Olmstead v. Anderson

• Decision Date: 06 February 1987
• Docket Number: Docket No. 77271
• Court: Michigan Supreme Court
• Parties: Becky Jill OLMSTEAD, Administrator of the Estate of Henry Stier Iler and Mary Lou Iler, both deceased, Plaintiff-Appellee, v. Reino ANDERSON, Administrator of the Estate of Robin Brzoznowski, deceased, Defendant-Appellant. 428 Mich. 1, 400 N.W.2d 292

Page 292

400 N.W.2d 292

Becky Jill OLMSTEAD, Administrator of the Estate of Henry Stier Iler and Mary Lou Iler, both deceased Plaintiff-Appellee, v. Reino ANDERSON, Administrator of the Estate of Robin Brzoznowski, deceased, Defendant-Appellant.

Docket No. 77271.

428 Mich. 1, 400 N.W.2d 292

Supreme Court of Michigan.

Argued Nov. 13, 1986.

Decided Feb. 6, 1987.

Torger G. Omdahl, Iron River, for plaintiff-appellee.

David J. Lori, Iron Mountain, for defendant-appellant.

RILEY, Chief Justice.

This case arises out of an automobile accident occurring in Wisconsin. Plaintiff's decedents, Minnesota citizens, were struck and killed by defendant's decedent, a Michigan resident. The sole issue presented is whether the law of Wisconsin, the state in which the accident occurred, or the law of Michigan, the forum state and defendant's state of residence, is to be applied. The trial court held that under the doctrine of lex loci delicti Wisconsin law governs. The Court of Appeals reversed, holding that Michigan law applies. We affirm the decision of the Court of Appeals.

I. FACTS

Plaintiff is the administratrix of the estates of her parents, Harry Stier Iler and Mary Lou Iler. The Ilers resided in Afton, Minnesota, having lived there since 1963. Plaintiff is also a Minnesota resident.

On September 3, 1982, the Ilers set out on a camping trip, their ultimate destination being a campground near Manistique, Michigan. They had planned to spend a short time in Michigan and then return to Afton. Mrs. Iler's niece, Maureen Briggs, accompanied them. Miss Briggs resided in Beldenville, Wisconsin.

En route, while driving in Wisconsin, the Ilers and Miss Briggs were killed as a result of being struck head-on by an automobile owned and driven by Robin Brzoznowski, who was also killed in the accident. ¹ Brzoznowski resided in Michigan, where he registered and insured his automobile.

Plaintiff initiated suit in a Minnesota probate court to have a nonfamily member appointed administrator of Robin Brzoznowski's estate. That action was dismissed for improper venue and lack of jurisdiction. Brzoznowski had no contacts in Minnesota other than the fact that his insurance carrier, United States Fidelity and Guaranty Company, did business there. Thus, under Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980), Minnesota was a constitutionally impermissible forum.

Following the dismissal in Minnesota, plaintiff brought this wrongful death action against defendant, a Michigan resident, administrator of Brzoznowski's estate.

Plaintiff moved for a declaratory judgment regarding which law would be applied to the substantive issues. The possibilities were Minnesota, where the Ilers resided; Wisconsin, where the accident occurred; or Michigan, the forum state and the state of Brzoznowski residence. The state law to be applied is of great importance to the parties, because Wisconsin law, at the time this action was filed, limited damages for wrongful death to $25,000, ² but neither Michigan nor Minnesota limits recoverable damages, leaving the trier of fact to determine the damage amount. ³

Plaintiff argued that under Sexton v. Ryder Truck Rental, Inc., 413 Mich. 406, 320 N.W.2d 843 (1982), Michigan, as the forum state, should apply its own law--lex fori. Defendant maintained that under the doctrine of lex loci delicti, the law of the state where the wrong occurred (Wisconsin) governs. Noting that the trend of the Michigan Supreme Court is toward applying the lex fori, the trial court, nonetheless, held for defendant, citing Abendschein v. Farrell, 382 Mich. 510, 170 N.W.2d 137 (1969). The trial court read Sexton to apply only in situations where all the parties are Michigan residents. Since the parties in this action are not all Michigan residents the court held that Abendschein controlled.

The Court of Appeals granted an interlocutory appeal to consider the trial court's order. Noting that Sexton had no majority opinion, the Court of Appeals offered a lengthy quote from Smith v. Pierpont, 123 Mich.App. 33, 333 N.W.2d 165 (1983), in which the Pierpont Court adopted the position of Justice Kavanagh in his concurrence in Sexton. The Pierpont Court held:

"[I]n a tort action commenced in this state, the law of this state is to be applied unless the court determines that a superior foreign state interest exists which calls for the application of the foreign law in order to reach a just resolution of the controversy. We think the presumption of lex fori is a logical and reasonable approach in that the fact that a Michigan court can obtain jurisdiction over the parties involved generally corresponds with a substantial level of state interest in the outcome of the litigation. However, the state which is the situs of the injury is entitled to a consideration of any disproportionate interest it may have in the controversy in order to avoid any injustice resulting from the application of lex fori." Olmstead v. Anderson, 145 Mich.App. 160, 165-166, 377 N.W.2d 853 (1985), quoting Pierpont, supra, 123 Mich.App. at 38, 333 N.W.2d 165.

Since both parties to this action are not Michigan residents, the Court of Appeals weighed the interests of Michigan and Wisconsin to determine which law should be applied. Because defendant was a Michigan resident and had owned, registered, and insured his automobile under Michigan law, the Court of Appeals determined that no unfairness would result in applying Michigan law. Further, defendant's insurer, doing business in Michigan, had notice of potential for unlimited liability for negligence of defendant in the operation of his automobile. Finding no unfairness to the parties in applying Michigan law, the Court of Appeals could discern no interest of Wisconsin in applying its law. Thus the Court of Appeals turned to Michigan's interest stating:

"Michigan has an avowed interest in favor or [sic] wrongful death actions resulting in full shifting of losses from those not at fault to those at fault. This is evident by the lack of a monetary limit on the recovery for the loss of society and companionship. Michigan's interest is particularly strong in regard to automobile accidents in light of Michigan's no-fault threshold scheme, MCL 500.3135; MSA 24.13135, in which only in a case of death or serious bodily injury of disfigurement does tort liability survive at all." Olmstead, supra, 145 Mich.App. at 168, 377 N.W.2d 853.

Therefore, the Court reversed the decision of the trial court, and held that Michigan law applied. We granted defendant's application for leave to appeal on April 22, 1986. 425 Mich. 851.

II

The Court in Sexton, supra, 413 Mich. at 419-425, 320 N.W.2d 843, provided an extensive exposition on the origins and pros and cons of lex loci delicti. Thus, a brief summary of the doctrine will suffice here. Prior to Sexton, the substantive rights of parties in an action brought in Michigan were governed by the law of the place of the wrong (the lex loci delicti). The use of the doctrine has been traced as far back as Wingert v. Wayne Circuit Judge, 101 Mich. 395, 59 N.W. 662 (1894). ⁴ Some years later, in Kaiser v. North, 292 Mich. 49, 289 N.W. 325 (1939), two Michigan residents were involved in an accident in Ontario, Canada. Ontario had an automobile guest statute barring recovery by a guest passenger against a host driver. Michigan, however, permitted recovery under some circumstances. Kaiser, supra, 53, 289 N.W. 325. The Court squarely held that the law of the place of the accident governed and, thus, on the basis of Ontario law, denied the plaintiff recovery. This holding was consistent with the majority view at the time, as well as the original Restatement of Conflicts of Laws, Sec. 378, which stated: "The law of the place of the wrong determines whether a person has sustained a legal injury."

The decline in popularity of the lex loci doctrine was initiated in the seminal case of Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963). The court applied the law of New York, as the state of the parties' residence, origin of the guest/host relationship, and beginning and anticipated end point of the trip, rather than the law of Ontario, where the accident occurred. After Babcock, a number of courts reexamined the advisability of adhering to the lex loci delicti doctrine.

In Michigan, the question of the continuing viability of lex loci delicti was presented in Abendschein, supra. That case also involved an accident which occurred in Ontario. The plaintiffs resided in New York and the defendants in Michigan. The trip began in New York and was to end in Michigan. The plaintiffs alleged that defendant Farrell caused the accident by his gross negligence. Under Ontario law, recovery was barred. The plaintiffs could recover under Michigan law if they could prove gross negligence or wilful and wanton misconduct on the part of the host driver. ⁵ New York, on the other hand, had no guest statute. Thus, the plaintiffs could have recovered under the laws of New York or Michigan. Rather than adopting an alternative methodology as argued by the plaintiffs, the Abendschein Court reaffirmed its adherence to the lex loci delicti doctrine. In light of the perceived advantages of lex loci--certainty, predictability, ease of application, and discouragement of forum shopping--the unanimous Court was unpersuaded that lex loci should be abandoned, despite "occasionally unjust" results. Abendschein, supra, 382 Mich. at 516, 170 N.W.2d 137.

At the time of the Abendschein decision, and since, the doctrine of lex loci has been heavily criticized by legal scholars. ⁶ The reputed advantages of certainty and predictability of results may have been true in theory, but were often illusory in practice. As noted in Sexton, supra, 413 Mich. at 426-431, 320 N.W.2d 843, courts employed escape devices to avoid potentially harsh results. The two main manipulative techniques were "procedural...