Without key witness, workers' compensation case nets $170K

By Douglas Levy

BridgeTower Media Newswires

According to employment litigator Manda L. Danieleski, one of the most elusive motions to obtain at trial is the adverse inference instruction.

The rule, MCR 6.01, pertains to failing to produce evidence or a witness. If the judge determines that no reasonable excuse was given for it, the jury may infer that the testimony or evidence would have been adverse to the party in question.

Danieleski said that virtually every trial lawyer waits his or her entire career for that moment to present itself, but it rarely comes.

Last month in Jackson County Circuit Court, it did.

The defense in Schultz v Harvest Springport Glen LLC did not present a key witness at trial, instead rebuffing the subpoena.

Danieleski, a Saginaw-based attorney, said her strategy was to simply let the situation play out, then seize the opportunity to make her move. It would result in a $170,024 jury verdict.

"If you are confident that you have properly served a subpoena before trial, there is some wisdom to sitting back and letting your opponent think you're going to be complacent in their ignoring it," she said. "Or that you're OK with them not bringing a witness in. Silence can be as big of a tool as an aggressive argument in a situation like this."

A Verdicts & Settlements report on the case can be found here.

Don't push it

The case concerned Danieleski's client, Michael Schultz, who did maintenance and repair work for a Jackson apartment complex. He was paid $12 per hour and received no benefits.

After being injured on the job Oct. 10, 2013, Schultz stopped working until the end of 2013, then worked light duty. His hours were reduced significantly, which Danieleski said was an adverse action, and his workers' disability compensation benefits claim was disputed.

Meanwhile, there had been a change in property management, and the new property manager, Heather Newland, had Schultz in March 2015 sign a probationary period agreement. Danieleski said the only reason for this was "to tighten up the ship and get some control."

"She claims she had everybody sign this agreement, but we only saw evidence that my client did," Danieleski said.

Schultz was fired the next day, with management citing injury-related absences that Danieleski said were unfounded. Harvest Properties LLC, the out-of-state employer, said the two people involved in the decision to terminate were Newland and a corporate agent/representative, Elizabeth DeMorrow.

During the course of litigation, DeMorrow signed discovery responses. But Danieleski said when she sent DeMorrow a trial subpoena, the defense responded that DeMorrow wouldn't be traveling to Michigan for the trial. Danieleski said she was told by the defense that DeMorrow's deposition could be used at trial instead.

Instead of pushing it, Danieleski said she decided to proceed with her trial preparation.

"I don't have to tell [defense counsel] that he has to comply with a subpoena," she said. "I was expecting after his email to get a motion to quash or a protective order or something. But I received nothing. And she's still under subpoena so I'm totally within my rights."

Making her move

As litigation progressed, Danieleski said she maintained her composure about the subpoena matter.

"I kept resisting the urge to bring it up during preliminary jury instructions, before we started," she said. "I thought, 'This judge could be really upset with me if I lay in the weeds.' But ? I think I had good facts to do it with."

At trial, Danieleski called Schultz, Newland, a plaintiff's economics expert and DeMorrow. Defense counsel responded that they said they told Danieleski how DeMorrow would not be appearing at trial. At that point, Judge Richard N. LaFlamme excused the jury.

Danieleski argued to LaFlamme that a proper subpoena was sent under court rule and that the proof of service was in the court file.

"In answers to discovery responses, when I asked for [DeMorrow's] contact information, [defense] had said to contact her through them," Danieleski explained. "All the signs pointed to, 'Fax us a subpoena.'"

LaFlamme then ruled that the subpoena was valid and defense had no reasonable excuse for DeMorrow's absence.

Danieleski added that under the rules for subpoena compliance, the court can grant a default if the named party doesn't adhere. Instead, Danieleski made her move and requested an adverse inference instruction be granted.

LaFlamme did so immediately.

"If you look at the instruction," Danieleski explained, "there are four different levels, the strongest one being that defense gave no reasonable excuse, with the rest giving a question as to whether [defense] was being reasonable and the witness was in their control. And the judge gave me the strongest one."

She added, "I was ecstatic. And I knew it would be a big deal for my client."

The jury responds

Danieleski said when the jurors returned, LaFlamme explained the rule to them and how during deliberations they could infer that DeMorrow's testimony would have been adverse for the employer.

"That allowed me to argue, at closing, that all of the boxes [on the jury form] get checked," Danieleski said. "Because if her testimony would have been adverse to them, absolutely she was motivated by my client's workers' compensation claim. Absolutely she knew about it and how it was a significant factor in the decision to discharge him."

The jury deliberated for approximately two hours and awarded $36,810 in past economic damages; $20,000 in past noneconomic damages; $111,214 in future economic damages; and $2,000 in future noneconomic damages.

Danieleski said that when the trial concluded, the jury requested to speak with trial counsel about the case. She said she asked the jurors about the adverse inference instruction and how significant it was for them.

"I expected them to say, 'Not very; we didn't understand what it meant,'" she said. "It takes a high threshold of understanding and you hope that they get it. And they did. They said it was huge that [DeMorrow] was involved in the decision and that [defense] ignored the subpoena."

Stephen D. Kursman, co-counsel for the defense, did not return a call seeking comment about the case or whether it would be appealed.

Published: Mon, Dec 12, 2016