Michigan Supreme Court Order Brings Conclusion to 25 Year Old Litigation
A recent order of the Michigan Supreme Court in favor of our client reversing in part the most recent Court of Appeals opinion in this case, heralds the end of more than 25 years of litigation in Hunt v Drielick. This litigation consisted of three separate lawsuits filed against two motor carries, the owner and the driver of a semi truck involved in a multi-vehicle accident that occurred on January 12, 1996. The driver was “bob-tailing” on his way to pick up a load that was brokered to him to be picked up at the motor carrier’s yard. The truck was insured under a “Non-Trucking Use” policy issued by Empire Fire and Marine Insurance Company.
Empire declined the tender of the defense of the lawsuit from its insureds, leaving them without insurance or the means to defend the lawsuit. Our client, one of the motor carriers, defended this case based on the fact that its lease with the owner of the truck had been terminated prior to the accident. The other motor carrier defended on the ground that it was not yet under lease with the owner of the truck at the time of the accident. After several years of litigation, in March 2000 the three plaintiffs, the owner, the driver and the two motor carriers entered into settlement agreements. These settlements included consent judgments against the owner and driver of the semi truck, which could only be enforced against the recalcitrant Non-Trucking Use insurer. The two motor carriers received assignments of a portion of any recovery from Empire and agreed to enforce the consent judgments against Empire.
Writs of Garnishment were issued against Empire in December 2020. For more than 20 years, Empire resisted paying these writs. Three times the trial court entered judgments against Empire. Three times Empire appealed to the Court of Appeals. After the Court of Appeals reversed the trial court on the second appeal, our office, in association with O'Neill, Wallace & Doyle P.C., counsel for the other motor carrier, jointly filed an application for leave to appeal with the Michigan Supreme Court, arguing that the Court of Appeals misapplied the policy exclusion relied upon by Empire. The Supreme Court granted leave and ultimately agreed with our position and remanded the cases to trial court for further consideration of that exclusion. Again the trial court ruled that the exclusion did not apply. The trial court also determined that Empire was responsible for pre- and post-judgment interest from the inception of the three lawsuits through the date of judgment.
Empire again appealed. This time the Court of Appeals affirmed the ruling on the policy exclusion, but struck that part of the interest that accrued after the entry of the consent judgments in March 2000. Empire filed an application for leave to appeal with the Michigan Supreme Court. We filed an application for leave to appeal as cross appellants requesting reinstatement of that part of the interest award that accrued after Empire became a party when the writs of garnishment were issued.
In an Order dated November 27, 2019, the Supreme Court denied Empire’s application for leave, thus finally putting to rest the question of whether it must pay the consent judgments against its insureds. The Supreme Court also requested further briefing and oral argument on our application for leave as cross appellants. The argument took place in October 2020. In its order dated April 9, 2021, in lieu of granting leave to cross appeal, the Court reversed the Court of Appeals, finding that Empire was required to pay pre-judgment interest from the date of the writs through entry of judgment on those writs.
In short, the exclusions relied upon by the recalcitrant insurer were not applicable and it was responsible for interest during the twenty years that contested its obligation to indemnify its insureds.
Reported decisions in this matter can be found at:
Hunt v Drielick, 298 Mich App 548; 828 NW2d 441 (2012)
Hunt v Drielick, 496 Mich 366; 852 NW2d 562 (2014)
