April 30, 2015
In a recent, published decision, the Michigan Court of Appeals of Clark v Progressive Insurance Company and Al-Amin et al, (___ Mich App ___; ___ NW2d ___; Docket No. 319454, 3/5/15)[1], the Michigan Court of Appeals held that the obligation of a plaintiff’s attorney to ensure his client knows the terms of a settlement agreement cannot be shifted to opposing counsel.
Plaintiff Clark was in a motor vehicle accident in 2011 that ultimately required shoulder surgery in May of 2013, along with treatment for several other injuries. She sued defendant seeking PIP benefits. A settlement agreement was reached before trial. The terms of this settlement were specific and were designed to represent a global settlement that would incorporate all expenses up to the entry of the agreement. The settlement was reported to the trial court on November 5, 2013, resulting in a payment by defendant to plaintiff of $78,000.
After the settlement was entered, Plaintiff received a bill in the amount of $28,942 from Synergy Spine and Orthopedic Surgery Center for the shoulder surgery in May of 2013. Plaintiff’s attorney contacted counsel for Progressive to indicate that he would not have settled the case for the $78,000 had he known about this bill.
Progressive filed a motion to have the settlement agreement enforced arguing that Plaintiff knew of these charges well before the settlement and that the agreement included all benefits to date, including the Synergy expense. Plaintiff filed a response arguing that the settlement was void for two reasons. First, Plaintiff did not know of the bill so it could not have been considered in settlement negotiations. Second, Progressive knew about the bill but failed to disclose it to Plaintiff during settlement negotiations and prior to settlement. The trial court agreed with Plaintiff and held the settlement agreement did not include the Synergy bill.
The Michigan Court of Appeals first determined the settlement agreement was not void due to fraud or duress, Streeter v Mich Consol Gas Co, 340 Mich 510, 517; 65 NW2d 760 (1954), because Plaintiff did not allege that either occurred here. Rather, Plaintiff argued that the settlement was void by way of mutual mistake. The Court of Appeals determined that no mutual mistake existed, however, where Progressive supposedly had knowledge of the bill and Plaintiff’s claimed lack of knowledge could not be considered a mistake in this context.
Plaintiff also presented the argument that counsel for Progressive had an obligation to disclose the outstanding bill to Plaintiff. The Court of Appeals disagreed, noting that such a finding would essentially shift a duty held by Plaintiff’s counsel to Progressive’s counsel. The Court affirmed that a plaintiff’s counsel is duty-bound to ensure his or her client considers all possibilities and ramifications of settlement and that the settlement is one made by an informed client. Thus, Progressive and its counsel had no duty to inform Plaintiff of any potential claims she may have had with respect to the surgical bill from Synergy. The Court reversed the trial court’s decision and remanded the matter back to the trial court for entry of an order to enforce the settlement agreement as agreed to by the parties on November 5, 2013.
*****************************
REGISTER NOW!
WINDY CITY SEMINAR
The 2015 Windy city Seminar will take place on Thursday, June 18, at the Chicago Marriott Schaumburg.
Please join us for a complimentary full day seminar, lunch will be included, also 6 Illinois Continuing Education Credits will be offered.
To register please contact Eileen Carty at: ecarty@garanlucow.com or 800-875-7600.
Seminar Agenda:
8:30 – 8:55 a.m. Continental Breakfast and Registration.
8:55 – 9:00 a.m. Welcome and Introduction.
Speaker: David A. Couch, Esq.
9:00 – 10:00 a.m. Illinois First Party and Third Party Auto Law Updates.
Speaker: Jennifer E. Davis, Esq.
10:00 – 10:15 a.m. Illinois Premises Liability Law Updates.
Speaker: David A. Couch, Esq.
10:15 – 10:30 a.m. Illinois Premises Liability Law Comparison With Adjacent State Laws.
Speaker: David A. Couch, Esq.
10:30 – 10:45 a.m. Break
10:45 – 11:30 a.m. Michigan First Party Auto Law Updates and Comparison with Illinois and Indiana Law.
Speaker: John W. Whitman, Esq.
11:30 – 12:00 noon Michigan Third Party Auto Law Updates and Comparison with Illinois Law.
Speaker: David A. Couch, Esq.
12:00 – 12:15 p.m. Question and Answer Session.
12:15 – 12:30 p.m. Examination on Illinois Law Topics and Comparison with Adjacent State Laws.
12:30 – 1:00 p.m. Lunch provided at the Chicago Marriott Schaumburg
1:00 – 4:00 p.m. Trial and Deposition Boot Camp.
Presenters: John W. Whitman, Jennifer E. Davis, and David A. Couch
**************************************