Hardrick v. Auto Club Insurance
294 Mich. App. 651
| Mich. Ct. App. | 2011Background
- May 2007 car accident caused traumatic brain injury to 19-year-old Hardrick; parents provide 24/7 attendant care at home.
- ACIA admitted PIP responsibility for reasonably necessary care expenses and paid parents at $10.25–$10.50 per hour.
- Hardrick sought a higher rate by arguing parents qualify as behavioral technicians requiring higher pay.
- Pretrial discovery violations by ACIA led to sanctions; trial court barred ACIA from presenting witnesses or evidence.
- Trial court’s sanction aimed to limit argument to $25–$45 per hour; jury awarded $28 per hour.
- Appellate court vacated the judgment and remanded for a new trial due to abuse of discretion in discovery sanction and reexamined the admissibility and relevance of evidence on reasonable charges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether discovery sanctions were an abuse of discretion | Hardrick contends the sanction was unjust and disproportionate | ACIA argues sanctions were appropriate but overly harsh | Yes, sanctions were abusive and disproportionate; judgment vacated and remanded |
| Whether agency rates are relevant to determining a reasonable charge for family care | Agency rates are relevant to show market value applicable to family care | Agency rates are irrelevant to family providers; focus on family-provider value | Agency rates are relevant as a probative measure, not controlling |
| Whether the jury should have been instructed with a broader framework for calculating reasonable charges | Alternative jury instruction capturing multifaceted factors should guide calculation | Trial court properly limited instructions | Yes; remand for proper instruction consistent with the opinion |
| Whether evidence of agency rates should have been excluded under Bonkowski/Mullins/Sokolek framework | Agency rates illuminate reasonable charges for family care | Agency rates would misrepresent family-provider compensation | Majority permits relevance; but the issue may be reconsidered on remand; concurrence would exclude |
Key Cases Cited
- Bonkowski v Allstate Ins Co, 281 Mich App 154 (2008) (agency rates may illuminate reasonableness but aren’t dispositive for family providers)
- Manley v Detroit Auto Inter-Ins Exch, 127 Mich App 444 (1983) (comparison to institutional rates used to gauge reasonableness; precedential status questioned)
- Reed v Citizens Ins Co of America, 198 Mich App 443 (1993) (reasonableness of expenses historically judged by comparison to institutional rates (overruled))
- Hofmann v Auto Club Ins Ass’n, 211 Mich App 55 (1995) (no-fault customary fees; agency payments not controlling)
- Mercy Mt Clemens Corp v Auto Club Ins Ass’n, 219 Mich App 46 (1996) (medicare/medicaid/BCBS not admissible to prove customary charges under no-fault)
- Sokolek v Gen Motors Corp, 450 Mich 133 (1995) (multifactorial determination of reasonable compensation in workers’ comp context)
- Mullins v Frank H Wilson Co, 450 Mich 133 (1995) (support for market-based valuation; agency rates not per se controlling)
- Sharp v Preferred Risk Mut Ins Co, 142 Mich App 499 (1985) (overhead and management costs in family care considerations)
- Smith v Khouri, 481 Mich 519 (2008) (reasonable attorney-fee framework: market rates in locality, not top lawyers’ fees)
- Advocacy Org for Patients & Providers v Auto Club Ins Ass’n, 257 Mich App 365 (2003) (multifactor test for reasonable charges under no-fault)
- McGill v Auto Ass’n of Mich, 207 Mich App 402 (1994) (no-fault cap on charges; reasonable charge standard)