Moody v. Home Owners Ins. Co., Docket Nos. 301783

• Court: Court of Appeal of Michigan (US)
• Citation: 849 N.W.2d 31,304 Mich.App. 415
• Docket Number: 301784,308723.,Docket Nos. 301783
• Parties: MOODY v. HOME OWNERS INSURANCE COMPANY. Hodge v. State Farm Mutual Automobile Insurance Company.
• Decision Date: 25 February 2014

304 Mich.App. 415
849 N.W.2d 31

MOODY
v.
HOME OWNERS INSURANCE COMPANY.
Hodge
v.
State Farm Mutual Automobile Insurance Company.

Docket Nos. 301783, 301784, 308723.

Court of Appeals of Michigan.

Submitted Sept. 10, 2013, at Detroit.
Decided Feb. 25, 2014, at 9:10 a.m.

[849 N.W.2d 35]

Richard E. Shaw, Detroit, for Charles Moody.

Law Offices of Nicholas A. Cirino, PLLC (by Nicholas A. Cirino), and Law Offices of Michael S. Cafferty & Associates (by Michael S. Cafferty, Detroit) for Get Well Medical Transport, Progressive Rehab Center, and Carol Reints, Inc.

Anselmi & Mierzejewki, PC, Bloomfield Hills (by Kurt A. Anselmi), for Home Owners Insurance Company.

Michael H. Former and Sheldon L. Miller, Farmington Hills, for Linda Hodge.

Hewson & Van Hellemont, PC, Oak Park (by James F. Hewson and Stacey L. Heinonen), for State Farm Mutual Automobile Insurance Company.

Gross & Nemeth, PLC, Detroit (by James G. Gross), for Auto Club Insurance Association.

Before: MARKEY, P.J., and FITZGERALD and OWENS, JJ.

MARKEY, P.J.

These consolidated appeals are before this Court for consideration as on leave granted.¹ Each case concerns the jurisdiction of the district court under MCL 600.8301(1) when a plaintiff presents evidence and argument of damages far in excess of the district court's $25,000 amount-in-controversy jurisdictional limit. In Docket No. 301783, plaintiffs Get Well Medical Transport, Progressive Rehab Center and Carol Reints, Inc., appeal the order of Wayne Circuit Judge Robert Colombo, Jr., reversing a district court judgment in their favor following a jury trial and remanding for a new trial. In Docket No. 301784, plaintiff Charles Moody appeals the same order of Judge Colombo vacating the judgment in Moody's favor because the district court lacked subject-matter jurisdiction and remanding to the district court to either dismiss the case or transfer it to the circuit court. Similarly, in Docket No. 308723, plaintiff Linda C. Hodge appeals the order of Wayne Circuit

[849 N.W.2d 36]

Judge Brian R. Sullivan vacating a district court judgment in her favor in the amount of $25,000 plus interest following a jury verdict of $85,957 against defendant State Farm Mutual Automobile Insurance Company. We affirm.

I. FACTS AND PROCEEDINGS

Moody filed his complaint for no-fault benefits in 36th District Court on September 15, 2008. Paragraph 3 of his complaint alleges that he “claims damages do not exceed $25,000.00.” The complaint's prayer for relief sought “damages in whatever amount Plaintiff is found to be entitled not in excess of [$]25,000.00, plus interest, costs, and no-fault attorney fees.”

The providers filed their complaint in 36th District Court on June 11, 2009, seeking payment for “reasonably necessary products, services and accommodations” that they provided Moody as a result of the motor vehicle accident. Get Well Medical Transport, Progressive Rehab Center and Carol Reints, Inc., sought no-fault benefits in the amounts, respectively, of $5,604; $14,845; and $2,533.14, for a combined total claim for damages of $21,982.14.

While still awaiting discovery regarding the extent of Moody's claims, Home Owners moved on July 29, 2009, to consolidate Moody's case with that of the providers. An order doing so was entered without objection. Meanwhile, Home Owners filed several motions to compel discovery. The district court finally entered an order compelling signed answers to Homeowners' interrogatories on October 6, 2009, to which Moody responded on October 12, 2009. In his answers to the interrogatories, Moody indicated that, in addition to a $32,447.23 bill from Henry Ford Hospital, he also intended to present to the jury damage claims for over $110,000 in lost wages and over $262,800 in attendant-care benefits.

In light of Moody's answers to the interrogatories and subsequent depositions taken just before trial, Home Owners, on the day trial was scheduled to commence, raised the issue of the trial court's subject-matter jurisdiction because it appeared certain Moody intended to claim damages far exceeding the $25,000 jurisdictional limit of the district court under MCL 600.8301(1). Home Owners asserted several arguments, including (1) when Moody's counsel presented argument and evidence of damages in excess of $25,000, the district court would lose jurisdiction, and defendant would move for summary disposition under MCR 2.116(C)(4) (the court lacks jurisdiction of the subject matter); (2) Moody's action could be transferred to circuit court under MCR 2.227(A)(1); and (3) if Moody's counsel were permitted to present argument and evidence of damages in excess of $25,000, Home Owners should be allowed to impeach Moody's claims through evidence or by judicial notice of the fact that the district court's jurisdiction is limited to claims not exceeding $25,000.

The district court ruled that it would not restrict Moody's counsel in the evidence or argument he could present, and that if the jury returned a verdict for Moody in excess of $25,000, it would cure the jurisdictional problem by limiting the judgment to $25,000, exclusive of attorney fees, interest, and costs. Furthermore, the district court ruled that it would not take judicial notice of the district court's jurisdictional limit and that defense counsel could not advise the jury of it. Finally, the district court ruled it would not transfer Moody's action to the circuit court. The district court entered a hand written order that provided: “This action will not be transferred to circuit court. Each plaintiff's complaint is limited to the jurisdictional dollar amount of $25,000 exclusive of attorney

[849 N.W.2d 37]

fees, interest and costs. Defendant will be precluded from advising [the] jury of [the] court's jurisdictional limits.”

During his opening statement, Moody's counsel repeatedly told the jury that if Home Owners were required to pay no-fault benefits, it could obtain reimbursement from the assigned claims facility. After defense counsel's third objection to the comments, the district court ruled it would not preclude the argument but that it would permit defense counsel to argue in its opening statement that Home Owners would not be entitled to reimbursement from the assigned claims facility. And that is what defense counsel did. The providers' counsel supported Moody's counsel on this point in his opening statement, indicating that he understood that an insurance company could obtain reimbursement from the assigned claims facility if it were determined within one or two years that the company should not have been paying the claim in the first place.

The main issue at trial was whether at the time of the accident Moody was “domiciled in the same household” as his father and stepmother, whom Home Owners insured, or whether Moody lived with his mother in Detroit. The trial extended over three weeks, and Moody's counsel presented evidence of no-fault claims far in excess of $25,000. In addition to the proofs of the $32,447.23 hospital bill from Henry Ford, Moody presented evidence of lost wages of $28,288 to $29,298.28, replacement services of $14,600, and claims of attendant care for $192,720. After presentation of this evidence, Home Owners twice renewed its motion for summary disposition under MCR 2.116(C)(4) because Moody's claims for damages far exceeded the district court's $25,000 jurisdictional limit; the district again denied Home Owners' motions.

The jury found against Home Owners on its coverage defense, deciding that Moody lived with his father and stepmother at the time of the accident; that issue has not been appealed. The jury awarded Moody $32,447.23 for the hospital expense. But the jury found that Moody did not sustain any lost wages nor did he incur any attendant-care expenses. The jury further found that Moody's allowable expenses were not overdue. When entering its judgment, the district court reduced the award to $25,000, the court's jurisdictional limit. The jury awarded the providers the amounts that they sought: $5,604 to Get Well, $13,845 to Progressive Rehab, and $2,533.14 to Carol Reints, Inc. Home Owners appealed in the circuit court.

Judge Colombo heard oral argument on Home Owners' appeal on October 19, 2010, and issued a lengthy opinion from the bench. Judge Colombo considered that MCL 600.605 provides that circuit courts have original jurisdiction over “all civil claims and remedies, except where exclusive jurisdiction is given in the constitution or by statute to some other court,” and that MCL 600.8301(1) provides that the “district court has exclusive jurisdiction in civil actions when the amount in controversy does not exceed $25,000.00.” The circuit court concluded that it was inappropriate for the district court to allow a plaintiff to present evidence of damages greater than the district court's jurisdictional limit, noting that although district courts formerly were permitted to award damages in excess of the limit when a case was remanded from the circuit court, the statute authorizing that practice, former MCL 600.641, had been repealed. Judge Colombo also noted that Moody was bound by his pleadings, which alleged damages of not more than $25,000. Accordingly, “Moody could not present damage proofs that exceeded $25,000.”

[849 N.W.2d 38]

Judge Colombo also rejected Moody's reliance on the principle that a court's subject-matter jurisdiction is determined only by the allegations in the plaintiff's complaint. Instead, Judge Colombo reasoned that a court must at all times question its own jurisdiction over parties, the subject matter of the action, and the limits of the relief that it may grant. Further, when a court determines that it lacks jurisdiction, it should not pursue the matter further except to dismiss the action or transfer it to the proper court. The circuit court opined:

Once [Home Owners] raised the issue of the district court's jurisdiction, the district court was obliged to determine whether it had subject...