Supreme Court Poised to Address Damages Claims Against Government for Negligent Operation of Motor Vehicles

As I mentioned in a previous post, the Michigan Supreme Court issued a reconsideration and Grant Order, and a Consolidation Order, with respect to the Court of Appeals’ decisions in Hunter v. Sisco, et al. and Hannay v. MDOT cases and will consider them together as calendar cases in the fall.

This is turning out to be a significant case both for no-fault insurers, as well as for governmental entities.

The question to be addressed in each of these cases is whether a plaintiff can recover damages available under the No-Fault Automobile Insurance Act, MCL 500.3101 et seq. (non-economic tort damages (Hunter) and excess economic benefits damages (wage loss and future earning potential) (Hannay), when the motor vehicle exception to governmental immunity in the Governmental Tort Liability Act (GTLA), MCL 691.1405, limits damages available to a plaintiff injured by the negligent operation of a government-owned motor vehicle to “bodily injury” and “property” damages.  I do not believe the government has consented by express legislation to submit itself to the provisions of the No-Fault Act, notwithstanding the Court’s previous, but cursory, conclusion in Hardy v. Oakland County, 461 Mich. 561  (2000), that a claimant suing the government under the motor vehicle exception still had to prove a “threshold” injury under the no-fault act to recover damages.  Indeed, the “threshold” injury requirement only avails the plaintiff of those noneconomic benefits damages that the COA panel in Hunter said could not be awarded against the government.

The implicit reading from Hardy and some other prior cases (e.g., Trent v. SMART, 252 Mich. App. 247 (2002), is that since the government “owns” and “operates” motor vehicles, and is therefore considered a registrant of those motor vehicles, it too must participate in the no-fault automobile insurance system.

My strong belief is that if the government is going to subject itself to a system of liability that imposes damages without regard to fault (first party bodily injury damages), and excess economic benefits damages and noneconomic damages that can be awarded against an ordinary (non-governmental) tortfeasor where fault, i.e., negligence, is proved (damages in excess of “bodily injury” damages) that must come via an express statement of an exception to the government’s broad immunity, and through the GTLA.  In Estate of Bradley, 494 Mich. 367 (2013), a case from last term, the Court unequivocally stated if a claimant seeks to impose any “tort liability” against the government, that liability can only be sought to be imposed under the exceptions in the GTLA.

As it stands, I believe the case of Wesche v. Mecosta County Rd Comm’n, 480 Mich. 75 (2008) provides clear guidance, if not precedent, for the proposition that damages awardable against the government must be those, and only those, expressly allowed by the motor vehicle exception, i.e., “bodily injury” and “property” damages.  Indeed, there is a statement in Wesche, which I quote at pages 25 and 26 of the amicus curiae brief I filed in the Hannay case (99705-sc-amicus-curiae-br), in which the Court appears to have foreclosed the future assertion that the government would be liable for the noneconomic damages at issue in Hunter and excess economic benefits damages at issue in Hannay.

Of course, the conclusion should be the same if one asserts a right to statutory damages for “first-party no-fault benefits” against the government under the No-Fault Act, which are automatically payable where injury arises from the operation, maintenance, use or ownership of a motor vehicle without regard to fault, i.e., without regard to negligence.  How can the government be liable for such damages when it has only expressly consented to waive immunity for “bodily injury” damages caused by negligence as provided in the motor vehicle exception (and perhaps for “gross negligence” under the proper proofs as provided in MCL 691.1407) of the GTLA?

Granted, neither Hunter or Hannay address this issue, but the end consequence of the outcome will have to reconcile how the government can be said to be a participant in a liability scheme that imposes liability for bodily injury damages without regard to fault.  Perhaps this is an issue for another day.  I did mention the apparent conundrum in my amicus brief in Hannay.

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