SECURITY FOR COSTS IS APPROPRIATE WHERE A PLAINTIFF FAILS TO OFFER EVIDENCE IN SUPPORT OF HIS ALLEGATIONS

Melissa N. Mead

In a recent, unpublished decision, Phillips v State Farm Mutual Automobile Insurance Company, et al (Docket No. 324723, 01/14/2016), the Michigan Court of Appeals affirmed the trial court’s decision to dismiss Plaintiff’s claims with prejudice for failing to post a bond for security for costs.

Plaintiff, Armin Phillips, was involved in numerous accidents that resulted in multiple injuries prior to the accident at issue.  He sought treatment for these injuries for over a twenty (20) year period and the frequency of his visits caused his medical providers to inquire whether he developed an addiction to his medications.

On August 31, 2012, Plaintiff alleges he was involved in a motor vehicle accident that resulted in new or exacerbated injuries.  The emergency room treatment following this accident revealed no such injuries.  On February 15, 2013, Plaintiff filed suit against the allegedly negligent driver and to recover No-Fault PIP benefits for his purported injuries.

Throughout litigation, Plaintiff was non-compliant with requests for independent medical evaluations and further failed to cooperate with requests for authorizations to obtain medical records.  Defendants subsequently filed motions and briefs for security for costs, on the basis that Plaintiff’s claims were unsupported by the evidence.  Plaintiff did not file a response to these motions, at which time the trial court ordered Plaintiff to file a $10,000.00 bond with respect to the negligence count, and a $20,000.00 bond with respect to the PIP suit.  Plaintiff failed to post these bonds.

Due to Plaintiff’s failure to comply with the Court order and post the pertinent bonds, Defendants requested dismissal of Plaintiff’s claims.  After hearing oral argument on the matter, the trial court granted Defendants’ requests and dismissed Plaintiff’s claims with prejudice.  Plaintiff filed a motion for reconsideration of the trial court’s granting of the motion for security of costs, which the court denied.

Plaintiff appealed, arguing that the trial court erred by granting the request for security for costs, by denying the motion for reconsideration, and by dismissing the claim with prejudice.  The Court of Appeals noted the trial court’s decision to order the security costs and regarding the motion for reconsideration is reviewed for abuse of discretion, which occurs when the outcome falls outside the range of reasonable.  Security for costs may be permitted where there is a “tenuous legal theory of liability” or where there is reason to believe that allegations are “groundless and unwarranted.”  In re Surety Bond for Costs, 226 Mich App 321, 331-332 (1997).

As Plaintiff did not contest the evidence submitted by Defendants regarding his pre-existing injuries and his post-accident abilities, the trial court did not abuse its discretion by ordering Plaintiff to post a bond for security for costs.  Likewise, because Plaintiff failed to submit any evidence that created a factual issue regarding the merits of his litigation, the denial of Plaintiff’s Motion for Reconsideration was proper.

As evidenced by the holding in Phillips v State Farm Mutual Automobile Insurance Company, et al, supra, defendants may consider filing motions for security for costs where the undisputed evidence fails to support a plaintiff’s contentions.

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