Michigan Court of Appeals; Docket #295499; Published
Judges Cavanagh, Stephens, and Krause; unanimous: by Judge Krause
Official Michigan Reporter Citation: Not Applicable (2011), Link to Opinion 
Leave to appeal to the Supreme Court was denied 6/28/2011; Link to Order
STATUTORY INDEXING:
Work Loss Benefits: Calculation of Benefits [§3107(1)(b)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous published opinion, by Judge Krause, the Court of Appeals affirmed the trial court’s grant of summary disposition pursuant to MCR 2.116(C)(10) in favor of plaintiff on the issue of how the plaintiff’s work loss benefits should be calculated. Specifically, the Court of Appeals affirmed the trial court’s finding that the plaintiff, who was a special education teacher who was paid in 26 biweekly installments of the yearly salary totaling $63,895, should be paid work loss benefits, pursuant to MCL 500.3107(1)(b), by dividing her yearly salary, less 15%, by 12 months for a total of $4,525.90 per month and the yearly total of $54,310.75.
On appeal, the defendant argued that the trial court incorrectly calculated plaintiff’s claims for work loss benefits. The defendant argued that the plaintiff’s claims for work loss benefits should be calculated by dividing her yearly salary by her 183 contract work days and subtracting taxes to arrive at a daily wage of $296.78. The defendant further argued that that daily rate should be multiplied only by the number of work days the plaintiff actually worked during each 30-day period, not including any days during summer break. Under this method, the calculation of plaintiff’s work loss benefits would fluctuate from $3,858.14 to $6,529.16. Due to the fact that some of the months exceeded the monthly cap on work loss benefits, the defendant’s calculation resulted in the plaintiff being entitled to approximately $10,000 less than the amount awarded by the trial court.
In affirming the trial court’s ruling, the Court of Appeals explained that MCL 500.3107(1)(b) simply defines work loss as “loss of income from work an injured person would have performed … if he or she had not been injured,” and, even though the statute provides a maximum cap on the amount of work loss benefits that an insurer must pay over a given month, the statute allows a plaintiff to recover the income loss as a consequence of not performing the work at issue, and does not require any sort of temporal correlation between the work that would have been performed and the income lost. In this regard, the Court specifically held:
“There is nothing ambiguous about MCL 500.3107(1)(b). As defendant correctly points out, statutes must be read as a whole. The first sentence of MCL 500.3107(1)(b) may not be phrased as artfully as possible, but it is clearly a definition provision: “work loss” is defined as ‘loss of income from work an injured person would have performed . . . if he or she had not been injured.’ The statute provides an upper limit on the amount of monthly compensation for work loss. However, the statute does not mandate any sort of temporal correlation between the work and the income, as defendant asserts. The calculation might be simplest if a claimant is paid a straightforward, fixed dollar amount a day, but the fact that a salaried employee’s income is not so linearly tied to the strict number of hours worked is not an impediment. Obviously, if a claimant does not actually miss any work, the claimant cannot claim any loss of income under the statute as a consequence. But if a claimant has missed work—as plaintiff has here—it remains only to determine the income lost as a consequence of not performing that work.
Put another way, MCL 500.3107(1)(b) does not say when “work loss” must be deemed to occur. This is reasonable. In a straightforward hourly employment context, many employers delay paychecks by some number of pay periods, so missing a day of work may not be reflected in a claimant’s paycheck for some considerable time. The income lost because the claimant did not work is therefore a reduction in pay several weeks—or more—later. In the instant case, pursuant to plaintiff’s contract, the income plaintiff lost because she did not work was 26 biweekly paychecks, totaling $63,895, that she did not receive for an entire year. Defendant seeks to create a fiction, completely unwarranted by anything in the statute, that plaintiff’s lost income was something other than what it actually was.”
