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04/27/76 UNDERWOOD v. RECHSTEINER

April 27, 1976

UNDERWOOD
v.
RECHSTEINER



Appeal from Bay, Leon R. Dardas, J.

Leave to appeal applied for.

D. E. Holbrook, P. J., and R. M. Maher and D. F. Walsh, JJ. D. F. Walsh, J., concurred. D. E. Holbrook, P. J. (dissenting).

SYLLABUS BY THE COURT

Opinion of the Court

1. Judgment -- Accelerated Judgment -- Disposition of Claim -- Insurance -- Reservation of Right -- Participation in Recovery.

An agreement by an insured plaintiff prior to commencement of a negligence action to hold as trustee all rights, claims and causes of action arising from the injury for the benefit of the insurer, without reservation by the plaintiff of a right to bring an action in his individual capacity for the injury, constitutes a Disposition of the claim before commencement of the action which will support a motion for accelerated judgment for the defendant even though the agreement provides for possible participation by the plaintiff in a recovery from the defendant.

Dissent by D. E. Holbrook, P. J.

2. Insurance -- Fiduciary Agreements -- Public Policy -- Control by Insurer -- Courts -- Sua Sponte Recognition.

An agreement which purports to make an insured a fiduciary for the insurer while at the same time allowing the insurer to control the time, forum, and amount prayed for in a cause of action for injury to the insured is patently against public policy, and therefore invalid, and the Court of Appeals has the authority to recognize such an issue sua sponte.

The opinion of the court was delivered by: Maher

Complaint by Sandy J. Underwood and Hazel E. Underwood against Timothy Neal Rechsteiner for damages resulting from an automobile collision. Accelerated judgment for defendant. Plaintiffs appeal.

Plaintiffs appeal from an order granting defendant's motion for accelerated judgment, GCR 1963, 116. We affirm.

Plaintiffs' complaint, filed May 13, 1975, in circuit court, alleges personal injuries caused by defendant's negligence in an accident on May 19, 1972, involving their automobile and an automobile driven by defendant. Also alleged was $2,000 damage to plaintiffs' automobile.

On April 11, 1975, plaintiffs, after receiving $4,149.13 from Allstate Insurance under their uninsured motorist coverage, entered into a "trust agreement". They agreed to hold as trustees for the benefit of Allstate "all rights, claims and causes of action" they might have "because of bodily injury, sickness, or disease or ...


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