Michigan Court of Appeals; Docket No. 67012; Published
Judges T.M. Burns, Gribbs, and Hoehn; Unanimous; Opinion by Judge T.M. Burns
Official Michigan Reporter Citation: 131 Mich App 784; Link to Opinion 
STATUTORY INDEXING:
Replacement Service Expense Benefits: Nature of the Benefit [§3107(1)(c)]
Replacement Service Expense Benefits: The Incurred Requirement [§3107(1)(c)]
Nature of Survivor’s Loss Benefits [§3108(1)]
Reasonable Proof Standard [§3142(1)]
12% Interest Penalty on Overdue Benefits – Nature And Scope [§3142(2), (3)]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Conduct Establishing Unreasonable Delay or Denial [§3148]
TOPICAL INDEXING:
Not Applicable
CASE SUMMARY:
This unanimous Opinion by Judge T.M. Burns is a significant decision regarding the recovery of replacement service expenses under §3107(b) and§3108, the burden of proof regarding such a claim and the right of relatives to recovery payment for such services.
The Court of Appeals reversed the circuit court judge and reinstated a district court jury verdict in favor of plaintiff for replacement service expenses together with an award of attorney fees and interest. Plaintiffs husband was killed in an automobile accident Plaintiff submitted a claim for survivors loss benefits pursuant to §3108 of the Statute, including replacement service expenses. Plaintiff had previously entered into an agreement with her children to pay them for services they rendered to her to replace the services that she lost because of her husband's death. Plaintiff encouraged her children to keep records of these services. The children marked on calendars the services they performed, the length of time they performed them and the rates charged. Entries from these calendars were then placed into a ledger and defendant was given a copy of this ledger as proof of plaintiff’s claim for replacement services.
In reversing the district court jury verdict in favor of plaintiff for these replacement service expenses, the circuit judge held that plaintiff had failed to prove that she had actually "incurred" these expenses and that in order to do so, plaintiff would have to present "checks, receipts and the like."
In reversing the circuit judge, the Court of Appeals made the following important holdings:
1. The Court made it clear that neither the statute nor the previous decision in Adkins v Auto-Owners (item number 339) stands for the proposition that a claimant must "present the checks, bills or invoices to support a claim for replacement services.... Contrary to the circuit court's ruling, this Court has found that a plaintiff may recover for replacement services without presenting such formal documentation. Youmans v Citizens (item number 177). Plaintiff is only required to establish that she incurred a liability. In the instant case, there was testimony to this effect. There was also extensive testimony as to the extent of liability that plaintiff incurred. The fact that decedent's children made the ledger which supported this testimony does not make the testimony inadmissible. Requiring further documentation such as checks, receipts and bills would not prevent collusion as the circuit court judge reasoned, because parties in collusion could easily pass these documents between themselves."
2. The circuit court also erred in finding as a matter of law that dependents and other family members were barred from receiving payment for the value of services rendered to other dependents. The Court stated, "The no-fault act is not concerned with the status of the person providing the replacement services. The replacement services are recoverable even if performed by members of the family."
3. The plaintiff is also not precluded from recovering expenses for replacement services which may seem to cover "ordinary household tasks." These things include such things as babysitting, housecleaning, lawn mowing, trash disposal, stove repairs, car maintenance, plumbing repairs, wood cutting, etc.
4. The circuit court also erred by denying interest under §3142 of the Statute. The imposition of the interest penalty does not require a finding of an arbitrary or unreasonable refusal to pay benefits. §3142 only requires that the insured present the insurer with reasonable proof of loss. If the insurer does not pay within 30 days after receiving such proof, it is liable for interest.5. The circuit court improperly reversed the district court's award of attorney fees under §3148. The district judge awarded an attorney after conducting a separate evidentiary hearing at which time the district judge concluded, "it seems clear from the testimony and evidence presented there was never an intention to pay the type of claim that was presented." The Court of Appeals found the facts sufficient to support the district court award of attorney fees.
