ZCD Transportation v State Farm

Taking Auto No-Fault Down the Wrong Road?

The Michigan Court of Appeals’ decision in ZCD Transportation v State Farm may be a sign that Michigan’s auto no-fault insurance system is headed down the wrong road.

In this case, the Court of Appeals concluded that the transportation services rendered for an injured person’s personal, non-medical transportation needs were not compensable as an allowable expense benefit under MCL 500.3107(1)(a), because the services were not related to the injured person’s care, recovery, or rehabilitation of the injuries he sustained in the motor vehicle accident.

In affirming the trial court’s ruling on this issue, the Court of Appeals reasoned that these personal transportation services were not directly related to the injured person’s medical treatment, but were solely to maintain his pre-injury quality of life. Notably, the Court of Appeals’ reasoning was premised on the fact that the injured person’s doctor testified that the personal transportation services allowed the injured person to live the same normal lifestyle he lived before he was injured, “but it was ultimately up to the lawyers and the insurance company to determine what was compensable under the No-Fault Act.” In this regard, footnote 1 of the Court of Appeals Opinion specifically states:

The doctor wrote the prescription as dictated to him by Grinblatt “under the presumption that [it] would be submitted to the insurer and that [it] would be the insurer’s decision as to what was covered.” While the doctor testified that rehabilitation includes participation in social or recreational activities and “community reintegration,” the tenor of his testimony was that the social and community aspects of rehabilitation were necessary for a patient’s complete recovery in that they were part of a normal lifestyle but it was up to the lawyers and insurance companies to determine what was compensable under the no-fault act.

Therefore, because there was no direct evidence that the personal transportation needs were related to the care, recovery, or rehabilitation of the person’s injuries sustained in the motor vehicle accident, the Court of Appeals found that the services constituted replacement services, rather than allowable expense services under MCL 500.3107(1)(a).

Notably, the decision ZCD Transportation is unpublished, which means that it is not authoritative precedent for other courts to follow when deciding other cases. Moreover, the decision may not necessarily be so bad, assuming that the Court of Appeals would have decided the case differently, if the plaintiff’s doctors would have given more convincing testimony that the personal transportation services were related to person’s care, recovery or rehabilitation. However, if this decision stands for the proposition that a person can never claim allowable expense benefits for any service the person required in their pre-accident lifestyle, then our auto no-fault system is headed down the wrong road that will be extremely perilous for the most catastrophically injured no-fault claimants.

Ultimately, the ZCD transportation case should be treated as a call to action for the attorneys and treating doctors of injured people to go the “extra mile” and explain why a service that an injured person needed before being injured can still be related to the care, recovery, or rehabilitation of the person’s injuries. For example, doctors need to explain why it is reasonably necessary for a catastrophically injured person’s care, recovery or rehabilitation to have transportation to buy groceries so that the person remains able to feed himself in his home. Furthermore, doctors of catastrophically injured people could also provide more thorough testimony about the importance of community integration to a catastrophically injured person’s care, recovery, or rehabilitation.

In short, we must now work harder to make the case that a catastrophically injured person’s ability to live some semblance of a normal life is, in fact, related to that person’s care, recovery or rehabilitation. After all, the statutory language of MCL 500.3107(1)(a) states that a no-fault insurer is liable to pay “all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.”

By Stephen H. Sinas

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