'Family joyriding' at issue in auto insurance cases before Michigan Supreme Court in oral arguments this week

Does a "family joyriding" doctrine require auto insurers to pay medical expenses for two drivers who drove family members' cars - despite knowing that the owners had forbidden them to do so? That is a question that the Michigan Supreme Court will consider when it hears oral arguments this week.

In Spectrum Health Hospitals v Farm Bureau, a car owner allowed his son's girlfriend to use his car, but had forbidden his son to drive the car and had also warned the girlfriend not to let the son drive it. But the son, who lacked a valid driver's license, borrowed the car with his girlfriend's permission and got into an accident while legally drunk.

In Progressive Marathon Insurance v DeYoung, a man with four drunk driving convictions was specifically excluded from his wife's auto insurance policy, and she had also forbidden him to drive her car. Despite knowing this, the man took his wife's car without permission and crashed it while driving drunk.

The insurance companies in both cases argued that the injured drivers had "taken unlawfully" in violation of Michigan's No-Fault Act, MCL 500.3113(a), which provides that "A person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident ... [t]he person was using a motor vehicle or motorcycle which he or she had taken unlawfully ...."

But in both cases, the Michigan Court of Appeals concluded that the "taken unlawfully" provision does not apply to "family joyriding," where a family member borrows a car without permission but without meaning to steal it. The Court of Appeals judges in Progressive Marathon said they were "acutely aware" that the no-fault act does not provide a family joyriding exception, but said they were constrained by prior appellate decisions that recognized the doctrine.

The Supreme Court will also hear People v Cole, in which the defendant seeks to withdraw or amend his no-contest plea to sexually abusing his five-year-old stepdaughter.

The state's criminal code requires lifetime electronic monitoring upon release from prison for anyone over age 17 who is convicted of second-degree criminal sexual conduct against a victim under 13.

While the sentencing judge told the defendant about the length of his prison term, the judge did not inform him of the mandatory lifetime electronic monitoring. The defendant argues that lifetime monitoring is a sentencing term and that he could not make a knowing and voluntary plea without that information.

In a split decision, a Court of Appeals panel ruled in the defendant's favor, with the majority finding that electronic monitoring is a "sentence" that the sentencing judge was required to disclose. The dissenting judge observed that, while it would be "better practice" for a sentencing judge to inform a defendant of every action the state is required to take, "the law plainly does not require such disclosure."

The remaining 11 cases the court will hear include constitutional, criminal, insurance, medical malpractice, legal procedure, property taxes and tort law issues.

The court will hear oral arguments in its courtroom on the sixth floor of the Michigan Hall of Justice today through Thursday, March 6, 7, and 8, starting at 9:30 a.m. each day. The court's oral arguments are open to the public. The arguments will also be broadcast on Michigan Government Television (mgtv.org).

Please note: The summaries that follow are brief accounts of complicated cases and may not reflect the way that some or all of the court's seven justices view the cases. The attorneys may also disagree about the facts, issues, procedural history, or significance of their cases.

Briefs are online at http://www.courts.michigan.gov/supremecourt/Clerk/msc_orals.htm.

Tuesday, March 6

Morning Session

SPECTRUM HEALTH HOSPITALS v FARM BUREAU MUTUAL INSURANCE COMPANY OF MICHIGAN, et al. (case no. 142874) Court of Appeals case no. 296976

Attorney for plaintiff Spectrum Health Hospitals: Richard E. Hillary, II.

Attorney for defendants Farm Bureau Mutual Insurance Company of Michigan and Farm Bureau General Insurance Company of Michigan: Kimberlee A. Hillock.

Trial Court: Kent County Circuit Court

At issue: A hospital sued an insurance company to recover payment for medical services that it provided to Craig Smith, Jr. after he was injured in an accident while driving his father's car. Smith, who was unlicensed and legally drunk at the time of the accident, had been forbidden by his father to drive the car - but the father had given permission to Smith's girlfriend to use the vehicle, cautioning her not to let Smith drive it. The insurance company argued that it was not liable for benefits because Smith had taken the vehicle "unlawfully," as defined by Michigan's no-fault act. But the trial court ruled that Smith was driving the vehicle lawfully, because his girlfriend, by virtue of having the father's permission, could in turn give Smith permission to drive the car. May an immediate family member who knows that he has been forbidden to drive a vehicle nonetheless be a permissive user - and be eligible for personal protection insurance benefits under MCL 500.3113(a) - if an intermediate permissive user grants permission to operate the accident vehicle, despite the owner's prohibition? Does the "family joyriding" exception to MCL 500.3113(a) apply?


Court of Appeals case no. 296502

Attorney for plaintiff Progressive Marathon Insurance Company: Nicholas S. Ayoub.

Attorney for intervenors Spectrum Health Hospitals and Mary Free Bed Rehabilitation Hospital: Richard E. Hillary, II.

Attorney for amicus curiae Insurance Institute of Michigan: Carson J. Tucker.

Trial Court: Ottawa County Circuit Court

At issue: The no-fault automobile policy in this case expressly excluded the car owner's husband - who has four drunk driving convictions - from coverage. Although he knew this, the husband drove the car while drunk and was injured in an accident. The insurance company filed a lawsuit, seeking a declaration that it was not obligated to pay for the injured husband's medical treatment and care. The trial court ruled in the insurance company's favor, but the Court of Appeals reversed. Does the "family joyriding exception" in MCL 500.3113(a) apply to a family member who knows that he or she has been forbidden to drive a vehicle and is excluded from coverage in the no-fault policy, but nevertheless drives the car and is hurt in an accident? If so, should the "family joyriding" exception be limited or overruled?

PEOPLE v COLE (case no. 143046)

Court of Appeals case no. 298893

Prosecuting attorney: Charles F. Justian.

Attorney for defendant David Mark Cole: Anne M. Yantus.

Attorneys for amicus curiae American Civil Liberties Union Fund of Michigan and the Criminal Defense Attorneys of Michigan: Kary L. Moss, John R. Minock.

Trial Court: Muskegon County Circuit Court

At issue: The defendant entered a plea to two counts of second-degree criminal sexual conduct, with an evaluation from the court, under People v Cobbs, 443 Mich 276 (1993), for concurrent five-year minimum prison sentences. Consistent with the plea, the judge sentenced the defendant to concurrent prison terms of five to 15 years; he also ordered lifetime electronic monitoring as required by MCL 750.520n. On appeal, the defendant argued that his plea was not voluntary because he was not informed of the lifetime monitoring requirement. In a split decision, the Court of Appeals remanded the case to the trial court with directions to permit the defendant to withdraw his plea. Does Michigan Court Rule 6.302 require that a defendant entering a plea to first-degree or second-degree criminal sexual conduct be informed that he or she will be subject to lifetime electronic monitoring if the victim is under 13 years of age and the defendant is sentenced to prison? Must lifetime electronic monitoring be included in the terms of a sentence evaluation under People v Cobbs?

Afternoon Session

MCCAHAN v BRENNAN, et al. (case no. 142765) Court of Appeals case no. 292379

Attorney for plaintiff Christina McCahan: Christian P. Collis.

Attorney for defendant University of Michigan Regents: Karl V. Fink.

Attorney for amicus curiae Michigan Association for Justice: Steven A. Hicks.

Trial Court: Court of Claims

At issue: The plaintiff, injured in a collision with vehicle owned by the University of Michigan, failed to file a notice of intent to file a claim with the Clerk of the Court of Claims within six months after the accident, as required by MCL 600.6431. She did provide information about the accident to the university within that time frame, and filed a notice of intent with the Clerk of the Court of Claims almost a year after the accident. The trial court granted summary disposition to the university and dismissed the case because the plaintiff failed to comply with MCL 600.6431's notice requirements. The Court of Appeals affirmed in a split, published decision. The plaintiff contends that the actual notice and information she provided substantially complied with the statute, foreclosing any claim that the university was prejudiced by noncompliance with the notice requirements. Did the plaintiff's failure to comply with the notice requirement of MCL 600.6431(3) require dismissal of her claim against the university?


Court of Appeals case no. 287024

Attorney for plaintiff Cedroni Associates, Inc.: Ryan W. Jezdimir.

Attorney for defendant Tomblinson, Harburn Associates Architects & Planners, Inc.: Ronald S. Lederman.

Attorney for amicus curiae American Institute of Architects - Michigan: Frederick F. Butters.

Trial Court: Genesee County Circuit Court

At issue: The plaintiff was the low bidder on a construction project contract that was offered by a public school district. The defendant architectural firm had an agreement with the school district to assist with the project bid evaluations. After the defendant provided its recommendation - which stated that the plaintiff should be disqualified - the school district chose the bidder that had submitted the second lowest bid. The plaintiff sued the defendant for tortious interference with a business expectancy, but the trial court granted summary disposition to the defendant. A split Court of Appeals reversed in a published decision. Are there genuine issues of material fact as to whether the plaintiff, a disappointed low bidder on a public contract, had a valid business expectancy? Did the defendant architectural firm's communications, made pursuant to its agreement with the school district, amount to intentional and improper conduct sufficient to sustain a claim of tortious interference with a business expectancy?

Wednesday, March 7

Morning Session


Court of Appeals case nos. 289174-6

Attorneys for petitioner Michigan Properties, L.L.C.: Michael B. Shapiro, John D. Pirich.

Attorneys for respondent Meridian Township: Peter A. Teholiz, Michael G. Woodworth.

Attorney for amicus curiae Michigan State Tax Commission: Matthew B. Hodges.

Attorney for amicus curiae Michigan Townships Association and the Michigan Municipal League: Robert E. Thall.

Lower Tribunal: Michigan Tax Tribunal

At issue: In 2004, the petitioner purchased three properties. Such a transfer in ownership allows the township to "uncap" the property's taxable value and assess property tax on the full state equalized value without the limitations imposed by Proposal A (Const 1963, art 9, § 3). In this case, the township failed to uncap the SEV of the three properties for the 2005 or 2006 tax year.

In March 2007, the local Board of Review corrected the taxable value for 2007, using the uncapped value of the property in 2005 as the base value. The petitioner appealed to the Tax Tribunal, arguing that MCL 211.27a requires that any change in taxable value be made in the year immediately after the property transfer. The Tax Tribunal ruled against the petitioner, but the Court of Appeals reversed, holding that the township was not permitted to adjust the taxable value because it had failed to do so in the year after the transfer. If the taxing authority fails to adjust real property's taxable value in the year immediately after a transfer, does MCL 211.27a(3) preclude a later adjustment?


NORTHVILLE (case no. 143281)

Court of Appeals case no. 301043

Attorney for petitioner Toll Northville Limited Partnership: David B. Marmon.

Attorneys for respondent Township of Northville: Laura M. Hallahan, Amy K. Driscoll.

Attorney for amicus curiae Michigan Association of Realtors: Gregory L. McClelland.

Attorney for amicus curiae Building Owners and Managers Association of Metropolitan Detroit: Andrew M. Harris.

Attorney for amicus curiae Michigan Townships Association: Robert E. Thall.

Lower Tribunal: Michigan Tax Tribunal

At issue: Northville Township raised the taxable value of the petitioner's property in 2000, pursuant to a statute that provided for the increase. The petitioner did not challenge the increase in 2000, but in 2001, the petitioner filed a lawsuit claiming that the statute was unconstitutional; in 2008, the Michigan Supreme Court declared that the statute was unconstitutional. The property owner then sought relief from the property taxes that it had paid on the unconstitutional addition to its property's taxable value. Did the Court of Appeals correctly hold that the Michigan Tax Tribunal had no jurisdiction to reduce an unconstitutional increase in the taxable value if the owner did not challenge the increase in the same year?

IN RE ESTATE OF PRICE (case no. 143123) Court of Appeals case no. 295212

Attorney for receiver Thomas Woods: Allan Falk.

Attorney for intervening defendant Dart Bank: Peter A. Teholiz.

Attorney for amicus curiae Community Bankers of Michigan: Michael A. Kus.

Attorney for amicus curiae Michigan Bankers Association and Michigan Credit Union League: Nicole L. Mazzocco.

Attorney for amicus curiae Michigan Association of Realtors: Gregory L. McClelland.

Trial Court: Ingham County Circuit Court

At issue: The trial court appointed a receiver to seize and sell property to satisfy an outstanding judgment against the property's owner. The receiver repaired the property, which was dilapidated and uninhabitable, to prepare it for sale. But as a result of the real estate market collapse, he could not sell the property for a high enough price to pay off an existing mortgage and to also pay the receiver's outstanding costs and fees. The trial court granted a lien against the property in the amount of the receiver's costs and fees, ruling that this lien had priority over the mortgage. The Court of Appeals affirmed. Must a mortgagee consent to the appointment of a receiver to be required to pay the receiver's costs and fees? Does the statutory right of first priority belonging to the holder of the recorded mortgage, MCL 600.3236, override the common-law rule that a receiver's costs and fees are entitled to first priority? Can a mortgagee be required to pay for expenses that did not benefit it?

Afternoon Session


Court of Appeals case no. 289080

Attorney for plaintiff Kenneth Admire: George T. Sinas.

Attorney for defendant Auto-Owners Insurance Company: Kimberlee A. Hillock.

Attorney for amicus curiae Michigan Insurance Coalition: Lori McAllister.

Attorney for amicus curiae Coalition Protecting Auto No-Fault: Liisa R. Speaker.

Trial Court: Ingham County Circuit Court

At issue: This auto no-fault case involves a claim for reimbursement of the full cost of a handicap-accessible van for a person who was catastrophically injured in an automobile accident. The trial judge granted summary disposition in the plaintiff's favor, finding that the defendant insurance company was obligated under a contract between the parties to pay the full purchase price of a new van (as opposed to paying for only those modifications required to enable the injured person to use the van). The Court of Appeals affirmed. The insurance company appeals, arguing that it is not required under the no-fault act to pay the full purchase price for the new van. The plaintiff filed a cross-appeal, arguing that the insurance company is obligated under both the no-fault act and the contract to pay the full cost of a new van. Whether, or to what extent, is the defendant obligated to pay the plaintiff personal protection insurance benefits under the no-fault act, MCL 500.3101 et seq., for handicap-accessible transportation?

ATKINS v SUBURBAN MOBILITY AUTHORITY FOR REGIONAL TRANSPORTATION, d/b/a SMART (case no. 140401) Court of Appeals case no. 288461

Attorney for plaintiff Vivian Atkins: Steven W. Reifman.

Attorney for defendant Suburban Mobility Authority for Regional Transportation, d/b/a SMART: Carson J. Tucker.

Attorney for amicus curiae Michigan Defense Trial Counsel, Inc.: Hal O. Carroll.

Attorney for amicus curiae Michigan Municipal Risk Management Authority: James T. Mellon.

Trial Court: Wayne County Circuit Court

At issue: The plaintiff was injured while riding one of the defendant's buses. Within 60 days of the accident, she contacted the defendant regarding an auto no-fault claim. But when the plaintiff sued the defendant, the trial court dismissed her tort claims, noting that she had not notified the defendant in writing of her tort claims within 60 days of the accident, as required by MCL 124.419. The Court of Appeals reversed, finding that the plaintiff's written contacts with the defendant's no-fault insurer, and other information the plaintiff provided, were sufficient to put the defendant on notice of the plaintiff's tort claims. Does written notice of the plaintiff's no- fault claim, together with the defendant's knowledge of facts that could give rise to a tort claim, satisfy MCL 124.419's written notice requirement?

Thursday, March 8

Morning Session Only

TITAN INSURANCE COMPANY v HYTEN, et al. (case no. 142774) Court of Appeals case no. 291899

Attorney for plaintiff Titan Insurance Company: Ronald M. Sangster.

Attorney for amicus curiae Insurance Institute of Michigan: Mary Massaron Ross.

Trial Court: Oakland County Circuit Court

At issue: The plaintiff insurance company issued a policy to an insured with a suspended driver's license; the policy became effective on the date that the insured expected her license to be reinstated. In fact, her license was not reinstated until about a month after the policy went into effect. Several months later, she was involved in an automobile accident, injuring two others. The insurance company sought to reduce the coverage provided by the policy, arguing that it could do so in light of the insured's misrepresentation about the status of her license, but the trial court denied its request. May an insurance carrier reform an insurance policy due to a misrepresentation in the insurance application where the misrepresentation is "easily ascertainable" and the claimant is an injured third-party?

PEOPLE v VAUGHN (case no. 142627)

Court of Appeals case no. 292385

Prosecuting attorney: Thomas M. Chambers.

Attorney for defendant Joseph Lashawn Vaughn: Randy E. Davidson.

Attorney for amicus curiae Craig A. Daly: Craig A. Daly.

Attorney for amicus curiae Attorney General Bill Schuette: Bruce H. Edwards.

Trial Court: Wayne County Circuit Court

At issue: During jury selection, the trial judge closed the courtroom to the public. Defense counsel did not object. Was the defendant denied his right to a public trial pursuant to US Const, Am VI, and Const 1963, art 1, § 20, see Presley v Georgia, 558 US ___; 130 S Ct 721; 175 L Ed 2d 675 (2010)? Did the defendant, by failing to object, forfeit or waive any error resulting from the exclusion of the public from the courtroom during the jury voir dire? If so, did trial counsel's failure to object amount to ineffective assistance of counsel? If some structural errors can be forfeited, is the denial of the right to a public trial among those forfeitable errors? Is the defendant is entitled to a new trial as a consequence of the trial court's exclusion of the public during the jury voir dire?



Court of Appeals case no. 306165

Attorney for appellant Robert Davis: Andrew A. Paterson.

Attorney for appellee Emergency Manager for the Detroit Public Schools: Heather S. Meingast.

Lower Court: Court of Appeals (complaint quo warranto)

At issue: The respondent was appointed emergency manager for the Detroit Public Schools, but he did not take the oath of office before assuming his duties. The petitioner asked the Attorney General to institute quo warranto proceedings against the respondent, to obtain a declaration that the office of emergency manager was vacant due to respondent's failure to take the oath. The respondent belatedly took the oath of office and the Attorney General declined the petitioner's request to institute quo warranto proceedings. The respondent filed an application for leave to file a complaint for quo warranto in the Court of Appeals, but the Court of Appeals denied the application. Should the office of emergency manager be declared vacant because the respondent did not take the oath of office before assuming his duties, but subsequently took the oath of office before this quo warranto action was filed?

JOHNSON v HURLEY MEDICAL GROUP, P.C., et al. (case no. 141793)

Court of Appeals case no. 287587

Attorney for plaintiff Thelma Johnson, Personal Representative of the Estate of Carl

Johnson: Michael S. Tashman.

Attorneys for defendant Hurley Medical Group, P.C., doing business as Hurley Medical Center: Marc S. Berlin, Anne Loridas Randall.

Attorney for defendant Dr. Moongilmadugu Inba-Vashvu, M.D.: Alan R. Sullivan.

Attorney for amicus curiae Michigan Association for Justice: David R. Parker.

Trial Court: Genesee County Circuit Court

At issue: The plaintiff sued the defendants for medical malpractice. The defendants moved for summary disposition, arguing that the plaintiff's pre-suit notice of intent to sue was defective because it did not contain the information required by MCL 600.2912b(4). The trial court granted the motion and dismissed the plaintiff's complaint. The Court of Appeals reversed, holding that the plaintiff was entitled to amend her notice of intent pursuant to MCL 600.2301 and Bush v Shabahang, 484 Mich 156 (2009), and to have that amendment relate back to the date of the original service of the notice. Does MCL 600.2301 apply to cases initiated before the amendment of MCL 600.5856 in 2004? Should the plaintiff have been allowed to amend her notice of intent?

Published: Tue, Mar 6, 2012