MacDONALD v STATE FARM MUTUAL INSURANCE COMPANY
Docket No. 68139
Supreme Court of Michigan
June 25, 1984
Rehearing denied post, 1213.
419 Mich 146
Argued October 4, 1983 (Calendar No. 6).
In an opinion by Justice Brickley, joined by Justices Kavanagh, Levin, and Ryan, the Supreme Court held:
No-fault work-loss benefits compensate a person injured in an automobile accident for income that would have been received had the accident not occurred. Where a person suffers an unrelated injury after the accident and is renderеd unable to work, eligibility for work-loss benefits ceases because no income would have been earned even if the accident had not occurred. Nor does an unrelated injury render the person eligible to receive work-loss benefits as a person who is temporarily unemployed because there is no income from work or its equivalent to lose.
1. A no-fault insurer is liable to pay benefits for income a person injured in an automobile accident would have performed during the first three years after the date of the accident had no injury occurred. In this case, the plaintiff would have worked for two weeks after the date of the accident, until the date of his heart attack. After that date he
2. A person who is temporarily unemployed at the timе of an accident or during the period of disability is eligible under the statute to receive work-loss benefits based on the income earned during the last month of full-time employment preceding the accident. The phrase “temporarily unemployed” refers to the unavailability of employment, not the physical inability to perform work. A person who becomes disabled at some time subsequent to an automobile accident for reasons unrelated to the accident is not temporarily unemployed, and thus work-lоss benefits are unavailable because there is no income from work or its equivalent that is lost. In this case, the plaintiff was not temporarily unemployed within the meaning of the no-fault act and is ineligible to receive work-loss benefits on that basis.
Reversed.
Justice Cavanagh, joined by Chief Justice Williams and Justice Boyle, dissenting, would hold that no-fault work-loss benefits paid because of a disability related to an automobile accident may not be withdrawn because the claimant sustains a subsequent independent disability resulting in an inability to work, so long as the injuries attributable to the accident in themselves prevent the claimant from working.
1. A no-fault insurer is liable to pay personal protection insurance benefits for the first three years after the date of an accident for loss of income from work an insured worker would have performed had injuries in an automobile accident not been sustained. At the time of the accident, the worker must have been employed, and there must have been a causal relationship between the injuries sustained as a rеsult of the accident and the inability to engage in gainful employment. As long as the claimant‘s injuries from the accident continue to result in an inability to work, an actual loss is incurred and work-loss benefits are payable. The fact that a second, independent disability also precludes the claimant from working does not break the causal relationship between the accident and the work loss.
2. The provision in the no-fault act for payment of work-loss benefits to a worker who at the time of an accident is, or during а period of disability becomes, temporarily unemployed because of a lack of available employment does not apply in cases such as this case where the claimant, already unemployed
108 Mich App 705; 310 NW2d 848 (1981) reversed.
REFERENCE FOR POINTS IN HEADNOTES
[1-5] 7 Am Jur 2d, Automobile Insurance § 361.
OPINION OF THE COURT
1. INSURANCE — NO-FAULT — WORK-LOSS BENEFITS — SECOND DISABILITY.
No-fault work-loss benefits compensate a person injured in an automobile accident for income that would have been received had the accident not ocсurred; where a person suffers an unrelated injury after the accident and is rendered unable to work, eligibility for work-loss benefits ceases because no income would have been earned even if the accident had not occurred (
2. INSURANCE — NO-FAULT — WORK-LOSS BENEFITS — SECOND DISABILITY.
A person who is temporarily unemployed at the time injuries are received as a result of an automobile accident or who becomes unemployed during the period of disability is eligible for no-fault work-loss benefits for loss of income from work the injured person would havе performed if he had not been injured; however, where an intervening event renders the injured person unable to work regardless of the accident, work-loss benefits are not recoverable (
DISSENTING OPINION BY CAVANAGH, J.
3. INSURANCE — NO-FAULT — WORK-LOSS BENEFITS — SECOND DISABILITY.
No-fault work-loss benefits paid because of a disability related to an automobile accident may not be withdrawn because the claimant sustains a subsequent independent disability resulting in an inability to work, so long as the injuries attributable to the accident in themselves prevent the claimant from working (
4. INSURANCE — NO-FAULT — WORK-LOSS BENEFITS — SECOND DISABILITY.
To be eligible to receive no-fault work-loss benefits, a claimant must have been employed at the time of the accident which resulted in injuries, and there must have been a causal relationship between the injuries and the claimant‘s inability to work; the fact that a second independent disability also pre-
5. INSURANCE — NO-FAULT — WORK-LOSS BENEFITS — SECOND DISABILITY.
The provision in the no-fault act for payment of work-loss benefits to a worker who, at the time of an accident, is, or during a period of disability becomes, temрorarily unemployed because of a lack of available employment does not apply in cases where the claimant, already unemployed because of disabling injuries sustained in an accident, is unable to work because of a second unrelated disability (
Robb, Dettmer, Messing & Thompson, P.C. (by George R. Thompson), for the plaintiff.
Willingham, Coté, Hanslovsky, Griffith & Foresman, P.C. (by Frederick M. Baker, Jr.), for the defendant.
Amici Curiae:
Dickinson, Mourad, Brandt, Hanlon & Becker (by Daniel R. Siefer) for Auto Club Insurance Association.
Lopatin, Miller, Freedman, Bluestone, Erlich, Rosen & Bartnick (by Richard E. Shaw) for Michigan Trial Lawyers Association.
BRICKLEY, J. This case presents the question whether a person receiving work-loss benefits under the no-fault act,
“This is an action brought by plaintiff Donald A. MacDonald seeking first party benefits under the Michigan no-fault insurance act from his insurer, State Farm Mutual Insurance Company.
“Plaintiff, a 56-year-old self-employed carpenter, while in the course of driving his vehicle, insured through State Farm Policy No. 4650-286-821-228, was involved in a single-car accident in Kalkaska County, Michigan. The date of the occurrence was November 10, 1976.
“From the accident plaintiff received injuries to his neck and shoulders from which he was disabled from gainful employment as defined under the Michigan no-fault insurance act for a period of 28 months.
“Plaintiff, during the pendency of his disability resulting from the automobile accident, was subsequently disabled as a result of the unrelated myocardial infarction which occurred November 25, 1976; that disability continues as of this point in time.
“Either occurrence acting independently of the other would give plaintiff a work-loss disability.
* * *
“The plaintiff claims he is entitled to work-loss benefits pursuant to § 3107(b) for the period of disability causally related to the automobile accident.
“The defendant claims plaintiff is only entitled to work-loss benefits pursuant to § 3107(b) from the date of the automobile accident to the date of the subsequent disability, in this case being approximately 15 days.”
Resolution of this case is dependent on the meaning of two seсtions of the no-fault act, § 3107(b) and § 3107a.
Section 3107(b) provides that a no-fault insurer is liable to pay benefits for:
“Work loss consisting of loss of income from work an
injured person would have performed during the first 3 years after the date of the accident if he had not been injured“.
If § 3107(b) stood alone, work-loss benefits would clearly be unavailable to plaintiff for the period after his heart attack. Our no-fault act is patterned after the Uniform Motor Vehicle Accident Reparations Act, and § 3107(b) of our act, in relevant part, is virtually identical to § 1(a)(5)(ii) of that act. See 14 ULA, Civil Procedural & Remedial Laws, Uniform Motor Vehicle Accident Reparations Act, pp 50, 54. As we have explained previously, by adopting the language of such a model act, it is evident that the Legislature “was cognizant of, and in agreement with, the policies which underlie the model acts’ language“. Miller v State Farm Mutual Automobile Ins Co, 410 Mich 538, 559; 302 NW2d 537 (1981). The drafter‘s comments to § 1(a)(5) of the UMVARA, and by extension to § 3107(b) of the no-fault act, are in part, as follows:
“Work loss‘, as are the other components of loss, is restricted to accrued lоss, and thus covers only actual loss of earnings as contrasted to loss of earning capacity. Thus, an unemployed person suffers no work loss from injury until the time he would have been employed but for his injury. On the other hand, an employed person who loses time from work he would have performed had he not been injured has suffered work loss * * * *. Work loss is not restricted to the injured person‘s wage level at the time of injury. For example, an unemployed college student who was permanently disabled could claim loss, at an aрpropriate time after the injury, for work he would then be performing had he not been injured. Conversely, an employed person‘s claim for work loss would be appropriately adjusted at the time he would have retired from his employment.”
A reading of both the clear language of § 3107(b)
The meaning of § 3107(b), however, does not end our inquiry. Plaintiff contends, and the Court of Appeals found, that plaintiff had an independent statutory right to recover work-loss benefits under § 3107a of the no-fault act. We find that § 3107a does not support that position.
Section 3107a was added to the no-fault act by 1975 PA 311, and provides:
“Subject to the provisions of section 3107(b), work loss for an injured person who is temporarily unemployed at the time of the accident or during the period of disability shall be based on earned income for the last month employed full time preceding the accident.”
It was added to the no-fault act for the reason that
“[the lack of a concise definition of loss of income in § 3107(b)] has given rise to certain problems in connection with persons who are seasonally employed or temporarily unemployed as a result of lay-offs, and who are disabled as a result of an auto accident. In the case of a worker who is unemployed at the time of an accident or during the period of disability, the law might be construed as providing for no work loss benefits since the
worker would have had no income at that time, had he/she not been injured. In addition, disabled workers are not entitled to unemployment compensation since benefits are not payable to a person who is unable to work. An unemployed worker who is disabled in an auto accident may thus find him/herself without benefits of either sort.” Analysis, HB 4221, November 21, 1975.
Although § 3107a was added to the no-fault act to allow temporarily unemployed persons to recover work-loss benefits, we cannot find that § 3107a provides an independent source of benefits for plaintiff. Section 3107a identifies an amount which is deemed by that section to be the work loss for temporarily unеmployed persons. It allows persons temporarily unemployed at the time of an automobile accident to recover benefits notwithstanding that they have no existing wage, and it allows those already receiving work-loss benefits to continue receiving benefits for those temporary periods when they would have had no wage had the accident not occurred. But § 3107a does not expressly state that persons unable to work for physical reasons are temporarily unemployed, and we cannоt read such a meaning into the statute.
The phrase “temporarily unemployed“, it is evident to us, refers to the unavailability of employment, not the physical inability to perform work. The legislative analysis of HB 4221 reveals a legislative concern with those who but for their disability could have received unemployment compensation as a substitute income. That concern evaporates with those already disabled, who lose no unemployment compensation when they receive a second disabling injury, and with those who suffer a second disability after being disabled in an automobile accident.
In short, those who are temporarily unemployed
Our result is consistent with the overall purpose of the no-fault act, “to accomplish the goal of providing an equitable and prompt method of redressing injuries in a way which mаde the mandatory coverage affordable to all motorists“. Tebo v Havlik, 418 Mich 350, 366; 343 NW2d 181 (1984). That goal could hardly be accomplished with an interpretation which required automobile insurers to pay work-loss benefits to persons who would be disabled from working regardless of whether there was an automobile accident. And notwithstanding plaintiff‘s contention to the contrary, our interpretation of §§ 3107(b) and 3107a will lead to no less prompt awards or any greater administrative morass than was contemplated in the creation of the no-fault system. Thе act already provides for the periodic examinations of claimants and requires payment by the insurer only as the work loss to the claimant accrues. See §§ 3110(4), 3142(1), 3151. Our decision today will merely allow insurers to use the act as it was intended and avoid paying compensation not due the claimant.
Reversed.
KAVANAGH, LEVIN, and RYAN, JJ., concurred with BRICKLEY, J.
CAVANAGH, J. (dissenting). The question presented in this case is one of first impression in Michigan. Although we would affirm the Court of Appeals holding that the plaintiff is entitled to continued work-loss benefits during the period of
Unlike the Court of Appeals, we do not reach our conclusion on the basis of the language in § 3107a because we believe that that statute is inapplicable to the present situation. The legislative purpose in enacting § 3107a was to address a problem created by the requirement in § 3107(b) that work-loss benefits must consist of payments for loss of income from work an injured person would have performed had the car accident not occurred, thus implying that the injured person has to be employed at the time of the car accident. As the legislative analysis of the bill which became § 3107a stated:
“This [lack of a concise definition of ‘loss of income’ in the no-fault law] has given rise to certain problems in connection with persons who are seasonally employed or temporarily unemployed as a result of layoffs, and who are disabled as a result of an auto accident. In the case of a worker who is unemployed at the time of an accident or during the period of disability, the law might be construed as providing for no work loss benefits since the worker would have had no income at that time, had he/she not been injured. In addition, disabled workers are not entitled to unemployment compensation since benefits are not payable to a person who is unable to work. An unemployed worker who is disabled in an auto accident may thus find him/herself without benefits of either sort.” Analysis, HB 4221, November 21, 1975.
It is evident that § 3107a was enacted to provide work-loss bеnefits for the insured worker who is temporarily unemployed at the time of the accident because of a lack of available employment or who becomes temporarily unemployed during the
Therefore, we conclude that § 3107a applies only to a person who, at the time of disаbility occasioned by a car accident, is or during that disability becomes temporarily unemployed because of a lack of available employment. Since § 3107a does not apply to the facts of the case before us, in which the plaintiff was not temporarily unemployed within the meaning of § 3107a during any time period relevant to our determination, we turn our attention to § 3107(b).
Section 3107(b) authorizes the payment of work-loss benefits for work an injured claimant would have performed during the first three years after the date of the accident if the accident had not occurred. We interpret this section to require that the claimant be employed at the time of the car accident and that there be a causal relationship between the injuries the claimant sustains from the car accident and the resulting inability to engage in gainful employment.
We believe that this interpretation is consistent with the statutory scheme of the no-fault act and the policies upon which it is based. It is because
Contrary to the defendant‘s contention, we do not think that this interpretation of § 3107(b) conflicts with §§ 3110(4), 3142(1), or 3151.
Section 3151 provides as follows:
“When the mental or physical condition of a person is material to a claim that has been or may be made for past or future personal protection insurance benefits,
the person shall submit to mental or рhysical examination by physicians. A personal protection insurer may include reasonable provisions in a personal protection insurance policy for mental and physical examination of persons claiming personal protection insurance benefits.”
Sections 3110(4) and 3142(1) provide that personal protection benefits are payable as the loss accrues, which may be at a different time than when the injury occurs. For example, had the plaintiff been able to work for a pеriod of time after the car accident before his injuries from the accident rendered him unable to work, the work-loss benefits would be payable from the date he stopped working rather than the date of the car accident. However, the fact that § 3151 requires a periodic evaluation of whether an actual work loss is being incurred because of the accident is not inconsistent with our interpretation of § 3107(b). As long as the plaintiff‘s injuries from the car accident continue to result in his inability to work, an actual work loss is being incurred and work-loss benefits are payable. Again, the fact that a second, independent disability also precludes him from working does not break the causal relationship between the car accident and the actual work loss suffered as a result of it.1
This statutory interpretation is consistent with the policies behind the no-fault act. This Court has frequently pointed out that the purpose of the no-fault system is to provide assured, adequate, and prompt compensation for insured claimants in-1
In addition, this Court has noted that:
“The [no-fault] act is designed to minimize adminis-2
We agree with the Court of Appeals that if a motor vehicle accident victim is entitled to work-loss benefits only for those days on which the accident injuries alone prevent him from working, then an administrative morass would result from trying to weed out those days in which the victim was prevented from working becаuse of other additional causes, such as bad weather, an unrelated illness, or a conflicting commitment. This would clearly inhibit the no-fault act‘s goal of prompt reparation for economic losses.
We would hold that work-loss benefits paid to an insured claimant under § 3107(b) of the no-fault act on the basis of a disability related to a car accident may not be withdrawn where the claimant sustains a subsequent independent disability which also renders the claimant unable to work. As long as the car accident injuries in themselvеs prevent the claimant from working, work-loss benefits are payable under § 3107(b).
WILLIAMS, C.J., and BOYLE, J., concurred with CAVANAGH, J.