Author(s): Beth A. Andrews

LOSE A KREINER MOTION? TRY A MOTION FOR SECURITY FOR COSTS!

In a third-party no fault case where the issue is whether the plaintiff has suffered a serious impairment of body function, MCL 500.3135(2)(a) requires the court to decide the issue as a matter of law where there is no factual dispute concerning the nature and extent of the person’s injuries, or where there is a factual dispute but it is not material to the determination of whether the person has suffered a serious impairment. Summary disposition can thus be granted only where there is NO material factual dispute.

But what if there is SOME factual dispute requiring the court to deny defendant’s motion, but still some strong reason to expect that defendant will prevail at trial? Examples:

g Plaintiff’s deposition testimony flatly contradicts his medical records. g Videotape shows plaintiff doing some of the very things which plaintiff claimed at deposition were no longer possible for her to do.

g A prior (or subsequent) accident or condition better explains plaintiff’s complaints and current diagnosis.

If there is some – but not SIGNIFICANT – factual support for plaintiff’s claim, consider seeking an alternative remedy: security for costs.

Motions for security for cost are available under MCR 2.109(A) whenever there is a tenuous legal theory of liability or good reason to believe that a party’s allegations are groundless and unwarranted. In re Surety Bond for Costs, 226 Mich App 321, 331; 573 NW2d 300 (1997). The rule essentially forces the plaintiff to post a bond equal to the amount of “costs and all other recoverable expenses” which might be awarded by the court should the plaintiff lost at trial. This would include case evaluation sanctions, prevailing party costs and sanctions imposed for filing a frivolous action. The court has great discretion on whether to set a bond and to determine its amount. If the plaintiff then fails to post the bond within the allotted time, the case is dismissed.

Indigent plaintiffs are exempt from this rule – up to a point. Under MCR 2.109(B)(1), a court has discretion to allow indigent plaintiff with “legitimate claims” to go forward with their cases if they can show financial inability to furnish a bond.

Since the purpose of a bond is to guarantee payment of costs, one might think that a plaintiff’s poverty (and thus inability to pay such costs if he loses the case) might entitle a defendant to such a bond. But Michigan courts have held that mere indigency, standing alone, is not enough. The court must have other, substantial reasons for ordering a plaintiff to post security for costs. Gaffer v St John Hospital, 68 Mich App 474; 243 NW2d 20 (1976). On the other hand, this exception does not provide indigent plaintiffs with carte blanche to pursue frivolous claims. It is not intended to excuse impoverished plaintiffs from posting security for costs in all cases. Id.

Thus, a defendant seeking security for costs must show a substantial likelihood of success and reason to believe that the plaintiff will not pay any costs imposed as a result of losing the case. In addition, at least one case has held that a defendant should bring such a motion only after a dispositive motion has been filed and denied. Hall v Harmony Hills Recreation, Inc, 186 Mich App 265; 463 NW2d 254 (1990).

On the other side, a plaintiff seeking to defend against a motion for security for costs must show both “legitimacy” to his claim and financial inability to post a bond.

Apparently, “legitimacy” means more than just a question of fact. One appellate panel recently held that security for costs is an appropriate remedy in a no fault threshold case where there is substantial doubt about plaintiff’s credibility and/or about whether the accident caused plaintiff’s impairment.

In Graham v Auto-Owners Ins Co, unpublished opinion per curiam of the Court of Appeals, issued August 5, 2008 (Docket No. 278382), the defendant was an underinsured motorist carrier contesting both causation and serious impairment. Defendant moved for summary disposition and submitted medical records, deposition testimony and a surveillance videotape of the plaintiff. The trial court denied the motion but noted that the videotape cast doubt on the credibility of plaintiffs’ claims and suggested that a bond for security for costs might be appropriate. Not surprisingly, defendant’s motion was granted. Plaintiff failed to post the bond, and when the case was dismissed, plaintiff appealed. The Court of Appeals affirmed, finding no abuse of discretion by the trial court.

In Graham, plaintiff’s explanation of her injuries at deposition contradicted entries in her medical records, she complained to her doctors before the accident of the same conditions she later attributed to the accident, and a videotape showed her doing activities which she claimed not to be able to do. All of this suggested that her impairment, if any, was not serious and perhaps not even due to this automobile accident. In short, this was a pretty typical no fault threshold case.

So . . . if you lose your summary disposition motion on a close case, consider filing a motion for security for costs.