, No. 17, July 18, 2011

From the Law Offices of Garan Lucow Miller, P.C.

 

From the Co-Editors

James L. Borin & Simeon R. Orlowski

 

HAS THE SUPREME COURT CLOSED ITS DOOR TO ANY REQUEST FOR REVIEW OF THE LOWERED “SERIOUS IMPAIRMENT” THRESHOLD UNDER McCORMICK?

CONTRIBUTOR – DANIEL S. SAYLOR

In two recent orders issued by the Michigan Supreme Court on June 24, 2011, defendants were denied leave to appeal in cases that would have challenged the substantially lowered tort threshold established last year in McCormick v Carrier, 487 Mich 180 (2010). Orders merely denying an application for appeal are very common and ordinarily would not be newsworthy. What makes the orders so significant in these cases are the concurring opinions issued with them.

The two cases, Brown v Blouir, __ Mich __ (Supreme Court No. 142159, June 24, 2011), and Wiedyk v Poisson, __ Mich __ (Supreme Court No. 138260, June 24, 2011), were typical auto-accident negligence cases in which the plaintiff claimed recovery of non-economic damages. To qualify for such recovery, the plaintiffs needed to prove they sustained injuries so significant as to result in “serious impairment of body function.” By statute, an impairment of body function is not “serious” unless it affects “the person’s general ability to lead his or her normal life.” MCL 500.3135(7).

In both cases, the plaintiffs’ claims were dismissed by the trial court under the stringent guidelines established in Kreiner v Fischer, 471 Mich 109 (2004), and both plaintiffs appealed. Their claims were reinstated after the Supreme Court issued McCormick v Carrier on July 31, 2010, and overruled Kreiner, substantially lowering (virtually eliminating, some would say) the “serious impairment” threshold. Emboldened by the Court’s conservative shift following the elections of November 2010, the defendants in these cases promptly pursued further review in the Supreme Court, urging that the Court grant leave to appeal and overrule McCormick.

On June 24, 2011, the Supreme Court rejected the defendants’ petitions — not a single justice voted in favor of the defendants. The orders in both cases, however, were accompanied by three very significant “concurring” opinions, which reveal a wide variance in the justices’ reasons for declining to grant review.

Most stunning is the concurring opinion of Chief Justice Robert Young, in which he suggests that it is time for the Court to quit trying to resolve the “serious impairment” dispute and let the Legislature address it:

We have reached the point again where the Legislature must speak if it wishes to preserve the no-fault act’s compromise between the provision of quick, generous insurance benefits without proof of fault and the act’s restrictions on access to additional tort recovery.

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I encourage the Legislature to judge for itself whether the current interpretation provided in McCormick for what constitutes a “serious impairment of body function” is truly the interpretation it originally contemplated. Should the Legislature determine that McCormick undermines the “grand compromise” of Michigan’s no-fault act, as I believe it does, that body may find it necessary to correct this Court’s McCormick construction that, in my opinion, fails to give meaning to the Legislature’s policy choices.

Wiedyk, and Brown, Orders of June 24, 2011, pp 1, 3 (C. J. Young, concurring). Notably, none of the other justices signed on to the view expressed by Justice Young.

In a separate concurring opinion, Justice Michael Cavanagh stated his reason for denying leave to appeal: quite simply, McCormick (which he authored) was decided correctly. In his view, “McCormick’s analysis faithfully applied the clear and unambiguous language of MCL 500.3135 [the no-fault act's tort provisions].” Justice Marilyn Kelly signed in agreement with Justice Cavanagh’s statement.

Finally, and perhaps most enlightening, is Justice Stephen Markman’s lengthy concurring opinion. While joining wholeheartedly in the Chief Justice’s view that McCormick misconstrued the “serious impairment” statute and erred in dismantling the standards properly established in Kreiner, Justice Markman rejected the notion that it is time for the Court simply to give up and leave it to the Legislature to declare its intent:

[I]t is not clear to me what is to be achieved by imposing upon the Legislature the obligation to again “speak” its intentions concerning our no-fault laws. … How many times does the Legislature have to say “we told you we mean a serious impairment” before this Court is prepared to interpret a serious impairment as requiring a serious impairment? Why is it now the Legislature’s “turn” to “speak,” rather than that of the judiciary, which is charged with saying what the laws of the Legislature mean?

Wiedyk, and Brown, Orders of June 24, 2011, p 6 (J. Markman, concurring).

Contrary to the view of Justice Young (whose statement one might regard more as an expression of frustration than an absolute rejection of any further consideration of the “serious impairment” issue), Justice Markman appears ready to revisit McCormick — but only when the right case comes along. His opinion notes that, in both Wiedyk and Brown, it was unclear whether the differing tests of Kreiner and McCormick would compel different results. The trial courts had ruled that the plaintiff loses under Kreiner, but in neither case was it established for certain that the outcome would be different under McCormick. Once the Court is confronted with a case in which the difference in standards is dispositive, Justice Markman, for one, seemingly would be in favor of granting review.

Interestingly, the three newest justices on the Court did not join in any of the three concurring opinions. Justices Mary Beth Kelly and Brian Zahra, who came onto the Court early in 2011, are politically aligned with those inclined to favor Kreiner over McCormick, but their reasons for voting to deny review in Wiedyk and Brown are unknown. Curiously, Justice Diane Hathaway was part of the Court’s four-member majority in the McCormick decision, yet she declined to join in Justice Cavanagh’s concurring statement in defense of McCormick.

One interpretation of the results in Wiedyk and Brown, particularly if one reads only the Chief Justice’s opinion, is that, for better or worse, McCormick is here to stay unless and until the Legislature amends (again) the no-fault act’s tort threshold provisions. Our view of the situation, however, turns more on how long the Court will retain its current composition. Absent another shift in the philosophical composition of the Court, it still seems likely that leave to appeal eventually will be granted if the right case comes along — one in which it is certain that the tests set forth in McCormick and Kreiner would compel different results. In short, notwithstanding his plea for Legislative action, even Justice Young probably would wade into the waters once again, given the appropriate case in which to do so.

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MICHIGAN SUPREME COURT HOLDS STATUTE OF LIMITATION/REPOSE FOR LAWSUITS AGAINST ARCHITECTS AND CONTRACTORS APPLIES TO TORT CLAIMS BUT NOT TO BREACH-OF-CONTRACT CLAIMS

CONTRIBUTOR – DAVID M. SHAFER

The Michigan Supreme Court recently issued a unanimous opinion that should make it easier for certain plaintiffs to sue architects and builders for breach of contract within the applicable six-year statute of limitation period.

The new Michigan Supreme Court opinion is Miller-Davis Co v Ahrens Construction, Inc, __ Mich __ (7-11-2011).

There is a Michigan statute that protects architects, engineers, and builders from so-called stale claims in lawsuits involving injuries and damage caused by their work. That statute is MCL 600.5839(1). This architect statute says that no person may maintain any action against a state licensed architect or professional engineer or a contractor to recover money damages for any injury to property, real or personal, or for bodily injury or wrongful death, arising out of the defective and unsafe condition of an improvement to real property more than six years after the time of occupancy of the completed improvement, use, or acceptance of the improvement. The statute also allows an action to be filed within one year after the defect is discovered. However, the statute further provides an absolute ten-year cut-off period, stating that no action may be filed more than ten years after the time of occupancy or use or acceptance of the improvement has occurred. The purpose of the statute is to shield architects, engineers, and contractors from stale claims and relieve them of open-ended liability for defects in their workmanship.

The new Miller-Davis opinion of the Michigan Supreme Court addresses the scope of this architect statute of limitation, MCL 600.5839(1). In essence, the Supreme Court limits the application of the statute to tort claims (for malpractice, for example) against architects and engineers and contractors; and it says that for other non-tort claims for breach of contract against architects and engineers and contractors, a different statute of limitation applies. That different statute of limitation is MCL 600.5807(8), under which the six-year limitation period ends six years after the breach-of-contract claim accrued.

Architects, engineers, and contractors would generally prefer the application of MCL 600.5839(1) over MCL 600.5807(8), because, under the former statute, the six-year period of the statute of limitation begins to run as soon as the plaintiff accepted or began using the building improvement, and it includes a ten-year cut-off period of repose; whereas under the latter statute, the six-year period begins to run only when the plaintiff’s claim “accrued”–which could well be long after the time when the plaintiff actually accepted or began using the building improvement–and it does not include any cut-off period of repose.

Finally, it is noted that in rendering its opinion in the Miller-Davis case, the Michigan Supreme Court specifically overruled two earlier opinions of the Michigan Court of Appeals from 1992 and 1998 that came to the opposite conclusion.

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 SAVE THE DATE

The 4th Annual Cherry-Roubaix bicycle race, sponsored by Garan Lucow Miller, P.C., will be held from August 12th through the 14th, 2011, on the streets of Traverse City, Michigan and neighboring Leelanau County, and will feature the 2011 State Road Race Championships. There will also be a charity fun ride out Old Mission Peninsula. Please see the event website at www.cherry-roubaix.com for more details.

Please mark your calendars to join us at this exciting event. Garan Lucow Miller will be hosting special VIP viewing areas at each race, please advise Peter Worden, in our Traverse City office at (231) 941-1611 or pworden@garanlucow.com, if you will be available to join in the festivities.

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GLM ANNUAL GOLF OUTING CLIENT INVITATIONAL

EVENT: Garan Lucow Miller’s Annual Golf Outing

DATE: Tuesday, August 23, 2011

VENUE: Forest Akers West Golf course on the campus of MSU

Banquet dinner to be on campus at the University Club

RSVP to Eileen Carty at ecarty@garanlucow.com by August 4, 2011.

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BASICS OF NO-FAULT

Jim Borin will be teaching the Fundamentals of No-Fault (PIP) course on Monday evenings from September 12 through November 7, 2011. The classes will be held at the Lexington Hotel, 925 S. Creyts Road, Lansing, Michigan 48192 from 6:00 to 8:30 p.m. Please contact Denise Tedder at dtedder@garanlucow.com to register, or call at (800)875-7600.

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UPCOMING SEMINARS

The Troy Breakfast Seminar will be held on Thursday October 27, 2011 at the Troy Marriott.

Please watch Law Fax for further information.