Cardelli Lanfear Appellate Victory–Reversal of Adverse No-Fault Insurance Priority/Indemnification Ruling

Appellate|Complex Commercial Litigation

Cardelli Lanfear has won a significant appeal, reversing a trial court decision that allowed a City of Detroit to (a) operate a bus system, making it liable for first-party benefits owed to a passenger; (b) self-insure, rather than incur the expense of securing insurance for first-party benefits; and (c) pass along its obligation to pay first party benefits via an indemnification provision in an unrelated contract. Detroit contended that the indemnification contract applied because of the potential to argue that a city vendor was at fault, even though the No-Fault first-party benefits are owed without regard to fault. The Michigan Court of Appeals reversal recognized that, by standing in the shoes of an insurer under the No-Fault Act, Detroit was limited to the indemnification options available to an insurer and could not otherwise be altered via contract. The Court of Appeals also reversed a separate order awarding attorney fees, recognizing that the language of the indemnification contract did not support an attorney fees award where Detroit was using in-house attorneys. See Bronner v. City of Detroit, 2019 Mich. App. LEXIS 3695, link: 20190709_c340930_40_340930.opn(1)).

Detroit’s motion for reconsideration was also denied. See order, link: @ 340930(46)_order(1)