Michigan Court of Appeals; Docket # 346926, 349344; Unpublished
Judges Gadola, Cavanagh, and Kelly; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
SUMMARY:
In this unanimous unpublished per curiam decision involving a priority dispute between no-fault insurers, the Court of Appeals vacated the trial court’s summary disposition order in favor of Meemic Insurance Company, a third-party defendant. Primarily at issue in this case was the domicile of Plaintiff Harbans Kaur, who was struck by a motor vehicle and subsequently filed two separate first-party actions: the first against Meemic and the second against Defendant Citizens Insurance Company of the Midwest. The trial court denied Citizens’ motion to consolidate the two lawsuits, but did allow Citizens to add Meemic as a third-party defendant in the second lawsuit. By that point, however, the trial court had already granted summary disposition in Meemic’s favor in the first lawsuit, and thus Meemic filed a motion for summary disposition in the second lawsuit, arguing that the issue of Kaur’s domicile was already determined in the first lawsuit, and that relitigation of that issue in the second lawsuit was therefore precluded by res judicata. The Court of Appeals ultimately determined that because Citizens was neither a party to the first lawsuit nor in privity with any party in that action, the doctrine of res judicata would not apply to bar Citizens’ third-party claim against Meemic in the second lawsuit.
Harbans Kaur was struck by a motor vehicle while crossing the street, and subsequently filed a first-party action against Meemic to recover no-fault PIP benefits related to her injuries. Kaur asserted that at the time she was struck by the motor vehicle, she was domiciled with her son, Meemic’s insured, and thus entitled to PIP benefits from Meemic as a resident relative under MCL 500.3114(1). Meemic moved for summary disposition, arguing that Kaur was actually domiciled with her other son in Ontario at the time of the collision.
While Kaur’s lawsuit against Meemic was pending, she filed a second first-party action against Citizens, who insured the driver of the vehicle that struck her. Citizens filed a motion to consolidate the two cases, which the trial court denied, but ultimately added Meemic as a third-party defendant to the second lawsuit. Meanwhile, in the first lawsuit, the trial court granted Meemic’s motion for summary disposition, determining that Kaur was not domiciled with her son in Michigan when she was struck by the motor vehicle. Meemic then moved for summary disposition in the second lawsuit, arguing that the issue of Kaur’s domicile had already been determined in the first lawsuit and that relitigation of the issue was thus precluded by res judicata. The trial court agreed, and granted Meemic’s motion.
On appeal, Citizens argued that the trial court erred by granting Meemic’s motion for summary disposition on the basis of res judicata. The Court of Appeals agreed, reasoning that the third element of the res judicata analysis was not satisfied because the two actions “did not involve the same parties or their privies.” Dart v. Dart, 460 Mich. 573 (1999).
In this case, Citizens was not a party to the second lawsuit, nor was it in privity with any party in that action. Meemic clearly is not in privity with Citizens, being diametrically opposed to Citizens’ interests in this matter. Plaintiff, an alleged accident victim seeking no-fault benefits from Citizens, also cannot be said to represent the same interests as Citizens. Because there was no privity between Citizens and the parties to the second lawsuit, Citizens’ interests were unrepresented in that action and the trial court therefore erred by concluding that res judicata applied to bar Citizens’ third-party claim against Meemic in this case.
The Court of Appeals further held that the trial court denied Citizens’ due process by denying Citizens’ motion to consolidate the two lawsuits, but then resolving the issue of domicile contrary to Citizens’ interests and without giving Citizens an opportunity to be heard on the issue of priority.
When determining the priority rights of two insurers implicated in a plaintiff’s claim, due process requires that both insurers be joined in the same action before the trial court. Plaintiff chose to file separate lawsuits against Meemic and Citizens for injuries alleged to arise from a single accident. The trial court was aware that Citizens was a non-party to plaintiff’s action against Meemic and was seeking to consolidate the cases, which would have permitted the trial court to address the issues of domicile and priority in a single lawsuit, but the trial court nonetheless denied the motion, instead allowing Citizens to bring Meemic into the third lawsuit as a third-party defendant. In what must have felt to Citizens like a bait and switch, the trial court then applied the decision issued in the second lawsuit to bar Citizens from raising its challenge to the priority determination in this case. It was a violation of due process to resolve that issue contrary to Citizens’ interests in the second lawsuit in which Meemic was a party but Citizens was not, and when Citizens was not given an opportunity to be heard on the issue of priority.
