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Spectrum Health Hospitals v Farmers Ins Exchange (COA - UNP; 2/21/2017; RB # 3614)


Michigan Court of Appeals; Docket # 329907; Unpublished
Judges Murphy, Sawyer and Swartzle; Unanimous, Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


Entitlement to PIP Benefits: Arising Out of/Causation Requirement [§3105(1)]
Penalty Attorney Fees - Requirement That Benefits Were Overdue [§3148(1)]


Not Applicable


In this unanimous unpublished per curiam Opinion, the Court of Appeals held the circuit court properly reversed the district court’s denial of defendant-insurer’s motion for directed verdict, finding that the causal connection between the insured’s 1989 auto accident and her 2013 ankle injury did not satisfy the “arising out of” requirement in MCL 500.3105(1). As a result, the Court found that plaintiff-medical provider, which had treated the insured’s ankle injury, was not entitled to no-fault benefits or penalty attorney fees pursuant to MCL 500.3148.

Tamra Wheeler was injured in a 1989 auto accident and defendant Farmers Insurance paid her no-fault PIP benefits. In the years that followed, Wheeler underwent numerous surgeries and medical treatments related to her accident injuries. Farmers paid the expenses related to these surgeries and medical treatments, including devices such as a wheelchair and a modified van. Despite her injuries, Wheeler was able to walk unassisted for short distances. Dr. John Maskill, an orthopedic surgeon who began treating Wheeler in 2010, indicated that Wheeler’s injuries rendered her left leg “like a post” and that a fusion in Wheeler’s left ankle caused her legs to have differing lengths, thereby causing her to have difficulty walking on uneven surfaces. On April 5, 2013, Wheeler took her wheelchair outside her home, got out of the wheelchair, slipped on ice and fractured her right ankle. After Dr. Maskill performed surgery on the ankle, plaintiff-Spectrum Health submitted bills and medical records to Farmers related to the surgery. Plaintiff and Farmers stipulated that charges of $17,300.57 were incurred and were reasonable. Farmers, however, denied plaintiff’s claim, asserting that Wheeler’s April 2013 ankle injury was caused by the intervening event of her slipping on ice, and did not arise from the 1989 auto accident, as required by §3105(1). Plaintiff then filed this action in district court to recover the expenses incurred in treating Wheeler for the April 2013 ankle injury. Plaintiff also sought penalty attorney fees under MCL 500.3148. Farmers moved for directed verdict, arguing that plaintiff failed to show a causal connection between Wheeler’s 1989 auto accident and her April 2013 ankle injury. The district court denied the directed verdict motion. A jury found that Wheeler’s April 2013 ankle injury arose out of the ownership, operation, maintenance or use of a motor vehicle, that allowable expenses were incurred and that payment for those expenses was overdue. The district court entered a judgment of $20,303.76 for the medical expenses plus penalty interest, costs of $1,670 and attorney fees of $35,027. The circuit court reversed, finding that plaintiff failed to present evidence to support a finding that Wheeler’s April 2013 injury arose from her 1989 auto accident.

On appeal, plaintiff first argued the circuit court did not have subject-matter jurisdiction because the appeal from the district court was untimely. The Court of Appeals rejected this claim, noting the district court’s January 13, 2015 order was the “only final order” and that Farmers’ appeal was filed on January 30, 2015, which was within 21 days of the district court’s order.

Turning to whether Farmers was liable for paying no-fault benefits, the Court of Appeals focused on two cases: McPherson v McPherson, 493 Mich 294 (2013), and Scott v State Farm Mut Auto Ins Co, 278 Mich App 578 (2008), vacated in part, 482 Mich 1074 (2008).

The Court explained that, under McPherson, it is not just “any bodily injury” that triggers an insurer’s liability to pay no-fault benefits. Rather, the Court emphasized that, pursuant to McPherson, the injuries must be “caused by the insured’s use of a motor vehicle.” In McPherson, the Michigan Supreme Court held the causal connection between plaintiff’s 2008 spinal cord injury and his 2007 accident were insufficient to satisfy the “arising out of” requirement in §3105(1). According to the McPherson Court, plaintiff in that case did not injure his spinal cord while using his motor vehicle in 2007, but injured it in the 2008 motorcycle crash, “which was caused by his seizure, which was caused by his neurological disorder, which was caused by his use of a motor vehicle as a motor vehicle in 2007.”

Applying McPherson to the present case, the Court of Appeals concluded that plaintiff’s 2013 fall and ankle injury did not “arise out of” her 1989 auto accident. The Court wrote:


“… Wheeler’s ankle fracture on April 5, 2013, was caused by her fall, which was caused by her instability when walking, which was caused by the injuries she suffered from the 1989 accident. … [T]he ‘causal connection’ between Wheeler’s 1989 injury and the April 2013 fall ‘is insufficient to satisfy the “arising out of” requirement of MCL 500.3105(1).’ … Therefore, ‘the second injury alleged by plaintiff is too attenuated from the first accident to permit a finding that the second injury was directly caused by the first accident.’ … For this reason, the district court erred in denying defendant’s motion for a directed verdict, and the circuit court properly reversed the district court’s denial.”

The Court of Appeals continued by distinguishing the Scott decision, finding it did not bolster plaintiff’s argument that the evidence supported a conclusion that Wheeler’s 2013 injury arose from the 1989 accident. In this regard, the Court said:

“In Scott, the defendant insurance company refused to pay PIP benefits for medication that the plaintiff alleged was necessitated by high cholesterol she suffered as a result of a motor-vehicle accident. …  As our Supreme Court stated in McPherson, the issue in Scott ‘was whether the evidence was sufficient to support a finding that the first injury caused the second injury in a direct way.’ … In contrast, the plaintiff in McPherson claimed that his 2008 injury ‘occurred as a result of the neurological disorder from the first accident in combination with the intervening motorcycle accident.’ … [T]hat causal connection could not support a finding that the plaintiff’s 2008 injury arose from the 2007 accident. … Likewise, Wheeler’s April 2013 injury resulted from the ‘intervening [slip and fall] accident’ rather than being a direct result of the 1989 accident. Therefore, Scott is distinguishable from this case and does not support plaintiff’s argument.”

The Court further rejected plaintiff’s claim that Wheeler’s April 2013 injury arose from the 1989 accident not because it was caused by the 1989 accident, but because the 1989 accident rendered her unable to compensate when she fell in April 2013, which caused her injuries from the April 2013 fall to be more severe than they otherwise would have been. Addressing this argument, the Court stated:

“We fail to see the relevance of this argument. As discussed above, defendant is only liable for PIP benefits resulting from the 2013 injury if the injury arose from the 1989 accident. … And for the reasons discussed above, under the standard set forth by our Supreme Court in McPherson, … the evidence cannot support a finding that Wheeler’s April 2013 fracture arose from the 1989 accident.”

Based on the foregoing, the Court of Appeals held that Farmers was not liable for no-fault benefits resulting from Wheeler’s 2013 fall. As a result, the Court also held that Farmers was not obligated to pay penalty attorney fees under §3148(1).

Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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