Bressi et al v. Elenbaas Steel Supply Co.
Filing
74
OPINION ; signed by Judge Robert Holmes Bell (Judge Robert Holmes Bell, kcb)
UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
ANTHONY BRESSI, et al.,
Plaintiffs,
File No. 1:12-CV-736
v.
HON. ROBERT HOLMES BELL
ELENBAAS STEEL SUPPLY CO.,
Defendant.
/
OPINION
This diversity personal injury action is before the Court on cross-motions for partial
summary judgment (Dkt. Nos. 40, 43) and on a motion to intervene filed by the Ohio Bureau
of Workers’ Compensation (Dkt. No. 65). For the reasons that follow, the motion to
intervene will be granted, Plaintiffs’ motion for partial summary judgment on Defendant’s
affirmative defense of tort immunity under the no-fault law will be granted, and Defendant’s
motion for partial summary judgment will be denied.
I.
On July 9, 2010, Plaintiff Anthony Bressi delivered a load of steel sheets from
Olympic Steel in Cleveland, Ohio to Elenbaas Steel Supply Co. in Greenville, Michigan.
Bressi worked for Bralyn Trucking Co., located in Ohio.
Bralyn owned the tractor and
trailer driven by Bressi and provided insurance for it.
As Ken Larsen, an Elenbaas employee, was using a forklift to unload the steel sheets
from the trailer, the load fell off the forklift and onto Bressi. Bressi sustained injuries,
including the partial amputation of his left leg and severe crush injuries to his right leg. The
Ohio Bureau of Workers’ Compensation (“OBWC”) has paid Bressi medical benefits and
indemnity compensation as a result of Bressi’s injuries.
Bressi and his wife Jamie Bressi filed this action against Elenbaas alleging negligence
and loss of consortium. Defendant Elenbaas asserts, as affirmative defenses, that Plaintiff’s
claims are barred by the no-fault act or by the collateral source rule. The parties have filed
cross-motions for partial summary judgment on the application of Michigan’s no-fault act
and the collateral source rule. The OBWC moves to intervene to assert its statutory right to
reimbursement from any recovery before any moneys are paid to Plaintiffs.
II.
The OBWC moves to intervene as a matter of right pursuant to Rule 24(a)(2).
because Defendant’s argument that the collateral source rule should be applied to reduce any
potential judgment by the amount of workers’ compensation benefits paid would eliminate
the OBWC’s reimbursement rights.
The Federal Rules of Civil Procedure provide:
On timely motion, the court must permit anyone to intervene who:
...
(2) claims an interest relating to the property or transaction that is the subject
of the action, and is so situated that disposing of the action may as a practical
matter impair or impede the movant’s ability to protect its interest, unless
existing parties adequately represent that interest.
2
Fed. R. Civ. P. 24(a)(2) (emphasis added).
The OBWC has presented evidence that it has paid and continues to pay benefits to
Plaintiff Bressis as a result of injuries arising out of the July 9, 2010 accident, and that to date
it has paid $271,737.93 in medical benefits and $174,612.75 in indemnity benefits. The
OBWC contends that it is entitled by law to a lien against Plaintiffs’ proceeds pursuant to
Ohio Rev. Code. § 4123.931, and that the collateral source rule accordingly does not apply.
Plaintiffs agree that the issue of collateral source should not be decided without letting
the OBWC intervene in this litigation. (Dkt. No. 53, Pls. Br. in Opp. 15.) Defendant, on the
other hand, opposes intervention on the basis that it is not necessary and would delay the
litigation. (Dkt. No. 59, Def.’s Reply 20-21.)
The Court finds that the OBWC is a necessary party. The OBWC is so situated that
disposing of this action may impair or impede its ability to protect its interests. The Court
further finds that because the existing parties have diverging interests, they will not
adequately represent the OBWC’s interests. Moreover, allowing the OBWC to intervene will
not delay the litigation because the OBWC’s rights are derivative of Plaintiff’s rights and will
not be enforced until after a verdict or settlement is entered with respect to Plaintiffs’
underlying claims. Accordingly, as noted on the record at oral argument on June 10, 2013,
the motion to intervene is granted.
III.
Plaintiffs and Defendant have filed cross-motions for summary judgment on the issues
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of no-fault immunity and application of the collateral source rule.
The Federal Rules of Civil Procedure require the Court to grant summary judgment
“if the movant shows that there is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In evaluating a motion for
summary judgment the Court must look beyond the pleadings and assess the proof to
determine whether there is a genuine need for trial. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986). If the movant carries its burden of showing there
is an absence of evidence to support a claim, the non-movant must demonstrate by affidavits,
depositions, answers to interrogatories, and admissions on file, that there is a genuine issue
of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324-25 (1986).
In considering a motion for summary judgment, “the district court must construe the
evidence and draw all reasonable inferences in favor of the nonmoving party.” Martin v.
Cincinnati Gas and Elec. Co., 561 F.3d 439, 443 (6th Cir. 2009) (citing Jones v. Potter, 488
F.3d 397, 403 (6th Cir. 2007)). Nevertheless, the mere existence of a scintilla of evidence
in support of the non-movant’s position is not sufficient to create a genuine issue of material
fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). The proper inquiry is
whether the evidence is such that a reasonable jury could return a verdict for the non-movant.
Id.; see generally Street v. J.C. Bradford & Co., 886 F.2d 1472, 1476-80 (6th Cir. 1989).
A. No-Fault Act
In answer to Plaintiffs’ complaint, Defendant has asserted, as an affirmative defense,
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that Plaintiffs’ claim is barred, in whole or in part, by the applicable provisions of the
Michigan no-fault act, Mich. Comp. Laws § 500.3101, et seq. (Dkt. No. 5, Answ.) Plaintiffs
move for summary judgment on Defendant’s no-fault immunity defense. Defendant has filed
an affirmative cross-motion for summary judgment, seeking a determination that it is
partially immune from tort liability based on the no-fault act.
The Michigan no-fault act provides that “tort liability arising from the ownership,
maintenance, or use within this state of a motor vehicle with respect to which the security
required by section 3101 was in effect is abolished” except as to certain noted exceptions,
including intentionally caused harm and noneconomic loss.
Mich. Comp. Laws
§ 500.3135(3). The parties’ cross-motions require the Court to determine whether the
Michigan no-fault act bars a claim for damages against a company for injuries sustained by
a non-employee when the company’s forklift operator was unloading a third-party’s trailer.
In Citizens Insurance Co. of America v. Tuttle, 309 N.W.2d 174 (Mich. 1981), the
Michigan Supreme Court held that “the no-fault act was not intended to work a
comprehensive abolition of all tort liability incident to a motor vehicle accident.” Id. at 177.
“The abolition of tort liability for injuries or damages caused by (arising from) the
ownership, maintenance or use of a motor vehicle . . . does not abolish the tort liability of the
non-motorist tortfeasor.” Id. In Tuttle, the court held that where defendant Tuttle’s cow ran
into the street and caused a motor vehicle accident, Tuttle’s liability for the accident was not
abolished by the no-fault act. The court reasoned that the wrongful act (Tuttle’s improper
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keeping of his cow), does not relate to the ownership, maintenance or use of a motor vehicle.
Id.
Plaintiffs contend that the partial abolition of tort liability under the no-fault act does
not apply to this case because the accident was caused by the use of a forklift, and forklifts
are not motor vehicles under Michigan law. See Mich. Comp. Laws § 257.33 (defining
“motor vehicle” as “every vehicle that is self-propelled,” but excluding “industrial equipment
such as a forklift . . . that is not subject to registration under this act”). Plaintiffs contend that
because Defendant’s employee was operating a forklift, he was a non-motorist tortfeasor
whose tort liability has not been abolished by the no-fault act.
Defendant admits that the general use of a forklift on private property would not
constitute the use of a motor vehicle under the no-fault act. Defendant contends, however,
that its liability, if any, arises out of the unloading of a motor vehicle (the trailer), and that
under Michigan law, the loading and unloading of a motor vehicle constitutes the use of that
motor vehicle and triggers the application of the no-fault act. In support of this argument
Defendant cites Goodwin & Bigelow Constr. Inc. v. CH&P Drilling Co., No. 175953, 1996
WL 33364141 (Mich. Ct. App. June 6, 1996). In Goodwin, the court held that “where
defendant’s alleged negligence was related to the unloading of defendant’s truck,” the
defendant was not a true nonmotorist, and the accident, which occurred during the unloading
process, arose out of the use of a motor vehicle as a motor vehicle. Id. at *1.
Goodwin involved the defendant’s unloading of the defendant’s own truck. Id.
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Defendant’s argument for immunity under the no-fault act based on the unloading of the
trailer might be viable if Defendant owned the trailer and had purchased no-fault insurance
on the trailer. But those are not the facts of this case. This case is distinguishable from
Goodwin because Defendant did not own or insure the trailer.1 The trailer was owned by
Bralyn and insured by Acuity, under a policy purchased by Bralyn. Defendant has cited no
case where a similarly situated defendant was entitled to no-fault immunity.
In response, Defendant notes that the no-fault statute simply requires that “the security
required by section 3101” be in effect. Mich. Comp. Laws § 500.3135(3). Defendant
contends that the security requirement has been met, as evidenced by the fact that Plaintiff
has received no-fault insurance personal injury protection (“PIP”) benefits under the Acuity
policy that covered the trailer. According to Defendant, under the plain language of the
statute, it does not matter which vehicle was insured, as long as no fault insurance was in
effect as to at least one of the vehicles involved in the accident.
The Court is not persuaded by Defendant’s argument. The Michigan Supreme Court
has explained that the no-fault act’s grant of immunity from tort liability goes hand-in-hand
with the purchase of no-fault insurance:
1
Goodwin relied on Bialochowski v. Cross Concrete, 407 N.W.2d 355 (Mich. 1987),
and Gordon v. Allstate Ins. Co., 496 N.W.2d 357 (Mich. Ct. App. 1992), in support of its
determination that unloading a trailer constitutes use of a motor vehicle. Goodwin, 1996 WL
33364141 at *1. It is questionable whether Bialochowski and Goodwin represent valid law
in light of the fact that their multi-purpose theory of motor vehicle use has been “essentially
overruled” by McKenzie v. Auto Club Ins. Ass’n, 580 N.W.2d 424 (Mich. 1998). Rice v. Auto
Club Ins. Ass’n., 651 N.W.2d 188, 193 (Mich. Ct. App. 2002).
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[S]ubsection (2) [now codified as subsection (3)] abolishes tort liability arising
from the ownership, maintenance or use only of vehicles for which the
required no-fault insurance or other security has been obtained. The policy
apparently expressed in so conditioning the abolition of tort liability upon the
obtaining of no-fault coverage is that a person is to be relieved of tort
liability only upon participating, through the payment of premiums, in a
system for spreading the costs of compensating vehicular injuries without
regard to fault. To extend the abolition of tort liability to non-motorist
tortfeasors would be to incorporate into the no-fault system the costs of
providing personal protection insurance benefits to motorists, passengers and
pedestrians injured by non-motorist tortfeasors without incorporating offsetting
premiums from non-motorist tortfeasors, since non-motorist tortfeasors are not
required to purchase no-fault insurance with respect to their conduct as
non-motorists
Tuttle, 309 N.W.2d at 178 (emphasis added) (footnote omitted).
“The non-motorist
tortfeasor is the equivalent of the uninsured motorist and should be treated similarly. Both
are outside the basic no-fault system of allocating the costs of accidents and both remain
subject to tort liability.” Id
In light of Tuttle, the Court finds that even if unloading the trailer constitutes “use”
of the trailer for purposes of the no-fault act, a defendant cannot claim immunity under the
no-fault act based on the existence of no-fault insurance on a vehicle neither owned nor
insured by the defendant.
Because Defendant did not pay premiums on the no-fault
insurance that covered the trailer, Defendant is not entitled to the benefit of the no-fault act’s
partial abolition for tort liability with respect to that trailer. For purposes of the accident at
issue in this case Defendant was a non-motorist tortfeasor outside the no-fault system who
remains subject to tort liability.
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B. Collateral Source Rule
In the alternative, if Plaintiffs’ claim is not barred by the no-fault abolition of tort
liability, Defendant requests a declaration that it is entitled to set off any award for economic
damages by the amounts paid by the no-fault carrier and the worker’s compensation carrier
under Michigan’s collateral source rule.2
Michigan’s statutory collateral source rule allows a tort defendant to offset its
potential liability with certain benefits received by the plaintiff from a collateral source.
Mich. Comp. Laws § 600.6303. The statute provides in pertinent part:
In a personal injury action in which the plaintiff seeks to recover for the
expense of medical care, rehabilitation services, loss of earnings, loss of
earning capacity, or other economic loss, evidence to establish that the expense
or loss was paid or is payable, in whole or in part, by a collateral source shall
be admissible to the court in which the action was brought after a verdict for
the plaintiff and before a judgment is entered on the verdict. Subject to
subsection (5), if the court determines that all or part of the plaintiff’s expense
or loss has been paid or is payable by a collateral source, the court shall reduce
that portion of the judgment which represents damages paid or payable by a
collateral source by an amount equal to the sum determined pursuant to
subsection (2). This reduction shall not exceed the amount of the judgment for
economic loss or that portion of the verdict which represents damages paid or
payable by a collateral source.
Mich. Comp. Laws § 600.6303(1). “The collateral source rule is designed to prevent double
recovery by plaintiffs.” State Auto. Mut. Ins. Co. v. Fieger, 730 N.W.2d 212, 216 (Mich.
2
Defendant is not seeking summary judgment on this issue. Defendant recognizes that
a ruling in its favor on the collateral source rule would not dispose of any of Plaintiffs’
claims. Application of the collateral source rule in the manner proposed by Defendant would
not preclude Plaintiffs from bringing their claims to the jury, or preclude the jury from
issuing an award for such damages. (Dkt. No. 44, Def. Resp. 23 n.16.)
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2007).
Certain benefits are excluded from the definition of collateral source:
As used in this section, “collateral source” means benefits received or
receivable from an insurance policy; benefits payable pursuant to a contract
with a health care corporation, dental care corporation, or health maintenance
organization; employee benefits; social security benefits; worker’s
compensation benefits; or medicare benefits. Collateral source does not
include life insurance benefits or benefits paid by a person, partnership,
association, corporation, or other legal entity entitled by law to a lien against
the proceeds of a recovery by a plaintiff in a civil action for damages.
Mich. Comp. Laws § 600.6303(4) (emphasis added).
The OBWC contends that because it is entitled by Ohio law to a lien against Plaintiffs’
recovery in this action, see Ohio Rev. code § 4123.931(A), the benefits paid by the OBWC
cannot be used as a collateral source to reduce Defendant’s potential no-fault or tort liability
in this action.
Defendant recognizes that the collateral source rule does not apply where a valid lien
exists, (Dkt. No. 44, Def. Resp. 23 n.15), and Defendant does not challenge the OBWC’s
assertion that it is entitled by law to a lien against Plaintiffs’ recovery. Defendant contends,
however, that because a no-fault carrier’s recovery rights are limited under Mich. Comp.
Laws § 500.3116, a worker’s compensation carrier who pays benefits in lieu of no-fault
benefits should have its recovery rights similarly limited.
The Court declines to rule on the application of the collateral source rule at this time.
Although the OBWC has raised the existence of issues surrounding the collateral source rule
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in its request for intervention, the OBWC has not yet had an opportunity to fully respond to
Defendant’s arguments in support of its request for a declaratory ruling regarding the
collateral source rule. Furthermore, the Court is not convinced that any ruling at this time
will be beneficial when the jury has not reached a verdict and there are outstanding factual
issues regarding how much, if any, of the OBWC’s payments constitute benefits paid in lieu
of no-fault benefits.
IV.
For the reasons stated herein, the OBWC’s motion to intervene will be granted,
Plaintiffs’ motion for partial summary judgment on Defendant’s affirmative defense of tort
immunity under the no-fault law will be granted, and Defendant’s motion for partial
summary judgment will be denied. The Court makes no ruling regarding the application of
the collateral source rule.
An order consistent with this opinion will be entered.
Dated: July 19, 2013
/s/ Robert Holmes Bell
ROBERT HOLMES BELL
UNITED STATES DISTRICT JUDGE
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