MICHIGAN AUTO ACCIDENT INJURY LAW: IMPORTANT CHANGES

Case Impact on Auto Accident Law in Michigan:  
Michigan Lawyer Can Accept a Case Evaluation Award in an Auto Injury Case

Allard v State Farm Ins. Co., No. 257702, 260435, 2006 WL 1006619
(Mich.App. April 18, 2006)

Holding: The Cam Construction case holding does not apply to no-fault cases first party; thus, an injured auto accident victim can accept a case evaluation in a no-fault case and not have that acceptance effect rights to future no fault insurance benefits.

Facts:
Mr. Allard was involved in an automobile accident and filed a PIP claim after suffering a serious back injury in an October, 2001.  The claim went to case evaluation where it was given a $55,000 value.  Both the auto accident victim’s lawyer and State Farm’s lawyer rejected this award and the case proceeded to trial.  The jury returned a verdict of no cause of action in State Farm’s favor, and the trial court awarded case evaluation sanctions to the lawyer representing the auto insurance company.  The Michigan attorney representing the car accident victim appealed.  One issue that the Michigan lawyer representing the victim raised was that he was forced to reject the case evaluation award, due to a previous Michigan case called Cam Construction that suggested that mutual acceptance by both Michigan attorneys in a lawsuit will extinguish future claims.

Reasoning:       
The Court ruled that awarding case evaluation sanctions to the Michigan attorney who wins at trial, and against the rejecting party and his or her lawyer, is determined as a matter of law, not as a matter of discretion.  Except for the three very limited exceptions to mandatory sanctions under Michigan law(equitable relief, a dram shop action, and a judgment entered as a result of a ruling on a motion under MCR 2.403(O)(2)(c)), the plaintiff did not fall within any of the three exceptions.  However, as to the argument that the attorney raised about the possible extinguishment of future no fault benefits by a mutual acceptance by both lawyers, the Court indicated, in dicta, that this will not apply to first party auto accident injury cases.

Comment:
Steven Gursten of Michigan Auto Law served as an advisor to the Wayne County Circuit Court judges on the problem that Detroit personal injury lawyers handling car accident first party cases in Wayne County Case Evaluation (Detroit Michigan) were facing following the Cam Construction ruling.  Although Allard is an important decision, it should be recognized that the language concerning future PIP no fault benefits is dicta under Michigan law, and personal injury attorneys still do not have binding legal certainty that a mutual acceptance will not in the future extinguish no fault benefits.  Following such controversial and unprecedented reversals of well-settled Michigan personal injury law by the Michigan Supreme Court in recent years, such as in Cameron and Devillers, it is advised that all Michigan attorneys still proceed with extreme care in this area.