# Emily Schenk v. Judith Hodge

> Michigan Court of Appeals · August 20, 2025

URL: https://www.frixlaw.com/law-library/cases/11124194

## Case

- **Court:** Michigan Court of Appeals
- **Decided:** August 20, 2025
- **Precedential status:** Unpublished
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/11124194

## How later opinions describe it (automated extraction)

- concluding that the plaintiffs’ proofs, including evidence that a staff member may have used an unapproved restraint technique when physically restraining the plaintiff, failed to raise a material question regarding gross negligence, rather than ordinary negligence, under the …
- applying holding that, under McKernan, negligence could not be predicated on the failure to enforce a private rule
- stating that evidence a ramp was constructed in violation of construction standards and the national building code demonstrated only ordinary negligence, not gross negligence
- holding that private rules “do not fix the obligations and liabilities of the master to its servants, nor to third persons and the public, those obligations, being fixed by law, cannot be diminished by such rules, nor, ordinarily, increased thereby”

## Opinion text

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

EMILY SCHENK, UNPUBLISHED
August 20, 2025
Plaintiff-Appellee, 1:35 PM

v Nos. 367834; 367940
Wayne Circuit Court
JUDITH HODGE, also known as JUDITH LC No. 19-009820-NI
HODGES, also known as JUDITH
SHACKELFORD-HODGE,

Defendant/Cross-Plaintiff,
and

MARC LOUIS ABDILLA and HURON VALLEY
AMBULANCE, INC.,

Defendants/Cross-Defendants-
Appellants,
and

CHARTER TOWNSHIP OF VAN BUREN,

Defendant-Appellant,

and

AMERICAN ALTERNATIVE INSURANCE
CORPORATION,

Defendant.

ROBERT RAYMOND REED and REGINA MARIE
REED,

Plaintiffs-Appellees,

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v Nos. 367842; 367939
Wayne Circuit Court
JUDITH SHACKELFORD-HODGE, LC No. 19-017359-NI

Defendant,
and

STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,

Defendant/Cross-Plaintiff,
and

MARC LOUIS ABDILLA, HURON VALLEY
AMBULANCE, INC., and CHARTER TOWNSHIP
OF VAN BUREN,

Defendants-Appellants,
and

AMERICAN ALTERNATIVE INSURANCE
CORPORATION,

Defendant/Cross-Defendant.

Before: BORRELLO, P.J., and M. J. KELLY and TREBILCOCK , JJ.

PER CURIAM.

This matter involves consolidated appeals.1 In Docket Nos. 367834 and 367842,
defendants, Marc Abdilla, Huron Valley Ambulance, Inc. (HVA), and Van Buren Charter
Township, appeal as of right the trial court’s order denying their motion for summary disposition
under MCR 2.116(C)(7). In those appeals, defendants contend that the claims brought by
plaintiffs, Robert Reed, Regina Reed, and Emily Schenk, are barred by the immunity provisions
of the Governmental Tort Liability Act (GTLA), MCL 691.1401 et seq. In Docket Nos. 367940
and 367939, defendants appeal by leave granted2 the same order on additional grounds involving

1
Schenk v Hodge, unpublished order of the Court of Appeals, entered January 26, 2024 (Docket
No. 367940); Reed v Abdilla, unpublished order of the Court of Appeals, entered January 26, 2024
(Docket No. 367939).
2
Reed v Abdilla, unpublished order of the Court of Appeals, entered January 26, 2024 (Docket
No. 367939); Schenk v Hodge, unpublished order of the Court of Appeals, entered January 26,
2024 (Docket No. 367940).

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negligence; the Emergency Medical Services Act (EMSA), MCL 333.20901 et seq.; and the
Worker’s Disability Compensation Act (WDCA), MCL 418.101 et seq. For the reasons stated in
this opinion, we reverse and remand.3

I. BASIC FACTS

This action arises out of a motor-vehicle crash that occurred in the afternoon of January 4,
2019, at the intersection of Haggerty Road and Ecorse Road in Van Buren Township. One of the
vehicles was an ambulance owned by HVA and driven by Abdilla, who was an employee of the
Van Buren Township Fire Department. Abdilla was driving the ambulance while plaintiffs Schenk
and Robert Reed were providing care to a critically ill patient who was being transported to a
nearby hospital. The ambulance was traveling northbound on Haggerty Road with its lights and
sirens activated. As Abdilla approached the intersection of Haggerty Road and Ecorse Road, the
light facing him turned red. Abdilla slowed, but did not stop. As he proceeded through the
intersection, Judith Shackelford-Hodge, who had failed to hear the sirens or see the lights on the
ambulance, accelerated through the intersection and crashed into the rear of the ambulance. The
impact knocked the ambulance onto its side. Both Schenk and Robert Reed sustained injuries as
a result of the crash.

Schenk and the Reeds filed complaints against defendants, alleging multiple negligence-
based claims. HVA moved for summary disposition in both cases, alleging that the trial court
lacked subject-matter jurisdiction in light of the exclusive-remedy provision of the WDCA. In
response, Schenk and Robert Reed argued that they were employed by HVA’s parent company,
Emergent Health Partners (EHP), not HVA. The trial court disagreed and granted HVA’s motions
in both cases. Plaintiffs appealed in this Court, which reversed and remanded for further
proceedings. Reed v Hodge, unpublished per curiam opinion of the Court of Appeals, issued
November 4, 2021 (Docket Nos. 353245 and 354038), pp 2, 4, 6-8. On remand, discovery
continued on both cases, which were eventually consolidated by the trial court.

Thereafter, defendants moved for summary disposition under MCR 2.116(C)(7) and MCR
2.116(C)(10), arguing that plaintiffs’ claims were barred by the GTLA and the EMSA. They
additionally argued that plaintiffs’ claims against HVA were precluded by the exclusive remedy
provision of the WDCA. Finally, they contended that, as a matter of law, they were not negligent.
Following a hearing, the trial court denied their motion. These consolidated appeals follow.

3
These consolidated appeals arise from two separate lower court actions involving a single motor
vehicle crash. Judith Shackelford-Hodge, American Alternative Insurance Corporation, and State
Farm Mutual Automobile Insurance Company are not participating in these appeals. Accordingly,
for ease of reference we will refer to Abdilla, HVA, and the Township, collectively, as
“defendants.” Further, we will refer to Schenk, Robert, and Regina, collectively, as “plaintiffs.”

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II. SUMMARY DISPOSITION

A. STANDARD OF REVIEW

Defendants argue that the trial court erred by denying their motions for summary
disposition. “We review de novo a trial court’s decision on a motion for summary disposition.”
El-Khalil v Oakwood Healthcare, Inc, 504 Mich 152, 159; 934 NW2d 665 (2019). “Summary
disposition under MCR 2.116(C)(7) is appropriate if a claim is barred because of immunity granted
by law.” Pike v Northern Mich Univ, 327 Mich App 683, 690; 935 NW2d 86 (2019). When
reviewing a motion under MCR 2.116(C)(7), “we consider all documentary evidence submitted
by the parties, accepting as true the contents of the complaint unless affidavits or other appropriate
documents specifically contradict them.” Krieger v Dep’t of Environment, Great Lakes, & Energy,
348 Mich App 156, 170; 17 NW3d 700 (2023) (quotation marks and citation omitted). “[I]f no
facts are in dispute, and if reasonable minds could not differ regarding the legal effect of those
facts, the question whether the claim is barred is an issue of law for the court.” Id. at 171 (quotation
marks and citation omitted). Motions brought under MCR 2.116(C)(10) test “the factual
sufficiency of a claim.” Wilmore-Moody v Zakir, 511 Mich 76, 82; 999 NW2d 1 (2023). “When
considering such a motion, a trial court must consider all evidence submitted by the parties in the
light most favorable to the party opposing the motion.” El-Khalil, 504 Mich at 160. “A motion
under MCR 2.116(C)(10) may only be granted when there is no genuine issue of material fact.”
Id. “A genuine issue of material fact exists when the record leaves open an issue upon which
reasonable minds might differ.” Id (quotation marks and citation omitted). “The application of
governmental immunity is a question of law subject to de novo review.” Yoches v Dearborn, 320
Mich App 461, 469; 904 NW2d 887 (2017).

B. ANALYSIS

1. GOVERNMENTAL FUNCTION VS PROPRIETARY FUNCTION

“Under the GTLA, governmental agencies and their employees are generally immune from
tort liability when they are engaged in the exercise or discharge of a governmental function.” Ray
v Swager, 501 Mich 52, 62; 903 NW2d 366 (2017); see also MCL 691.1407(a). On appeal,
plaintiffs suggest that the Township was not engaged in a governmental function. In support, they
direct this Court to Berkowski v Hall, 91 Mich App 1; 282 NW2d 813 (1979). That case, however
is not binding. See MCR 7.215(J)(1). Moreover, the Berkowski Court relied upon Parker v
Highland Park, 404 Mich 183; 273 NW2d 413 (1978), which adopted the governmental-essences
test; however, Parker’s approach was subsequently rejected by our Supreme Court in Ross v
Consumers Power Co, 420 Mich 567; 363 NW2d 641 (1984). In Ross, the Supreme Court held
that “a governmental function is an activity which is expressly or impliedly mandated or authorized
by constitution, statute, or other law.” Ross, 420 Mich at 620. That definition was later codified
by the Legislature in MCL 691.1401(b). Given that there is a statutory definition expressly
defining what constitutes a governmental function and given that the caselaw relied upon by
plaintiffs has been superseded by both caselaw and statute, we do not find Berkowski to be
persuasive and we decline to apply the governmental-essence test to determine whether the
provision of ambulance services is a governmental function.

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As defined in MCL 691.1401(b), a governmental function is statutorily defined as “an
activity that is expressly or impliedly mandated or authorized by constitution, statute, local charter
or ordinance, or other law.” MCL 691.1401(b). The operation of an ambulance service through a
township’s fire department is expressly permitted by statute. See MCL 41.806(1)(a) (permitting
townships to establish and maintain a fire department); MCL 41.711 (authorizing a township to
operate an ambulance service in connection with their fire protection service and permitting the
services to be provided by contract between the township and an individual, firm, organization, or
corporation). As such, the provision of ambulance services in this case is a governmental function.

Plaintiffs, however, assert that the proprietary-function exception to governmental
immunity applies to its claim against the Township. The proprietary-function exception provides:

The immunity of the governmental agency shall not apply to actions to
recover for bodily injury or property damage arising out of the performance of a
proprietary function as defined in this section. Proprietary function shall mean any
activity which is conducted primarily for the purpose of producing a pecuniary
profit for the governmental agency, excluding, however, any activity normally
supported by taxes or fees. [MCL 691.1413.]

“Therefore, to be a proprietary function, an activity: (1) must be conducted primarily for the
purpose of producing a pecuniary profit; and (2) it cannot be normally supported by taxes and
fees.” Goodhue v Dep’t of Transp, 319 Mich App 526, 532; 904 NW2d 203 (2017) (quotation
marks and citations omitted).

Plaintiffs contend that the Township was engaged in a proprietary function because it
entered into a service agreement with HVA regarding the provision of the Township’s ambulance
services. That agreement required HVA to provide ambulance services staffed by at least two
HVA employees. However, HVA could request that a Township employee drive an HVA
ambulance if it was necessary for the HVA employees to administer medical services to patients
in the back of the ambulance. Plaintiffs address the first prong of the proprietary-function test by
claiming that the Township’s “clear purpose” in allowing its employees to operate HVA’s
ambulances in this manner was to “reduce costs,” and “create profit” under the service agreement.
They contend is that the Township would have incurred greater costs if HVA had to staff its
ambulances with three HVA employees.

The record does not support that assertion. Under the express language of the service
agreement, the Township was not required to pay for any of the services provided by HVA.
Instead, HVA had to collect payment “directly from those individuals to whom they are provided,
or appropriate third party payers.” There is no language indicating that, but for the provisions
related to the staffing requirements, the Township would have had to pay HVA for its ambulance
services. Plaintiffs’ beliefs that the clear purpose of the staffing provisions is to create a profit for
the Township, therefore, amounts to nothing more than speculation, which is insufficient to
establish a genuine issue of material fact. See McNeill-Marks v MidMichigan Med Ctr-Gratiot,
316 Mich App 1, 16; 891 NW2d 528 (2016).

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Additionally, plaintiffs have not provided any evidence or argument as to whether the
provision of ambulance services “cannot be normally supported by taxes and fees.” Goodhue, 319
Mich App at 532. This requirement must be met in order for a function to qualify as a proprietary
function. “It is not enough for an appellant in his brief simply to announce a position or assert an
error and then leave it up to this Court to discover and rationalize the basis for his claims, or unravel
and elaborate for him his arguments, and then search for authority either to sustain or reject his
position.” Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959). Because no argument
was presented on this portion of the proprietary-function test, the issue is abandoned.4

Because the Township was engaged in a governmental function, not a proprietary function,
governmental immunity bars plaintiffs from suing it in tort on any ground relating to the ambulance
services. MCL 691.1407(1). The trial court, therefore, erred to the extent that it denied summary
disposition to the Township on the basis of governmental immunity.

2. GROSS NEGLIGENCE

Next, plaintiffs contend that Abdilla is not immune from liability because his actions in
operating the ambulance were grossly negligent. Under MCL 691.1407(2):

(2) Except as otherwise provided in this section, and without regard to the
discretionary or ministerial nature of the conduct in question, each officer and
employee of a governmental agency . . . is immune from tort liability for an injury
to a person or damage to property caused by the officer, employee, or member while
in the course of employment or service or caused by the volunteer while acting on
behalf of a governmental agency if all of the following are met:

(a) The officer, employee, member, or volunteer is acting or reasonably
believes he or she is acting within the scope of his or her authority.

(b) The governmental agency is engaged in the exercise or discharge of a
governmental function.

(c) The officer’s, employee’s, member’s, or volunteer’s conduct does not
amount to gross negligence that is the proximate cause of the injury or damage.

Plaintiffs first argue that the Township was not engaged in the exercise of a governmental
function under MCL 691.1407(2)(b). However, as noted above, MCL 691.1401(b) defines
governmental function as “an activity that is expressly or impliedly mandated or authorized by
constitution, statute, local charter or ordinance, or other law.” And as previously discussed, the
provision of ambulatory services through a fire department—including the provision of such
services via a contract entered into between the Township and a third party—is a governmental

4
Regardless, payment for ambulance services may be provided through state, federal, or private
funds. MCL 333.20948(1). As such, it seems clear that this is the type of services that can
normally be supported through taxes and fees.

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function under this definition. The Township was therefore engaged in a governmental function
at the time of the accident for purposes of MCL 691.1407(2)(b).

Next, we must consider whether Abdilla’s actions amounted to gross negligence. The
GTLA defines gross negligence as “conduct so reckless as to demonstrate a substantial lack of
concern for whether an injury results.” MCL 691.1407(8)(a). “Evidence of ordinary negligence
is not enough to establish a material question of fact regarding whether a government employee
was grossly negligent.” Chelsea Investment Group LLC v Chelsea, 288 Mich App 239, 265; 792
NW2d 781 (2010). “Moreover, simply alleging that an actor could have done more is insufficient
under Michigan law, because, with the benefit of hindsight, a claim can always be made that extra
precautions could have influenced the result.” Wood v Detroit, 323 Mich App 416, 424; 917
NW2d 709 (2018) (quotation marks, citation, and alteration omitted). Rather, “[g]ross negligence
suggests almost a willful disregard of precautions or measures to attend to safety and a singular
disregard for substantial risks.” Dougherty, 340 Mich App at 350 (quotation marks and citation
omitted).

Here, when Abdilla approached the intersection, the ambulance’s sirens and lights were
activated. The traffic light facing Abdilla turned red, while the traffic light facing Hodge turned
green. A semitruck was stopped in the first position of the through lane of Ecorse Road. At that
time, Abdilla was driving below the speed limit. Abdilla testified that he knew drivers occasionally
proceeded through the intersection from the curbside lane of Ecorse Road, and he saw a vehicle
drive behind the semitruck and out of his sight. As a result Abdilla paid particular attention to the
area surrounding the semitruck, slowed the ambulance down, and did not increase his speed again
until he saw the white SUV cross the intersection in front of him. Abdilla further testified that he
had not seen any other vehicles to his right or left after the white SUV drove through the
intersection. He, therefore, believed the intersection was clear and began accelerating so that he
could get out of the intersection.

Abdilla never came to a full stop at any point while traveling through the intersection. Data
collected from the ambulance after the crash reveals that, in the five seconds before the collision,
Abdilla reduced the speed of the ambulance to just under 50 percent. He then began accelerating
again about two-and-a-half seconds before the crash. At the time of the crash, he had increased
the ambulance’s speed from 18 miles per hour to 23.6 miles per hour. Surveillance footage of the
incident generally demonstrates that Abdilla was already approaching or within the intersection
during the relevant timeframe.

Making all legitimate inferences in favor of plaintiffs, as the nonmoving party, Anderson,
341 Mich App at 507, one could infer that Abdilla began accelerating before he could see
completely around the semitruck to confirm that no other vehicles were approaching. However,
plaintiffs have not provided any evidence contradicting Abdilla’s testimony that he thought the
intersection was clear at that point. Rather, plaintiffs essentially argue that he could not have
known whether the lane was clear, so he acted in a grossly negligent manner by accelerating
through the lane instead of stopping. However, considering that Abdilla slowed down in the
intersection in an attempt to avoid the possibility of a collision, albeit with a different vehicle, an
objective observer could not reasonably conclude that Abdilla demonstrated “almost a willful
disregard of precautions or measures to attend to safety and a singular disregard for substantial
risks.” Dougherty, 340 Mich App at 350 (quotation marks and citations omitted).

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In an effort to demonstrate gross negligence, plaintiffs presented evidence that Abdilla’s
decision to proceed through the intersection without stopping violated national safety standards.
However, such evidence is only demonstrative of ordinary negligence. See, e.g., Maiden v
Rozwood, 461 Mich 109, 124-128; 597 NW2d 817 (1999) (concluding that the plaintiffs’ proofs,
including evidence that a staff member may have used an unapproved restraint technique when
physically restraining the plaintiff, failed to raise a material question regarding gross negligence,
rather than ordinary negligence, under the circumstances); Rakowski v Sarb, 269 Mich App 619,
623, 635-636; 713 NW2d 787 (2006) (stating that evidence a ramp was constructed in violation of
construction standards and the national building code demonstrated only ordinary negligence, not
gross negligence). Again, “[e]vidence of ordinary negligence is not enough to establish a material
question of fact regarding whether a government employee was grossly negligent.” Chelsea, 288
Mich App at 265.

Plaintiffs also argue that Abdilla violated the internal policies of the Township’s Fire
Department and that he neglected training consistent with those policies. However, it is well-
settled that internal policies and procedures cannot “ ‘fix the standard of [its] duty to others.’ ”
Meyers v Rieck, 509 Mich 460, 473; 983 NW2d 747 (2022), quoting McKernan v Detroit Citizens’
Street R Co, 138 Mich 519, 530; 101 NW 812 (1904). In Meyers, our Supreme Court explained
that “a defendant's violation of its own internal rule, even if the rule is designed to protect the
public, does not constitute negligence per se.” Meyers, 509 Mich at 473. “As such, the mere
allegation that a defendant breached its own internal rule or regulation does not, without more,
make out a claim for negligence.” Id. See also Baker v Mich Central R Co, 169 Mich 609, 637;
135 NW 937 (1912) (holding that private rules “do not fix the obligations and liabilities of the
master to its servants, nor to third persons and the public, those obligations, being fixed by law,
cannot be diminished by such rules, nor, ordinarily, increased thereby”); and Dixon v Grand Trunk
Western R Co, 155 Mich 169, 173-174; 118 NW 946 (1908) (applying holding that, under
McKernan, negligence could not be predicated on the failure to enforce a private rule). The Meyers
Court further acknowledged that a contrary position “might also discourage entities from adopting
internal rules that require a ‘higher degree of care than the law imposes. . . . [I]f the adoption of
such a course is to be used against him as an admission, he would naturally find it to his interest
not to adopt any rules at all.’ ” Meyers, 509 Mich at 474. Ultimately, “the law ‘neither permits
corporations to legislate away their responsibilities by rules, nor imposes discriminating liabilities
upon them by reason of their efforts to lessen public danger.’ ” Meyers, 509 Mich at 474-475,
quoting McKernan, 138 Mich at 532. Thus, the Township’s internal training policies cannot fix
the standard of care in order to establish ordinary negligence. As such, it also cannot establish
gross negligence.

Further, Abdilla’s testimony stating his disagreement with certain aspects of his training—
such as the concept that activated emergency signals merely constitute a request for permission to
have the right of way when proceeding through a red traffic light— is not evidence of gross
negligence. Notably, despite his opinion that emergency vehicle drivers did not need to ask other
drivers for their “permission” to yield the right-of-way, Abdilla did not testify that emergency
drivers were never required to yield to other drivers or stop at red traffic lights or blind
intersections. Rather, he testified that whether an emergency driver needed to completely stop,
rather than merely slow down, depended on the specific circumstances. Here, as mentioned,
Abdilla articulated his reasons for believing, at the time of the accident, that he could proceed
slowly through the intersection without causing a collision. While this decision may have been

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negligent given the circumstances, it does not constitute “conduct so reckless as to demonstrate a
substantial lack of concern for whether an injury results.” MCL 691.1407(8)(a).

For the foregoing reasons, even viewing the record in a light most favorable to plaintiffs,
reasonable minds could not conclude that Abdilla operated the ambulance in a grossly negligent
manner. Dougherty, 340 Mich App at 345. Accordingly, Abdilla is afforded governmental
immunity from plaintiffs’ third-party negligence claims under MCL 691.1407(2), and Abdilla was
therefore entitled to summary disposition under MCR 2.116(C)(7) and MCR 2.116(C)(10). The
trial court erred to the extent it denied defendants’ motion for summary disposition relative to
Abdilla.

3. OWNER’S LIABILITY

Plaintiffs next contend that, even if Abdilla was not grossly negligent, HVA can be held
vicariously liable for Abdilla’s ordinary negligence under the owner’s liability statute, MCL
257.401(1). We disagree. In Alex v Wildfong, 460 Mich 10, 21-22; 594 NW2d 469 (1999), our
Supreme Court concluded that a finding of immunity under the GTLA precluded a finding of
liability under the owner’s liability statute, even in cases where the vehicle is not a government-
owned vehicle. Moreover, MCL 257.401 provides only “vicarious liability of an automobile
owner for the negligence of a driver.” Kaiser v Allen, 480 Mich 31, 38; 746 NW2d 92 (2008).
Accordingly, because Abdilla is immune from tort liability, HVA cannot be vicariously liable
under MCL 257.401.

4. EXCLUSIVE REMEDY PROVISION

Defendants next argue the trial court erred by denying their motion for summary
disposition relative to their claims that HVA was entitled to the protection of the exclusive-remedy
provision of the WDCA. “[W]hether a business entity is a particular worker’s ‘employer,’ as that
term is used in the WDCA, is a question of law for the courts to decide if the evidence on the
matter is reasonably susceptible of but a single inference.” Clark v United Technologies Auto, Inc,
459 Mich 681, 693-694; 594 NW2d 447 (1999). “Only where evidence of a putative employer’s
status is disputed, or where conflicting inferences may reasonably be drawn from the known facts,
is the issue one for the trier of fact to decide.” Id. at 694.

The WDCA provides that an employee’s “right to the recovery of benefits as provided in
this act shall be the employee’s exclusive remedy against the employer for a personal injury or
occupational disease.” MCL 418.131(1). Because the exclusive remedy provision does not define
the term “employer” in a manner relevant to the present inquiry, Michigan courts apply “the
‘economic realities test’ to determine whether an employment relationship exists for purposes of
the exclusive remedy provision, and thus whether an individual or entity is the ‘employer’ of a
given employee.” Clark, 459 Mich at 687. When applying the economic-reality test, courts assess
the totality of the circumstances but focus on the following four factors: “(1) the control of a
worker’s duties, (2) the payment of wages, (3) the right to hire and fire and the right to discipline,
and (4) the performance of the duties as an integral part of the employer’s business towards the
accomplishment of a common goal.” Id. at 688 (quotation marks, citation, and alteration omitted).
“No one factor is controlling.” Id. at 689. In addition to the foregoing factors, “[a] salient factor
in determining an employee-employer relationship in the parent-subsidiary context is the use of a

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combined worker’s compensation insurance policy by both parent and subsidiary.” James v
Commercial Carriers, Inc, 230 Mich App 533, 539; 583 NW2d 913 (1998). “Combined
bookkeeping and accounting, together with income tax treatment that regards the corporations as
a single entity, has also been a persuasive factor in supporting the conclusion that two corporations
should be treated as one for the purposes of the exclusive remedy provision.” Id.

Wells v Firestone Tire & Rubber Co, 421 Mich 641; 364 NW2d 670 (1984) is the leading
case when analyzing whether an employee-employer relationship exists within a parent-subsidiary
context. In Wells, 421 Mich at 650, our Supreme Court acknowledged “the general principle that
in Michigan separate entities will be respected.” However, after applying the economic-reality
test to the specific facts before it, the Wells Court departed from this general principle and
effectively engaged in a “reverse-piercing” of the corporate veil of the parent corporation in
question. Id. at 648-650; see also Clark, 459 Mich at 689-690. The Wells Court “premised its
willingness to depart from the general rule and disregard the separate corporate entities in that case
on the Court’s recognition of the important public policies underlying the [WDCA] and [its] belief
that a contrary determination would be inequitable under the facts of [the] case.” Clark, 459 Mich
at 690 (quotation marks and citation omitted; first alteration in original). Accordingly, “in the
classic Wells parent-subsidiary scenario, an essentially vertical relationship exists between two
business entities who, if warranted by the application of the economic realities test and the equities
of the case, will be treated as essentially one entity for purposes of the exclusive remedy
provision.” Id. at 691.

Regarding the public policy considerations underlying the WDCA, the Wells Court
acknowledged that, “[b]y agreeing to assume responsibility for all employment-related injuries,
employers protect themselves from the possibility of potentially excessive damage awards. In
order to effectuate these policies, the statute has been liberally construed to provide broad coverage
for injured workers.” Wells, 421 Mich at 651. The Wells Court then concluded that, “[i]f the
statute is to be construed liberally when an employee seeks benefits, it should not be construed
differently when the employer asserts it as a defense to a tort action brought by the employee who
claimed and accepted benefits arising from that employment relationship.” Id.

Here, the trial court denied defendants’ motion for summary disposition relative to their
WDCA arguments on the basis of its conclusion that EHP, not HVA, was Schenk and Robert
Reed’s employer. In doing so, the court did not err.

First, there is no real dispute that EHP controlled Schenk and Robert Reed’s work duties.
Although Ronald Slagell, the president and chief executive officer (CEO) of both EHP and HVA,
testified that Robert Reed’s “everyday functions” were “tied to HVA,” he did not identify any
ways in which HVA actually controlled the daily job functions of Schenk or Robert Reed. Rather,
Slagell’s testimony merely indicated that Robert and Schenk utilized HVA-owned ambulances and
equipment to accomplish their job duties and presented themselves as HVA employees by wearing
uniforms bearing HVA’s name. In contrast, Slagell’s deposition testimony and Robert Reed’s
affidavit indicated that EHP’s employees handled the administrative aspects of Schenk and Robert
Reed’s daily employment, including scheduling the days and times they worked. Similarly,
although Robert Reed’s affidavit and Slagell’s testimony conflict regarding whether Robert’s
direct supervisor was a sole employee of EHP or a dual employee of HVA and EHP, this dispute
arises from Slagell’s apparent belief that each employee of any EHP subsidiary, such as HVA, was

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also an employee of EHP such that the two separate sources of employment were indistinguishable.
There is no evidence in the record that any employee worked solely for HVA, nor is there any
indication that HVA singularly controlled any aspect of Robert’s or Schenk’s EMT duties.

Second, although EHP administered payroll for employees who worked on HVA’s
ambulances, the economic reality was that HVA actually paid the employees’ wages. Specifically,
plaintiffs presented evidence that EHP issued Robert’s and Schenk’s paychecks, and Slagell
testified that EHP issued the paychecks using funds drawn from accounts owned and operated by
EHP. However, Slagell also testified that EHP did not independently earn any funds. Instead,
EHP used revenue collected by its subsidiaries to fund employee payroll. Regarding Robert and
Schenk, specifically, Slagell testified that HVA funded their paychecks and, if not for the funding
provided by HVA, EHP would not have had any means to pay their wages.

Third, there is no genuine dispute that EHP had the right to hire the EMTs who worked on
HVA’s ambulances. Schenk provided documentary evidence that EHP hired her, and Slagell
testified that EHP’s human resources department handled hiring for all of EHP’s subsidiaries.
Although Robert was hired by HVA, this occurred before EHP was created. The record is less
clear regarding the right to fire or discipline the EMTs who worked on HVA’s ambulances.
However, it nonetheless preponderates that EHP again had sole firing and disciplinary authority.
Specifically, Robert Reed’s affidavit and Slagell’s testimony both indicate that Robert Reed’s
direct supervisor was an EHP employee. To the extent Slagell testified that the same supervisor
was also an employee of HVA, this again speaks to Slagell’s view of the employment relationship
between EHP and its subsidiaries as indistinguishable. Similarly, Slagell identified the individuals
with the power to fire Robert or Schenk as employees of both EHP and HVA.

Finally, the record indicates that the work performed by the EMTs on HVA’s ambulances
was an integral part of EHP’s business toward the accomplishment of a common goal. Slagell’s
uncontradicted testimony indicated that HVA was created in 1981, to provide ambulatory services
throughout Washtenaw County. As HVA’s operations expanded, HVA formed additional entities
to provide services to other communities, each of which were initially subsidiaries of HVA. When
EHP was later formed as an “administrative parent company,” HVA and its former subsidiaries
underwent corporate restructuring and all became subsidiaries of EHP. EHP acted as “the
administrative arm of the organization so that the individual ambulance companies could then
focus on the ambulance operations.” More specifically, EHP handled the administrative aspects
of the organization, such as billing, financing, human resources, employee training, payroll,
insurance coverage for the organization’s employees, and community relations. EHP did not,
itself, have any ambulance operations, own any ambulances, or independently earn any funds.
Rather, as previously mentioned, revenue collected by the ambulance services of EHP’s
subsidiaries, such as HVA, “flow[ed] upward” to EHP to fund the administrative functions it
carried out on behalf of itself and its subsidiaries. Slagell confirmed that it was “the existence of
HVA itself and not EHP that allow[ed]” Robert and Schenk “to actually have a job . . . .” Thus,
the existence of both HVA and EHP are integral to their combined ability to provide ambulatory
services to the communities HVA served.

Notably, there are several additional considerations that, when analyzed together with the
primary factors of the economic-reality test, lead us to conclude that EHP and HVA should be
treated as essentially one entity for purposes of the exclusive remedy provision of the WDCA. In

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this respect, we find a brief comparison of the facts of this case to James and Wodogaza v H & R
Terminals, Inc, 161 Mich App 746; 411 NW2d 848 (1987), instructive.

In James, 230 Mich App at 535, the plaintiff worked for Fleet Carrier Corporation. Fleet
and the defendant were both wholly owned subsidiaries of Ryder System, Inc. Id. Fleet sent the
plaintiff to premises owned by the defendant, where the plaintiff was hurt. Id. After applying for
workers’ compensation benefits from Fleet, the plaintiff received the benefits from a third wholly-
owned subsidiary of Ryder, which subsidiary was responsible for administering all workers’
compensation claims for Ryder and Ryder’s subsidiaries. Id. Plaintiff then filed a negligence
lawsuit against the defendant. Id. at 535-536. The James Court ultimately found that, under the
totality of the circumstances there, “Fleet and [the] defendant must be considered components of
the same employer, their parent corporation Ryder, for purposes of the WDCA.” Id. at 542. The
James Court reasoned:

In addition to sharing a filing for worker’s compensation self-insurer status, these
subsidiaries share numerous financial functions through their connection to the
parent corporation. Cash management and treasury functions for all Ryder
subsidiaries are performed by Ryder’s central staff at its corporate headquarters in
Miami. All Ryder customers send their payments to depository accounts that are
dispensed into concentration accounts at the end of every day. The money in the
concentration accounts is transferred into disbursement accounts that process all
Ryder’s subsidiaries’ disbursements. Moreover, there is a unity of management
between the parent corporation Ryder and each of its subsidiaries. Defendant and
Fleet share the same three directors, one who is also a director, president, and CEO
of Ryder, and another who is a senior executive vice president of Ryder. Defendant
has twenty-seven officers and Fleet has twenty-two officers, nineteen of which they
share. [Id. at 542-543.]

By contrast, in Wodogaza, 161 Mich App at 748-749, the plaintiff, who was employed by
the parent corporation, was injured on the premises of the defendant H & R Terminals, Inc., by a
tractor owned by the defendant S & P Equipment, Inc. Both of the defendants were wholly owned
subsidiaries of the parent company. Id. at 749. After receiving workers’ compensation benefits
from the parent company, the plaintiff sued the subsidiary defendants. Id. After analyzing the
specific facts of that case, together with “certain equitable considerations,” the Wodogaza Court
concluded that the defendant subsidiaries were not entitled to protection from the exclusive remedy
provision of the WDCA. Id. at 757. In coming to this conclusion, the Wodogaza Court noted the
following:

Defendant H & R Terminals, Inc., was organized solely for the purpose of owning
land and leasing it back to its parent corporation, Preston Trucking Company, Inc.
Defendant S & P Equipment, Inc. was organized for the purpose of owning
equipment and leasing it back to Preston. Neither of the wholly owned subsidiaries
had any employees other than their statutorily required officers, and their offices
and activities were controlled by Preston. Neither carried workers’ compensation
coverage. There is no intimation that anyone other than Preston exercised control
over plaintiff, paid his wages, or was responsible for the imposition of discipline.

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Under these circumstances, it seems clear that Preston, and neither S & P nor H &
R, was plaintiff’s employer. [Id. at 753-754.]

Additionally, the Wodogaza Court distinguished the equities of that case from those present in
Wells. Id. at 755-756. In this respect, the Wodogaza Court found particularly significant that the
defendant subsidiaries sought “to shield themselves from tort liability without having assumed any
concomitant liability for the payment of workers’ compensation benefits. Defendants have never
accepted any responsibility for the work-related injuries of their parent’s employees.” Id. at 756.

The present cases are more analogous to James than to Wodogaza. Here, like in Wodogaza,
EHP controlled the work duties of employees working on HVA’s ambulances and had the
exclusive right to hire, fire, and discipline those employees. Unlike in Wodogaza, however, HVA
was not merely a shell corporation. Although only HVA owned the ambulances and equipment
used in its ambulance operations, it did not avoid responsibility for the work-related injuries of the
employees who used its ambulances and equipment in the course of their employment. Instead,
HVA, through its payments to EHP, solely funded the workers’ compensation insurance benefits
for these employees.

Additionally, like in James, 230 Mich App at 542-543, HVA and the other subsidiaries of
EHP shared “financial functions” and had a “unity of management” with EHP. Specifically,
Slagell’s uncontradicted deposition testimony indicated that, although each of EHP’s subsidiaries
had individual bank accounts, payments made to each subsidiary were collected in a single,
common lockbox, and EHP’s vice president of finance was responsible for bookkeeping for the
accounts of EHP and EHP’s subsidiaries. In his affidavit, Slagell stated that he was the president
and CEO of both EHP and HVA. Although a direct year-to-year comparison of the officers and
directors of EHP and HVA is not available, a comparison between EHP’s directors and officers in
2019 against those of HVA in 2018 reveals that, in those years, EHP and HVA shared the same
treasurer and secretary, as well as five common directors. In 2019, both HVA and EHP also had
the same resident agent and registered office mailing address.

Considering the totality of the circumstances, HVA is considered an integral component of
its parent corporation, EHP, such that HVA is entitled to the exclusive remedy provision of the
WDCA. See id. at 544. Although Schenk and the Reeds dispute HVA’s entitlement to protection
under the WDCA, they have not presented any evidence that actually calls the relationship between
EHP and HVA into dispute. Similarly, there are no conflicting inferences that can be drawn from
the available evidence regarding the relationship between EHP and HVA. Accordingly,
defendants were entitled to summary disposition under MCR 2.116(C)(4). Clark, 459 Mich at
693-694. The trial court therefore erred in denying defendants’ motion for summary disposition
on this ground.

This conclusion does not conflict with this Court’s previous decision in Reed. Within the
context of finding summary disposition inappropriate because there was insufficient evidence to
conclude that no genuine issue of material fact existed regarding each factor of the economic-
reality test, the Reed Court analyzed the parent-subsidiary relationship between EHP and HVA
against those present in Wells and James and determined that (1) Wells was distinguishable
because the plaintiff there sued the parent corporation that paid workers’ compensation benefits,
whereas Robert and Schenk sued HVA, the subsidiary corporation that did not pay their WDCA

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benefits, and (2) James was distinguishable because HVA did not present “relevant evidence of
the sort considered in James.” Reed, unpub op at 6. On remand, however, those conclusions are
negated by the relevant portions of Slagell’s deposition testimony, which shed more light on the
relationship between HVA and EHP.

The law-of-the-case doctrine does not preclude defendants from prevailing on this issue on
remand. Under the law-of-the-case doctrine, “if an appellate court has passed on a legal question
and remanded the case for further proceedings, the legal questions thus determined by the appellate
court will not be differently determined on a subsequent appeal in the same case where the facts
remain materially the same.” Krieger, 348 Mich App at 173 (quotation marks and citation
omitted). “The purpose of the doctrine is primarily to maintain consistency and avoid
reconsideration of matters once decided during the course of a single continuing lawsuit.” Rott v
Rott, 508 Mich 274, 286-287; 972 NW2d 789 (2021) (quotation marks and citations omitted).
Here, defendants obtained deposition testimony from Slagell after the Reed Court remanded to the
trial court for further proceedings. This deposition testimony contained new material information
regarding the relationship between EHP and HVA that directly impacted the trial court’s ability to
determine whether HVA could be considered Schenk and Robert’s employer for purposes of the
WDCA. Thus, because facts did not remain materially the same, the law-of-the-case doctrine did
not apply.5

Reversed and remanded for entry of an order granting summary disposition in defendants’
favor on the issues of governmental immunity and WDCA protections. We do not retain
jurisdiction. Defendants may tax costs under MCR 7.219(A).

/s/ Stephen L. Borrello
/s/ Michael J. Kelly
/s/ Christopher M. Trebilcock

5
Our conclusions that Abdilla and the Township were entitled to governmental immunity and
plaintiffs’ claims against HVA were precluded by the exclusive-remedy provision of the WDCA
act to bar all of plaintiffs’ claims against defendants. “An issue is moot if an event has occurred
that renders it impossible for the court to grant relief. An issue is also moot when a judgment, if
entered, cannot for any reason have a practical legal effect on the existing controversy.” King v
Mich State Police Dep’t, 303 Mich App 162, 192; 841 NW2d 914 (2013) (quotation marks and
citation omitted). Here, the issues related to EMSA immunity are moot because, regardless of our
conclusions as to those matters, plaintiffs’ claims against defendants are precluded by
governmental immunity, as to Abdilla and the Township, and the exclusive-remedy provision of
the WDCA, as to HVA.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11124194. Public record. Not legal advice.