Lawyers’ Corner: Court Conflict in Garrett v Washington

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What happens when different panels of the Michigan Court of Appeals disagree? Court conflict is a fast track to the Michigan Supreme Court. But what does that mean for trial attorneys practicing today? What is the law on res judicata and uninsured motorist benefits now, and where will it likely go from here?

Res judicata has been a popular topic for the Michigan Court of Appeals recently. In August 2015, the court decided Adam v Bell. Since then, other panels have created unpublished opinions in Barnes v Ormond and Michigan Head & Spine Institute PC v State Farm Mutual Auto Ins Coall addressing the issue of res judicata among various lawsuits connected a single auto accident.

But not all the panels of the Michigan Court of Appeals necessarily agree. The Adam court determined that an injured plaintiff’s uninsured motorist claim isn’t barred by res judicata, even when his or her first party claim has been resolved. In Garrett v Washington, a decision published on February 23, 2016, another panel of judges disagreed.

The Garrett case was the result of a January 4, 2013 auto accident between Gary Garrett and Darita Washington. Garrett sued his no-fault insurance provider, State Farm, in June 2013 for personal protection insurance (PIP) benefits (the “original action”). That matter went to case evaluation on February 20, 2014, resulting in a dismissal on April 22, 2014.

That same day, Garrett filed a Third Party claim against Washington and an uninsured motorist (UM) claim against State Farm. But State Farm claimed that Garrett should have brought his UM claim along with his PIP claim.

Adam and Uninsured Motorist Claims

That argument didn’t mesh with Adam. In a very similar situation, the Adam court had ruled:

“Using this pragmatic approach, we conclude that although plaintiff’s PIP claim and plaintiff’s tort/UM contract claim both arise from the same automobile accident, the claims also have significant differences in the motivation and in the timing of asserting the claims, and they often do not form a convenient trial unit.”

That court had determined it would be unreasonable to require a plaintiff to bring no-fault and negligence claims at the same time.

Michigan no-fault law is designed to get injured motorists timely payment of benefits so he or she can be appropriately cared for during recovery. In contrast, a Third Party claim is based on fault and requires proof that the plaintiff has suffered a threshold injury. That means either death, permanent serious disfigurement, or a serious impairment of an important body function that affects day-to-day life.

The Adam court felt that the timing and motivations of the two types of cases were sufficiently different to defeat a res judicata defense.

Garrett Creates Court Conflict

The panel in Garrett acknowledged that it was bound to follow Adam in deciding State Farm’s res judicata claims. So it was compelled to rule that res judicata did not bar Garrett’s claim for UM benefits. It said:

“However, we disagree with the holding in Adam, and we would conclude that the claim for UM benefits in this case is barred by the doctrine of res judicata if we were not bound to follow Adam.”

The Garrett court emphasized that both the PIP and UM claims arose from the same group of operative facts – the accident and the plaintiff’s injuries. It indicated that the plaintiff’s timing in filing the Third Party just two months after the PIP case settled suggested he would have had sufficient information to add the UM claims to the initial complaint.

What Court Conflict Means

When Michigan Court of Appeals panels disagree, it’s a safe bet that the Michigan Supreme Court will take up the issue in the near future. Judges often use published opinions to pressure a higher court into taking action to resolve a court conflict.

The Garrett court did just that. It quoted Adam extensively, while at the same time providing a thorough explanation for its own position. The opinion sets the stage for a Michigan Supreme Court decision to resolve the issue of res judicata in uninsured motorist claims.

Which Case Wins: Garrett or Adam?

The problem with the Garrett reasoning is that it leaves room for interpretation of timing and motivations in each plaintiff’s case. Garrett relied on the short time span between the First Party and Third Party lawsuits to justify the need to resolve them together.

If two months was too soon to preserve the UM claim, what about six months or a year? What if the plaintiff did not get evidence to support a Third Party claim until after the PIP claim was already resolved? Attorneys in each case will have to argue whether a UM claim was finalized and filed late enough to make it a separate claim.

The Adam decision doesn’t have the same ambiguity. It distinguishes PIP and UM claims based on their inherent elements, rather than the facts of each particular case. Should the Michigan Supreme Court adopt the Adam interpretation of res judicata’s transactional test, it will provide assurances to auto accident trial attorneys on how to best handle the two stages of litigation.

David Christensen is an auto accident attorney at Christensen Law in Southfield, Michigan. He has been handling complex PIP and UM insurance claims for over 20 years. If your client is facing a tough auto accident case, contact Christensen Law for a referral today.