Michigan Court of Appeals; Docket # 294363; Published
Judges Shapiro, Hoekstra, and Talbot; unanimous: by Judge Hoekstra
Official Michigan Reporter Citation: Not applicable; Link to Opinion 
The Michigan Supreme Court reversed in part the Court of Appeals' decision on 7/30/12; Link to Opinion
STATUTORY INDEXING:
Replacement Service Expense Benefits: Nature of the Benefit [3107(1)(c)]
Liability for Excess Economic Loss Caused by Insured Tortfeasors [3135(3)(b)]
Objective Manifestation Element of Serious Impairment (McCormick Era – 2010 –Present) [3135(7)]
Determining Serious Impairment of Body Function as a Matter of Law (McCormick Era – 2010 –Present) [3135(2)]
General / Miscellaneous [3107]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous, published opinion authored by Judge Hoekstra, the Court of Appeals held that under MCL 500.3135(3)(c), services commonly known as “replacement services” rendered in excess of $20 per day or for more than three years after the date of the accident, are recoverable in an auto liability case. The Court also reversed the trial court’s grant of summary disposition on the issue of serious impairment on the basis that the trial court failed to consider evidence that suggested plaintiff suffered an objectively manifested injury.
The injured person, Johnson, sustained back injuries when she was hit by a vehicle in 2004. Plaintiff filed a third-party liability claim alleging back injuries consisting of a herniated disc at L5-S1 and other back-related complaints. The trial court dismissed the portion of plaintiff’s excess damage claim under MCL 500.3135(3)(c) for replacement service expenses rendered in excess of the amounts covered for those services under MCL 500.3107(1)(c). The trial court reasoned that claims for excess “replacement services” were not a recoverable element of damages in a liability case because replacement services are in a different section of the no-fault statute than “allowable expenses” under MCL 500.3107(1)(a).
In reversing the trial court, the Court of Appeals held that replacement service expenses are not separate and distinct from “allowable expenses.” Rather, the Court of Appeals reasoned that replacement services could be considered a category of “allowable expenses.” The Court reasoned that the definition of “allowable expenses” includes reasonable charges incurred for reasonably necessary products, services, and accommodations for an injured person’s “care, recovery, or rehabilitation.” The Court reasoned that under the Supreme Court holding in Griffith v State Farm Mut Automobile Ins Co, 472 Mich 521 (2005), the term “care” must be given a meaning broader than “recovery” and “rehabilitation,” and that it includes expenses for products, services, and accommodations that are necessary because of the accident but that may not restore a person to his pre-injury state. The Court therefore reasoned that “replacement services” such as cooking or other household services is “care” as defined in Griffith, and was necessitated by the injury sustained in the accident. Because replacement services are services for the “care” of an injured person, the Court concluded that replacement services are not separate and distinct from allowable expenses. The Court further reasoned that although replacement services are separately identified in MCL 500.3107(1)(c), the reason for that separate treatment was because the Legislature intended to place monetary limits on the amount of expenses for replacement services consisting of a limitation of $20 per day for such expenses. The Court further recognized that the expenses described in MCL 500.3107(1)(c) are not labeled “replacement services expenses,” but rather that statute only refers to “expenses.” The Court therefore concluded there is no reason to conclude that “expenses” are not just one category of “allowable expenses.” The Court also noted that there was nothing in the language of the no-fault act to suggest an intent by the Legislature to exclude replacement service expenses from the recovery of excess economic losses under MCL 500.3135(3)(c).
The Court of Appeals also reversed the trial court regarding its Order granting summary disposition in favor of the defendant on the issue of serious impairment of body function under MCL 500.3135(2). The Court held there was a material dispute whether, as a result of the subject motor vehicle accident, the plaintiff sustained a herniated disc at L5-S1. The Court recognized that two MRIs, one in 2005 and the other in 2006 noted the existence of a herniated disc at L5-S1. The Court of Appeals ultimately reversed the trial court on the grounds that the trial court failed to consider the evidence that suggested plaintiff suffered an objectively manifested injury. The Court further ordered that upon remand, all further inquiries into whether plaintiff suffered a threshold injury shall be answered under the new standards announced by the Supreme Court in McCormick v Carrier, 487 Mich 180 (2010).
