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Estate of Baldwin, et al v Estate of Davies, et al  (COA – UNP 5/20/2021; RB #4264)

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Michigan Court of Appeals; Docket #353852;  Unpublished
Judges  Tukel,  Servitto, and  Rick;  Per  Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


STATUTORY INDEXING:
Not Applicable

TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
Motor Vehicle Code (Definition of Owner) (MCL 257.37) (MCL 257.401a)


SUMMARY:
In this unanimous unpublished per curiam  decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing Plaintiff Estate of Lamereo Baldwin’s negligence action against Defendants Tom Davies Seamless Gutters (“TDSG”) and the Estate of Tom Davies.  The Court of Appeals held first that TDSG had no ownership interest in the motor vehicle involved in the collision, as the insurance policy that covered the vehicle had been transferred to a different entity almost a year prior to the collision.  Therefore, TDSG could not be sued under the Michigan’s owner liability statute, MCL 257.401.  The Court of Appeals held second that the Baldwin Estate could not proceed with its negligent entrustment action against the Davies Estate because it had previously sued Farm Bureau, the insurer of the motor vehicle and Davies’s new corporation, which was named on the policy covering the vehicle, in a separate negligence action based on the same facts.  That case was dismissed after an order of summary disposition was entered in Farm Bureau’s favor, and since Farm Bureau was a privy of the Davies Estate and the same issues raised in the instant action could have been raised in the first action against Farm Bureau, the instant action was barred by the doctrine of res judicata.

Lamero Baldwin was killed while traveling as a passenger in a motor vehicle being driven by Brian Surhigh.  The vehicle they were traveling in was provided to Surhigh by Pro Exterior Renovations, LLC (“PER”), but was originally purchased by Tom Davies for TDSG, a company he had formed with his partner prior to 2015.  Davies and his partner eventually formed a new company, PER, in 2015, and subsequently transferred the Farm Bureau policy covering the vehicle to PER.  Thus, at the time of the crash, the vehicle was insured through a Farm Bureau policy issued to PER.

Baldwin’s Estate filed a first- and third-party lawsuit in the Wayne County Circuit Court against Farm Bureau and Surhigh, but that case was dismissed after the trial court granted summary disposition in the defendants’ favor.  The Baldwin Estate then filed the instant action, naming TDSG and the Davies Estate as defendants, alleging that TDSG was liable for Surhigh’s negligence under the “Owner’s Liability Statute” and that Davies negligently entrusted the vehicle to Surhigh.  Ultimately, the trial court granted summary disposition in the defendants’ favor, finding that TDSG had no legal relationship to the vehicle or the crash and that the action against the Davies Estate was barred by res judicata.

The Court of Appeals first affirmed the trial court’s summary disposition order in favor of TDSG, holding that, for purposes of Michigan’s owner liability statute, MCL 257.401,TDSG had no legal relationship to the case.  The Baldwin Estate failed to present any evidence that TDSG had any ownership interest or legal relationship to the motor vehicle at the time of the crash, as the insurance policy had been transferred more than one year prior.

"Sciotti testified that TDSG was formed with Davies as a partnership. Eventually, because of pressure from a national client, TDSG was abandoned and PER was created as a limited-liability company. At the time of the accident, and contrary to plaintiff’s assertion, the F-150 was insured by Farm Bureau through a policy issued to PER, not TDSG. Plaintiff presented no evidence that TDSG continued to operate, or was otherwise involved in PER’s business. While it is true the F- 150 was originally purchased by Davies and insured through TDSG, the insurance policy was transferred to PER well before the accident. Indeed, the certificate of insurance which plaintiff presented, which was issued to TDSG, predated the accident by more than one year and was not in effect on the date of the accident. This evidence, that TDSG had no legal relationship to the F- 150 or the parties at the time of the accident, was unrebutted; thus, the trial court properly granted summary disposition to TDSG. MCR 2.116(C)(10)."

The Court next affirmed the trial court’s summary disposition order in favor of the Davies Estate on the basis of res judicata, holding that the Baldwin Estate’s previous lawsuit in the Wayne County Circuit Court against the vehicle’s insurer, Farm Bureau, precluded it from proceeding with the instant action.  The Court noted that res judicata bars a subsequent action only if “(1) the prior action was decided on the merits, (2) both actions involve the same parties or their privies, and (3) the matter in the case was, or could have been, resolved in the first.”  Adair v State, 470 Mich 105 (2004).  In this case, the summary disposition ruling in the prior case operated as a decision on the merits; Farm Bureau was a privy of the Davies Estate in the previous action, as both had “identical interests in avoiding any liability arising from the car accident”; and that the Baldwin Estate could have raised the same issues in the previous case, as that case related to the same crash. 

"As a general rule, 'a summary disposition ruling is the procedural equivalent of a trial on the merits that bars relitigation on principles of res judicata.' Mable Cleary Trust v Edward- Marlah Muzyl Trust, 262 Mich App 485, 510; 686 NW2d 770 (2004), overruled on other grounds by Titan Ins Co v Hyten, 491 Mich 547; 817 NW2d 562 (2012). In the Wayne County case, after plaintiff filed its motion to amend the complaint, the defendants moved for summary disposition as to plaintiff’s claims against them. The trial court granted summary disposition to defendants and closed the case. Consequently, the action in Wayne Circuit Court was decided on the merits. Thus, the first requirement of res judicata has been met. 

. . . 

In the Wayne County case, plaintiff sued two parties: Farm Bureau, which insured the F- 150, under the policy which initially had insured TDSG and which was transferred to PER after that entity was formed; and Surhigh, the driver of the F-150 at the time of the accident. Plaintiff’s theory was that the employer negligently entrusted the F-150 to Surhigh, causing the accident. Farm Bureau was in privity with PER by virtue of the insurance policy; the policy contractually obligated Farm Bureau to pay any damages incurred due to PER’s acts of negligence. Thus, Farm Bureau and PER had identical interests in avoiding any liability arising from the car accident that took Baldwin’s life. Stated another way, Farm Bureau’s potential liability was derivative of PER’s; Farm Bureau could only be liable if PER was liable, so it had the same incentive as PER to establish that PER had not acted negligently. Thus, PER and Farm Bureau were in privity by virtue of PER’s insurance policy with Farm Bureau for the F-150. Similarly, by being in privity with PER, through the insurance policy issued to PER, Farm Bureau was also in privity with Davies, the owner of the vehicle. As with PER, Farm Bureau could only be held liable for acts by Davies if Davies had acted negligently; and plaintiff’s theory was that Davies had acted negligently by entrusting the F-150 to Surhigh. Thus, Farm Bureau had the same interest in demonstrating that there was no negligence in allowing Surhigh to drive the F-150 as did Surhigh in the Wayne County case and the Davies Estate in the present case. Accordingly, there was privity between the Davies Estate and the defendants in the Wayne County case, which establishes the second requirement of res judicata, privity. 

. . . 

The claims raised in this case could have been raised in the first case, which is evidenced at least in part by the fact that plaintiff attempted to amend the Wayne County case to add the defendants in this case to that case. Plaintiff’s claims against the defendants in Wayne Circuit Court related to the August 2016 accident, which is the same event that forms the basis for the claims against defendants in this case. The Wayne Circuit Court denied the motion to amend the complaint because plaintiff chose to conduct further discovery to determine whether plaintiff was an employee of PER or TDSG and thus covered by the exclusive remedy provision of the WDCA. See n 1 of this opinion. Defendants then filed a motion for summary disposition, which the Wayne Circuit Court granted. The issue of whether the exclusive remedy provision of the WDCA barred the Wayne County suit does not preclude the application of res judicata here; the same issue could be and was raised in the trial court in this case. Whether or not plaintiff had a meritorious claim for relief in the Wayne County case, he nevertheless could have raised and, at least initially, sought to raise all of the present claims in that case. See Adair, 470 Mich at 121 (emphasis added) (res judicata applies if ‘the matter in the second case was, or could have been, resolved in the first.’ "


Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit SinasDramis.com.

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