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State Supreme Court Reverses Lugo: Paving 'New' Era of Premises Liability Law

September 7, 2023

This article was first published in the Detroit Legal News on September 7, 2023.

A. Vince Colella
Moss & Colella P.C.

In early 2001, Michigan Lawyers Weekly published its yearly compilation of verdicts and settlements that exceed the million-dollar mark. Included on that list as the second highest settlement was a $7.94-million-dollar premises liability case. In years prior, slip (or trip) and fall cases proved to be a lucrative endeavor for personal injury trial lawyers. However, throughout the late 1980s and 1990s we witnessed an erosion of the common law principles and an inconsistent application of the Second Restatement of Torts, leading to a series of opinions that opened the door for a massive shift in jurisprudence. On July 1, 2001, the Supreme Court delivered a fatal blow to premises liability law in Michigan when it announced its opinion in Lugo v Ameritech, 464 Mich 512 (2001).  The impact of Lugo cannot be overstated. Since then, thousands of cases have been dismissed or abandoned, bringing premises liability cases to the brink of extinction.

However, last month the court issued the fervently anticipated decision, Kandil-Elsayed v F. E. Oil Inc., 2023 Mich. LEXIS 1148 (July 28, 2023).  In a nutshell, the Supreme Court concluded that Lugo was wrongly decided in two respects. First, it determined that the Lugo court erred in situating the open and obvious danger doctrine (and any exceptions to it) in its duty analysis. Second, that the “special aspects” doctrine is inconsistent with the Second Restatement as it pertains to the anticipation of dangerous conditions.

In reaching its decision, the Kandil-Elsayed court assessed the basic contours of duty and breach and the interrelationship with comparative fault. This coordinated analysis revealed that Lugo and its progeny wrongly conflated a landowners’ duty with those who lawfully enter. Justice Elizabeth Clement, who wrote the majority opinion, recognized that while the focus of Lugo was on the landowner’s duty to determine whether a danger was open and obvious, courts continuously focused on whether the plaintiff was bound by their own knowledge to anticipate it. For example, courts often point to the plaintiff’s testimony about their own knowledge of a fall hazard and failure to avoid it to decide whether a danger was open and obvious. This shift in fault proved to be the fatal flaw of Lugo and provided the impetus for correction.  The court recognized that the legislative adoption of comparative negligence did not abrogate the necessity of an initial finding that the premises owner owed a duty of reasonable care to invitees. It recognized that only once a duty is established does it become relevant whether a plaintiff was comparatively at fault. Clement correctly pointed out that duty is determined by the relationship between the parties and not simply their conduct.

The majority also recognized the inherent problem in allowing courts to decide whether “special aspects” of a condition could serve as an exception to the open and obvious defense. Moreover, the majority demonstrated how the illustrations of special aspects empathized by the Lugo court were riddled with nuance. For example, while the court insisted that a 30-foot pit in the middle of a parking lot was a condition that would be considered unreasonably dangerous, it also created an unrealistic metric for tripping hazards. Moreover, by suggesting that there are unreasonably dangerous conditions that could be avoided by some people and not others created appellate discord over which persons must encounter a dangerous condition from those who choose to. Again, the analysis centered on what a plaintiff knows about a particular condition and whether they are required to encounter it – concepts and questions that go to the issue of comparative fault and not the duty of a landowner.

The Kandil-Elsayed court also toyed with the idea of adopting the Third Restatement of Torts by abandoning status-based categories and creating a general duty of care owed to anyone who entered a landowner’s property. Under this approach, a general duty of reasonable care is owed to all entrants with respect to risks associated with the property or conduct of its owner. While some justices showed interest in adopting the Third Restatement approach, the Court deemed it too ‘radical’ of an adjustment and not one that the majority embraced.

Ultimately, this decision was rooted in rather basic principles.  First, situating the open and obvious analysis in duty wrongly places a judge – not a jury – in charge of deciding the plaintiff’s negligence. Second, that the Lugo case defies practicable workability by creating confusion among the courts trying to apply it. Third, by overruling Lugo, it would effectively end decades of uncertainty creating a clear standard for applying the rule of law.  

In short, the Supreme Court determined that while the open and obvious danger doctrine is an objective standard, the courts routinely focused on the plaintiff’s subjective knowledge and response to a hazardous condition.  In other words, it realized that courts would say one thing and do another, leading to a chaotic approach to premises liability cases — a paradox that will no longer preclude fall victims from having their cases decided by a jury.

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A. Vince Colella is a co-founder of personal injury and civil rights law firm Moss & Colella.

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