Opinion ID: 626814
Heading Depth: 5
Heading Rank: 4

Heading: Effect of Settlement and Unfavorable Adjudication

Text: Attacking the plaintiffs from another angle, the defendants claim that the plaintiffs were not deprived of their causes of action because the plaintiffs pursued the claims to resolution, be it by settlement or by final adjudication. Appellee Cassens Br. at 28. This argument mischaracterizes the plaintiffs' property interest. The plaintiffs did not lose the ability to litigate their claims entirely, but the value of their claims was allegedly diminished because of the fraud. Of course, the plaintiffs' RICO action can succeed only by proving that the plaintiffs suffered an ascertainable injury from the defendants' fraud. To do that, they must show that their claims to benefits had value, i.e., the claims had some likelihood of success had they been able to present them in a fair proceeding. This is similar to legal malpractice cases, where the plaintiffs also allege injury to an underlying claim, and Michigan requires plaintiffs to prove a suit within a suitin other words, that they could have prevailed or obtained a better outcome in the original lawsuit. Coleman v. Gurwin, 443 Mich. 59, 503 N.W.2d 435, 437 (1993) (internal quotation marks omitted). This requirement insure[s] that the damages claimed to result from the attorney's negligence are more than mere speculation. Id. Losing or settling the original lawsuit does not, on its own, render the injury speculative. To the contrary, damages are generally quantified counterfactually. See, e.g., Chronister Oil Co. v. Unocal Ref. & Mktg. (Union Oil Co. of Cal.), 34 F.3d 462, 464 (7th Cir.1994) (Posner, J.) (The point of an award of damages, whether it is for a breach of contract or for a tort, is, so far as possible, to put the victim where he would have been had the breach or tort not taken place. (emphasis added)). The same logic is true here; losing or settling a case due to fraudulent medical reports does not extinguish the plaintiffs' property interest in bringing a claim free of fraud. It would be nonsensical to allow a plaintiff to sue her attorney for malpractice only if she had won the suit in which the malpractice occurred, even though she must still put on evidence that she would have won absent her attorney's malpractice. Likewise, here, plaintiffs should be allowed to proceed on their RICO claim and put on evidence that they would have received a better result in the underlying state agency proceedings had the defendants not submitted fraudulent medical reports. The fact that the plaintiffs lost or settled in tainted proceedings is not evidence that the plaintiffs would have lost or settled if the proceedings had been fair. Raising an argument that goes to the merits of the adjudication, the defendants dispute whether the plaintiffs were injured on the job. Cf. Mich. Comp. Laws § 418.841(1) (Any dispute or controversy concerning compensation ... shall be submitted to the [WCAC]....). This argument relates only to damages, however, and not whether plaintiffs had a property interest in a fraud-free adjudication of their claims. Even if a person cannot ultimately satisfy the criteria to receive the statutory entitlement, she still has a property interest in her statutory right to raise the claims and be subject to a fair proceeding on the merits of her claims. We hold that the plaintiffs have a property interest in their claims for worker's compensation benefits, and the favorable or unfavorable adjudication or settlement of those claims in a proceeding tainted by fraud does not extinguish their property interest in those benefits. The plaintiffs, then, have alleged an injury to property.