LAKE STATES INSUR CO V PEGGY S SCHNEIDER
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STATE OF MICHIGAN
COURT OF APPEALS
DOROTHY DENISE SHULER, BRIAN SCOTT
SHULER, NINA JILLANE SHEPHERD,
MARGARET MAE MAYES, FRANCES ANDRE
MAYES, KALLIE J. GEILING, JAMES M.
GEILING,
FOR PUBLICATION
February 10, 2004
9:05 a.m.
Plaintiffs-Counter-DefendantsAppellees,
and
MARION DAVID SUTTON, M.D., and MIDMICHIGAN FAMILY PHYSICIANS, P.C.,
Intervening-Plaintiffs-Appellees,
and
PEGGY S. SCHNEIDER and RONALD G.
SCHNEIDER,
Intervening-Plaintiffs-AppelleesCross-Appellants,
v
MICHIGAN PHYSICIANS MUTUAL
LIABILITY COMPANY, a/k/a AMERICAN
PHYSICIANS ASSURANCE CORPORATION,
Defendant-Counter-PlaintiffAppellant-Cross-Appellee,
and
TIG INSURANCE COMPANY,
Defendant-Not Participating.
-1-
No. 239291
Midland Circuit Court
LC No. 98-008351-CK
LAKE STATES INSURANCE COMPANY,
Plaintiff-Counter-DefendantAppellant,
v
DOROTHY DENISE SHULER, BRIAN SCOTT
SHULER, NINA JILLANE SHEPARD,
MARGARET MAE MAYES, FRANCIS ANDRE
MAYES, KALLIE J. GEILING, JAMES M.
GEILING, MARION DAVID SUTTON, M.D.,
P.C., and MID-MICHIGAN FAMILY
PHYSICIANS,
No. 239471
Midland Circuit Court
LC No. 98-007874-CK
Defendants-Counter-PlaintiffsAppellees.
LAKE STATES INSURANCE COMPANY,
Plaintiff-Appellant,
v
PEGGY S. SCHNEIDER, RONALD G.
SCHNEIDER, MARION DAVID SUTTON,
M.D., MARION DAVID SUTTON, M.D., P.C.,
and MID-MICHIGAN FAMILY PHYSICIANS,
Defendants-Appellees.
No. 239472
Midland Circuit Court
LC No. 98-007872-CK
Updated Copy
April 23, 2004
Before: Smolenski, P.J., and Murphy and Wilder, JJ.
WILDER, J.
The suits in these consolidated cases arise out of allegations that in the late 1980s and
early 1990s, Dr. Marion David Sutton committed criminal sexual conduct (CSC) against several
of his patients, including Peggy Schneider (also Dr. Sutton's former employee), Nina Shepherd,
Kallie Geiling, Margaret Mayes, and Dorothy Shuler, by inappropriately touching each patient's
clitoris during pelvic examinations. Upon consideration of the various issues raised, we affirm
in part, reverse in part, and remand to the trial court.
I. Facts and Proceedings
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A. Criminal Proceedings
In February 1992, the Midland County Prosecuting Attorney charged Dr. Sutton with two
counts of second-degree CSC based on the accusations made by Schneider and a patient who is
not a party to these proceedings. In April 1992, the prosecuting attorney charged Dr. Sutton (in a
separate complaint) with five counts of second-degree CSC and one count of fourth-degree CSC
arising out of claims made by a number of other patients.
After severing the charges in the first complaint, the trial court conducted a jury trial on
the complaint concerning the nonparty patient's accusations. The jury convicted Dr. Sutton of
second-degree CSC as charged. In October 1992, immediately before sentencing Dr. Sutton, the
trial court met with counsel for the parties and requested that Dr. Sutton plead guilty to the
remaining charges in exchange for a delayed sentence without additional time in jail. Dr. Sutton
accepted that offer and pleaded guilty of committing second-degree CSC against Schneider,
Shepherd, Geiling, and Shuler, and pleaded guilty of committing fourth-degree CSC against an
additional patient who is not a party to these proceedings. Before entering his pleas, Dr. Sutton
stated that that he could not admit having a conscious awareness of touching his patients with a
sexual intent, although he stated that he intentionally touched each patient's clitoris without a
medical purpose. The trial court sentenced Dr. Sutton to five years' probation and one year in
jail, subject to review in six months, for his jury trial conviction. Thereafter, the trial court
imposed a delayed sentence for the charges to which Dr. Sutton pleaded guilty during the
October 1992 sentencing hearing. On appeal, this Court vacated Dr. Sutton's sentence because it
was disproportionately lenient. People v Sutton, unpublished opinion per curiam of the Court of
Appeals, issued October 26, 1994 (Docket No. 171214).
Following remand, the trial court granted Dr. Sutton's motion to withdraw the guilty
pleas he entered in October 1992. Thereafter, in 1995, the trial court conducted a jury trial
concerning the charge based on Schneider's allegation regarding a 1990 pelvic examination by
Dr. Sutton. Although the jury acquitted Dr. Sutton of second-degree CSC, it convicted him of
fourth-degree CSC. Subsequently, in March 1996, Dr. Sutton pleaded no contest to fourthdegree CSC in the cases concerning Geiling, Shuler, Shepherd, and another patient. In addition
to the charges arising directly out of the sexual assaults, Dr. Sutton pleaded no contest to a
charge of attempted perjury in exchange for dismissal of a perjury charge based on the
inconsistency between his trial testimony and his statements at the October 1992 plea
proceeding. Dr. Sutton served his sentence for these convictions and was released in August
1997.
B. Civil Proceedings
1. Suits filed by Schneider and the plaintiff-patients
In 1992, in separate yet nearly identical complaints, Shuler, Shepherd, Geiling, and
Mayes (the plaintiff-patients) sued Dr. Sutton and his professional corporations, M. David
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Sutton, M.D., P.C., and Mid-Michigan Family Physicians, P.C., for assault and battery or
criminal sexual conduct, medical malpractice, and breach of contract.1 The same year, Schneider
filed an action alleging (1) gross negligence, sexual harassment, hostile work environment sexual
harassment, assault and battery, and medical malpractice against Dr. Sutton, (2) negligent hiring
and supervision against Mid-Michigan Family Physicians, P.C., and M. David Sutton, M.D.,
P.C., and (3) intentional and negligent infliction of emotional distress against Dr. Sutton, M.
David Sutton, M.D., P.C., and Mid-Michigan Family Physicians, P.C.2
2. Declaratory relief requested by Michigan Physicians Mutual Liability Company
After becoming aware of the suits against its insureds in 1992, Michigan Physicians
Mutual Liability Company (MPMLC), Dr. Sutton's malpractice insurer, refused to defend or
indemnify Dr. Sutton and Mid-Michigan Family Physicians, P.C., because of the "criminal acts"
exclusion in the insurance policy. The exclusion provides that coverage is not provided for "any
liability as a consequence of the performance of a criminal or fraudulent act by the Insured,
whether or not such an act was performed in conjunction with the rendering or failure to render
professional services." On the basis of this exclusion, MPMLC filed a complaint seeking a
declaratory judgment that it did not need to defend or indemnify Dr. Sutton or Mid-Michigan
Family Physicians, P.C. MPMLC also named Shuler, the first patient to file suit, as a defendant
in the declaratory action.
In 1993, the trial court granted MPMLC's motion for summary disposition pursuant to
MCR 2.116(C)(10), concluding that none of Shuler's theories of liability was covered by the
policy in light of Dr. Sutton's guilty pleas to charges involving Shuler. Thus, the trial court held
that MPMLC had no duty to indemnify or defend Dr. Sutton or Mid-Michigan Family
Physicians, P.C., in Shuler's suit.
3. Settlement reached by the plaintiff-patients
In June 1998, after Dr. Sutton had completed his sentences in the criminal matters, the
patients-plaintiffs entered into settlement agreements with Dr. Sutton and his professional
corporations, settling their civil claims for $500,000 for each person or couple. Each agreement
was subject to Dr. Sutton and his corporations (1) assigning the patients-plaintiffs their rights
under insurance policies issued by four insurance companies; (2) requiring the plaintiff-patients
1
Additionally, Brian Shuler, Francis Mayes, and James Geiling each filed a claim of loss of
consortium.
2
Ronald Schneider also filed a claim of loss of consortium. Although Peggy Schneider was Dr.
Sutton's patient, she was also his employee. Throughout the rest of this opinion, the term
"patients-plaintiffs" refers only to Shuler, Shepherd, Geiling, and Mayes. Moreover, because the
loss of consortium claims filed by the patients' husbands are derivative in nature, references to
married plaintiffs (i.e., Peggy and Ronald Schneider) are stated in the singular throughout this
opinion.
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to pursue declaratory relief against the insurance companies; and (3) permitting the plaintiffpatients to refile their suits if their efforts to collect from the insurers were unsuccessful.
4. Declaratory relief requested by Lake States Insurance Company
In April 1998, three of the four insurers named in the settlement agreements, Lake States
Insurance Company (Lake States), TIG, and Aetna (succeeded in interest by Travelers Property
& Casualty Company), sought declaratory judgments stating that they did not have to provide
coverage for the suits by Schneider and the patients-plaintiffs arising from Dr. Sutton's actions.
Lake States' suit against Schneider is the only one of these declaratory actions relevant on appeal
(Docket Nos. 239471 and 239472).3 Lake States, which insured Dr. Sutton and Mid-Michigan
Family Physicians, P.C., under a Special Business Owners Policy, asserted in its complaint that
under the terms of the policy (1) Schneider did not suffer a "personal injury," (2) her injuries did
not result from an "occurrence," and (3) coverage did not extend to the injuries because (a) they
were expected or intended by the insureds, (b) they arose out of Schneider's employment with
the insureds, (c) they arose out of rendering or a failure to render treatment or professional
services, (d) they arose out of the willful violation of a penal statute, and (e) Dr. Sutton was not
an "insured" under the policy.
5. Declaratory relief requested by the plaintiff-patients
In August 1998, the patients-plaintiffs filed a suit for declaratory relief against MPMLC
and TIG, requesting a declaratory judgment that MPMLC and TIG, alternatively or together,
were required to indemnify their insureds, and a money judgment in favor of each patientplaintiff consistent with the settlement agreements, plus interest, costs, and attorney fees. In its
affirmative defenses, MPMLC asserted that the plaintiff-patients' claims were barred by res
judicata and the prior decision that MPMLC did not have to provide coverage. Additionally,
MPMLC stated that the criminal acts exclusion in its policy excluded these claims from
coverage. MPMLC also filed a counterclaim requesting a declaratory judgment concerning the
criminal acts exclusion and the binding nature of the prior declaratory judgment in its favor. The
trial court permitted Dr. Sutton, Mid-Michigan Family Physicians, P.C., and Schneider to
intervene as plaintiffs in this matter, following a stipulation by the parties.
6. Motions for summary disposition filed by the insurers and Schneider
3
Lake States filed appeals from the trial court's decisions regarding lower court number 98007874-CK, its case against the patients-plaintiffs (Docket No. 239471), and lower court number
98-007872-CK, its case against Schneider (Docket No. 239472). Although the caption of its
brief on appeal references both docket numbers, Lake States' arguments address the trial court's
decision regarding Schneider only.
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The insurers in both declaratory actions filed motions for summary disposition pursuant
to MCR 2.116(C)(8) and (10)4 and Schneider moved for summary disposition pursuant to MCR
2.116(C)(10) against Lake States only. The trial court consolidated these cases for hearing and
decision on the various motions. Following oral arguments, the trial court issued a written
opinion in which it granted the motions filed by TIG and Aetna for reasons not relevant on
appeal.
Additionally, the trial court denied Lake States' motion concerning coverage for
Schneider's claim of negligent hiring and supervision against Mid-Michigan Family Physicians,
P.C.,5 and granted her cross-motion for summary disposition, concluding that (1) negligent
hiring and supervision could be characterized as an occurrence under the policy, (2) Schneider
had alleged physical ailments that qualify as "bodily injury" under the terms of the policy, and
(3) it was irrelevant whether Dr. Sutton was an insured under the policy because Schneider's
claim pertained to Mid-Michigan Family Physicians' negligence. The trial court also stated that
Schneider's claims against Mid-Michigan Family Physicians, P.C., did not arise out of rendering
or failing to render a professional service and, therefore, were not excluded from coverage.
The trial court denied MPMLC's motion for summary disposition in part, deciding that
res judicata did not bar the patients-plaintiffs' suits because Dr. Sutton withdrew the guilty pleas
underlying the prior declaratory judgment after the declaratory judgment had been entered.
Additionally, the trial court stated that because Dr. Sutton pleaded no contest to the criminal
charges,6 a genuine issue of material fact existed regarding whether his actions constituted
criminal acts excluded from coverage. The trial court granted MPMLC's motion regarding
Schneider's claims, however, stating that no genuine issue of material fact existed because a jury
convicted Dr. Sutton of fourth-degree CSC based on Schneider's allegations.
7. Trial conducted in the plaintiff-patients' suit against MPMLC
At trial, Shepherd testified that, on Shuler's recommendation, she visited Dr. Sutton's
office for a physical and pelvic examination in November 1990, during her pregnancy.7 While
Dr. Sutton conducted the pelvic examination, she felt him "flip[] his hand upward and tilt[] it in"
as though he was feeling for something, and then felt his thumb moving back and forth against
her clitoris. She believed that he did not intentionally touch her clitoris and did not have any
indication that he was sexually aroused.
4
Presumably, Lake States intended to file pursuant to MCR 2.116(C)(9), failure to state a valid
defense, rather than C(8), failure to state a claim.
5
Schneider admits this is the only count of her complaint to which the Lake States policy
applied.
6
The trial court did not mention the fact that Dr. Sutton was not charged with any crime based
on Mayes's allegations.
7
Later testimony revealed that at the time Shuler referred Shepherd to Dr. Sutton, Shuler had
already been inappropriately touched by Dr. Sutton during three examinations.
-6-
She further testified that despite this incident, she continued to treat with Dr. Sutton, and
Dr. Sutton did not stimulate her clitoris during any subsequent examinations. On one occasion,
however, he hugged her while she sat on the examining table with only a paper sheet covering
her and later kissed her after she got dressed. However, she had no knowledge that he had
engaged in any of this behavior for a sexual purpose.
Shuler testified that she started treating with Dr. Sutton in 1988. She estimated that Dr.
Sutton performed approximately eight pelvic examinations on her. During three nonconsecutive
examinations, she felt Dr. Sutton touch her clitoris for a period of perhaps ten to thirty seconds.
She did not say anything to Dr. Sutton about his conduct. He did not say anything to her of a
sexual nature during the examinations, and she did not know whether he touched her clitoris
intentionally or accidentally.
Shuler testified that when she heard that other women complained about Dr. Sutton, she
wondered whether the contact she experienced was not accidental, and she and Shepherd decided
to contact a police detective concerning their experiences. She felt a duty to the other
complaining women to assist them by providing testimony during the criminal trials recounting
what had happened to her. She would not have referred Shepherd to a doctor she believed was
intentionally touching her inappropriately.
Geiling testified that she began treating with Dr. Sutton in 1989. In November 1990, Dr.
Sutton rubbed her clitoris while performing a pelvic examination. Dr. Sutton did not say
anything to her of a sexual nature during the examination, and she had no reason to believe that
he touched her for a sexual purpose or was sexually aroused during the examination. At some
point after the incident, Geiling told her sister that Dr. Sutton had done something that no doctor
should do, that she felt "very raped," and that she was not going back to Dr. Sutton. She stated
that she did not undergo any pelvic examinations from 1990 until 1998 because she did not want
to be in that situation again and has not treated with Dr. Sutton since that incident. After she
learned that other women had reported similar experiences, she felt a need to support the women
making the complaints.
Mayes testified that Dr. Sutton examined her in December 1990, after Shepherd referred
her to him. She intended to undergo only a routine physical, having lost a significant amount of
weight in a short time, but Dr. Sutton decided to perform a pelvic examination and take a pap
smear as well. During the pelvic examination, Dr. Sutton touched her clitoris for "just a matter
of a few seconds." He did not say anything to her of a sexually suggestive nature during the
examination. When she asked him whether she was underweight, he put his hands on her waist
and told her she looked just right. She did not treat with him thereafter.
Dr. Sutton testified that while performing bimanual pelvic examinations, he attempts to
avoid touching the patient's clitoris, although the thumb of one hand is positioned near the
clitoris while he uses the first two fingers of that hand to examine the patient internally. He also
testified that he cut a tendon in his left pinky finger in 1977 and subsequently injured it beyond
repair while delivering a baby. Scarring caused the finger to "contracture" down. Then, in
September 1989, he tore ligaments in the ring finger of the same hand and subsequently
reinjured it twice in 1990. For the 1-1/2 years this injury was healing, conducting bimanual
pelvic examinations became uncomfortable and, at times, he was only able to use his right hand
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to conduct the entire examination. If, after he suffered this injury, any patient had complained
that he touched her clitoris during an examination, he would have attempted to explain that his
hand was sore and, if concerned it might happen again, he would have stopped conducting pelvic
examinations.
Dr. Sutton recalled treating Shepherd on November 13, 1990, and examining her
internally to assess the bones of her pelvis to ensure that her baby would not have difficulty
moving through her birth canal. This examination involves pressing very deeply with the fingers
inside to try to reach the backbone of the pelvis and then moving those fingers side to side to feel
the mid-pelvis bones. He stated that he did not recall stimulating her clitoris at any point during
the examination. Dr. Sutton testified that on the day he hugged and kissed Shepherd, she was
emotionally distraught, and he was suddenly "caught up in the emotion of the moment."
Dr. Sutton testified that he performed a pelvic examination on Shuler during her first
prenatal visit in January 1989. He had no memory of touching her clitoris during this
examination or her October 1990 pelvic examination, but did not deny that he may have touched
it. Dr. Sutton testified that because Shuler suffered an anal fissure during the delivery of one of
her children, he tried to avoid applying pressure to the tissues near her anus, which meant he had
to apply more pressure in the front, increasing the chance of contact with the clitoris.
Dr. Sutton also did not recall touching Geiling's clitoris during her pelvic examinations.
Because Geiling complained that she had pain during intercourse, Dr. Sutton examined her more
fully to try to find the source of her pain. Although Dr. Sutton did not have any medical records
for Mayes, he testified that he would have insisted on conducting a full examination in light of
her recent weight loss, given that it could be a sign of ovarian cancer. He testified that he did not
do anything for his own sexual gratification during any examination and did not attempt to
induce sexual arousal in his patients.
After deliberating, the jury concluded that Dr. Sutton had not engaged in a criminal act
with respect to any of the plaintiff-patients.
8. Posttrial motions filed by the parties
On July 19, 2001, the trial court heard the plaintiff-patients' motion for entry of
judgment. The patients-plaintiffs requested a collective judgment of $600,000, representing the
limit of Dr. Sutton's insurance policy, plus prejudgment interest. Over MPMLC's objection, the
trial court concluded that pursuant to MCR 2.605(F), which permits the court to enter "[f]urther
necessary or proper relief" in addition to a declaratory judgment, the plaintiff-patients could
request further relief in the form of a money judgment. Accordingly, the trial court indicated
that it would enter a declaratory judgment based on the jury verdict and permit the plaintiffpatients to file a motion for further relief. MPMLC opposed the plaintiff-patients' subsequent
motion, but the trial court stated that MPMLC had waived its right to contest the fairness of the
settlement amount, having failed to accept requests that it participate in the settlement
negotiations, object to the request for a money judgment in the pleadings, or indicate that the
jury needed to consider any issue other than the existence of criminal acts. Accordingly, the trial
court granted the plaintiff-patients' request for further relief.
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After the trial court entered the judgment, MPMLC moved for a new trial on the basis of
MCR 2.611, arguing that the trial court abused its discretion regarding several evidentiary issues
at trial. MPMLC also argued that that the jury's verdict was against the great weight of the
evidence. The trial court denied the motion on each of the grounds raised. The trial court did,
however, grant MPMLC's motion for a stay of execution or enforcement of the judgments
pending appeal. This appeal followed.
II. Standards of Review
This Court reviews the trial court's decision to admit or exclude evidence for abuse of
discretion. People v Aldrich, 246 Mich App 101, 113; 631 NW2d 67 (2001), citing People v
Starr, 457 Mich 490, 494; 577 NW2d 673 (1998).
An abuse of discretion is found only if an unprejudiced person,
considering the facts on which the trial court acted, would say that there was no
excuse for the ruling made. People v Snider, 239 Mich App 393, 419; 608 NW2d
502 (2000). A decision on a close evidentiary question ordinarily cannot be an
abuse of discretion. People v Sabin (After Remand), 463 Mich 43, 67; 614 NW2d
888 (2000). [Aldrich, supra at 113.]
However, when the resolution of a preliminary question of law determines the admissibility of
the evidence, this Court's review is de novo. People v Lukity, 460 Mich 484, 488; 596 NW2d
607 (1999). A trial court abuses its discretion if it admits evidence that is inadmissible as a
matter of law. Id.
This Court also reviews for abuse of discretion the trial court's decision to permit the use
of leading questions, In re Susser Estate, 254 Mich App 232, 239; 657 NW2d 147 (2002), the
trial court's denial of a motion for new trial, Campbell v Sullins, 257 Mich App 179, 193; 667
NW2d 887 (2003), and the trial court's decision to grant or deny declaratory relief, Allstate Ins
Co v Hayes, 442 Mich 56, 75; 499 NW2d 743 (1993).
We review questions of statutory interpretation de novo. People v Schaub, 254 Mich
App 110, 114-115; 656 NW2d 824 (2002). Likewise, this Court reviews a trial court's decision
on a motion for summary disposition de novo. Ditmore v Michalik, 244 Mich App 569, 574; 625
NW2d 462 (2001), citing Van v Zahorik, 460 Mich 320, 326; 597 NW2d 15 (1999). Whether res
judicata bars a claim is also a question of law subject to review de novo. Ditmore, supra at 574.
III. Analysis
A. MPMLC's Appeal8
8
In each of its arguments concerning the admission or exclusion of evidence, MPMLC asserts
that the trial court denied its right to a fair trial. Other than a brief conclusory statement in each
section of its brief, however, MPMLC devotes no argument to and provides no support for this
(continued…)
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MPMLC first argues that the trial court abused its discretion by prohibiting MPMLC
from impeaching Dr. Sutton's credibility with his conviction of attempted perjury. We agree.
As mentioned above, the prosecution charged Dr. Sutton with perjury as a result of the
inconsistencies between his trial testimony and the statements he made while pleading guilty on
October 16, 1992. Dr. Sutton pleaded no contest to one count of attempted perjury in exchange
for dismissal of the perjury charges. In granting the patients-plaintiffs' motion to exclude
evidence of this conviction, the trial court perceived a conflict between MRE 410, which
prohibits admission of evidence of a plea of nolo contendere "except . . . in a civil proceeding to
support a defense against a claim asserted by the person who entered the plea," and MRE 609,
which permits impeachment of a witness's credibility with proof of a conviction of a crime
involving "an element of dishonesty or false statement." Ultimately, the trial court decided that
MRE 410 "trumped" application of MRE 609 and excluded the evidence. The trial court stated
that even if that were not the case, it still would have excluded the evidence because the danger
of unfair prejudice substantially outweighed the probative value of the attempted perjury
conviction.
The trial court erred, however, in deciding that MRE 609 and MRE 410 conflict. MRE
410 excludes evidence of a plea of no contest, while MRE 609 permits use of certain convictions
for impeachment purposes, regardless of whether the specific conviction followed a guilty plea, a
no-contest plea, or a not-guilty plea.9 Although no published opinion of this Court or our
Supreme Court addresses the intersection of these two rules, we agree with the federal courts of
appeal that have determined, after construing federal rules that are nearly identical in all relevant
respects, that a conviction that ordinarily could be used for impeachment purposes is not
excluded from that use because the conviction resulted from a plea of no contest. See Brewer v
City of Napa, 210 F3d 1093, 1096 (CA 9, 2000), citing United States v Williams, 642 F2d 136,
138-140 (CA 5, 1981), and United States v Lipscomb, 226 US App DC 312; 702 F2d 1049
(…continued)
assertion. Accordingly, this argument has been abandoned. Flint City Council v Michigan, 253
Mich App 378, 393 n 2; 653 NW2d 604 (2002), citing Davenport v Grosse Pointe Farms Bd of
Zoning Appeals, 210 Mich App 400, 405; 534 NW2d 143 (1995).
9
Although the parties seem unaware of this distinction, on some level, the trial court seemed to
recognize the difference. When framing the issue before it, the trial court stated that it was
reviewing the "possible 609 use of the convictions on a nolo conviction—nolo plea based
conviction on the perjury charges." After reaching its decision and learning from MPMLC that,
if allowed, it would have used the stipulation of fact for the no-contest plea and the judgment of
sentence to prove the conviction, the trial court stated:
I must tell you . . . that you would not have used that stipulation in a 609
case. You would have had the fact that he had, by his plea, been convicted of
perjury, but it's a nolo plea. That stipulation of fact that was used to establish the
basis, I don't think I would have allowed. . . .
The trial court's ruling, however, does not reflect its awareness of this distinction.
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(1983). As these courts noted, FRE 609 does not distinguish between convictions arising from
guilty pleas and those arising from no-contest or not-guilty pleas. Brewer, supra at 1096.
Similarly, MRE 609 does not contain such a distinction.10
A plea of no contest "admits 'every essential element of the offense [that is] well pleaded
in the charge.'" Williams, supra at 138, quoting Lott v United States, 367 US 421, 426; 81 S Ct
1563, 1567; 6 L Ed 2d 940 (1961). Although a no-contest plea cannot be used as an admission,
it nevertheless forms the basis of a conviction that can be used to impeach, just as a conviction
following a not-guilty plea and trial can be used to impeach credibility. Williams, supra at 139.
Therefore, the fact that Dr. Sutton's conviction of attempted perjury resulted from a plea of no
contest bears no relevance in the analysis whether the conviction can be used to impeach his
credibility.
Moreover, because this conviction indisputably falls within the class of crimes that
"contain[] an element of dishonesty or false statement" that are available for impeachment use
pursuant to MRE 609(a)(1), the trial court may not engage in the balancing test of MRE 609(b)
or MRE 403 to exclude the conviction because of its prejudicial effect. People v Allen, 429
Mich 558, 593-594, 594 n 16; 420 NW2d 499 (1988) ("Since we find that as a matter of law
prior convictions of crimes involving dishonesty or false statement are more probative than
prejudicial, it obviously cannot be argued that the probative value is 'substantially outweighed'
by prejudice."). Accordingly, the trial court lacked the discretion to prohibit MPMLC from
impeaching Dr. Sutton with his conviction of attempted perjury, although MPMLC could not
have done so by indicating that Dr. Sutton pleaded no contest to that crime.
Despite the trial court's improper exclusion of this evidence, we need not reverse because
failure to do so would not be inconsistent with substantial justice. MCR 2.613. Through Dr.
Sutton's testimony, the jury learned that Dr. Sutton pleaded guilty to CSC charges and that he
later testified that he did not commit those crimes. Although the jury did not learn that he was
convicted of attempted perjury, the readily apparent inconsistencies in his testimony could have
conveyed his lack of credibility to the jury with equal force.
MPMLC next argues that the trial court abused its discretion by excluding the complaints
filed in the initial civil suits against Dr. Sutton. We disagree. In ruling on the plaintiff-patients'
motion in limine, the trial court stated that admitting the pleadings from the underlying civil
suits, suits that were never tried, would contravene principles behind permitting alternative or
inconsistent pleading and, therefore, concluded that the pleadings in the underlying civil suits did
not constitute admissions. MPMLC asserts that because the jury was charged with determining
credibility, it was entitled to know that the plaintiff-patients alleged in the underlying civil suits
that Dr. Sutton intentionally touched them.
10
MRE 609(d), however, does except from admissibility convictions that have been pardoned or
annulled, in certain circumstances.
-11-
On the contrary, we conclude that the trial court appropriately relied on principles
underlying alternative pleading in granting the plaintiff-patients' request to exclude the
complaints because the plaintiff-patients alleged that Dr. Sutton acted either "intentionally or in a
grossly negligent manner." In Larion v Detroit, 149 Mich App 402, 407; 386 NW2d 199 (1986),
this Court stated that "a party should not be placed in the position of having to forego a claim at
the risk of having inconsistent allegations treated as admissions." In support of its decision that
alternative pleadings are an exception to the general rule permitting treating pleadings as
admissions, the Court quoted with approval McCormick on Evidence (3d ed, 1984), § 265, pp
780-782:
"A basic problem which attends the use of written pleadings is uncertainty
whether the evidence as it actually unfolds at trial will prove the case described in
the pleadings. Traditionally a failure in this respect, i.e., a variance between
pleading and proof, could bring disaster to the pleader's case. As a safeguard
against developments of this kind, the common law evolved the use of counts,
each a complete separate statement of a different version of the same basic claim,
combined in the same declaration, to take care of variance possibilities. . . . The
modern equivalent of the common law system is the use of alternative and
hypothetical forms of statement of claims and defenses, regardless of consistency.
It can readily be appreciated that pleadings of this nature are directed primarily
to giving notice and lack the essential character of an admission. To allow them
to operate as admissions would render their use ineffective and frustrate their
underlying purpose. Hence the decisions with seeming unanimity deny them
status as judicial admissions, and generally disallow them as evidential
admissions." [Larion, supra at 408 (emphasis in Larion).]
Accordingly, the trial court properly concluded that the alternatively stated claims in the
patients-plaintiffs' underlying civil suits did not constitute admissions that could be used against
them at trial.
Next, MPMLC claims that the trial court abused its discretion by overruling MPMLC's
hearsay objection and permitting Dr. Sutton to testify about the impressions his attorney's
statements made on him concerning the plea-taking and sentencing process. We disagree.
At trial, Dr. Sutton testified that when talking to his attorney during plea negotiations in
the various criminal cases, he gained certain impressions concerning the consequences he would
face if he accepted or rejected the various plea bargains offered. Although the trial court did not
permit Dr. Sutton to testify directly about his attorney's statements, it stated:
However, I don't think that stops you from inquiring of your client that he
was under certain impressions and that that's why he did things. Based on what
he had been told by his lawyer, he did certain things.
He took certain, made certain decisions to avoid. I think you can get at it
indirectly in any event.
-12-
MPMLC contends that permitting Dr. Sutton to testify to his impressions does not differ
from permitting him to testify about his attorney's statements because his impressions were
founded on his attorney's statements. MPMLC also contends that the statements were being
offered for the truth of the matter asserted because the relevance of the statements depended on
their truth. In other words, unless Dr. Sutton believed the statements were true, MPMLC claims,
he would not have responded to the statements in the manner he did.11
Contrary to MPMLC's arguments, the impressions Dr. Sutton formed from his attorney's
statements are analytically distinguishable from the statements themselves. For example, Dr.
Sutton may have misunderstood his attorney's statements and gained impressions that did not
correspond with his attorney's intentions. In any event, the statements were not being offered for
their truth, but for their effect on Dr. Sutton and were, therefore, admissible. City of Westland v
Okopski, 208 Mich App 66, 77; 527 NW2d 780 (1994) (holding that a 911 tape was admissible
to show why police officers responded to a specific location). Accordingly, the trial court
properly permitted Dr. Sutton's testimony.
MPMLC next asserts that the trial court abused its discretion by excluding the written
settlement agreements from evidence. We disagree. At trial, the trial court sustained the
patients-plaintiffs' objection to MPMLC's request to admit the agreements into evidence and
stated:
If we put these in, I see great confusion for the jury. You guys are looking
at this in terms of spin. I am not. I am looking at it in terms of confusion, and
they could easily come to a conclusion that there are all kinds of insurance
companies out there that I would have to—we would have to go into another
section for this court to explain what's happened with regard to those other
companies and where that all stands, and I am not about to do that.
MPMLC argues on appeal that the agreements were relevant to the relationship between
Dr. Sutton and the patients-plaintiffs and were "crucial" to the jury's determination of credibility.
Because the agreements were relevant, MPMLC claims, they should have been excluded only if
the danger of confusion "substantially outweighed" their probative value. MRE 403. MPMLC
contends that the potential for confusion was minimal and that any confusion could have been
eliminated by a jury instruction on the issue.12
We agree with the trial court's determination that the agreements could create confusion
in the minds of the jurors because insurers other than MPMLC, the only insurer participating at
trial, are listed in the agreements. Additionally, the documents have minimal probative value
11
MPMLC offers no legal authority to support its argument that the witness's belief in the
declarant's statement determines whether the statement is being offered for its truth and has,
consequently, abandoned this argument. Flint City Council, supra.
12
Notably, however, MPMLC did not suggest during trial that the trial court attempt to eliminate
any confusion with a jury instruction.
-13-
because the existence of the agreements, and therefore the relationship between the plaintiffpatients and Dr. Sutton, was conceded at trial. Although whether the danger of confusion
"substantially outweighed" the probative value of the agreements is a close question, this Court
does not find an abuse of discretion when faced with a close evidentiary question, Aldrich,
supra, and we, therefore, affirm the trial court's decision on this issue.
MPMLC next contends that the trial court abused its discretion by permitting Dr. Sutton's
counsel to ask leading questions of Dr. Sutton and the plaintiff-patients on cross-examination.
We disagree. MRE 611(c)(2) states: "Ordinarily leading questions should be permitted on crossexamination." As the word "ordinarily" indicates, a trial court is not always required to permit
leading questions on cross-examination. MPMLC urges this Court to follow the 1972 Advisory
Committee notes to proposed FRE 611(c), which contains the same language as MRE 611(c)(2).
The committee stated:
The purpose of the qualification "ordinarily" is to furnish a basis for
denying the use of leading questions when the cross-examination is crossexamination in form only and not in fact, as for example the "cross examination"
of a party by his own counsel after being called by the opponent (savoring more
of a re-direct) or of an insured defendant who proves to be friendly to the
plaintiff.
Although the trial court has the discretion to prohibit leading questions on cross-examination, it
does not follow that the trial court abuses its discretion if it permits leading questions in the
situations mentioned in the committee notes. See Morvant v Constr Aggregates Corp, 570 F2d
626, 635 (CA 6, 1978). MPMLC, therefore, has not demonstrated that the trial court abused its
discretion.
Next, MPMLC argues that the trial court abused its discretion by denying MPMLC's
motion for new trial based on the great weight of the evidence. We disagree.
In deciding whether to grant or deny a motion for a new trial, the trial
court's function is to determine whether the overwhelming weight of the evidence
favors the losing party. This Court gives substantial deference to a trial court's
determination that the verdict is not against the great weight of the evidence. This
Court and the trial court should not substitute their judgment for that of the jury
unless the record reveals that the evidence preponderates so heavily against the
verdict that it would be a miscarriage of justice to allow the verdict to stand.
[Campbell, supra at 193 (citations omitted).]
Contrary to MPMLC's assertions, this is not "one of those few cases where a genuine
miscarriage of justice can be found" if the verdict stands. MPMLC bases its argument on the
existence of conflicting evidence and its contention that the evidence of Dr. Sutton's criminal
convictions should carry great weight.
[W]hen testimony is in direct conflict and testimony supporting the verdict
has been impeached, if "it cannot be said as a matter of law that the testimony
thus impeached was deprived of all probative value or that the jury could not
-14-
believe it," the credibility of witnesses is for the jury. [People v Lemmon, 456
Mich 625, 643; 576 NW2d 129 (1998), quoting Anderson v Conterio, 303 Mich
75, 79; 5 NW2d 572 (1942).]
During trial, Dr. Sutton offered explanations for his decisions to enter guilty pleas and
no-contest pleas in his criminal cases. He also testified that the injuries from which he suffered,
as well as the conditions from which the plaintiff-patients suffered, could have increased the risk
of contacting a patient's clitoris. Although his testimony and that of the plaintiff-patients was
impeached at trial, it was not deprived of all probative value. "The credibility of a witness is
determined by more than words and includes tonal quality, volume, speech patterns, and
demeanor, all giving clues to the factfinder regarding whether a witness is telling the truth."
Lemmon, supra at 646, citing State v Turner, 186 Wis 2d 277, 521 NW2d 148 (Wis App, 1994).
The jury had the opportunity to perceive all of these factors, as did the trial court, and it cannot
be said that the trial court abused its discretion by denying the motion.
MPMLC also argues that the trial court abused its discretion by granting the plaintiffpatients' motion for further relief. We disagree. MCR 2.605(F) provides that "[f]urther
necessary or proper relief based on a declaratory judgment may be granted, after reasonable
notice and hearing, against a party whose rights have been determined by the declaratory
judgment." MPMLC claims that the money judgment granted by the trial court was neither
necessary nor proper because the plaintiff-patients could have refiled the underlying civil suits,
providing MPMLC a "fair" opportunity to participate in settlement negotiations or trial. We
note, however, that MPMLC had the opportunity to participate in the settlement negotiations in
the underlying civil suits but chose not to participate. Moreover, the existence of an alternative
means of proceeding does not defeat the propriety of the trial court's order. MPMLC also asserts
that the settlement amounts are excessive because the jury decided that Dr. Sutton's acts were
unintentional, a decision inconsistent with the patients-plaintiffs claims in the underlying suits.
This argument lacks merit, however, because the settlement agreements also resolved the
patients-plaintiffs' alternative claims of negligent behavior.
Additionally, MPMLC contends that enforcement of the settlement agreements is
improper because the jury considered only the criminality of Dr. Sutton's acts and not the amount
of damages. This argument also lacks merit. The complaint in this action put MPMLC on notice
that the patients-plaintiffs requested enforcement of the settlement agreements, yet MPMLC
raised no objections to this request, did not contest the validity of the settlement agreements
throughout this litigation, and did not indicate to the trial court that the jury should also consider
the amount of damages.13
MPMLC also claims that the complaint did not allege causes of action that could support
a money judgment, citing MCR 2.111(B). MPMLC, however, did not move for a more definite
13
Contrary to MPMLC's claims, the trial court did not state in its opinion resolving the motions
for summary disposition that the only issue for the jury's resolution was whether Dr. Sutton's
actions were criminal in nature.
-15-
statement or to strike the request for money damages from the complaint. See Hofmann v Auto
Club Ins Ass'n, 211 Mich App 55; 535 NW2d 529 (1995). MPMLC should have raised with the
trial court before trial its belief and desire that the issue of damages should also be submitted for
determination by the jury. See Hofmann, supra at 92.
Finally, MPMLC argues that the judgment interest in this case should be adjusted to
reflect amendments of MCL 600.6013 that took effect during the pendency of these appeals. We
agree. As amended, the relevant portions of MCL 600.6013 provide:
(1) Interest is allowed on a money judgment recovered in a civil action, as
provided in this section. However, for complaints filed on or after October 1,
1986, interest is not allowed on future damages from the date of filing the
complaint to the date of entry of the judgment. As used in this subsection, "future
damages" means that term as defined in section 6301.
* * *
(5) Except as provided in subsection (6), for a complaint filed on or after
January 1, 1987, but before July 1, 2002, if a judgment is rendered on a written
instrument, interest is calculated from the date of filing the complaint to the date
of satisfaction of the judgment at the rate of 12% per year compounded annually,
unless the instrument has a higher rate of interest. In that case, interest shall be
calculated at the rate specified in the instrument if the rate was legal at the time
the instrument was executed. The rate shall not exceed 13% per year
compounded annually after the date judgment is entered.
(6) For a complaint filed on or after January 1, 1987, but before July 1,
2002, if the civil action has not resulted in a final, nonappealable judgment as of
July 1, 2002, and if a judgment is or has been rendered on a written instrument
that does not evidence indebtedness with a specified interest rate, interest is
calculated as provided in subsection (8).
(7) For a complaint filed on or after July 1, 2002, if a judgment is rendered
on a written instrument evidencing indebtedness with a specified interest rate,
interest is calculated from the date of filing the complaint to the date of
satisfaction of the judgment at the rate specified in the instrument if the rate was
legal at the time the instrument was executed. If the rate in the written instrument
is a variable rate, interest shall be fixed at the rate in effect under the instrument at
the time the complaint is filed. The rate under this subsection shall not exceed
13% per year compounded annually.
(8) Except as otherwise provided in subsections (5) and (7) and subject to
subsection (13), for complaints filed on or after January 1, 1987, interest on a
money judgment recovered in a civil action is calculated at 6-month intervals
from the date of filing the complaint at a rate of interest equal to 1% plus the
average interest rate paid at auctions of 5-year United States treasury notes during
the 6 months immediately preceding July 1 and January 1, as certified by the state
-16-
treasurer, and compounded annually, according to this section. Interest under this
subsection is calculated on the entire amount of the money judgment, including
attorney fees and other costs. The amount of interest attributable to that part of
the money judgment from which attorney fees are paid is retained by the plaintiff,
and not paid to the plaintiff 's attorney.
MPMLC correctly argues that this case falls within the category of cases described in
MCL 600.6013(6). The plaintiff-patients filed this action between January 1, 1987, and July 1,
2002; the action did not result in a final nonappealable judgment as of July 1, 2002; and the
judgment was rendered based on the insurance policy, which, pursuant to Yaldo v North Pointe
Ins Co, 457 Mich 341, 346; 578 NW2d 274 (1998), constitutes a written instrument for purposes
of the statute. MPMLC freely admits that the trial court correctly applied the law as it existed at
the time of its decision and applied an interest rate of twelve percent.
The plaintiff-patients argue that this Court cannot consider the issue presented by
MPMLC because MPMLC consented to the trial court's application of the twelve-percent
interest rate. However, because the Legislature had not enacted the relevant amendments of
MCL 600.6013 when the trial court entered the judgment in this case, MPMLC had no basis
upon which it could have objected. MPMLC's agreement to apply the law as it then existed does
not amount to a consent judgment, order, or decree that MPMLC cannot appeal. See Dora v
Lesinski, 351 Mich 579, 582; 88 NW2d 592 (1958).
The plaintiff-patients also argue that the judgment rendered was a "final, nonappealable"
judgment not subject to modification to provide for the rate found in MCL 600.6013(8). In
support of this contention, they argue that because MCR 7.203(B)(5) grants this Court
jurisdiction over "any judgment or order when an appeal of right could have been taken but was
not timely filed," virtually any judgment based on a written instrument that was rendered in the
specified time frame is subject to modification. The Legislature, the plaintiff-patients claim,
could not have intended such a broad result. It is not necessary for this Court to examine the
reach of the Legislature's action, however. Because the judgment at issue fits within the
classification described in MCL 600.6013(6), we remand to the trial court for modification of the
judgment to conform to MCL 600.6013(8).14
B. Intervening-Plaintiff Schneider's Cross-Appeal
Schneider first argues that MPMLC waived all defenses other than the applicability of
the criminal acts exclusion by not asserting them when it initially denied coverage. Because the
trial court did not address this issue, it has not been properly preserved. Fast Air, Inc v Knight,
235 Mich App 541, 549; 599 NW2d 489 (1999). Nevertheless, we will briefly address it. We
conclude that MPMLC did not waive defenses to Schneider's intervening complaint by failing to
14
See Morales v Auto Owners Ins Co (After Remand), 469 Mich 487, 490 n 4; 672 NW2d 849
(2003) (applying the most recent amendments to MCL 600.6013 to a judgment rendered before
the amendments were enacted).
-17-
assert them when it initially denied coverage. Schneider's reliance on cases such as Smith v
Grange Mut Fire Ins Co of Michigan, 234 Mich 119, 122; 208 NW 145 (1926), is misplaced.
Smith provides that when an insurer denies coverage, it must assert or waive every defense to
coverage based on the policy. Because the defenses MPMLC later raised, such as res judicata,
were not based on the policy, they were not waived.
Schneider also argues that the trial court erroneously granted MPMLC summary
disposition because res judicata does not bar her claims. The trial court, however, did not
conclude that res judicata barred Schneider's claims. Rather, it concluded that because the jury's
verdict convicting Dr. Sutton constituted conclusive evidence of criminal activity, no genuine
issue of material fact precluded summary disposition in MPMLC's favor. We need not,
therefore, examine the applicability of res judicata to this case.
Schneider also argues, however, that because her second claim, based on allegations that
Dr. Sutton removed her bra during a 1991 bronchial examination, did not form the basis of
criminal charges, the trial court erred by concluding that Dr. Sutton's conviction regarding the
1990 incident supported granting MPMLC summary disposition on her second claim. Because it
is unclear from the trial court's ruling whether the trial court considered Schneider's claims
separately, we remand to the trial court to consider whether any genuine issue of material fact
exists concerning the applicability of the criminal acts exclusion to Schneider's claims arising out
of her 1991 bronchial examination.15
C. Lake States' Appeal
Lake States argues that the trial court erred by granting Schneider summary disposition
regarding coverage for her claim of negligent hiring and supervision against Mid-Michigan
Family Physicians, P.C. We agree. "'[I]f the allegations of the underlying suit arguably fall
within the coverage of the policy, the insurer has a duty to defend its insured.'" Radenbaugh v
Farm Bureau Gen Ins Co of Michigan, 240 Mich App 134, 137; 610 NW2d 272 (2000), quoting
Royce v Citizens Ins Co, 219 Mich App 537, 543; 557 NW2d 144 (1996) (emphasis supplied), in
turn citing American Bumper & Mfg Co v Hartford Fire Ins Co, 207 Mich App 60, 67; 523
NW2d 841 (1994), aff 'd 452 Mich 440; 550 NW2d 475 (1995).
15
We reject MPMLC's request that we assume that the trial court considered that the 1991
examination did not form the basis of criminal charges against Dr. Sutton. Similarly, we decline
MPMLC's request that we nevertheless affirm the trial court's decision because Dr. Sutton
committed fourth-degree CSC during the 1991 examination, triggering the applicability of the
criminal acts exclusion. Other than presenting Schneider's opinions that the act of removing her
bra did not have a medical purpose, MPMLC offers no evidence to support its contention that
removing a patient's bra while listening to a patient's chest is medically recognized as unethical
or unacceptable. See MCL 750.520e(1)(b)(iv). Accordingly, we will not determine that, as a
matter of law, Dr. Sutton committed a criminal act.
-18-
Lake States contends that this Court should first examine the viability of Schneider's
underlying claim, stating that Schneider has offered no factual support for her claim of negligent
hiring and supervision.16 We decline to do so. The issue before the trial court was whether, as a
matter of law, Lake States was obligated to defend Mid-Michigan Family Physicians, P.C.,
against Schneider's claim. Because the scope of an insurer's duty to defend can require an
insurer to defend against frivolous lawsuits, Auto-Owners Ins Co v City of Clare, 446 Mich 1,
10; 521 NW2d 480 (1994), we will not determine whether the claim would succeed before
deciding whether the policy requires Lake States to defend against the allegations in the
complaint.
Next, Lake States argues that Schneider's claim of negligent hiring and supervision
constitutes a claim of medical malpractice and is, therefore, excluded from coverage under the
policy's professional services exclusion.17 We agree that Schneider's claim against MidMichigan Family Physicians, P.C., is excluded from coverage because it arose out of rendering
or failing to render a professional service.
The Lake States policy does not provide coverage for "'[b]odily injury' or 'property
damage' due to rendering or failure to render any professional service. This includes but is not
limited to . . . [m]edical, surgical, dental, x-ray or nursing services or treatment; . . . [a]ny health
service or treatment." The policy's definition of professional services also includes "supervisory
. . . services." Lake States relies on cases such as Bronson v Sisters of Mercy Health Corp, 175
Mich App 647, 652-653; 438 NW2d 276 (1989), to show that a failure to properly hire and
supervise physicians constitutes medical malpractice.18 We need not resolve this question,
however, because the relevant inquiry is whether the injury resulted from rendering or failing to
render a professional service.
Although Schneider contends that St Paul Fire & Marine Ins Co v Quintana, 165 Mich
App 719; 419 NW2d 60 (1988), leads to the conclusion that her injuries did not result from
rendering or failing to render professional services, that case is inapplicable because it addresses
only a physician's provision of medical services. Id. at 724. Our concern, rather, is whether
Mid-Michigan Family Physicians, P.C., provided or failed to provide a professional service
16
Lake States also argues that summary disposition was improper because Schneider's claim
against Mid-Michigan Family Physicians, P.C., is a "sham" because Dr. Sutton is Mid-Michigan
Family Physicians, P.C. Lake States did not preserve this argument in the trial court, and we
decline to address it. Fast Air, Inc, supra.
17
Although Schneider admits that the policy does not cover Dr. Sutton's actions because they
arose out of providing professional services, she does not admit that the corporation's actions are
likewise excluded from coverage.
18
See also Dorris v Detroit Osteopathic Hosp Corp, 460 Mich 26, 45-47; 594 NW2d 455 (1999)
(relying on the Bronson Court's analysis for determining the applicable statute of limitations to
establish whether the plaintiff needed to comply with certain requirements of MCL 600.2912b
and MCL 600.2912d).
-19-
when it allegedly negligently failed to supervise Dr. Sutton. Whether a professional service is
being rendered depends on the nature of the act or omission, not the character or title of the
person who acted or failed to act. See American Fellowship Mut Ins Co v Ins Co of North
America, 90 Mich App 633, 636-638; 282 NW2d 425 (1979) (also stating that "professional
services" include any business activity performed by insured company); see also Centennial Ins
Co v Neyer, Tiseo & Hindo, Ltd, 207 Mich App 235, 238-239; 523 NW2d 808 (1994).
Properly supervising employees to prevent patient harm is part of providing health
services, which was the undertaking of Mid-Michigan Family Physicians, P.C. See Bronson,
supra at 652-653 ("The providing of professional medical care and treatment by a hospital
includes supervision of staff physicians and decisions regarding selection and retention of
medical staff."). Moreover, Schneider's claim against Mid-Michigan Family Physicians, P.C.,
depends on Dr. Sutton's actions, which, admittedly, are excluded from coverage. In a similar
situation, the court in Duncanville Diagnostic Center, Inc v Atlantic Lloyd's Ins Co of Texas, 875
SW2d 788, 791-792 (Tex App, 1994), decided that a similar professional services exclusion
applied equally to the plaintiff 's claim of negligent hiring and supervision against the defendant
medical center and the plaintiff 's negligence claims against the health care provider because the
two claims are interrelated. See also American Rehabilitation and Physical Therapy, Inc v
American Motorists Ins Co, 829 A2d 1173, 1177-1179 (Pa Super, 2003), citing Millers Casualty
Ins Co of Texas v Flores, 876 P2d 227 (NM, 1994), and Duncanville, supra (also stating that
supervising employees constitutes a vital part of providing medical services and is excluded
from coverage by the "professional services" provision). Accordingly, we conclude that
Schneider's claim of negligent hiring and supervision is not covered by the policy and that the
trial court erroneously granted Schneider, rather than Lake States, summary disposition.19
IV. Conclusion
In MPMLC's appeal, we conclude that although the trial court erroneously excluded
evidence of Dr. Sutton's attempted perjury conviction, reversal is not necessary. We affirm each
of the trial court's other rulings challenged by MPMLC on appeal. Finally, we remand for the
trial court to amend the judgment to provide interest as dictated by the recent amendments to
MCL 600.6013.
In Schneider's cross-appeal, we remand to the trial court for consideration of whether a
genuine issue of material fact exists concerning the applicability of the criminal acts exclusion to
Schneider's claim arising out of her 1991 bronchial examination. We affirm the trial court's
grant of summary disposition to MPMLC in all other respects.
In Lake States' appeal, we conclude that the trial court erroneously granted Schneider
summary disposition and remand for entry of summary disposition in Lake States' favor.
19
Because we conclude that the policy does not provide coverage for Schneider's claim, we need
not address Lake States' alternative argument that the claim does not qualify as an occurrence
under the policy.
-20-
Affirmed in part, reversed in part, and remanded for proceedings consistent with this
opinion. We do not retain jurisdiction.
/s/ Kurtis T. Wilder
/s/ Michael R. Smolenski
/s/ William B. Murphy
-21-
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