• Introduction to Auto Tort Liability Claims
• Claims for Noneconomic Loss
• Claims for Excess Economic Loss
• Wrongful Death Motor Vehicle Liability Claims
• Protecting the Liability Claims

 

Introduction to Auto Tort Liability Claims

If a person sustains bodily injury in a motor-vehicle accident caused by the fault (i.e., negligence) of another motorist, the Michigan No-Fault Act permits the victim to pursue a liability claim. This liability claim (also called the tort claim) permits the victim to recover compensation for two distinct types of damages: excess economic loss and noneconomic loss. These two types of damage claims will be discussed in greater detail below.

 

In order to successfully pursue a liability claim for either noneconomic loss or excess economic loss, the injured person must first prove that the other driver was, to some significant extent, at fault for the accident. The legal word for fault is negligence, which is nothing more than the failure to act as a reasonably careful person would act under the same or similar circumstances. Violations of the Michigan Motor Vehicle Code, including speeding, failing to stop at a stop sign, failing to yield, running a red light, improper lane usage, etc. are all evidence of negligence. If both the injured party and the other driver were, in some way, negligent in causing the accident, the injured party may still recover damages, but the amount of those damages will be reduced by the percentage of the injured party’s fault. This is referred to as the rule of comparative negligence.

 

An accident victim who has a valid liability claim under the Michigan No-Fault Act is entitled to be compensated for that claim by the insurance company of the negligent party. If litigation is required to enforce that claim, the lawsuit must name the negligent party. However, the damages are actually paid by the negligent party’s insurance company up to the amount of liability insurance coverage carried by the negligent party. If the damages exceed the negligent party’s liability insurance coverage, the negligent party may be personally responsible for the excess.

Back to top

 

Claims for Noneconomic Loss

Under Michigan law, noneconomic damages consist of those losses that affect a person’s quality of life, such as pain and suffering, incapacity, disability, loss of function, diminished social pleasure and enjoyment, mental anguish and emotional distress, scarring and disfigurement, etc. Under Section 3135 of the Michigan No-Fault Act, an accident victim is only entitled to recover damages for noneconomic loss if the victim sustained a “threshold injury.” Under the Act, a threshold injury consists of one or more of the following: (1) serious impairment of body function; (2) permanent serious disfigurement; or (3) death.

 

In 1995, the Michigan Legislature enacted an important amendment to the No-Fault Act (1995 PA 222) that, in Subsection 3135(7), redefined the threshold element of “serious impairment of body function.” The new definition states: “serious impairment of body function means an objectively manifested impairment of an important body function that affects the person’s general ability to lead his or her normal life.” The Legislature did not, however, define the threshold element of “permanent serious disfigurement.” The issue of whether an injury rises to the level of “serious impairment of body function” or “permanent serious disfigurement” is a matter that depends upon the facts and circumstances of each individual case. Obviously, the more serious the injury, the more likely that the injury “crosses the threshold.” However, the courts have held that an injury need not be permanent in order to be a “serious impairment of body function.”

 

In the case of Kreiner v Fischer, 471 Mich 109 (2004), the Michigan Supreme Court significantly restricted the type of injuries that can qualify as a serious impairment of body function. In this decision, the Court held that the injured person’s normal life before the accident must be compared with his or her life after the accident, in order to determine if the injury resulted in a change in the “course or trajectory” of the injured person’s life. Although the Kreiner case affirmed the legal principle recognized in previous cases that the injured person need not prove a permanent injury or a permanent disability, the Kreiner decision created, what many people believed, was an unduly restrictive definition of the serious impairment of body function threshold.

 

On July 31, 2010, the Michigan Supreme Court overruled its earlier decision in Kreiner v Fischer in the case of McCormick v Carrier, 487 Mich 180 (2010). In McCormick, the Court held that the Kreiner “course and trajectory” standard was wrong. The Court held that the 1995 statutory definition of serious impairment of body function only requires that the injured victim prove that an injury has had “an influence on some of the person’s capacity to live in his or her normal manner of living.” The Court in McCormick went on to say that the statutory requirement that an impairment be “objectively manifested” is established if there is “an impairment that is evidenced by actual symptoms or conditions that someone other than the injured person would observe or perceive as impairing a body function.”

 

Clearly the McCormick decision has made the serious impairment of body function threshold less restrictive than it was under the Kreiner case. However, the real impact of the McCormick decision will not be known until our appellate courts have had more time to apply its principles. In light of the Supreme Court’s decision in McCormick, it has become critically important for auto-accident victims to consult with attorneys who are very knowledgeable about the Michigan No-Fault Act in order to learn whether their injury satisfies the legal definition of the threshold elements of “serious impairment of body function” and/or “permanent serious disfigurement.”

 

The 1995 amendments to the Michigan No-Fault Act also provide that noneconomic damages are not recoverable if the injured person is more than 50 percent comparatively negligent. In addition, injured persons are precluded from recovering noneconomic damages under the 1995 amendments if they were driving an uninsured motor vehicle at the time of the accident which was owned by the injured person. Therefore, in assessing liability claims for the noneconomic loss, it is important to thoroughly evaluate and compare the conduct of the victim and the other driver and to also determine if the victim complied with the mandatory insurance requirements of the statute.

Back to top

 

Claims for Excess Economic Loss

Excess-economic-loss damages consist of those past, present, and future out-of-pocket expenses that are not compensable by no-fault PIP benefits. The No-Fault Act provides that if an injured person suffers excess-economic-loss damages, then the injured person can recover those damages in the liability claim against the negligent driver who caused the accident. For example, these excess-economic-loss damages would be recoverable if the injured person has a high income and the monthly no-fault wage loss benefit does not fully compensate that person for his or her full lost wages. Similarly, if the injured person is disabled permanently or for an extended period of time and, as a result, will sustain a loss of income beyond the three-year no-fault work loss benefit period, then excess-economic-loss could be recovered in the liability claim. With regard to claims for excess-economic-loss damages, it is very important to emphasize that the No-Fault Act and case law are very clear that an injured person need not prove a threshold injury (serious impairment of body function or permanent serious disfigurement) in order to recover excess-economic-loss damages. It is also important to note that under the 1995 amendments to the No-Fault Act, liability claims for excess-economic-loss are not prohibited where the injured person was more than 50 percent comparatively negligent or where the injured person was the owner and operator of an uninsured motor vehicle involved in the accident.

Back to top

 

Wrongful Death Motor Vehicle Liability Claims

If a person sustains wrongful death as a result of the negligence of a third party, the estate of the injured person is entitled to pursue a wrongful-death liability claim against the party at fault for purposes of recovering noneconomic damages and certain economic-loss damages. Wrongful-death liability claims are controlled by the Michigan Wrongful Death Act (MCL 600.2922). In addition, where the wrongful death arises out of a motor-vehicle accident, then the provisions of the Michigan No-Fault Automobile Insurance Act (MCL 500.3101, et seq) will also control the claim. In this situation, it is imperative that the requirements and procedures of both statutes be strictly observed.

 

Under the Michigan Wrongful Death Act, close relatives of the decedent are entitled to be compensated for certain specific damages they may have suffered as a result of the decedent’s death. These damages include loss of financial support; loss of services; and most importantly, loss of the love, affection, companionship and society of the decedent. Those relatives entitled to be compensated for such losses include surviving spouses, children, parents, grandparents, brothers and sisters, and stepchildren of the decedent. However, in order to pursue a wrongful-death claim, the statute requires that an estate be formally opened in the name of the decedent and that a Personal Representative be appointed for that estate by the probate court with jurisdiction over the matter. The wrongful-death claim is then pursued in the name of the decedent’s estate, not in the individual names of the surviving relatives.

 

The designation of the Personal Representative is controlled by the Michigan probate law. Under the probate law, certain family members are given “preference” in terms of the appointment of a Personal Representative. In this regard, the parents of a deceased child have statutory preference to be appointed Personal Representative of the child’s estate. Similarly, a surviving spouse has statutory preference to be appointed Personal Representative of the estate of his or her deceased spouse. Where the decedent is a non-married adult with children, the statutory preference regarding the appointment of a Personal Representative resides with the children, but it can only be enforced by an appropriate adult acting on the child’s behalf after being formally appointed by the probate court. Therefore, the first order of business in pursuing a wrongful-death claim is to identify the person or persons who should be appointed Personal Representative of the decedent’s estate and file an appropriate petition in the probate court seeking to open an estate and designate a Personal Representative. Once this is done, the wrongful-death claim can be officially pursued.

Back to top

 

Protecting the Liability Claims

In light of the fact that no-fault PIP benefits do not fully compensate auto-accident victims for all of the damages they sustain, the liability claim is oftentimes the only way a victim can be “made whole.” Therefore, if a motor vehicle accident results in serious injury or death as a result of the fault of another driver, the injured person or the person’s estate should seriously consider pursuing a liability claim for noneconomic loss and excess economic loss.

 

Many accident victims significantly weaken their liability claim by not moving quickly to protect it. This is unfortunate because it is a virtual certainty that in serious injury cases, the insurance company for the party at fault will indeed move quickly to conduct a thorough investigation for purposes of building a defense to the claim. Therefore, the injured victim must counter that effort by taking appropriate steps in a timely fashion. In this regard, the injured victim should do the following.

 

1. Initiate a Thorough Investigation

The victim should arrange to have his or her legal representative investigate the accident as soon thereafter as possible. Such an investigation should include interviewing all witnesses, photographing the scene, photographing all vehicles involved in the accident (both inside and outside), taking measurements at the scene, collecting physical evidence at the scene, interviewing police officers, etc. The victim can do this by either hiring a competent private investigator or by retaining a lawyer or law firm who specializes in motor-vehicle personal-injury work.

 

2. Photograph Injuries and Document the Course of Treatment

Where a victim has sustained significant visible injury, such as lacerations, burns, surgical scarring or other disfigurement, those visible injuries should be thoroughly photographed as soon as possible with excellent camera equipment. In addition, photographs or videos should be taken of certain kinds of medical treatment (e.g., inpatient hospitalizations, physical therapy, burn treatment, etc.). If photographic equipment is not available to the victim’s family, then arrangements should be made for a professional photographer to take these photographs.

 

3. Avoid Investigators or Adjusters Representing the Interests of the Party at Fault

As previously indicated, the insurance company for the party at fault will be conducting an investigation soon after the accident. One of the first things that is typically done in connection with such an investigation is to contact the victim and ask the victim to give a statement, either in writing or by tape recorder. The victim should refuse to do this unless he or she has first consulted with an attorney specializing in personal-injury law regarding the advisability of such an interview. In this regard, it is important to remember what the police tell suspects in criminal cases prior to taking statements: “What you say can and will be used against you!”

 

4. Refuse to Sign Medical Authorizations, Except Those Requested by the Victim’s Own No-Fault Insurance Company

Oftentimes, the injured person will be asked by an insurance adjuster for the party at fault to provide a signed medical authorization release form enabling that adjuster to obtain all of the victim’s medical records and speak with the victim’s physicians. The victim should refuse to sign such an authorization until the victim has first talked with an attorney specializing in personal-injury law to discuss the situation.

 

5. Avoid Premature Settlement Negotiations Without Proper Legal Advice

Many times the insurance company representing the party at fault will approach a seriously injured victim and offer to make a settlement of the bodily injury tort claim in exchange for the victim signing a full release of liability. It is absolutely foolhardy to consider entering into such settlement negotiations with an insurance company unless all of the following facts have first been established: (1) the victim is reasonably certain that he or she is fully recovered from all accident related injuries; (2) the victim has fully investigated the accident and knows the identities of any and all potential defendants and insurance companies who may have liability; (3) the release is only a release of the liability claim and not a release of any other rights the victim may have; (4) the victim has completely researched whether such a settlement would jeopardize other claims the victim may have against other parties or against the victim’s own insurance company for additional benefits, such as underinsured motorist benefits; and (5) the victim has obtained competent legal advice from a motor-vehicle personal-injury specialist regarding the wisdom of entering into such a settlement. Remember, once a release is signed, the victim can never “undo the deal.”

 

 

View our video on Liability Claims

 

Back to top