Prior lawsuits may haunt car accident victims, as Court approves State Farm’s use of Wayne County crash victim’s previous legal actions to show ‘fraud scheme’ and justify insurer’s denial of No Fault insurance benefits
Can you sue someone more than once?
It’s actually a common question that I hear quite often as an auto accident attorney. The reason is because, for so many people hurt in car wrecks, injuries get worse over time instead of better.
People think they’re going to be returning to work, and instead, they find out within weeks or months of a settlement that they will need another major surgery. The problem isn’t necessarily the amount of money – or the lack of sufficient money – from an injury settlement. The problem is that many people are forced to sue because of notice provisions and the statute of limitations in certain types of auto accident cases that prevent a person from knowing the full extent of their injuries and impairments. While the statute of limitations for suing a person who causes a car accident (really his or her insurance company) is three years in Michigan, that time period can be much shorter for claims made on an uninsured motorist, bus accident or governmental entity under Michigan law.
The other problem is that car accidents occur all the time. Statistically, I’ve heard that people can be involved in some sort of car accident at least every four to five years. Hopefully, most of these are extremely minor fender-bender type crashes, or hitting a parked car in a shopping mall parking lot. But for many, it’s just blind luck that the person behind you stops in time and isn’t texting or playing on their radio when you’re stopped in traffic in front of them.
As for the question I raised above, the exact answer that has recently addressed by a Michigan Court of Appeals case out of Wayne County, stemming from one particular car accident that occurred in Detroit, Michigan.
The saying goes that your past can sometimes come back to haunt you. And, if you’re a Michigan car accident victim whose past includes “prior lawsuits involving similar motor vehicle accidents,” then your past may come back with a vengeance.
That’s one lesson that Michigan auto accident attorneys can take away from this Wayne County car accident. Accident victim Judy Williams learned the hard way when she sued State Farm for No Fault insurance benefits and the giant auto insurer refused to pay after Williams was injured in a hit-and-run, rear-end crash.
In Williams v. State Farm Mutual Automobile Insurance Company, the Michigan Court of Appeals ruled that evidence of Williams’s “prior” automobile accident “lawsuits” was relevant to and thus, admissible. The big distinction here is that her prior auto accidents and lawsuits weren’t relevant and admissible as to the nature and extent of her injuries and any aggravation. Of course they would be and they always are, but in this case, they were relevant and admissible on the auto insurer’s theory that “no accident occurred …” in Ms. Williams subsequent auto accident claim:
- “The fact that a party has previously exercised the right to bring a lawsuit would not typically be relevant to a jury’s determination in a later case. However, given the unique facts of this case, where the defense asserts that the accident never occurred and that its report was part of an ongoing scheme to defraud, we find that the trial court did not abuse its discretion by ruling that the evidence was legally relevant for a proper purpose. MRE 404(b) allows for evidence of other acts ‘as poof of . . . scheme, plan or system in doing an act.’”
- “Moreover, the risk of unfair prejudice from mentioning the fact of the lawsuits did not substantially outweigh the probative value of the evidence, particularly when plaintiffs concede that evidence of the accidents and past injuries was admissible, and it is the pattern of accidents which is most compelling in this case.”
- “Indeed, the references to the lawsuits were relatively few at trial, consisting of several questions over the course of three days and some very brief remarks in closing.”
For motor vehicle accident victims – and for the attorneys who represent them – the lesson from Williams is that any crash victims is vulnerable to any accusations of fraud by insurance companies who want to avoid paying No Fault PIP benefits, or as here, stemming from an uninsured motorist claim from a hit and run car accident.
Here, all State Farm needed to do in order to offer otherwise inadmissible “character evidence” against Williams in support of the insurer’s “fraud” theory was:
- Allege the accident didn’t occur (despite considerable direct evidence to the contrary); and,
- Present the testimony of an expert – in this case a mechanical engineer who would testify
“Williams’s vehicle had not been involved in a rear-end accident of the type described by plaintiffs.”
The mechanical engineer part is certainly troubling and suspect. As you can see from this deposition of a very well-known Detroit biomechanical engineer, an expert can truly say outrageous things that are not supported by the science or medicine when they are paid enough money from the insurance companies.
One further lesson for auto accident attorneys from this case is that it sets the evidentiary bar ridiculously low for offering such highly prejudicial and misleading evidence. It basically opens the door to charges of fraud and all sorts of allegations of insurance abuse. And for the auto insurer who wants to get out of providing the No Fault PIP coverage for which they gladly accepted years and years worth of car insurance premiums, there is a real conflict in interest and motivation to get out of paying a valid PIP claim or uninsured motorist claim from a hit-and-run car accident.
I should add that hit-and-run car accidents are extremely common, especially in cities like Detroit where approximately 50% of the drivers are uninsured, and thus flee the accident scene so they will not be punished for breaking Michigan law and driving without insurance.
Although the Williams case is unpublished and, thus, thankfully, not “binding precedent,” it nevertheless presents a very troubling concern for how recklessly auto insurers will be allowed to allege fraud to avoid paying claims – especially to any person who has had the misfortune to be involved in more than one car accident.
Evidence of prior car accident lawsuits to deny an uninsured motorist hit and run driver claim
In support of its theory at trial that No Fault auto insurance benefits were not owed to Williams because “no accident occurred,” State Farm offered the following evidence of Williams’s “prior lawsuits:”
“Williams in particular had been involved in two previous automobile accidents in 2005 and 2011, both involving rear-end collisions, minor claimed damage to her vehicle, and claims for back, knee, and other injuries prompting lawsuits against no-fault insurers. As in the present case, the other driver in the 2005 accident left the scene without waiting for police.”
Two car accidents in six years falls within the statistical probability for anyone. This was not a case of strongly suspected insurance fraud with someone who has had 20 other alleged car accidents and lawsuits. This was a woman who lived in Detroit – where 50% of drivers do not drive with the legally required auto No Fault insurance on their cars. This third car accident occurred years after her 2011 claim that did involve an identified driver. And even if the driver of the second car accident was never identified, I made the point above that hit and run auto accidents are sadly common in Detroit because people have a real motivation to flee the scene and not be fined for driving uninsured.
The Court fumbled on this one. This highly speculative and extremely prejudicial evidence never should have been found relevant, let alone admissible.