On July 28, 2023, the Michigan Supreme Court overturned the open and obvious doctrine, opening the door for individuals to file and win premises liability cases against Michigan property owners. This ruling signifies a massive shift in premises liability law, which deterred lawsuits and benefited landowners for more than 20 years.
The Supreme Court’s decision will have a major impact on businesses, property owners, insurance companies, and the public. In this article, we outline how the law changed, how future cases will be analyzed, and subsequent impacts.
Michigan Premises Liability Law | Then & Now
Premises liability cases are predicated on the idea that a landowner has a duty to protect its invitees from an unreasonable risk of harm.
2001 Supreme Court Decision | If a condition is open and obvious, the property owner does not have a duty to protect its visitors from it.
In the 2001 case – Lugo v. Ameritech Corp. – the Supreme Court ruled that if an individual visits a property (as an invitee) and encounters a condition that is open and obvious, the property owner does not owe this person a duty of care. In addition, the individual cannot recover damages for their injuries.
Why? The court reasoned that the condition was known, and the individual should have taken steps to avoid it.
However, the court allowed exceptions, known as special aspects. Was the condition unavoidable? Would the condition cause a severe degree of harm? If special aspects existed, the injured party could recover damages. If they didn’t, the property owner effectively won based on the open and obvious defense.
As the years went on, courts struggled with consistently applying the law and found that the special-aspects test created confusion. It contradicted Michigan’s comparative fault law and did not answer the question: Did the property owner satisfy their duty, or did they breach it?
2023 Supreme Court Decision | Property owners have a duty not to harm visitors. Did they violate this responsibility?
The Supreme Court chose to take up two cases – Kandil-Elsayed v F & E Oil, Inc and Pinsky v Kroger Co of Mich – to settle the open and obvious confusion for good. As a result, the justices eradicated the open and obvious standard, holding that it is no longer part of the duty analysis and ending 20 years of arguments. Effective immediately, premises liability claims will be evaluated based on fault and whether the property owner violated its duty to protect visitors from unreasonable harm.
Judges and juries will seek to answer the following questions:
- Did the property owner owe a duty to this person? What was the status of the individual: licensee, invitee, or trespasser?
- Did the property owner breach their duty?
- What was the condition that caused harm? Was it open and obvious? Could the individual have avoided it?
- Did the owner take the necessary or reasonable steps to address the condition?
- How much is each party at fault?
Michigan courts will analyze claims in more detail rather than looking at the open and obvious nature of the condition. Then, they can evaluate who is at fault and to what extent.
A Premises Liability Example | 2001 vs. 2023
Let’s examine how the same premises liability case may have been decided in 2001 compared to 2023.
Situation: It’s winter in Michigan. A woman parks at a gas station and gets out of her car. She slips on ice, falls, and breaks her wrist. She sues the gas station.
2001: Ice is common in Michigan winters and is considered open and obvious. The court rules the gas station did not owe her a duty of care, and she is not awarded damages. Her attorney may have encouraged her not to file because they had a low probability of overcoming the open and obvious doctrine.
2023: The court evaluates the gas station’s actions to plow, salt, and make its patrons aware of ice. It finds both parties share fault, but the woman is awarded economic damages to cover medical bills and time off work.
Hazards aren’t limited to weather-related conditions. Hazards include physical conditions such as potholes, flooring and sidewalk defects, low lighting, and faulty machinery. People may also create hazards by leaving out equipment or supplies, fluids, electrical cords, etc.
What are the impacts of the Supreme Court’s ruling?
Before July 2023, the open and obvious doctrine killed many premises liability cases before they began. Now, these cases stand a chance in court, and because of Michigan’s comparative fault law, plaintiffs are eligible for damages, even if they share fault.
Currently, the majority of lawsuits in Michigan are auto-related. In time, we predict premises liability cases will claim the No. 2 spot (currently held by debt collection cases). Property owners and insurance companies need to be prepared to defend these claims and seek counsel on how to avoid such claims.
We expect properties with high levels of traffic – apartment buildings, offices, grocery and retail stores – will be hit the hardest. If you own one of these establishments, you’ll want to be proactive about identifying harmful conditions, fixing them, notifying visitors, and ensuring employees continually support these efforts.
Additionally, you should be aware that you’re responsible for the work of any contractors you hire to conduct maintenance and repairs. This ruling could present an opportunity to review your contracts with such individuals or businesses – requiring plowing, salting, maintenance, and inspections.
For any current or future contracts with contractors or on-site vendors, consider including an obligation that they maintain a safe premise, eliminate or report hazards, and do not create hazardous conditions. A contractual indemnification clause or insurance clause may also help protect you.
Consider reviewing your insurance policies and coverage to ensure you’re covered against any premises liability claims with satisfactory limits. You don’t want to receive a claim and argue with your insurance provider about coverage. As claims tick up over the years, don’t be surprised if your insurance rates climb too.
Insurance companies should be ready for an influx of premises liability claims and higher damages. Michigan law states that if a plaintiff is more than 51% at fault, they are not entitled to noneconomic damages (pain and suffering) but can recover economic damages.
Before 2023, many premises liability cases were worth $0. Now, cases will likely include a monetary figure for economic recovery (medical bills, lost wages, etc.) and noneconomic damages.
Plaintiffs & Property Maintenance Providers
This ruling is welcome news for plaintiffs who were disadvantaged by open and obvious conditions on the premises. Now, they have a far better chance of winning and receiving damages.
Plus, property owners may increase their budgets for property maintenance services to reduce their exposure to injury claims. This decision could result in more work for property maintenance providers. You’ll want to make sure your employees and contracts protect you.
About the Author
Jeff Hart has more than 27 years of experience as a lawyer. He litigates complex commercial, employment, construction, professional liability, transportation, OSHA, and MIOSHA matters. He earned his Juris Doctor from Loyola University Chicago School of Law.
We cannot stress enough how significant this ruling is to Michigan’s legal, insurance, and business landscape. Don’t wait for a lawsuit to take preventative action; start today. If you have any questions about premises liability law and how it may affect you, please contact Smith Haughey.