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The insurance defense perspective on McCormick v. Carrier

August 6, 2010 by Steven M. Gursten

Personal injury lawyer’s observations based upon yesterday’s MDTC seminar for attorneys defending car accident cases in Michigan

I’ll be speaking on September 1, 2010 to the Michigan Association for Justice (MAJ) – formerly the Michigan Trial Lawyers Association – and again on October 1 for the State Bar of Michigan and the Institute of Continuing Legal Education annual meeting in Grand Rapids on my thoughts on how the recent case of McCormick v. Carrier will change how car accident lawyers in Michigan practice. So, I thought it would be fun to listen in and hear what the defense bar is saying to its members and the insurance adjusters that defend auto accident claims at yesterday’s Michigan Defense Trial Counsel seminar.

Here’s where I agree and disagree with what the panel said:

1. McCormick v. Carrier will be fully retroactive to all existing car accident cases, including those already filed before the change in our law on August 1, 2010.

Agree. The law hasn’t changed. McCormick is simply correcting an early erroneous interpretation made in the Kreiner v. Fischer case (particularly the additional hurdles and restrictions found nowhere in the statutory definition that the Kreiner majority created). Therefore, McCormick v. Carrier should be fully retroactive as well as prospective.

2. McCormick v. Carrier will not result in a “floodgate” of new lawsuits.

Agree. Unlike 1995, when every plaintiff lawyer was filing every car accident case he had before the new law took effect in March 1996, McCormick will result in an immediate rise of some new filings – mostly car accident victims who have had significant initial injuries but of shorter duration – but nothing like what happened in 1995. Arguably, McCormick will even reduce litigation – at least in the long run and certainly on the costly appellate level.

Since Kreiner in 2004, there were three times more appeals of auto accident cases. Now that the uncertainty has been removed, there should be significant cost savings. Also, when I first started as a car accident lawyer 16 years ago, I used to settle one-third of my cases with claims adjusters pre-lawsuit. Pre-lawsuit settlements with adjusters basically stopped after Kreiner, because insurance companies wanted to file Kreiner motions on everything. This also should substantially reduce the need for litigation.

3. Auto insurance companies will try to use the McCormick ruling as a ploy to raise insurance rates.

Agree. But only because most people will never learn the truth, which is that since Kreiner, when auto accident filings dropped 54 percent, insurance companies still raised rates and enjoyed record-breaking profits. Auto accident liability payouts amount to 20 percent of No-Fault insurance (car damage is over 50 percent). Even if liability settlements rise to 22 percent or 24 percent, is should not raise rates.

4. Plaintiffs lawyers will start using McCormick to file motions for summary disposition as a matter of law.

Agree. If plaintiffs lawyers can show “some effect” that influences “some of plaintiff’s capacity to live his or her normal life,” then courts should be granting motions on behalf of the plaintiff.

5. Insurance medical exams will become even more important to raise questions of fact to avoid motions for summary disposition.

Disagree. It’s sad that the need to find and use these insurance examiners, who get paid vast amounts of money to usually find nothing wrong with people will likely increase. But, I disagree with the defense lawyers. Read pages 33 and 34 of McCormick v. Carrier again. By the time most of these IME exams take place, say eight months to a year after a car accident, and normally several months after the lawsuit has been filed, the plaintiffs should have a well-documented and uncontroverted period showing how the car accident has affected their normal life to be granted serious impairment as a matter of law.

In other words, a “hired gun” saying there is nothing wrong with someone one year after a car crash should not create a question of fact because there is still a one-year period of uncontroverted serious effect on a person’s life. And that should be more than sufficient.

Future constitutional challenges with McCormick v. Carrier?

Ah, life can be ironic. My law associate Alison Tomak helped write the Negligence Section of the State Bar of Michigan amicus brief, raising the significant constitutional challenges to what Kreiner was doing to people’s right to a jury trial, as well as procedural v. substantive law challenges to serious impairment motions.

These arguments appeared in the McCormick decision, in footnote 7 on page 11, but now it may be the defense lawyers raising these constitutionality arguments to oppose plaintiff motions for summary disposition on serious impairment of body function. However, these constitutionality objections may also now be used by plaintiffs to finally overturn as unconstitutional some of the more disturbing changes made to our law in 1995, such as caps on pain and suffering, as courts have found in many other states.

6. The jury instruction on serious impairment of body function will need to be re-written after McCormick.

Agree. For example, the objective manifestation prong of the serious impairment definition is clearly now in error. I will note parenthetically this was also disturbingly judicially created language by Judge Whitbeck in the Netter v. Bowman case for no other apparent reason than to make car accident litigation even harder in this state. Netter v. Bowman has clearly, and correctly, been overturned by McCormick v. Carrier. Judge Whitbeck also has the distinction of writing the Court of Appeals decision upholding the dismissal of Rodney McCormick’s case (a Flint car accident), finding that 14 months off work, two surgeries including implantation of hardware, and continuing pain were not “serious enough.” Isn’t life ironic, Judge Whitbeck?

7. What about muscle spasms, abnormal EMGs, soft tissue injuries, whiplash, after McCormick?

Disagree. I must challenge my friend Barry Conybeare, and the rest of the panel. The mistake they are making is looking at the personal injury itself and saying it will or will not be. This is where decisions must be made on a case-by-case basis based upon the effect on the plaintiff.

The mistake is assuming, as the questioner did, that these must be “small” injuries of inconsequential impairment. Yet taking “soft tissue cases” for example, there are more than 40 well-respected peer-reviewed journal articles today that say these types of personal injury can be permanent and cause permanent pain. For example, Reggie White, the “Minister of Defense” was one of the greatest and toughest football players of all time, but he had to quit playing football because of a little “soft tissue” minor bulging disc in his neck.

The error that the panel made here, which is the same mistake that insurance claims adjusters make all the time when evaluating car accident claims, is to focus on the injury itself and ignore the impairment. If there is an objectively manifested impairment of an important body function that has affected – now “some effect” and “influences some of plaintiff’s capacity to live his or her normal life” – that should be enough to at least create a question of fact. Again, it must be a case by case basis.

8. The examples on page 34 of the McCormick decision will be the future “guts” as to what is and is not a viable car accident case in Michigan.

Agree and Disagree. The panel mentioned that McCormick will be more subjective, and yes, it will be more subjective than Kreiner, but it will not be more substantial than the statute itself, in which the legislature deliberately rejected the Cassidy era definition of an “objective person test” in favor of a subjective examination on the life of each plaintiff.

That’s all I have. See you in September at the Michigan Association for Justice No-Fault Institute.

Steven M. Gursten is recognized as one of the nation’s top lawyers handling serious car and truck accident injury cases and auto insurance No-Fault litigation. Steve speaks and writes extensively on McCormick v. Carrier and Michigan’s No-Fault laws. He is available for comment on Michigan’s new auto accident law.

Related information:

Michigan Supreme Court releases McCormick v. Carrier – overturning Kreiner v. Fischer!

Insurance company lie: Rising car accident settlements after McCormick v. Carrier

Told you have no case by a personal injury lawyer after a car accident?


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