Michigan Court of Appeals; Docket No. 132904; Published
Judges Fitzgerald, Holbrook, and Corrigan; 2-1 (with Judge Holbrook, Concurring Separately, and with Judge Fitzgerald, Dissenting)
Official Michigan Reporter Citation: 199 Mich App 730; Link to Opinion
Work Loss Benefits: Nature of the Benefit [§3107(1)(b)]
Work Loss Benefits: Mitigation Requirement [§3107(1)(b)]
Uniform Motor Vehicle Accident Reparations Act (UMVARA)
In this 2-1 published Opinion written by Judge Corrigan, the Court of Appeals held that a no-fault wage loss claimant has a duty to "mitigate damages" and seek acceptable alternative employment where the claimant lost her previous job as a result of an auto accident disability and then subsequently was found to be no longer physically disabled.
In this case, the plaintiff was the head operating nurse at South Macomb Hospital at the time of her automobile accident. As a result of that accident, she was found to be disabled from performing her previous position, and, therefore, her position as head nurse was subsequently filled. Plaintiff then returned to college and completed her B.S. degree in nursing approximately a year and a half after the accident At about that same time, an insurance IME found the plaintiff to no longer be disabled. Plaintiff had not worked full-time since the accident, nor sought employment since the accident. However, she did work part-time at her fiance's medical clinic when returning to college.
The plaintiff contended that strong evidence existed that the Michigan Legislature did not intend mitigation of damages concepts to apply to no-fault wage loss claims because these concepts were in fact included in the Uniform Motor Vehicle Accident Reparations Act (UMVARA) and those UMVARA provisions were not incorporated into the Michigan no-fault statute. Nevertheless, the court cited the previous decision in Marquis v Hartford Accident & Indemnity Company (Item No. 1558) as a case that impliedly embraced mitigation concepts. In Marquis, a no-fault wage loss claimant who obtained and then quit a lesser paying post-accident job was entitled to wage loss benefits based upon the difference between her pre-accident employment and the post-accident substitute work. Apparently, the majority felt that because the plaintiff in Marquis did not receive full wage loss benefits based upon 85% of her pre-accident earnings, an implication arose that mitigation concepts pertained to no-fault wage loss claims. The court also distinguished previous decisions in Nawrocki v Hawkeye Security Insurance Company (Item No. 76) and Lenart v DAIIE (Item No. 995) on the basis that in the former case, plaintiff had made efforts to return to employment but was unsuccessful and in the latter case, there was no evidence that plaintiff was capable of holding any type of favored employment.
In holding that mitigation concepts apply to no-fault wage loss claims, the majority stated:
"In both contract and tort actions, an injured party must make every reasonable effort to minimize damages... The general principle of mitigation should thus apply to no-fault work loss suits unless the Legislature intended to abrogate the common law doctrine of mitigation... The enactment of the no-fault act did not extinguish common law doctrines predating that legislation... The statute must not be construed to abrogate establish common law principles by implication. Because the no-fault act did not specifically abrogate the common law principle of mitigation, the defense remains available... The reasonableness of mitigation is a question of fact. Section 3107(b) requires defendant to pay plaintiff for work she 'would have performed' in the three years after the accident. What work plaintiff 'would have 'performed is what she would have done in the absence of insurance benefits. Had plaintiff been injured in a non-compensable accident, she would have been motivated to return to productive employment as soon as possible. The jury should decide what work the plaintiff could have found and whether she reasonably should have taken it." (emphasis added)
The court goes on to emphasize in footnote 3, however, that its decision should not be construed as meaning that a claimant is obligated to take any employment offered. In this regard, the court stated:
"We emphasize that we are not holding, contrary to the dissent's suggestion at fn 2, that as a matter of law plaintiff was necessarily obliged to take any employment offered to her. Whether her decision not to seek alternative employment was a reasonable one will be for the jury to determine."
Judge Holbrook concurred separately, stating, "I believe that employees when losing a job under these circumstances have the duty to mitigate by seeking other employment Although I agree with Judge Corrigan that reasonableness of mitigation is a question of fact, I would welcome standards (preferably from the Legislature) that might quell the onslaught of litigation regarding the 'reasonableness' of mitigation our holding is bound to initiate."
Judge Fitzgerald dissented. He pointed out that our appellate courts have long recognized the principle that the provisions of UMVARA are helpful in construing the meaning of the Michigan No-Fault Act, and that in cases such as Spencer v Hartford (Item No. 1286), our courts have held that where the Michigan Legislature fails to enact a comparable portion of UMVARA, a presumption exists that the Legislature considered but rejected the proposed language. Judge Fitzgerald stated that UMVARA very clearly adopted the concept of mitigation of damages in wage loss claims and that the UMVARA provision was not adopted by the Michigan Legislature. Therefore, a strong presumption existed that Michigan has rejected mitigation of damage concepts in no-fault wage loss claims.