Michigan Court of Appeals; Docket #300523; Unpublished
Judges Shapiro, Whitbeck, and Gleicher; unanimous; per curiam
Official Michigan Reporter Citation: Not Applicable, Link to Opinion 
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Collateral Estoppel and Res Judicata
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Michigan Court of Appeals
reversed the trial court’s Order dismissing ACIA’s counterclaim and third-party claim
on the basis that res judicata barred the claims in light of the parties’ settlement of a prior
lawsuit that resulted in a dismissal without prejudice.
Kenneth Brafman, the plaintiff in this case, sustained injuries in motor vehicle accidents
that occurred in 1996 and 1999. Mr. Brafman was entitled to claim no-fault benefits
from ACIA for the injuries he sustained in both of these accidents. Mr. Brafman’s
wife, Carolyn Brafman, started a transportation company and provided transportation
services to Mr. Brafman. ACIA ultimately denied payment of the services rendered
by the transportation companies, as well as payment for other no-fault benefits.
Accordingly, in approximately 2007, Mr. Brafman and the transportation companies filed
lawsuits against ACIA to recover payment of these benefits. ACIA filed counterclaims
alleging that the Brafmans and the transportation companies were defrauding and/or
misrepresenting material facts regarding their claims for no-fault benefits. On January
21, 2009, the parties reached a settlement which they placed on the record with the trial
court. The settlement provided that ACIA would pay $20,000 to the Brafmans. The
settlement agreement provided that going forward into the future, the Brafmans could
claim no-fault benefits for mileage incurred for Mr. Brafman’s medical transportation
needs, but the Brafmans could not claim transportation services for Mr. Brafman.
Moreover, the parties agreed to dismiss all of the claims and counterclaims brought
by both parties without prejudice. The trial court entered an Order closing the case
because the parties had voluntarily dismissed their claims and counterclaims without
prejudice.
In May 2009, Mr. Brafman filed a lawsuit against ACIA that underlies this case. ACIA
filed a counter-complaint, as well as a third-party complaint, against Carolyn Brafman
and the transportation companies. ACIA again alleged in this counter-complaint that
the Brafmans and the transportation companies intentionally and falsely misrepresented
material facts about Mr. Brafman’s condition and the services rendered to him. ACIA
sought reimbursement for the benefits it had paid for these services and also exemplary
damages.
In reversing the trial court’s Order dismissing ACIA’s counter-complaint, the Court of
Appeals recognized that where the parties assent to an entry of an order dismissing
an action without prejudice, the order is presumably intended to carry into effect the
agreement the parties reached to allow further proceedings as necessary to resolve the
controversy. In this case, the court recognized that the parties entered a settlement on
the record in January 2009 that resulted in a dismissal of all claims, but that the order
was not a final decision on the merits because the dismissals were without prejudice.
In this regard, the court explained,
“[t]he Order dismissed all claims without prejudice,
leaving open the possibility that a party could raise those claims in a later lawsuit.
Therefore, res judicata did not bar Auto Club from re-filing its fraud claims against the
Brafmans and the transportation companies.”
