Michigan Supreme Court; Docket #143088; Published
Justice Markman joined by Justices Young, Zahra, and M.B. Kelly; 4-3 Per Curiam;
Justice Hathaway dissenting, joined by Justices M. Kelly and Cavanagh;
Official Michigan Reporter Citation: ____ Mich ____ (2012); 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)(c)]
Accrual of PIP Benefits [§3110(4)]
No Lien As to Noneconomic or Excess Economic Loss [§3116(4)]
One-Year Back Rule Limitation [§3145(1)]
TOPICAL INDEXING:
Not Applicable
In this 4-3 per curiam Opinion by Justice Markman, the Michigan Supreme Court held that in a third-party tort action, tort damages for excess replacement service expenses are not recoverable under § 3135(3)(c), because replacement services are not among the specific categories of damages listed in that section. In reaching its opinion, the Court focused on the specific language of § 3135(3)(c), which allows tort damages for “allowable expenses, work loss, and survivor’s loss as defined in [MCL 500.3107 to MCL 500.3110] in excess of the daily, monthly, and 3-year limitations contained in those sections.” Replacement service expenses are not specifically referenced in this statutory language. Therefore, tort recovery for excess replacement service expenses is not allowed. Accordingly, the Court overruled the Court of Appeals which had reached a contrary conclusion.
The Court concluded that the Court of Appeals’ decision was incorrect because it had erroneously interpreted the Supreme Court’s earlier decision in Griffith v State Farm, 472 Mich 521 (2005) as having defined replacement services as a subcategory of allowable expenses. In holding that this was an “overly expansive reading of Griffith,” the Court stated:
“Although it can be fairly said that “replacement services are services that are needed as the result of an injury,” Id., at 246, it does not follow that they fall within the definition of “care” set forth in Griffith. Accordingly, it does not follow that replacement services constitutes merely a subcategory of allowable expenses. . . . Services that were required both before and after the injury, but after the injury can no longer be provided by the injured person himself or herself because of the injury, are “replacement services,” not “allowable expenses.” They are services “in lieu of those that, if he or she had not been injured, an injured person would have performed . . . for the benefit of himself or herself . . . .” MCL 500.3107(1)(c). Thus, contrary to the Court of Appeals’ interpretation of Griffith’s definition of “care,” replacement services is not “merely one category of allowable expenses”: rather, allowable expenses and replacement services are separate and distinct categories of PIP benefits.”
After explaining the basic difference between replacement service expenses and allowable expenses, the Court then focused on the issue of food preparation. With regard to that type of service, the Court noted that food preparation is not an allowable expense because cooking food for the injured person was as much required before the accident as it was after the accident. Accordingly, the plaintiff’s need to prepare food is not different as a result of the accident. In this regard, the Court stated:
“As we noted in Griffith, "the statute does not require compensation for any item that is reasonably necessary to a person's care in general." Griffith, 472 Mich at 534 (emphasis added). Rather, such care "must be related to the insured's injuries." Id. In Griffith, the plaintiffs food costs were not allowable expenses because "if Griffith had never sustained, or were to fully recover from, his injuries, his dietary needs would be no different than they are now." Id. at 536. Accordingly, allowable expenses do not include expenses for products or services that are required after the injury in a manner indistinguishable from those required before the injury. Those services are not properly characterized as "related to the insured's injuries. . . .
As with the food in Griffith, there is no doubt that cooking is necessary for plaintiff’s survival. However, cooking is not “care” pursuant to MCL 500.3107(1)(a) because if plaintiff “had never sustained, or were to fully recover from, [her] injures,” her need to have food cooked “would be no different” than it is now. Griffith, 472 Mich at 536. Cooking was required both before and after plaintiff’s injury. Thus, cooking is necessary to plaintiff’s care in general, but is not specifically “related to the insured’s injuries” which places it outside the scope of “allowable expenses.” Id. at 534. Rather, cooking in this instance is solely a “replacement service,” something that must now be done on behalf of an injured person.”
After discussing the food preparation issue, the Court drew an important distinction in Footnote 7 between “food preparation” and “feeding an injured person.” In this regard, the Court stated that:
“On the other hand, if a person sustains injuries that necessitate that someone actually feed the person, this service would constitute “care” pursuant to MCL 500.3107(1)(a). The need to have someone feed the injured person would not have existed absent the injuries, and this service would then be specifically related to the person’s injuries.”
The majority opinion then directed its attention to the argument that excluding replacement service expenses from recovery under § 3135(3)(c) would produce the “absurd result” of also excluding replacement services from the provisions of § 3110(4) dealing with the accrual of a claim, § 3116(4) dealing with a PIP carrier’s tort lien, and § 3145(1) dealing with the one-year-back rule. In discussing this argument, the Court did not dispute the fact that replacement service expenses would indeed be excluded under these three other sections. However, the majority opinion stated that this was not an “absurd result” within the scope of that doctrine. In this regard, the Court stated:
“The rationale for the dissent’s assertion that our analysis produces “absurd results” is entirely grounded in the fact that our interpretation excludes replacement services from not only the residual-tort-liability provision, MCL 500.3135(3)(c), which is at issue in this case, but also the accrual provision, MCL 500.3110(4); the subtraction-or-reimbursement provision, MCL 500.3116(4); and the exception to the one-year period of limitations in MCL 500.3145(1). . . . To properly invoke the “absurd results” doctrine, the burden rests on the dissent to show that it is quite impossible that the Legislature could have intended to exclude replacement services from MCL 500.3110(4), MCL 500.3116(4), MCL 500.3135(3)(c), and MCL 500.3145(1). . . . Although it is not our burden to suggest conceivable explanations that would render the instant statute “not absurd,” one possible explanation for the exclusion of replacement services from MCL 500.3135(3)(c) and other provisions of the no-fault act concerning economic losses lies in the obvious fact that the four types of benefits identified in MCL 500.3107 and MCL 5003108 are defined, operate, and apply differently.”
Justice Hathaway wrote a dissenting Opinion that was joined by Justice Marilyn Kelly. The dissent contended that the Court’s decision was inconsistent with the intent of the Legislature and would produce chaos because replacement services would now be excluded from the sections referenced above, which would result in significant confusion. Moreover, the dissent stated that exclusion of replacement service expenses from § 3135(3)(c) was a result of a 1991 amendment to the statute which was not accompanied by any legislative history that supported the conclusion that excess replacement service expenses were no longer intended to be compensable in tort cases. Rather, the amendment dealt with making work loss benefits optional for persons over the age. Moreover, the dissent reasoned that the term “allowable expense” as used in § 3135(3)(c) was not intended to refer solely to expenses payable under § 3107(1)(a), but rather was a broader term that permitted recovery in a tort case for any expense that is “allowed” under the Michigan No-Fault Act.
Justice Michael F. Cavanagh concurred in the result proposed by Justice Hathaway’s dissent.
