Michigan Court of Appeals; Docket #298922; Unpublished
Judges Servitto, Markey and K.F. Kelly; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
On December 5, 2012, the Michigan Supreme Court VACATED the Judgment of the Court of Appeals and REMANDED for reconsideration in light of the Court's decisions in Johnson v Recca and Douglas v Allstate; Link to Order
STATUTORY INDEXING:
Allowable Expenses for Conservatorships and Guardianships [§3107(1)(a)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s ruling that defendant Auto Club was liable for conservatorship expenses in the amount of $11,274.00 to reimburse the conservatorship for expenses incurred in the defense of the ward in certain real estate and indebtedness disputes, as well as legal fees for work done on behalf of the ward to recover no fault insurance benefits. The probate court found that all of these fees were qualified allowable expenses under Section 3107(1)(a) and the Court of Appeals affirmed.
In reaching its conclusion, the Court of Appeals relied on Heinz v. Auto Club, 214 Mich App 195 (1995), which held that if a person is so seriously injured in a motor vehicle accident that it is necessary to appoint a guardian or conservator, the services performed by the guardian and conservator are compensable under Section 3107(1)(a). The exception recognized in the case of In re Estate of Shields, 254 Mich App 367 (2002), did not apply to this case because in Shields the court concluded the conservatorship expenses were in no way related to the ward’s auto accident injuries, but were attributable solely to the fact that the ward was a minor and needed a conservator only for that reason.
The Court of Appeals also rejected defendant’s argument that the supreme court’s decision in Griffith v. State Farm, 472 Mich 521 (2005) limits the rule of Heinz. Unlike the food expense claim that was rejected by the Supreme Court in Griffith because those expenses were not in any way related to the auto accident injury, the Court of Appeals, in this case, found that the need for the conservatorship was solely attributable to accident related injuries, thus making this case distinguishable. In this regard, the court held:
"Here there is no question that the provision of conservatorship was necessitated by the injury sustained in the motor vehicle accident and there is no question that Cisneros’s incapacitation was solely the result of injuries sustained due to an automobile accident. In other words, but for the accident, a conservator would not have been needed. Moreover, there is no dispute as to whether the expenses charged by petitioner were reasonable. . . .Griffith explains care 'is broader than ‘recovery’ and ‘rehabilitation’ because it may encompass 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 then looked to its recent decision in May v. ACIA, ___ Mich App ___ (Docket No. 292649, issued April 26, 2011) where the Court of Appeals held that conservatorship expenses involved in marshaling assets, paying bills, attending meetings and arranging for legal services for the protected person were compensable allowable expenses under Section 3107(1)(a). In referring to May, the court stated:
“a conservatorship was necessary as a part of the protected person’s ‘care’ because 'he could no longer manage his own affairs as a result of a closed head injury. . . .' Pursuant to May, we conclude that because the conservatorship was necessary to care for Cisneros as a result of bodily injuries she suffered in an automobile accident and because the reasonable expenses incurred by petitioner in managing Cisneros’s business and legal affairs would not have been necessary but for the accident, those expenses were 'allowable expenses' under MCL 500.3107(1)(a)."
In reaching its conclusion, the court also specifically rejected defendant’s argument that petitioner’s claim was one for “replacement costs” under Section 3107(1)(c). The court stated that the explicit language of the statute confirmed that replacement service expenses under Section 3107(1)(c) are distinctly different from allowable expenses under Section 3107(1)(a).
