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July 15, 2019
In Bronner v City of Detroit, the Court of Appeals reversed the trial court decision granting summary disposition to the City of Detroit.
In September of 2014, Keith Bronner was riding a bus operated by the City of Detroit. That bus was hit by a garbage truck driven by GFL, formerly known as Rizzo Environmental Services. As a result of the accident, Bronner sought payment of PIP benefits from the City of Detroit. The City of Detroit is a self-insured entity under the No-Fault Act. The City of Detroit denied payment of Bronner’s no-fault benefits and Bronner initiated a lawsuit. The City of Detroit eventually settled the lawsuit with Bronner and paid him the PIP benefits owed.
The City of Detroit then filed a third-party complaint against GFL alleging 1) indemnification; 2) contribution; and 3) breach of contract for failing to indemnify and defend the City. GFL moved for summary disposition pursuant to MCR 2.116(C)(8). They argued that the City was improperly attempting to avoid liability under the No-Fault Act. The City of Detroit then responded with its own motion for summary disposition alleging that the services contract placed GFL as the priority insurer and that GFL was required to indemnify payment of Bronner’s PIP benefits because of their negligence under the terms of the contract. The trial court denied GFL’s motions for summary disposition and granted summary disposition for the City of Detroit.
The Court of Appeals held that under State Farm Mutual Auto Insurance Co v Enterprise Leasing Co, 452 Mich 25 (1996), Corwin v DiamlerChrysler Insurance Co, 296 Mich App 242 (2012), and Auto-Owners Insurance Co v Martin, 284 Mich App 427 (2009), a services contract cannot be interpreted as an attempt to shift a contracting party into the position of primary no-fault insurer. An owner, who is self-insured, as is the City of Detroit, cannot contractually shift its statutory responsibility for maintaining primary no-fault benefits to another party.
In addition, the Court of Appeals held that the indemnification clause of the City’s services contract was unenforceable under the Michigan No-Fault Act. Normally, “parties are free to contract as they see fit, and the courts must enforce contracts as written unless they are in violation of law or public policy.” Village of Edmore v Crystal Automation Sys, Inc, 322 Mich App 244, 263 (2017). However, if the terms of the contract are in conflict with the Michigan No-Fault Act, then the contract is unenforceable. The Court of Appeals found that the plain text of the Michigan No-Fault Act provides the only way for shifting cost of mandatory PIP coverage after payment is made, and because private indemnification agreements, like the one used in this case, are not anticipated by the Act, it is therefore unenforceable.
Finally, the Court of Appeals addressed the issue of attorney fees that were awarded to the City of Detroit. The court followed Escanaba and Lake Superior R Co v Keewanau Land Association Ltd, 156 Mich App 804 (1986), and held that the City of Detroit counsel could not recover the fees because this lawsuit would have been litigated as part of the regular course of business and under similar circumstances. Even though GFL’s negligence led to the lawsuit, the current lawsuit did not cause the City’s attorneys to incur expenses outside of their normal course of business in litigating PIP claims for the City of Detroit.
 Bronner v City of Detroit, unpublished opinion per curiam of the Michigan Court of Appeals, decided July 9, 2019 (Docket No 340930), available at:
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