Michigan Court of Appeals; Docket No. 62906; Published
Judges Maher, Wahls, and Hathaway; Unanimous; Per Curiam
Official Michigan Reporter Citation: 143 Mich App 419; Link to Opinion
Allowable Expenses for Room and Board [§3107(1)(a)]
Allowable Expenses for Rehabilitation [§3107(1)(a)]
Allowable Expenses: Reasonable Necessity Requirement [§3107(1)(a)]
Standards For Deductibility of State and Federal Governmental Benefits [§3109(1)]
Other Benefits [§3109(1)]
Requirement That Benefits Were Unreasonably Delayed or Denied [§3148(1)]
Conduct Establishing Unreasonable Delay or Denial [§3148]
This unanimous per curiam Opinion involved several significant holdings regarding recovery of allowable and rehabilitation expenses pursuant to §3107(a). Plaintiff lost his right leg in a motorcycle-automobile accident. Prior to the accident, he was employed as a gas station attendant Plaintiff’s doctor opined that after receiving his prosthesis, plaintiff would probably have difficulty if he attempted to resume employment requiring being on his feet for long hours. Accordingly, the doctor advised plaintiff that training for sedentary employment be considered. After being evaluated by rehabilitation counselors, plaintiff enrolled in an electronics program at the Ohio Institute of Technology. Among other things, defendant refused to pay for plaintiff’s tuition and related expenses. The court rendered the following holdings:
First, the court rejected defendant's contention that it was only statutorily obligated to restore plaintiff to his pre-accident status, as opposed to elevating plaintiff to an economic position above what he occupied prior to the accident. Given the fact that vocational experts testified at trial that the college program attended by plaintiff constituted reasonable rehabilitation due to plaintiff’s need to secure sedentary employment, the issue of whether or not the tuition expenses were a recoverable-allowable expense under §3107(a) was properly left for the jury.
Second, the court held that plaintiff was entitled to jury determination of his claim that he should be able to collect, an allowable expense under §3107(a), the increased housing expenses that plaintiff incurred incident to going away to school. Plaintiff requested that the jury award him the difference between his actual living expenses while away at school and the lesser amount he would have paid for living expenses prior to the accident. The court held that "the determination whether these extraordinary expenses were reasonably necessary and thus 'allowable expenses' was properly one for the jury."
Third, the court held that defendant insurer was entitled to setoff $3,000 in rehabilitation benefits paid to plaintiff by the Department of Education's Bureau of Rehabilitation. Such a setoff was proper under §3109(1) in that it was a governmental benefit which was duplicative of no-fault benefits within the meaning of the Supreme Court's recent opinion in Jarosz v DAIIE.
Fourth, the court reversed' the trial court's ruling that plaintiff was not entitled to recover attorney fees under §3148 of the statute. The court stated that regardless of defendant's interpretation of its legal obligation to pay for plaintiff’s "vocational rehabilitation," the adjuster's opinion that plaintiff was fully rehabilitated after receiving his prosthesis was "personal and not based on any expert advice. Moreover, defendant's offer of judgment made after suit commenced does not change the result." The court noted, "the offer was not a tender of what defendant believed was due under its own definition of rehabilitation. Rather, it was, in defendant's own words, an offer to compromise the claim."
Finally, citing the Supreme Courts opinion in Kewin v Massachusetts Mutual (Item No. 338), the Court of Appeals held that plaintiff failed to plead and prove a cause of action for intentional infliction of emotional distress as an independent tort Plaintiff’s complaint alleged facts showing no more than a failure to properly investigate plaintiff’s need for rehabilitation and to provide a rehabilitation program. Therefore, the jury verdict in plaintiff’s favor on the intentional infliction of emotional distress claim was reversed. In addition, the court held that plaintiff was not entitled to go to the jury on a claim for bad faith breach of the statutorily created duty to pay no-fault benefits. The court stated that, "More than just a statutory duty must be shown." The court analogized no-fault contracts to the disability insurance contract involved in Kewin, which was characterized by the Supreme Court as "commercial in nature."