Timothy McAllister v. Mike Vuich III ( 2019 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
TIMOTHY MCALLISTER, UNPUBLISHED
March 19, 2019
Plaintiff-Appellant,
No. 339877
Macomb Circuit Court
LC No. 2015-002875-NI
v
MIKE VUICH, III, BPD PAVING SERVICES,
INC., LONNIE HAVERCAMP, and VAN HORN
BROS, INC.,
Defendants,
and
LIBERTY MUTUAL FIRE INSURANCE
COMPANY,
Defendant-Appellee.
Before: SHAPIRO, P.J., and SERVITTO and GADOLA, JJ.
SHAPIRO, P.J. (dissenting).
I respectfully dissent. This case should be remanded for consideration under MCR
2.111(F)(3)(c), which provides in relevant part:
Under a separate and distinct heading, a party must state the facts constituting
* * *
(c) a ground of defense that, if not raised in the pleading, would be likely
to take the adverse party by surprise.
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The accident in which plaintiff was injured occurred on November 20, 2014, and plaintiff
thereafter filed a claim for personal protection insurance (PIP) benefits with defendant Liberty
Mutual Fire Insurance Company (Liberty). Liberty accepted the claim and paid PIP benefits in
the amount of approximately $162,000. The record does not provide information as to when,
how and on what basis Liberty declined to continue coverage. On August 11, 2015, plaintiff
sued for payment of PIP benefits.
On November 20, 2015, the one-year anniversary of the accident, i.e., the last date for
them to do so, Liberty filed suit against Secura Insurance (Secura) and Westfield Insurance
(Westfield). Liberty claimed that either Secura or Westfield, rather than Liberty, was the insurer
that owed PIP coverage to plaintiff. Liberty prevailed on a motion for summary disposition and
Secura or Westfield or both have reimbursed Liberty. For reasons the record does not reveal,
plaintiff was not named as a party in that suit and it is unclear whether, when and how he was
notified of that suit and its outcome. The record also does not indicate whether plaintiff asserts a
continuing need for coverage and whether or not Secura or Westfield has agreed to provide that
coverage.
Unless plaintiff and his counsel knew that Liberty had sued Secura and Westfield and
prevailed, they had no basis to expect that Liberty would claim that it was not the insurer of
highest priority, particularly in light of the fact that it had already paid $162,000 without
asserting that another insurer should be paying. Moreover, Liberty did not assert a priority
defense until 14 months after filing its answer to plaintiff’s complaint. In that setting, the
defense would be likely to take plaintiff by surprise and MCR 2.111(F)(3)(c) would be
implicated. Whether Liberty should have been permitted to amend its answer so as to assert this
defense would have turned on the existence of prejudice to plaintiff, i.e., whether his potential
claim for PIP benefits against Secura or Westfield had been lost or limited as a result of delay.
Weymers v Khera, 454 Mich 639, 659; 563 NW2d 647 (1997) (“[A] court may deny a motion to
amend if the delay was in bad faith or if the opposing party suffered actual prejudice as a
result.”). Given the inadequate record before us, I would remand to the trial court to make the
necessary findings and determine whether Liberty waived the defense pursuant to MCR
2.111(F)(3)(c).
As to the other grounds, I agree that we are bound by Stanke v State Farm Mut Auto Ins
Co, 200 Mich App 307; 503 NW2d 758 (1993), though in my view that case was poorly
reasoned and wrongly decided. The Stanke Court seems to have completely ignored the text of
MCR 2.111(F)(2), which provides in the plainest of terms:
A party against whom a cause of action has been asserted by complaint . . . must
assert in a responsive pleading the defenses the party has against the claim. A
defense not asserted in the responsive pleading or by motion as provided by these
rules is waived . . . . [Emphasis added.]
The language of the rule makes it mandatory (“must”) for a defendant to assert “the defenses the
party has against the claim.” The text does not limit the requirement to affirmative defenses
which are covered separately by MCR 2.111(F)(3)(a) and (b).
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The purpose of requiring notification of defenses early in the case (or later by motion if a
new defense arises) is simply to allow a plaintiff notice of what will be contested in the case.
Stanke suggests that any matter that a plaintiff may have to prove at trial is one that defendant
need not give notice of because it is part of the “prima facie case.” See id. at 315-316, 318 n 3.
But prima facie proofs vary fundamentally from case to case depending on what the defenses are.
For example, in a contract case if the only dispute is whether a breach occurred, a plaintiff is
unlikely to present evidence of offer and acceptance.
When a party is informed of what will be at issue then it can conduct focused discovery
and prepare to present proofs on that issue at trial. Stanke’s approach, if applied to a complaint
rather than an answer, would permit plaintiffs to allege that a defendant’s premises were unsafe
without identifying the hazard or that a doctor committed malpractice without stating how.
According to Stanke, the premises owner should be prepared to show that there were no hazards
anywhere in his home and the doctor prepared to justify every action she ever took in relation to
the patient. By the same token, unless a plaintiff is notified of what issues will be contested at
trial there is no way for him to know if a defendant-insurance company is denying coverage
because (a) the relevant vehicle was not involved in the accident; (b) the vehicle was not covered
by a policy; (c) no accident occurred; (d) no injuries occurred; (e) the injuries were not caused by
the accident; (f) the claimed medical care was not necessary; (g) the price of the care was not
reasonable and customary; or (h) the plaintiff was not a resident relative of the policy holder. Of
course, there are many other possible defenses.
Litigation should not be a game of “gotcha.” Accordingly, if a defendant fails to list a
defense, it should be allowed to amend unless it would be futile or the delay has been prejudicial.
By the same token, a defendant should not be permitted to withhold notice of a defense and then
after discovery, file a motion to dismiss based upon it. Plaintiff is entitled to have an opportunity
to fully discover and respond to those defenses. Stanke’s conclusion that the defense may play
“gotcha” plainly ignores the explicit language of MCR 2.111(F)(2) and the reality of litigation.
It should be revisited and either overruled by the Supreme Court or by a conflict panel of this
Court.
Setting aside the questions concerning Stanke, this case should be remanded for the trial
court to determine, after making the relevant factual findings, whether Liberty’s priority defense
was one “that, if not raised in the pleading, would be likely to take the adverse party by
surprise.” If the court finds this to be the case, it should then determine if defendant’s violation
of MCR 2.111(F)(3)(c) resulted in prejudice to plaintiff. If prejudice resulted then the grant of
summary disposition should be set aside and the defense barred.
/s/ Douglas B. Shapiro
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