Douglas v. Allstate Insurance Company, 492 Mich. 241

Under Michigan no-fault PIP, allowable expenses must be for an injured person’s care, recovery, or rehabilitation.
This case questions whether Katherine Douglas’s services for plaintiff qualify as care, whether remand findings on incurred expenses were proper, and whether the circuit court erred by using a $40 per hour rate.
The circuit court awarded attendant care benefits, computing 67 hours/week pre-2007 and 40 hours/week thereafter at $40/hour, totaling over $1 million.
Court of Appeals remanded for evidence on whether charges were actually incurred and for broader time period, while affirming some aspects of the award.
The majority reverses the $40/hour rate as clearly erroneous and remands for recalculation based on incurred charges and reasonable rates tied to an individual caregiver.
The issue involves distinguishing allowable expenses from replacement services and the one-year-back rule for recovery.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are Mrs. Douglas’s services allowable expenses for care?	Douglas provided care necessitated by plaintiff’s injury.	Many tasks are replacement services, not for care.	Some services qualify as allowable expenses; others are replacement services; overall remand required.
Did the circuit court err by not requiring incurred charges documentation?	Evidence showed incurred charges for attendant care.	Prior recordkeeping was inadequate; need explicit incurred costs.	Remand to determine whether charges were actually incurred with proper documentation.
Should the hourly rate reflect an individual caregiver rather than a commercial agency?	Agency rates may inform reasonableness; individual compensation matters more.	Agency rates reflect market pricing and overheads.	Hourly rate must be based on an individual caregiver’s compensation, not wholesale agency rates.
Does the period for incurred charges extend beyond after November 7, 2006?	Reasonable to include all periods with incurred charges related to the injury.	Focus on post-2004 incurred expenses per remand scope.	Remand must consider the entire period for which charges are claimed; not limited to post-2006 only.

Griffith v State Farm Mut Auto Ins Co, 472 Mich 521 (2005) (defines care vs. recovery/rehabilitation and related scope of allowable expenses)
Visconti v DAIIE, 90 Mich App 477 (1979) (limits on ‘ordinary household tasks’; attendant care may be allowable)
Johnson v Recca, 492 Mich 169 (2012) (clarifies distinctions between allowable expenses and replacement services)
Proudfoot v State Farm Mut Auto Ins Co, 469 Mich 476 (2003) (incur defined; payments for future services not due until incurred)
Burris v Allstate Ins Co, 480 Mich 1081 (2008) (dissent on ‘incurred’ emphasizing insurer obligation to pay for actually rendered services)
Hardrick v Auto Club Ins Ass’n, 294 Mich App 651 (2011) (agency rates admissible as related evidence; not controlling; supports reasonableness analysis)
Bonkowski v Allstate Ins Co, 281 Mich App 154 (2008) (agency rates not controlling; caregiver compensation focus needed)