February 03, 2011
EDITORS’ NOTE: Although claims for Underinsured (UIM) Benefits have been part of the legal landscape for well over 20 years, perhaps surprisingly, there are no adopted jury instructions and very few guidelines to assist the insurance company and attorney who dares to venture forth to try a case involving UIM benefits. One of GLM’s own lawyers, Mark Mueller in our Traverse City office, has actually tried not one, but two UIM cases within the last few months. Each case was handled differently by the assigned trial judge. Mark was fortunate enough to obtain a favorable result for his client in each case. We asked Mark to share his experiences in defending these two cases. The two cases illustrate the different approaches adopted by two trial judges in trying the UIM case.
Recently, I had the opportunity to try two third-party auto negligence cases where the plaintiff also had a UIM policy of insurance. The purpose of this article is to explore the dynamics involved in trying these cases and to address what many fear is the 800 pound gorilla in the courtroom, i.e. the insurance carrier defendant. These cases were tried differently, and both had good results.
In the first case, my client was the insured negligent driver who had $100,000 in liability coverage. Liability was admitted and the policy was tendered before trial. However, for whatever reason, plaintiff’s counsel wanted to try his tort case and refused to accept the $100,000 offer even though, at one point in time, the UIM carrier had approved and consented to a settlement with the tortfeasor. Despite a $350,000 offer to settle, which included $250,000 from the UIM carrier, and $100,000 from the underlying tortfeasor’s policy, the plaintiff never came down from his $800,000 demand and the matter proceeded toward trial. Before trial, the UIM carrier withdrew its consent to settle with my client and filed a motion to sever so the plaintiff would pursue a cause of action only against my client. The UIM carrier had policy language that indicated it was not bound by any judgment or settlement obtained without its written consent. Therefore, they believed they were entitled to try the matter again regardless of the results in the first trial. The plaintiff believed the UIM carrier would be bound by the results of the first trial pursuant to theories of res judicata and collateral estoppel.
The attorney for the UIM carrier attended the four day jury trial, at the end of which the jury returned a no cause of action verdict in favor of my client. The case proceeded in a normal fashion without reference to insurance, with the exception of some commentary during voir dire. However, it is my belief the jury is well aware of insurance as we all own and drive automobiles. Moreover, my claim representative and the attorney for the UIM carrier stood out in the courtroom. It should be noted, in this case, the plaintiff was alleging exacerbation of psoriatic arthritis, a condition with which he was diagnosed as a young man. The plaintiff was in his fifties at the time of the accident and working full time for a family owned insulation company. As a result of the accident, he claimed an exacerbation of his arthritic condition, as well as myofascial pain syndrome in the low back and neck. He was reduced to working half time. All of his treaters and an IME physician supported him. It was a classic egg shell plaintiff case. Despite that, the jury did not believe he sustained a threshold injury. After the verdict was reached, I had an opportunity to discuss the trial with members of the jury. The jury was not convinced the plaintiff sustained anything other than a whiplash injury. Moreover, they did not believe the plaintiff had met his burden of proof in regard to a claim for economic damages.
The second lawsuit was similar in nature, however, tried in a different manner. In the second case, I once again represented the underlying tortfeasor who had a primary policy of insurance of $100,000. The plaintiff’s UIM carrier had an additional $500,000 in coverage. This was an admitted liability case where the insured’s son was operating her motor vehicle with her permission and consent and crossed the centerline causing serious injury to the plaintiff. The plaintiff sustained a pilon fracture to his left lower extremity. A pilon fracture is a high impact injury caused when the heel and ankle are impacted into the fibula and tibia. The calcaneus as well as other ankle bones are fractured, and the tibia and fibula are also fractured completely. It requires two surgeries to repair, the first of which is the placement of an external fixator. After the fracture blisters go down, the surgeon opens the leg to perform open reduction and internal fixation requiring significant plating and screws. The plaintiff in this case was employed as an IT individual
for a nonprofit corporation and worked from his home. There was no claim for excess wage loss, but the plaintiff did blackboard in excess of $300,000 in a claim for loss of household services. Prior to trial, between the underlying policy and the UIM policy, the defendants had offered $225,000. The plaintiff would not come below $325,000. If push had come to shove, the UIM carrier likely would have contributed another $25,000, but the plaintiff would not move. This case was tried differently in that the UIM carrier was also a defendant at trial. Prior to trial, the judge did an excellent job explaining to the potential jury members what the parties’ roles were and that they were not to consider liability limits. The 16-year-old insured was not able to attend trial as he was overseas in school. I reminded the jury in opening and closing that his absence was due to his education needs. However, his mother appeared everyday on his behalf. She was also a defendant pursuant to the owners liability statute. The jury returned a verdict in the amount of $233,000, which the defendants regarded as a victory considering it was less than what the defendants had been willing to offer before trial. The UIM carrier was represented by separate counsel, and he and I had the opportunity to discuss the case with the jury after their verdict. They were not influenced by the fact that an insurance company was also a defendant. They took their role seriously and listened to the judge’s instructions regarding refraining from considering insurance. There seems to be a fear amongst the insurance industry and defense bar that references to insurance will directly impact the jury’s decision. I have found this, in at least my last two trials, not to be the case. These cases were decided on their merits and not by the fact that one or more parties may have had insurance. The second trial was extremely effective because there were two defense attorneys. However, we did not appear to be on the same side in front of the jury. Any interaction we had together was outside the presence of the jury to give them the impression that we were not on the same team. Of interesting note, the UIM carrier requested a special instruction regarding its subrogation rights in the event of a verdict in excess of the underlying policy. The judge denied this request because he had explained it to the jury members at the beginning of trial. He was very adamant that during the trial there would be no discussions regarding insurance or rights of subrogation. I am not sure if this is an appealable issue, but counsel for the UIM carrier made a record of it in case a verdict was not favorable.
Prior to trial, I secured an agreement with plaintiff’s counsel to waive any rights of collection in the event of a verdict in excess of the UIM carrier’s limits. I also was able to secure the same agreement with counsel for the UIM carrier. Therefore, my insured’s exposure was capped at policy limits. The parties also entered into a high/low agreement and agreed to waive any rights of appeal on the eve of the verdict pursuant to a suggestion from plaintiff’s counsel.
I believe these cases require a case by case analysis to determine the best way to try them. The insured’s appearance and presentation are factors as is the capability of defense counsel for the UIM carrier. Giving the jury the impression that your client and the UIM carrier are not trying the case in collusion is also important. A continued theme throughout the case was reminding the jury their job is to be fair and reasonable to not only the plaintiffs, but to the insured at fault driver. Finally, selection of a jury that will listen, understand, and follow the judge’s instructions is crucial. I often utilize the jury instructions during voir dire that require jurors to be fair, reasonable, not 2Ms. Andrews is a Partner in the Firm’s Troy office and can be reached at (248)641-7600 or bandrews@garanlucow.com 3 Quoting The Random House Dictionary of the English Language: Unabridged Second Edition (1998), p 671.
speculate or guess while using sound judgment, and not to punish the defendant if a verdict is reached.
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SIGNIFICANT LIMITATION ON IMPAIRED PLAINTIFF
PENALTY UNDER MCL 600.2955a(1)
CONTRIBUTOR – BETH A. ANDREWS
In a new, published opinion, the Michigan Court of Appeals has significantly limited the circumstances under which the impaired plaintiff penalty statute can bar claims by plaintiffs whose impairment by liquor or a controlled substance causes the accident or event resulting in death or injury. This statute was enacted as part of the 1995 tort reforms and creates an important exception to Michigan’s more general, modified comparative fault statute, MCL 600.2959. The impaired plaintiff penalty provides a defendant with an absolute defense to any and all liability for injury to person or property if the plaintiff is 50% or more the cause of “the accident or event” that resulted in “the death or injury”:
MCL 600.2955a(1) It is an absolute defense in an action for the death of an individual or for injury to a person or property that the individual upon whose death or injury the action is based had an impaired ability to function due to the influence of intoxicating liquor or a controlled substance, and as a result of that impaired ability, the individual was 50% or more the cause of the accident or event that resulted in the death or injury. If the individual described in this subsection was less than 50% the cause of the accident or event, an award of damages shall be reduced by that percentage. [Emphasis added.]
In Piccalo v Nix (On Remand), 252 Mich App 675, 680; 653 NW2d 447 (2002), the Court of Appeals defined the phrase “accident or event” broadly to mean “ ‘something that happens or is regarded as happening; an occurrence, especially one of some importance’ or ‘the outcome, issue, or result of anything.’ ” 3 In that case, an impaired, but underage, plaintiff decided to accept a ride in a van operated by the defendant driver. Not only was that driver also impaired, but the van lacked proper seating or restraints and was filled with tires and tools. When the inevitable (single-vehicle) accident occurred, plaintiff was injured by objects inside the vehicle. He argued, however, that since he was not operating the vehicle, his own impairment did not cause the “accident or event” and thus the statutory penalty should not bar his suit against the driver. The Court of Appeals disagreed, holding that plaintiff’s impairment caused the “accident or event” because it led, at least in part, to his decision to ride with the intoxicated defendant driver. Since Piccalo, it has been assumed that this broad definition of “accident or event” would permit consideration of the plaintiff’s impairment even if that impairment only affected later events. But a new, published opinion from the Michigan Court of Appeals now calls this into question. 4 The plaintiff argued on appeal that the impaired plaintiff penalty statute does not apply to medical malpractice actions, but because the issue had not been raised below, the appellate court declined to decide it and simply presumed, without deciding, that the statute would apply.
In Beebe v Hartman, ___ Mich App ___ (2010), decided 11-9-10 (Docket No. 292194), the appellate court held that a plaintiff’s impairment leading up to and causing an initial injury could NOT be considered in a medical malpractice suit for negligent treatment of those injuries. The facts of Beebe are classic. After consuming 11 cans of beer during a hot August afternoon (and with a blood alcohol level of .13), plaintiff Donald Beebe attempted to operate his snowmobile across his lawn. Not surprisingly, things did not go well. In the ensuing accident, he fractured both the tibia and fibula of his right leg, for which he was treated by defendants at a local hospital. He was discharged from the hospital one day after open reduction surgery, despite complaints of intense pain in the leg and numbness and swelling in the foot. Plaintiff argued that the defendants should have recognized that he had developed a recognized surgical complication known as “deep compartment syndrome.” He claimed that as a result of the defendants’ failure to promptly address that condition, he developed “clawing” or flexion contractures of the toes which required extensive reconstructive surgery. Plaintiff sued the defendants for medical malpractice, asserting that as a result of their negligence, he “has been and remains lame and disabled from many vocational, recreational, household and personal activities and in pain.”
Defendants argued that plaintiff’s complaint for damages was barred by the impaired plaintiff penalty in MCL 600.2955a(1) because plaintiff was intoxicated at the time of the snowmobile accident and the parties stipulated that plaintiff was 50 % or more the cause of the snowmobile accident – “the accident or event” – that resulted in his leg injuries.4 The court disagreed, holding that the impaired plaintiff penalty could not apply: In sum, we hold that the applicable “accident or event” under MCL 600.2955a(1) was defendants’ alleged medical malpractice. Viewing the evidence in a light most favorable to plaintiff, there was more than one cause that resulted in the pain and clawing of the toes in plaintiff’s right foot. Therefore, MCL 600.2955a(1) does not apply to the facts of this case.
Note that this holding would seem to be inconsistent with the plain language of the penalty statute, which specifically contemplates that it can apply when as much as 49% of the cause of the accident or event were factors other than the plaintiff’s impairment!
The court held that there were 2 separate injuries and events here: (1) the initial snowmobile accident and leg fractures and (2) the medical malpractice and the further injuries which resulted from the undiagnosed and untreated deep compartment syndrome. The plaintiff’s impairment only caused the first “accident or event” and the first injuries – but those were not the ones for which plaintiff was suing the defendants. The applicable “accident or event” under MCL 600.2955a(1) was thus defendants’ alleged medical malpractice.
5 NOTE: Judge Bandstra concurred in the result in this case and would not apply the impaired plaintiff penalty, but disagreed with this portion of the majority’s analysis. He would not require proof that the impaired plaintiff’s impairment was “the one proximate cause.”
In an ordinary negligence claim, the plaintiff need only prove that the defendant’s fault was A proximate cause of the injury. But here, the court was construing a statute, and in footnote 5, the majority in Beebe held that the language in this statute “requires the impairment to be “the” one “cause of the accident or event that resulted in the . . . injury.” [Emphasis added.] In other words, plaintiff’s impairment must be THE ONE proximate cause of the accident or event and not just A proximate cause. In arriving at this conclusion, the majority emphasized the Legislature’s use of the word “THE” in the statute as it relates to accidents, events and injuries. The court analogized this statute to the governmental tort liability act, MCL 691.1407(2)(c), where it has been held that the Legislature’s choice of the word “the” to modify the term “proximate cause” requires the plaintiff to show that the governmental unit’s negligence was “the one most immediate, efficient, and direct cause of the injury or damage, i.e. the proximate cause.” Robinson v City of Detroit, 462 Mich 439, 462 (2000) [emphasis added].
The majority in Beebe further held: Even assuming that plaintiff’s impairment due to the influence of intoxicating liquor is a proximate cause of the injuries that resulted to his leg as a result of the compartment syndrome, defendants would also be a proximate cause of those injuries if the evidence is viewed in a light most favorable to plaintiff. There was evidence that compartment syndrome can be a complication of fractures to the tibia and fibula and that plaintiff developed a deep compartment syndrome in his right leg after defendants performed surgery on the leg. There was also evidence that defendants did not diagnose or treat plaintiff’s compartment syndrome and that plaintiff suffered pain and clawing in the toes of his right foot as a result of the compartment syndrome. In this case, we do not decide whether both plaintiff and defendants were proximate causes of the pain or the clawing of the toes of plaintiff’s right foot and, if they both were proximate causes, whether plaintiff’s impairment was a substantial factor in producing the pain and clawing. We also do not decide whether defendants’ alleged medical malpractice was foreseeable or whether it was an independent, intervening cause sufficient to sever the causal connection between plaintiff’s impairment from alcohol and the injuries that resulted from defendants’ alleged malpractice. Generally, proximate cause is a factual issue to be decided by the trier of fact. Nichols v Dobler, 253 Mich App 530, 532; 655 NW2d 787 (2002). Our task in this case is limited to determining whether plaintiff was the proximate cause of the pain and the clawing of the toes of plaintiff’s right foot under MCL 600.2955a(1). Viewing the evidence in a light most favorable to plaintiff, we conclude that defendants may have been the proximate cause of the injuries plaintiff suffered as a result of the compartment syndrome, consequently MCL 600.2955a does not apply to the facts of this case.
[Emphasis added.] 6Mr. Fosmire is a Partner in the Firm’s Marquette Office and can be reached at (906)226-2524 or sfosmire@garanlucow.com
The majority in Beebe also distinguished another case, Harbour v Correctional Medical Services, Inc, 266 Mich App 452 (2005). In that case, a chronic abuser of alcohol was arrested for driving while under the influence of intoxicating liquor and taken to jail, where he was assessed by a nurse and placed on “sick call” in a holding cell. He died approximately 2 hours later as a result of irregular heart rhythms caused by acute alcohol withdrawal. The court held that alcohol withdrawal meets the broad definition of an “event” under MCL 600.2955a(1) (id. at 459) and that “[b]ecause the decedent’s alcohol related impairment caused the acute withdrawal that was the most immediate, efficient and direct cause of the decedent’s death, the defendant was entitled to the absolute defense of impairment provided by MCL 600.2955a. Id. at 463.
The Court of Appeals in Beebe distinguished the Harbour case by noting that in Harbour, there was only one injury (the death), whereas in Beebe, there were two: the initial leg fractures and the subsequent injuries resulting from the compartment syndrome. In Harbour, there was also a significantly stronger causal connection between the decedent’s impairment from alcohol and his death, since the decedent literally drank himself to death. Finally, the plaintiff’s expert in Harbour admitted that what might have happened if the decedent had been treated differently by the nurse was “pure speculation.” Id. at 446. The court in Beebe reiterated that “for MCL 600.2955a to apply, plaintiff’s impairment from alcohol must have been the one cause that resulted in the pain and the clawing of the toes of his right foot.”
The court in Beebe concluded by noting that medical personnel must exercise reasonable care in treating all patients, regardless of how they incurred their injuries in the first place, and thus no public policy would be served by insulating physicians from medical malpractice liability merely because the initial presenting injury or condition was caused by the plaintiff’s own impairment. The net result of the decisions in Piccalo, Harbour and Beebe is that the statutory penalty will apply to injuries resulting from the intoxication or impairment itself (Harbour), and to injuries incurred due to poor decision-making caused by the intoxication or impairment (Piccalo), but the penalty will NOT apply to situations where the plaintiff’s impairment merely pre-existed the defendant’s fault and thus played no role in the specific injury caused by the defendant (Beebe).
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CMS Extends MMSEA Reporting Deadlines CONTRIBUTOR – M. SEAN FOSMIRE6 The Centers for Medicare and Medicaid Services (CMS) has recently announced that it will extend certain of the MMSEA reporting requirements for one additional year. As readers of this publication will recall, the MMSEA reports are those which are required to be made by insurers or by self-insured entities. When a case involving a plaintiff who has had any of his medical
expenses paid by Medicare is settled, or a judgment is paid, and if the claim included medical expenses, the insurer or self-insured must report the amount that it paid to CMS, using specified reporting forms. The reporting requirements were outlined in our December 3, 2008, issue. CMS had previously extended the deadlines for a few months at a time. This most recent extension is for one additional year. The reporting of certain claims will now be required if those claims are resolved on or after October 1, 2011, and the reporting will have to take place by January 1, 2012.
The claims to which the extension applies are lump sum settlements of personal injury claims and redemptions of workers’ compensation claims. Payments that involve “ongoing responsibility for medical”, such as first-party no-fault claims and workers’ compensation claims that are being paid, are still subject to the original deadline, covering claims resolved on or after October 1, 2010.
Many of the carriers we work with have already registered and are in the process of reporting resolved claims. For those who are doing so, there is no reason that the current reporting should not continue. This one-year extension will provide all carriers and self-insureds with some “breathing room” to allow them to ensure that the collection of information and the reporting of settlements is being done in a proper fashion, without a concern for inadvertent errors triggering unexpected penalties.
The low-value reporting thresholds have also been extended. These are the exemptions provided for very modest settlements. Under the new schedule, the maximum amount that can be paid to a plaintiff without triggering a reporting requirement will be:
2012 $5,000
2013 $2,000
2014 $ 600
We emphasize, as we always have, that these involve reporting requirements only. They do not affect the substantive requirement imposed on plaintiffs and their attorneys, and on insurers, to ensure that the “interests of Medicare are respected” when a case is being settled.
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The Firm’s Estates, Probate and Elder Law practice group has published a weblog called the Michigan Probate and Estate Journal, found at http://www.michiganestatejournal.com. Articles are posted on a regular basis by members of the practice group. We encourage you to visit, read, and comment on the postings.