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IDS Property Casualty Insurance Co. v. Kasneci

United States District Court, E.D. Michigan, Southern Division

December 5, 2016

IDS PROPERTY CASUALTY INSURANCE COMPANY, Plaintiff/Counter-Defendant,
v.
FRANO KASNECI, Defendant/Counter-Plaintiff.

          OPINION AND ORDER REGARDING CROSS-MOTIONS FOR SUMMARY JUDGMENT

          Gerald E. Rosen United States District Judge

         I. INTRODUCTION

         After Defendant Frano Kasneci sustained injuries in a 2007 automobile accident, he reached a settlement with his automobile insurer, Plaintiff IDS Property Casualty Insurance Company, that called for Plaintiff to provide various benefits to Defendant for a two-year period concluding in April of 2014. Upon conducting surveillance of Defendant in September of 2012, however, the Plaintiff insurer determined that Defendant was no longer entitled to the benefits awarded to him under the parties' settlement agreement. Accordingly, Plaintiff evidently ceased to pay these benefits in March of 2013, and it also commenced the present action in this Court, seeking (i) a declaration that it has no further obligation to provide benefits to Defendant under the parties' settlement agreement, and (ii) recovery of all past payments made to Defendant under the settlement agreement. Defendant, in turn, has filed a counterclaim against the Plaintiff insurer, alleging that it has breached the parties' settlement agreement by improperly ceasing payment of the benefits granted to Defendant under the agreement.

         Through the present cross-motions, Defendant seeks an award of summary judgment in his favor as to each of the claims asserted in Plaintiff's complaint, and Plaintiff requests that summary judgment be awarded in its favor on the counterclaims asserted by Defendant. These motions have been fully briefed by the parties.[1] Having reviewed the parties' briefs and accompanying exhibits, as well as the remainder of the record, the Court finds that the relevant allegations, facts, and legal arguments are adequately presented in these written submissions, and that oral argument would not aid the decisional process. Accordingly, the Court will decide the parties' cross-motions “on the briefs.” See Local Rule 7.1(f)(2), U.S. District Court, Eastern District of Michigan. This opinion sets forth the Court's rulings on these motions.

         II. FACTUAL BACKGROUND

         On March 20, 2007, Defendant Frano Kasneci sustained various injuries in an automobile accident. Following this accident, Defendant sought benefits from his automobile insurer, Plaintiff IDS Property Casualty Insurance Company. Although Plaintiff allegedly “commenced the payment of benefits to [Defendant] from the date of the accident” through the date the present suit was filed, (Complaint at ¶ 7), Defendant evidently was dissatisfied with these payments and brought a state court suit against Plaintiff in April of 2009.

         In May of 2012, the parties entered into a settlement agreement calling for Plaintiff to pay certain benefits to Defendant for the period from April 20, 2012 to April 19, 2014. (See Complaint, Ex. 1, Settlement Agreement.) Specifically, this agreement provided that Plaintiff would pay Defendant (i) $1, 568.00 per week for 128 hours of home attendant health care services, (ii) $400 per month for transportation services, and (iii) the cost of a health club membership in lieu of physical therapy. (Id. at 1-2.)[2] In addition, Plaintiff promised to pay the “reasonable medical expenses incurred for [Defendant's] care, treatment, rehabilitation and accommodation . . . arising as a result of” his auto accident, as well as the cost of “all medications prescribed by physicians[]” for Defendant's care and treatment arising from this accident. (Id. at 2-3.) The parties agreed, however, that if there was “a substantial change in [Defendant's] medical circumstance, ” Plaintiff would be relieved of its obligation to pay benefits “for that period of time that said change [in] circumstance shall continue.” (Id. at 3.)

         Both before and during the two-year term of the settlement agreement, a private investigator retained by the Plaintiff insurer conducted surveillance of Defendant's activities. (See Defendant's Motion, Ex. 7, Adamczyk Dep. at 10-11, 20, 33-36.) Although Defendant's health care providers opined that he could not drive due to his medical condition, [3] Defendant was observed driving a car in November of 2011 and September of 2012. (See Id . at 15-19, 25-31; see also Plaintiff's Motion, Ex. 9, 9/30/2012 Surveillance Report at 2.) Moreover, Defendant suffered from occasional seizures and episodes of aggressive behavior and loss of control, concerns that presumably led to the provision in the settlement agreement calling for over 18 hours a day of attendant care. Yet, Plaintiff's surveillance disclosed that Defendant engaged in various activities - e.g., a convenience store transaction, (see 9/30/2012 Surveillance Report at 25), numerous interactions with a contractor at his home over the course of several hours, (see Plaintiff's Motion, Ex. 10, 1/28/2013 Surveillance Report at 19-37), and helping a man confined to a wheelchair gain entrance to an office building, (see Plaintiff's Motion, Ex. 11, 3/19/2013 Surveillance Report at 22-23) - without any attendant care provider on hand to intervene and assist Defendant if that proved necessary.

         In light of this surveillance, the Plaintiff insurer ceased making payments to Defendant under the settlement agreement. In addition, Plaintiff commenced the present action in this Court on March 20, 2013, seeking (i) a declaration that the parties' settlement agreement is no longer enforceable, whether due to a mistaken understanding of Defendant's condition at the time the parties entered into this agreement or a subsequent improvement in Defendant's condition, and (ii) reimbursement of the payments made by Plaintiff to Defendant under the agreement. Defendant, in turn, filed a counterclaim against Plaintiff, seeking (i) a declaration that Plaintiff is responsible for paying the entirety of the benefits called for under the settlement agreement, and (ii) an award of all benefits withheld by Plaintiff over the two-year term of this agreement.

         III. ANALYSIS

         A. The Standards Governing the Parties' Cross-Motions

         Through the present cross-motions, both Plaintiff and Defendant seek an award of summary judgment in their favor as to each of the claims asserted against them by the opposing party. Under the pertinent Federal Rule governing these motions, summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). As the Supreme Court has explained, “the plain language of Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552 (1986).

         In deciding a motion brought under Rule 56, the Court must view the evidence “in a light most favorable to the party opposing the motion, giving that party the benefit of all reasonable inferences.” Smith Wholesale Co. v. R.J. Reynolds Tobacco Co., 477 F.3d 854, 861 (6th Cir. 2007). Yet, the nonmoving party may not rely on bare allegations or denials, but instead must support a claim of disputed facts by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). Moreover, any supporting or opposing affidavits “must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.” Fed.R.Civ.P. 56(c)(4). Finally, “[a] mere scintilla of evidence is insufficient” to withstand a summary judgment motion; rather, “there must be evidence on which the jury could reasonably find for the non-moving party.” Smith Wholesale, 477 F.3d at 861 (internal quotation marks and citation omitted).

         B. Issues of Fact Remain as to Whether the Plaintiff Insurer Has Established a Substantial Change in Circumstances That Would Relieve It of Any Further Payment Obligations Under the Parties' Settlement Agreement.

         In its three-count complaint, the Plaintiff insurer seeks (i) a declaratory judgment enforcing the provisions of the parties' settlement agreement and relieving Plaintiff of the obligation to make any further payments to Defendant under this agreement, (ii) the reimbursement of payments already made to Defendant under an alleged mistake of fact, and (iii) the reimbursement of these payments under the alternative theory of unjust enrichment. In seeking an award of summary judgment in his favor as to the first of these claims, Defendant argues (i) that Plaintiff has failed to identify a basis for setting aside the settlement agreement in its entirety, and (ii) that there is no evidentiary support for Plaintiff's claim of a substantial change in circumstances that would relieve it of any further obligation to make the payments called for under the agreement. As discussed below, the Court accepts the first of these contentions, but finds that it must be left to the trier of fact to determine whether Plaintiff may invoke the “substantial change in circumstances” provision of the settlement agreement to avoid any further payments to Defendant.

         As Defendant observes in his motion, it is not entirely clear from the complaint whether Plaintiff seeks to set aside the parties' settlement agreement in its entirety, or whether Plaintiff instead wishes to affirmatively enforce the terms of this agreement in order to relieve itself of any further obligations otherwise owed to Defendant under the agreement. On one hand, the plea for relief in count I of the complaint expressly incorporates a request that the Court “set aside the [parties'] ‘Settlement Agreement.'” (Complaint, Count I, Prayer for Relief.) On the other hand, Plaintiff states in its response to Defendant's motion that it is not pursuing a claim that the settlement agreement “is void ab initio, ” but rather “seeks a determination concerning the applicability/enforceability of specific ...


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