Michigan Court of Appeals; Docket No. 222542; Published
Judges Gage, Jansen and O’Connell; unanimous
Official Michigan Reporter Citation: 250 Mich. App. 249, Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses for Home Accommodations [3107(1)(a)]
12% Interest Penalty on Overdue Benefits – Nature and Scope [3142(2) (3)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous published opinion by Judge Gage, the Court of Appeals rendered a significant holding regarding the obligation of no-fault insurers in home accommodation cases. Specifically, the court held that when an insurance company builds or buys a new residence for a catastrophically injured auto accident patient and the patient is willing to contribute to the cost of the new home, the amount of his equity in his existing residence, then the no-fault insurance company must convey legal title of the new residence to the patient. In this regard, the court stated:
“The No-Fault Act does not address with specificity to what extent an insurer must supply an insured accommodations in the form of housing. The language of the act focuses on reasonableness, requiring that the insurer pay for ‘all reasonable charges incurred for reasonably necessary ... accommodations.’ Neither party disputes that the cost involved in defendant’s purchase and renovation of a house to suit plaintiff’s postaccident needs constitutes a reasonable charge for accommodations reasonably necessary to provide for plaintiff’s care and recovery. Accordingly, MCL 500.3107(1)(a) plainly requires that defendant shoulder the involved expenses pursuant to its contract with plaintiff. See Sharp v Preferred Risk Mutual Insurance Company, 142 Mich App 499 (1985) [Item No. 834], ... in which this Court noted, in a case involving the no-fault insured’s apartment rental expenses, that ‘as long as housing larger and better equipped is required for the injured person than would be allowed if he were not injured, the full cost is an “allowable expense”’ under MCL 500.3107(1)(a). The limited question in this case concerns whether defendant’s provision of title in plaintiff’s name likewise qualifies as a reasonable charge reasonably necessary for plaintiff’s care. We find that in this case, for several reasons, having title of the furnished house be in plaintiff’s name constitutes a reasonable charge reasonably necessary for plaintiff’s care. ...plaintiff has averred his willingness to give up ownership in his current split-level house and contribute the amount of his equity toward defendant’s presumably less costly alternative suggestion to purchase and renovate an existing ranch house.... Under the undisputed and unique circumstances of this case, we conclude that defendant’s conveyance of title to the renovated ranch house to plaintiff, in exchange for plaintiff’s contribution of his existing equity in his house to defendant, as a matter of law qualifies as a ‘reasonable charge incurred for reasonably necessary ... accommodations for an injured person’s care, recovery, or rehabilitation....’”
The court distinguished its earlier opinion in Kitchen v State Farm Insurance Company for several reasons, including the fact that in this case, the house was being built for a minor child, the minor’s parents did not give up their equity in their existing home and the title of the new home was to be placed in the name of a corporate trustee.
The court also rendered a significant holding regarding a no-fault insurer’s obligation to pay penalty interest under the provisions of section 3142 of the Act. In this particular case, the defendant agreed that plaintiff was entitled to receive payment for medical expenses on an uncoordinated basis even though those expenses had been paid by Blue Cross/Blue Shield. Defendant also acknowledged that it owed payment for those medical expenses in an amount at least equal to the amount that Blue Cross/Blue Shield paid to the medical providers. Nevertheless, defendant refused to pay anything to plaintiff for medical expenses until plaintiff was able to show the defendant the exact amount that was due. The Court of Appeals held that defendant’s conduct in this regard violated the provisions of section 3142 and in that regard, held:
“We reject defendant’s suggestion that it need not have paid plaintiff any benefits until plaintiff requested the exact amount of money that defendant owed. The statute requires only reasonable proof of the amount of loss, not exact proof. Once plaintiff armed defendant with the information from MFBH [Mary Free Bed Hospital] containing a total amount billed and an amount paid by BCBSM [Blue Cross/Blue Shield], defendant, if it had desired to challenge or investigate the amount purportedly paid by BCBSM, could have and should have conducted some investigation of its own during the thirty day legislative grace period to establish a lesser amount of uncoordinated benefits owed.... Accordingly, we affirm the trial court’s imposition of no-fault penalty interest.”
