Michigan Court of Appeals; Docket # 339753; Unpublished
Judges Kelly, Sawyer, and Markey per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Allowable Expenses for Home Accommodations [§3107(1)(a)]
Allowable Expenses: Incurred Expense Requirement [§3107(1)(a)]
TOPICAL INDEXING:
SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals reversed the trial court’s order granting summary disposition for Defendant Progressive Michigan Insurance Company (“Progressive”) regarding payment for home modifications in a first party PIP case. The Court of Appeals reversed the trial court because case law will allow the trial court to establish future obligations for home modification for PIP benefits.
Plaintiff was seriously injured in a motorcycle accident and was eligible to receive PIP benefits. After the accident, Plaintiff engaged an architect and a contractor for modifications to his home. Plaintiff argued that these modifications were necessary since he had lost his leg in the motorcycle accident. Progressive received a report from an occupational therapist who believed that the home modifications were significantly less than Plaintiff’s proposed plan. Plaintiff brought an action to have Progressive pay for the plan. The trial court granted summary disposition for Progressive because it found that Progressive was only obligated to pay for costs that were already incurred. The trial court further refused to allow Plaintiff to amend its complaint “because the evidence before the Court shows that the amendment would not be justified.”
The Court of Appeals reversed the trial court because it found that a trial court was allowed to establish future obligations for home modification for PIP benefits. Both Plaintiff and Defendant agreed that the case was controlled by Proudfoot v State Farm Mut Ins Co, 469 Mich 476; 673 NW2d 739 (2003); however, both disagreed over its application. The Court of Appeals found that under Proudfoot a trial court could establish future obligations for home modifications in accordance with PIP benefits. However, the insurer is not obligated to make any payments until an expense is actually incurred. Thus, the Court of Appeals found that future obligations by Progressive could be established, but Progressive would be required to pay for such obligations only when they were incurred.
“We need not resolve this aspect of the dispute because Proudfoot establishes that, while entering into a contract would satisfy the statutory requirement that the insured actually incur an expense, 469 Mich at 476 n 4, it also establishes that declaratory judgment may also be obtained to establish what future expenses the insurer would be obligated to pay”
The trial court had denied Plaintiff’s claim because it found the initial pleading inadequate. The trial court also did not allow Plaintiff to amend its complaint because the “evidence before the Court shows that the amendment would not be justified.” On appeal Progressive argued that the amended complaint was correctly denied because allowing it would have caused an undue delay and caused prejudice. The Court of Appeals found no undue delay because the delay was only five weeks. The Court also found no prejudice because the amended complaint would not be a new complaint, but rather it would expand on the prior pleading. Progressive was already on notice for the prior pleading and so an amended complaint that expanded upon the prior pleading would not cause prejudice.
“Defendant argues that it was properly denied because of undue delay in moving to amend and prejudice to defendant because discovery had already closed. As for the delay, the motion was filed the day after the trial court denied reconsideration of the grant of summary disposition and approximately 5 weeks after the initial grant of summary disposition. We do not find that to be undue delay. . . . As for prejudice to defendant because discovery had closed and it was approximately a month before the scheduled trial date, we note that the proposed amendment does not add a new claim, but merely expands the pleading for an existing claim for declaratory relief. Defendant was already on notice that, if the trial court had denied the motion for summary disposition, it would need to defend at trial its decision to deny the proposed modifications.”
Thus, the Court ordered the trial court to accept an amended complaint.
