Opinion ID: 2973368
Heading Depth: 2
Heading Rank: 1

Heading: Original 1974 Lawsuit and Settlement

Text: Nos. 04-2260, 05-1317 The present action arises from a 1973 automobile accident in which Linda Coles (“Coles”), at that time a twelve year old pedestrian, was struck by a vehicle owned by Amoco, and operated by Amoco employee Mark Hagenow. The brain injuries Coles sustained rendered her in a permanent vegetative state, and she is unable to walk, talk or care for herself. On or about May 24, 1974, Rudolph Coles, Coles’ father, individually and as a next friend of Linda Coles, and Gladys Coles, Coles’ mother, filed suit against Mark Hagenow and Amoco in the Wayne County Circuit Court. In the 1974 lawsuit, there were separate claims for the estate of Linda Coles (Count I), Rudolph Coles (Count II), and Gladys Coles (Count III). The case was removed to the United States District Court for the Eastern District of Michigan in June 1974, and the parties engaged in discovery for over two years. On July 8, 1976, the parties reached a global settlement. Prior to entry of the settlement, Nicholas Smith (who had previously been one Coles’ attorneys) and Security Bank & Trust were appointed co-guardians of the estate of Linda Coles by the Wayne County Probate Court, and the original Complaint was amended to list the plaintiffs as Nicholas Smith and Security Bank and Trust Company, co-guardians of the estate of Linda Coles, a minor, and Gladys and Rudolph Coles. A Motion and Stipulation for Entry of Consent Judgment was filed in the district court on July 8, 1976, settling claims both for traditional tort damages and past and future no-fault benefits pursuant to the Michigan no-fault law. The settlement terms were reduced to three separate consent judgments, one for the estate of Linda Coles, one for Rudolph Coles and one for Gladys Coles. The estate of Linda Coles received $500,000 total, $250,000 in no-fault claims and $250,000 in traditional tort claims. Rudolph and Gladys Coles received $220,000 each, including $110,000 for 2 Nos. 04-2260, 05-1317 their no-fault claims and $110,000 for their tort claims. The attorneys fees of $313,333.33 were paid from the recoveries of Rudolph and Gladys Coles only, not from the estate of Linda Coles. Prior to signing the consent judgments on July 8, 1976, the magistrate judge held a hearing, which was attended by all interested parties, including Coles, her co-guardians, parents, and attorneys for defendant Amoco. During the hearing, the magistrate judge sought to ascertain whether the settlement was in the best interest of the child. Coles’ co-guardians and parents testified. As part of his questioning of the co-guardians, the magistrate judge asked, Do you understand that if you thought it in her best interests, and if you determined that you wanted to, its conceivable that you could try the pending case to a conclusion, and irrespective of the outcome of that still collect no-fault benefits for the child perhaps for life? Do you understand that if the child’s claim is settled here today no further money can be asked of either Amoco or Mr. Hagenow either for no-fault benefits or for damages under tort? (J.A. at 229.) Both co-guardians replied “yes,” to these questions. Nicholas Smith testified that the settlement amounts were reached after long discussions and negotiations with attorneys and representatives of the defendants in order to arrive at a settlement that was in the best interest of Coles and her parents. Immediately following witness testimony, the magistrate judge signed the consent judgments, deeming the awards appropriate. The language of the consent judgment for Coles’ estate provides that the amounts recovered were to be in “full settlement of all claims, including all claims for and to traditional tort damages and, also, in full settlement of all claims and all rights for and to recovery on theory of tort liability under the no-fault law.” (J.A. at 196.)