Michigan Court of Appeals; Docket No. 154398; Unpublished
Judges Jansen, White, and Talbot; 2-1 (with Judge White Concurring in Part, Dissenting in Part); Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 
STATUTORY INDEXING:
Allowable Expenses for Home Accommodations [§3107(1)(a)]
Allowable Expenses: Incurred Expense Requirement [§3107(1)(a)]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
In this 2-1 unpublished per curiam Opinion, the Court of Appeals vacated a jury's verdict of $204,700 for allowable expenses for construction of a barrier-free and handicap accessible house for plaintiff, who was rendered a quadriplegic in an automobile accident.
Plaintiff filed suit in Wayne County Circuit Court claiming breach of contract by Auto Club for its refusal to pay certain medical and home care bills, and for its refusal to fully pay for the construction of a new barrier-free and handicap accessible house as recommended by plaintiffs doctor, and as designed by plaintiffs builder. The matter was tried to a jury and the jury concluded that $1,116 of overdue and unpaid benefits were due, and that the claim for $204,700 in benefits for construction of the new barrier-free home was an allowable expense for reasonably necessary accommodations under §3107. However, the jury also concluded that plaintiff had not "incurred" any allowable expenses within the meaning of §3107(l)(a) which requires:
Allowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery or rehabilitation... (emphasis added)
In vacating the jury's verdict of $204,700 for construction of the home, the majority held that a declaratory judgment action would have been a more appropriate forum of pleading in this case, and further, that the jury's verdict was dispositive in that the jury determined that no expenses had been "incurred." Thus, although the jury had awarded an amount of money clearly indicating its agreement with the reasonableness of the cost of constructing the barrier-free home, the fact mat the jury also concluded that plaintiff had not "incurred" allowable expenses was dispositive, and because no allowable expenses were incurred, as a matter of law, no money judgment should enter. In the present case, plaintiff presented no evidence that the services of building a new house had actually been incurred. Therefore, the jury's verdict that no allowable expenses had been incurred should have been given its legal significance. The court distinguished this case from Manley vDAIIE, 425 Mich 140 (1986), on the grounds that the trial court in Manley had entered a declaratory judgment determining amounts payable in the future before the expenses were actually incurred. The Supreme Court in Manley, supra, stated that while the insurer is required to pay only necessary allowable expenses actually incurred, a trial court is not precluded from entering a declaratory judgment determining that an expense is both necessary and allowable and the amount that will be allowed. Such a declaration does not oblige the insurer to pay for the expense until it is actually incurred and the insurer receives a bill of service.
The majority also ruled that because of its determination regarding the jury's money judgment, the trial court's award of attorney fees and mediation sanctions should also be vacated.
In her concurrence in part and dissent, Judge White dissented from the majority's vacating of the jury verdict of $204,700. While she would agree that a declaratory judgment action would have been the most appropriate forum of pleading, Judge White concludes that the dispute here elevates form over substance, particularly in light of the positions taken by the attorneys at trial and in light of the trial court's decision to allow the case to go to the jury based on its conclusion that an injured person whose need for special accommodations is undisputed need not actually incur the expense of obtaining those accommodations before the injured person can seek benefits under §3107. In the instant case, the question of whether the expense was "incurred" was a legal question inappropriate for jury submission and irrelevant to the real dispute between the parties. Further, the questions of reasonableness and necessity were fully tried and were submitted to and decided by the jury. Under Manley, Judge White would permit the portion of the jury's verdict in the instant case that is declaratory in nature, i.e., that plaintiff is entitled to $204,700 in allowable expenses for construction of the home to stand, while applying Manley's holding that the insurer's obligation to pay for any expense does not arise until the expense is actually incurred.
