HOOVER v MICHIGAN MUTUAL INSURANCE COMPANY
Docket No. 278237
Court of Appeals of Michigan
Submitted October 7, 2008. Decided December 11, 2008.
281 Mich. App. 617
Leave to appeal sought.
The Court of Appeals held:
The trial court did not properly apply Griffith v State Farm Mut Automobile Ins Co, 472 Mich 521 (2005), resulting in erroneous conclusions on several, but not all, of the expenses and services at issue.
- Griffith held that a no-fault insurer must pay benefits only to the extent that the benefits claimed are causally connected to the accidental bodily injury arising out of the automobile accident. Griffith requires a court to determine whether the expenses would
not have been incurred but for the accident and the resulting injury, that is, whether the expenses would have been incurred in the course of an ordinary life unmarred by an accident. If they would have been incurred anyway, a causal connection between the expenses and the accidental bodily injury would be lacking, and it could not be said that the accidental bodily injury necessitated the provision of products, services, and accommodations. - Under Griffith, parents providing accommodations and services for an injured adult child are not afforded no-fault benefits to the full extent of the accommodations and services provided. For example, had Michael not been injured, his activities would still have generated expenses for utility usage. Given the Griffith requirement of a causal connection, a court must allocate not the portion of a utility bill attributable to the injured person‘s usage, but that portion attributable to the injured person‘s usage that is occurring only because of the injuries, such as the power to operate Michael‘s ventilator. Griffith requires this even though the calculations and the proper allocation might prove difficult.
- The trial court did not err by awarding benefits covering 100 percent of the costs of the backup generator, television monitoring system, medical alert pendant, elevator inspections, and dumpster. Those expenses are causally connected to, and necessitated by, Michael‘s injuries. Michael‘s injuries require use of an elevator, and inspecting it is a normal safety precaution. Even though the plaintiffs also use the dumpster for their garbage and Michael would generate some waste even if injury-free, Michael generates most of the garbage that goes into it, and a dumpster would not be necessary absent Michael‘s injuries. Like the special diet food discussed in Griffith, the dumpster is fully covered as a no-fault benefit.
- The size of the house, its design, and various amenities in it are causally connected to, and necessitated by, Michael‘s injuries. These, in turn, have increased the amounts the plaintiffs pay for property taxes, homeowner‘s insurance, maintenance, and utilities. Some of the costs associated with the security system are also causally connected to, and necessitated by, Michael‘s injuries.
- Maxine Hoover is entitled to be compensated for any time spent cleaning areas that Michael and his caregivers use that goes beyond the time for cleaning one would ordinarily expect to perform. Costs for snow removal greater than those that would regularly be spent—to provide round-the-clock access for shift nurses, for example—are attributable to Michael‘s needs.
- Further development of the record under the Griffith framework is appropriate. A remand is proper for the parties to submit
additional evidence on each of the expenses remaining at issue. The 28 percent allocation ordered by the trial court was not legally sound and is inconsistent with the analysis under Griffith. - The defendant unreasonably refused to pay or delayed paying benefits for expenses associated with the backup generator, television monitoring system, medical alert pendant, elevator inspections, and dumpster. Attorney fees are recoverable to the extent that they relate to benefits for those expenses, and penalty interest is appropriate with respect to those items. Further review is necessary before the trial court can determine the appropriateness of additional attorney fees and penalty interest for the other items of expense. No basis currently exists for awarding the defendant attorney fees under
MCL 500.3148(2) for an excessive or fraudulent claim without foundation brought by the plaintiffs.
Affirmed in part, reversed in part, and remanded for further proceedings.
SCHUETTE, P.J., concurring in part and dissenting in part, agreed that the 28 percent allocation was not legally sound and was arbitrary and that there is no basis for awarding the defendant attorney fees because the plaintiffs’ claims were not fraudulent. He dissented, however, from awarding the plaintiffs benefit payments for any costs other than those for the backup generator, television monitoring system, and medical alert pendant and from the determination that the defendant unreasonably refused to pay or delayed payment of benefits for any costs other than the costs for those items. The trial court should recalculate attorney fees with respect to the items that the defendant conceded were appropriate, and interest under
INSURANCE — NO-FAULT — PERSONAL PROTECTION INSURANCE BENEFITS — FAMILY MEMBERS.
A no-fault insurer is liable to pay personal protection insurance benefits only to the extent that the benefits claimed are causally connected to the accidental bodily injury arising out of the automobile accident; in the case of items for which expenses would have been incurred even in the absence of the accident and resulting injury, a court must determine what portion is causally connected to the injury and allocate not the portion of the expenses attributable to the injured person‘s usage, but the portion attributable to the injured person‘s usage that is occurring only because of the injury (
C. Robert Beltz for the plaintiffs.
Before: SCHUETTE, P.J., and MURPHY and FITZGERALD, JJ.
OPINION OF THE COURT
MURPHY, J. Defendant appeals the trial court‘s order awarding plaintiffs personal protection insurance (PIP) benefits under the no-fault act,
In 1985, Michael Hoover, two years old at the time, was struck by a drunk driver and suffered serious, life-altering injuries. Michael, now 25, is developmentally disabled from a brain injury and is a quadriplegic, and he depends on a ventilator to breathe, all as a result of the accident. In 2002, plaintiffs built a new home with a wing specifically constructed and designed to accommodate Michael and his injuries. Alarms monitor Michael‘s breathing, in-home nurses working shifts around the clock provide medical care,
The parties have litigated the payment of PIP benefits off and on over the years, dating back to 1986, when plaintiffs first commenced suit for the recovery of benefits. Defendant‘s general obligation to provide PIP benefits was settled early in the litigation, and the court has adjusted the amount of benefits payable for home-care and living expenses through the years. In 2002, plaintiffs built a specially designed house with accommodations necessary to properly care for Michael. Pursuant to a settlement agreement, defendant paid approximately 28 percent of the construction costs. Thereafter, and on the basis of language in the agreement, defendant filed a motion requesting an order canceling future benefit payments for accommodations; however, the trial court denied the motion, and that ruling is not the subject of this appeal. Subsequently, plaintiffs moved for an increase in benefits to cover home-care and living expenses, and defendant, in response, argued that there should be a reduction. The trial court ruled that 28 percent of the home could be attributed to Michael‘s needs. Using this allocation, the trial court ordered defendant to pay benefits covering 28 percent of the following expenses: real estate tax bills, gas and electric utility bills, homeowner‘s insur-
Whether a cost constitutes an allowable expense under
In Reed v Citizens Ins Co of America, 198 Mich App 443; 499 NW2d 22 (1993), overruled by Griffith, this Court, in an opinion I authored, addressed a claim for
We see no compelling reason not to afford the same compensation under the act to family members who provide room and board. [
MCL 500.3107(1)(a) ] does not distinguish between accommodations provided by family members and accommodations provided by institutions, and we decline to read such a distinction into the act. Moreover, holding that accommodations provided by family members is an “allowable expense” is in accord with the policy of this state. Denying compensation for family-provided accommodations while allowing compensation in an institutional setting would discourage home care that is generally, we believe, less costly than institutional care. . . .We hold that, where an injured person is unable to care for himself and would be institutionalized were a family member not willing to provide home care, a no-fault insurer is liable to pay the cost of maintenance in the home. [Id. at 452-453 (citations omitted).]
We are of the opinion that Reed was correctly decided and that it honored the language in
In Griffith, the plaintiff‘s husband, Douglas Griffith, was involved in a motor vehicle accident, resulting in a severe brain injury and leaving him confined to a wheelchair. He was first treated at in-patient facilities and hospitals for two years before returning home with the plaintiff, where he required assistance with basic tasks such as bathing and eating. The insurer denied the plaintiff‘s claim to recoup her husband‘s food expenses under
Proceeding on an assumption that the food expenses could be compensated under
“Care” must have a meaning that is broader than “recovery” and “rehabilitation” but is not so broad as to render those terms nugatory. As noted above, both “recovery” and “rehabilitation” refer to an underlying injury; likewise, the statute as a whole applies only to an “injured person.” It follows that the Legislature intended to limit the scope of the term “care” to expenses for those products, services, or accommodations whose provision is necessitated by the injury sustained in the motor vehicle accident. “Care” is broader than “recovery” and “rehabilitation” because it may encompass expenses for products, services, and accommodations that are necessary because of the accident but that may not restore a person to his preinjury state. [Id. at 535.]
The Griffith Court, applying its definition of “care,” proceeded to analyze the claim for food expenses pursued by the plaintiff:
Griffith‘s food costs here are not related to his “care, recovery, or rehabilitation.” There has been no evidence introduced that he now requires different food than he did before sustaining his injuries as part of his treatment plan. While such expenses are no doubt necessary for his sur-
vival, they are not necessary for his recovery or rehabilitation from the injuries suffered in the accident, nor are they necessary for his care because of the injuries he sustained in the accident. Unlike prescription medications or nursing care, the food that Griffith consumes is simply an ordinary means of sustenance rather than a treatment for his “care, recovery, or rehabilitation.” In fact, if Griffith had never sustained, or were to fully recover from, his injuries, his dietary needs would be no different than they are now. We conclude, therefore, that his food costs are completely unrelated to his “care, recovery, or rehabilitation” and are not “allowable expenses” under MCL 500.3107(1)(a) . [Id. at 535-536 (emphasis in original).]
The Court, rejecting the plaintiff‘s argument that there was no difference between food costs for hospital food and the cost of food provided to an insured as part of at-home care, reasoned:
Food costs in an institutional setting are “benefits for accidental bodily injury” and are “reasonably necessary products, services and accommodations for an injured person‘s care, recovery, or rehabilitation.” That is, it is “reasonably necessary” for an insured to consume hospital food during in-patient treatment given the limited dining options available. Although an injured person would need to consume food regardless of his injuries, he would not need to eat that particular food or bear the cost associated with it. Thus, hospital food is analogous to a type of special diet or select diet necessary for an injured person‘s recovery. Because an insured in an institutional setting is required to eat “hospital food,” such food costs are necessary for an insured‘s “care, recovery, or rehabilitation” while in such a setting. Once an injured person leaves the institutional setting, however, he may resume eating a normal diet just as he would have had he not suffered any injury and is no longer required to bear the costs of hospital food, which are part of the unqualified unit cost of hospital treatment.
This reasoning can be taken a step further when considering the costs of items such as an injured person‘s clothing,
toiletries, and even housing costs. Under plaintiff‘s reasoning, because a hospital provided Griffith with clothing while he was institutionalized, defendant should continue to pay for Griffith‘s clothing after he is released. The same can be said of Griffith‘s toiletry necessities and housing costs. While Griffith was institutionalized, defendant paid his housing costs. Should defendant therefore be obligated to pay Griffith‘s housing payment now that he has been released when Griffith‘s housing needs have not been affected by his injuries? [Id. at 537-539 (emphasis in final paragraph added).]
It is crucially important for our purposes here to keep in mind all the language in the rhetorical question regarding housing needs posed in this passage from Griffith, which demands a determination whether the housing needs at issue are “affected by [one‘s] injuries.” Griffith expressly overruled Reed on the basis that the rule announced in Reed was contrary to
that the claimed room and board or living expenses were atypical, unusual, or out of the ordinary; rather, they were ordinary expenses typically associated with living in the home. Id. at 446 (trial court stated that benefits would not be recoverable because the “expenses would have been incurred regardless of the injury sustained“), 450 n 3 (proposed amended complaint sought reasonable accommodation expenses), and 453 (Court disagreed that “expenses that are as necessary for uninjured persons as they are for injured persons are not allowable expenses“).
At its core, the holding in Griffith requires a court to determine whether expenses would not have been incurred but for the accident and resulting injuries. Stated otherwise, the question is whether the expenses would have been incurred in the course of an ordinary life unmarred by an accident. And if they would have been incurred, like the ordinary food costs at issue in Griffith, a causal connection between the expenses and the accidental bodily injury would be lacking and it could not be said that the act of providing products, services, and accommodations was necessitated by the accidental bodily injury. No-fault benefits would not be payable absent a link between the expenses and the injury. But if the expenses were atypical and arose solely because or out of the accidental bodily injury, a causal connection between the expenses and the injury would exist and it could be said that the act of providing products, services, and accommodations was necessitated by the accidental bodily injury. Payment of no-fault benefits to cover the expenses would be mandated in that situation.
An initial question that begs asking as part of the “but for” analysis concerns whether you take into consideration the fact that it is Michael‘s parents who are providing “services” and “accommodations” to Michael. Consistent with Supreme Court‘s tendency to use dictionaries to determine the plain meaning of statutory terms undefined in the statutory scheme, People v Morey, 461 Mich 325, 330-331; 603 NW2d 250 (1999), “accommodations” is defined as “lodging” or “food and lodging” and services encompass “act[s] of helpful activity . . . .” Random House Webster‘s College Dictionary (2001). Given that Michael is 25 years old, plaintiffs are not under any legal obligation as parents to pay for his food, lodging, accommodations, support, or services or to otherwise pay for his care. See generally the Support and Parenting Time Enforcement Act,
A medical or nursing home facility that provides institutionalized care is likewise not obligated to provide accommodations and services, but once an undertaking is made and a patient is admitted under contract, accommodations and services are provided, as well as products, and the no-fault insurer is required to pay benefits to cover the associated costs. However, under the analysis in Griffith, especially considering its rejection of Reed, a case with many parallels to the case at bar, it appears that parents providing accommodations and services for an injured adult child, although under no legal obligation to do so, are not afforded no-fault insurance benefits to the full extent of the accommodations and services provided. This is so despite the fact that, in our opinion, there is indeed a causal connection between the accidental bodily injury and the accommodations and services. Again, plaintiffs are providing Michael with accommodations and services, which, but for the accident, they would likely no longer be providing, given his age. But in contemplating whether an expense for a particular item would have been incurred even without the accident, Griffith suggests that it matters not who would have incurred the expense in an accident-free life, just that it would have ordinarily been incurred.6 Thus, for example, all costs attributable
We now turn to the expenses for which plaintiffs seek no-fault benefits, applying the principles enunciated. It is important to first identify the expenses at issue and those not at issue in this case. Defendant concedes that Michael is in need of “24 hour per day nursing services, widened hallways and elevators . . . , wheelchairs, ventilators, specially equipped beds, and other such amenities that [he] needs as a result of the injuries” and that “[s]uch expenses are causally related to [the] automobile accident and are covered under no-fault insurance.” Defendant also concedes that the expenses associated with the backup generator should be and are fully covered by insurance, as are television monitoring and medical alert pendant expenses. Defendant challenges, however, the awarding of insurance benefits to cover, even partially, property taxes, standard utility bills, homeowner‘s insurance, home maintenance costs, telephone bills, dumpster expenses, elevator inspection
It is necessary to carefully scrutinize the expenses at issue and take into account factors that have a bearing on those expenses.
With respect to property taxes, it is indisputable that plaintiffs’ property taxes are affected by the value of the home, see the General Property Tax Act,
With respect to the ADT security system, Mr. Hoover indicated that it is used for crime prevention and to help the nurses feel safer. Given that nurses would be unnecessary but for the accident and considering that the home contains expensive medical equipment related to Michael‘s care, it could be surmised that some of the costs associated with the security system are causally connected to, and necessitated by, Michael‘s accidental bodily injuries. We would also not be surprised if the cost of the system is greater because of the immense size of the home necessitated by features constructed to properly care for Michael. Furthermore, Mr. Hoover testified that a “panic button” for Michael was part of the ADT security system and included in the monthly bill for the system.
In regard to elevator inspection costs, the fact that plaintiffs’ house even has an elevator is directly connected to, and necessitated by, Michael‘s injuries and, therefore, inspection and operational expenses can also be attributed to accidental bodily injury. Indeed, as quoted earlier, defendant concedes that Michael is in need of “widened hallways and elevators.” Michael‘s need for basement access during weather emergencies by means of an elevator specifically arises because of his injuries, and defendant apparently believes that Michael has another means to access the basement during a tornado or other weather emergency or that he need not be given a safe haven. Defendant‘s position is
With respect to the dumpster, Michael alone generates numerous bags of garbage a day because of the nature of his injuries and their attendant care, which goes beyond the amount of garbage that would typically be generated by an adult child who is not afflicted with the injuries suffered by Michael. Mr. Hoover testified that most of the garbage that goes into the dumpster is generated by Michael and that without a dumpster, garbage would pile up all over the place and blow into the street.7 Absent Michael‘s injuries, no dumpster would be necessary. At first glance, allocating the full amount of the dumpster cost to Michael would appear improper because plaintiffs also use the dumpster for their waste and, even if injury-free, Michael would generate some waste. However, this issue is somewhat analogous to the food expense issue in Griffith. Just as daily sustenance can be accomplished by eating an ordinary diet or a special diet, garbage removal can be accomplished by using a standard trash can set out at the curb or by use of a dumpster, something typically relegated to use by restaurants and businesses because of the quantity of waste generated. Consistent with our
On the issue of benefits to cover stipends for Mrs. Hoover related to cleaning Michael‘s living area, parents of a healthy adult child might clean up after the child, they might make the child clean up after himself, or the parents and child might share the cleaning duties. What is abundantly clear here is that Michael‘s incapacity does not allow him to clean up after himself and that the needed cleaning goes beyond cleaning that would ordinarily be expected.8 Part of Mrs. Hoover‘s cleaning time is spent taking care of messes created as the nurses provide care for Michael, which, but for the accident, would not be necessary. She also testified that she cleans daily to make sure that Michael‘s room is “dust free,” which is understandable given Michael‘s susceptibilities to infection or illness. We conclude that Mrs. Hoover is entitled to be compensated for any time spent cleaning areas used by Michael and his caregivers that goes beyond the time for cleaning that one would ordinarily expect to perform. With respect to snow removal costs, Mr. Hoover testified that part of the need to clear the driveway as often as it is done is because of
In regard to telephone bills, the evidence was unclear, such that we cannot render any assessment of the issue.
We conclude that a remand is proper for the parties to submit additional evidence on each of the expenses remaining at issue in order to give them an opportunity to properly present arguments under the analytical framework outlined here and as required by Griffith. At the time of the hearing on plaintiffs’ motion to increase benefits, during which the parties and court agreed to have the case decided on documentary evidence submitted to the court, Griffith had not yet been decided. Moreover, the approach taken by both parties was to have the court simply allocate the expenses, across the board, on the basis of the percentage of the home devoted to Michael‘s use, which would then be multiplied by the particular bill covering the entire home. The parties disagreed on the percentage of the home devoted to Michael‘s use, and that was the focus during much of the litigation below. Plaintiffs did indeed submit bills, statements, and other evidence of the expenses. We conclude that remand for further development of the record under Griffith guidelines is proper.
We do agree with defendant that the 28 percent allocation ordered by the trial court was not legally sound, and it is inconsistent with our analysis, although the court‘s decision was understandable from a practical standpoint considering the difficulties in making technical allocations for each item of cost and the desire to simplify matters. Despite the difficulties in making the necessary assessments, we reverse with respect to the expenses that were given a 28 percent allocation
On the issue of attorney fees, defendant did unreasonably refuse to pay or delay payments of benefits for expenses associated with the backup generator, television monitoring system, medical alert pendant, dumpster, and elevator inspections. Thus, attorney fees are recoverable to the extent that they relate to benefits for those claimed expenses.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.
FITZGERALD, J., concurred.
HOOVER v MICHIGAN MUTUAL INSURANCE COMPANY
Docket No. 278237
Court of Appeals of Michigan
Submitted October 7, 2008. Decided December 11, 2008.
281 Mich. App. 617
I respectfully dissent, however, from the majority‘s expansive application of Griffith v State Farm Mut Automobile Ins Co, 472 Mich 521; 697 NW2d 895 (2005), to this case. I do not believe that plaintiffs are
Under the Griffith Court‘s interpretation of
At the outset, I agree with the majority that the trial court erroneously allocated 28 percent of the cost of plaintiffs’ home as directly related to Michael‘s custody and care. In arriving at 28 percent, the trial court relied on the parties’ agreement on accommodations and found that defendant had contributed $200,000 toward construction costs of the handicap-accessible home—or roughly 28 percent of the total cost of the $700,000 home. However, this figure merely represents a settlement agreement between the parties regarding defendant‘s contribution to construction costs for “any and all accommodations reasonably necessary for Michael Hoover‘s care, recovery and rehabilitation.” The fact that nearly 28 percent of the construction costs related to accommodations for Michael does not mean that 28 percent of the home is apportioned to Michael or that care related to Michael‘s injury constitutes 28 percent of the cost of certain items for which the court awarded benefits. Similarly, despite plaintiffs’ assertion that 28
Given this, the court‘s awards apportioned at 28 percent were arbitrary. First, the award of 28 percent of plaintiffs’ real estate taxes in no way accounts for the home‘s appraisal value. The fact that defendant contributed 28 percent of the cost of the home does not explain the extent to which facilities constructed for care of Michael‘s injuries caused by the accident affected the tax appraisal. Second, no evidence was presented concerning the percentage of plaintiffs’ utility bills, maintenance costs (including those for a water softener, well, septic system, the roof, structural maintenance, and general maintenance and repair), and telephone bills that are attributable to Michael‘s care necessitated by his injuries. Indeed, irrespective of his injuries, plaintiffs would be required to pay taxes, utilities, maintenance costs, and telephone bills.
Further, allocation of 28 percent of the security system expenses and homeowners insurance to defendant was wholly improper. Regarding the security system, Rodney Hoover testified that this system is used for crime prevention and helps Michael‘s nurses feel safer. The system is not reasonably necessary for
Moreover, the trial court improperly awarded plaintiffs 100 percent of the costs of the dumpster, elevator maintenance, Maxine Hoover‘s cleaning, and snow removal. First, although Michael generates two to three bags of garbage a day, the court‘s finding that the dumpster is “solely for Michael‘s waste” was clearly erroneous given Rodney‘s testimony that this expense covers waste removal for the entire household, as well as testimony that use of the dumpster is also necessitated by the fact that the house is 2,500 feet from the road. Use of the dumpster is not reasonably necessary for Michael‘s care, recovery, or rehabilitation. Second, regarding the elevator maintenance costs, although Rodney testified that the elevator permits Michael access to the basement in the event of a weather emergency, the need for access to a basement because of weather conditions is not causally related to Michael‘s injuries. Third, while Maxine explained that she performs “serious” daily cleaning of Michael‘s room (including vacuuming, mopping and sweeping floors, and cleaning the tub, walls, and windows), evidence was not presented that this cleaning is causally related to Michael‘s injuries. Further, Maxine admitted that a portion of her cleaning results from the mess left by Michael‘s nurses. Moreover, removing snow from a driveway is completely unrelated to the injuries at
Further, I agree with defendant that the court erred in awarding plaintiffs attorney fees and penalties and in failing to address defendant‘s request for attorney fees.
The no-fault act provides for attorney fees when an insurance carrier unreasonably withholds benefits. The trial court‘s decision about whether the insurer acted reasonably involves a mixed question of law and fact. What constitutes reasonableness is a question of law, but whether the defendant‘s denial of benefits is reasonable under the particular facts of the case is a question of fact. [Ross v Auto Club Group, 481 Mich 1, 7; 748 NW2d 552 (2008).]
A trial court‘s award of interest under the no-fault statute is reviewed de novo. Attard v Citizens Ins Co of America, 237 Mich App 311, 319; 602 NW2d 633 (1999).
Under
With the exception of payments that defendant concedes plaintiffs legitimately claimed (i.e., payments for
Defendant also contends that the trial court erred in awarding plaintiffs interest under
I would reverse and remand for the trial court to award costs and recalculate attorney fees and penalties.