Douglas v. Allstate Insurance Company

Michigan Supreme Court
Lansing, Michigan
Chief Justice: Justices:
Opinion Robert P. Young, Jr. Michael F. Cavanagh
Marilyn Kelly
Stephen J. Markman
Diane M. Hathaway
Mary Beth Kelly
Brian K. Zahra
FILED JULY 30, 2012
STATE OF MICHIGAN
SUPREME COURT
JAMES DOUGLAS,
Plaintiff-Appellee,
v No. 143503
ALLSTATE INSURANCE COMPANY,
Defendant-Appellant.
BEFORE THE ENTIRE BENCH
YOUNG, C.J.
Under the terms of the no-fault act,1 a person injured in a motor vehicle accident is
entitled to recover personal protection insurance (PIP) benefits for “[a]llowable expenses
consisting of all reasonable charges incurred for reasonably necessary products, services
and accommodations for an injured person’s care, recovery, or rehabilitation.”2 This case
requires this Court to consider whether the services provided by plaintiff’s wife
1
MCL 500.3101 et seq.
2
MCL 500.3107(1)(a).
constituted services “for an injured person’s care,” whether the Court of Appeals properly
remanded this case to the circuit court for findings of fact regarding the extent to which
expenses for services for plaintiff’s care were actually incurred, and whether the circuit
court erred by awarding an hourly rate that corporate agencies charge for rendering
services, rather than an hourly rate that individual caregivers receive for those services.
We hold that “allowable expenses” must be “for an injured person’s care,
recovery, or rehabilitation.”3 Accordingly, a fact-finder must examine whether attendant
care services are “necessitated by the injury sustained in the motor vehicle accident”
before compensating an injured person for them.4 However, the services cannot simply
be “‘[o]rdinary household tasks,’” which are not for the injured person’s care.5
Moreover, because an allowable expense consists of a “charge[]”6 that “‘must be
incurred,’”7 an injured person who seeks reimbursement for any attendant care services
must prove by a preponderance of the evidence not only the amount and nature of the
services rendered, but also the caregiver’s expectation of compensation or reimbursement
for providing the attendant care. Because the no-fault act does not create different
3
Id. (emphasis added).
4
Griffith v State Farm Mut Auto Ins Co, 472 Mich. 521, 535; 697 NW2d 895 (2005).
5
Visconti v DAIIE, 90 Mich. App. 477, 481; 282 NW2d 360 (1979), quoting Kushay v
Sexton Dairy Co, 394 Mich. 69, 74; 228 NW2d 205 (1975).
6
MCL 500.3107(1)(a).
7
Griffith, 472 Mich. at 532 n 8, quoting Manley v DAIIE, 425 Mich. 140, 169; 388 NW2d
216 (1986) (BOYLE, J., concurring in part).
2
standards depending on who provides the services, this requirement applies equally to
services that a family member provides and services that an unrelated caregiver provides.
If the fact-finder concludes that a plaintiff incurred allowable expenses in
receiving care from a family member, the fact-finder must also determine to what extent
any claimed expense is a “reasonable charge[].”8 While it is appropriate for the fact-
finder to consider hourly rates charged by individual caregivers when selling their
services (whether to their employers that commercially provide those services or directly
to injured persons), comparison of hourly rates charged by commercial caregiving
agencies is far too attenuated from an individual’s charge for the fact-finder simply to
adopt that agency charge as an individual’s reasonable charge.
In applying these principles of law to the facts of this case, we hold that the Court
of Appeals correctly determined that plaintiff may recover “allowable expenses” to the
extent that they encompass services that are reasonably necessary for plaintiff’s care
when the care is “related to [plaintiff’s] injuries.”9 However, because the circuit court
erred by awarding damages for allowable expenses without requiring proof that the
underlying charges were actually incurred, we agree with the decision of the Court of
Appeals to remand this case to the circuit court for a determination whether charges for
allowable expenses were actually incurred. Nevertheless, we also conclude that the Court
of Appeals erred to the extent that its decision limited the scope of the determination on
remand to the period after November 7, 2006. Instead, the circuit court must reexamine
8
MCL 500.3107(1)(a).
9
Griffith, 472 Mich. at 534.
3
on remand the evidentiary proofs supporting the entire award. While we reject
defendant’s request for a verdict of no cause of action because there remain unresolved
questions of fact, we caution the circuit court that a fact-finder can only award benefits
that are proved to have been incurred. Finally, in determining the hourly rate for
attendant care services, the circuit court clearly erred by ruling that plaintiff is entitled to
an hourly rate of $40 for attendant care services because that rate is entirely inconsistent
with the evidence of an individual’s rate of compensation, including the compensation
that Katherine Douglas, plaintiff’s wife, actually received as an employee hired to care
for plaintiff. We reverse the judgment of the Court of Appeals on this issue. Therefore,
we affirm in part, reverse in part, vacate the award of attendant care benefits, and remand
this case to the circuit court for further proceedings consistent with this opinion.
I. FACTS AND PROCEDURAL HISTORY
In 1996, plaintiff, James Douglas, sustained a severe closed-head brain injury
when a hit-and-run motorist struck the bicycle he was riding. Plaintiff was hospitalized
for approximately one month after the accident and received therapy and rehabilitation
after his discharge. Because the driver of the motor vehicle that struck plaintiff could not
be identified, plaintiff sought assignment of a first-party insurance provider through the
Michigan Assigned Claims Facility.10 The facility assigned defendant, Allstate Insurance
10
MCL 500.3172(1) provides that
[a] person entitled to claim because of accidental bodily injury arising out
of the ownership, operation, maintenance, or use of a motor vehicle as a
motor vehicle in this state may obtain personal protection insurance
benefits through an assigned claims plan if no personal protection insurance
4
Company, to plaintiff’s claim. In the three years after the accident, defendant paid
plaintiff PIP benefits for his hospitalization, medical expenses, wage loss, and attendant
care, as well as for replacement services, in accordance with the no-fault act. Defendant
claims that plaintiff did not seek additional PIP benefits after 1999 until he filed the
instant lawsuit in 2005.
In 1999, plaintiff began the first of a series of full-time jobs. However, he was
unable to hold a job for very long, and he eventually stopped working. During this time,
he twice attempted suicide. After the second suicide attempt, a 2005 letter written by
plaintiff’s psychiatrist indicated that plaintiff “requires further treatment” because he
“continues to suffer from ill-effects as a result of his closed-head injury . . . .” In
particular, the psychiatrist emphasized that plaintiff suffered from short-term memory
problems and impulsivity as a result of the accident and explained that plaintiff “should
have the opportunity to obtain the care that will most likely restore him to a good level of
functioning.” Defendant claims that it did not receive this letter before plaintiff initiated
this lawsuit.
Plaintiff filed the instant lawsuit on May 31, 2005, in the Washtenaw Circuit Court
seeking compensation for unspecified PIP benefits that defendant “has refused or is
expected to refuse to pay . . . .”11 Defendant filed three successive dispositive motions,
is applicable to the injury, [or] no personal protection insurance applicable
to the injury can be identified . . . .
11
Because defendant paid PIP benefits for medical bills during the pendency of the suit,
the only potential PIP benefits at issue were the services that plaintiff’s wife provided.
5
only the first of which was granted.12 Relevant here, the second motion for summary
disposition claimed that attendant care was not reasonably necessary because none of
plaintiff’s medical providers had prescribed attendant care for plaintiff. The circuit court
denied the motion without prejudice in advance of further discovery. The third motion
for partial summary disposition claimed that plaintiff could not recover for attendant care
services provided before November 7, 2006, because plaintiff’s treating psychologist, Dr.
Thomas Rosenbaum, neither authorized nor prescribed attendant care services before that
date. In opposing the motion, plaintiff offered an affidavit from Dr. Rosenbaum, which
stated that plaintiff “is in need of aide care during all waking hours” and that Katherine
Douglas “has been providing her husband with aide care, while the two of them are
together, since the motor vehicle accident.” After hearing oral argument, the circuit court
denied defendant’s third motion, ruling that Dr. Rosenbaum’s affidavit created a question
of fact that precluded partial summary disposition.
The parties proceeded to a bench trial on the claim for attendant care services that
Mrs. Douglas allegedly provided. Defendant’s claims adjuster testified during plaintiff’s
case-in-chief as an adverse witness. This witness agreed with plaintiff’s counsel that
plaintiff “would have needed [attendant care] back when the lawsuit first began” in 2005
12
The first motion for partial summary disposition claimed that MCL 500.3145(1) barred
any portion of plaintiff’s claim that accrued more than one year before plaintiff
commenced the suit, that is, before May 31, 2004. The circuit court granted defendant’s
motion for partial summary disposition with the consent of the parties. See MCL
500.3145(1), which states, in relevant part, that a claimant “may not recover [PIP]
benefits for any portion of the loss incurred more than 1 year before the date on which the
action was commenced.”
6
and that “it would be appropriate to pay Mrs. Douglas for some of [the] care that she
provides . . . at home[.]” However, on direct examination by defendant’s counsel, the
claims adjuster testified that there was no evidence that any compensable care had
actually been provided to plaintiff.
Katherine Douglas testified that when she was at home, her entire time was spent
“babysitting” and “watching James,” even while she was performing other household
chores. She believed that her presence in the house kept plaintiff from being hospitalized
or incarcerated. She also testified about a series of forms, each labeled “AFFIDAVIT OF
ATTENDANT CARE SERVICES,” all dated June 25, 2007, covering each month
between November 2004 and June 2007. These forms totaled up the number of hours
during which she claimed to have provided services and outlined the various tasks that
she performed, including organizing her family’s day-to-day life, cooking meals,
undertaking daily chores, maintaining the family’s house and yard, ordering and
monitoring plaintiff’s medications, communicating with health care providers and Social
Security Administration officials, calling plaintiff from work to ensure plaintiff’s safety,
monitoring plaintiff’s safety, and cueing or prompting various tasks for plaintiff to
undertake. However, she admitted that the forms were all completed in June 2007, that
she did not contemporaneously itemize the amount of time she spent on any particular
item, and that in completing the forms, she went through household bills to reconstruct
what had occurred in her life during the relevant period.
Dr. Rosenbaum testified that he began treating plaintiff on November 7, 2006, and
recommended that Mrs. Douglas provide attendant care for all of plaintiff’s waking
7
hours,13 although in November 2007 he revised his recommendation to 40 hours of
attendant care a week. Dr. Rosenbaum also testified that his company, TheraSupport,
L.L.C., served as plaintiff’s attendant care provider and that TheraSupport had employed
Mrs. Douglas to provide her husband’s attendant care. Although TheraSupport paid Mrs.
Douglas $10 an hour for providing services to plaintiff, it billed plaintiff $40 an hour for
those very services. Dr. Rosenbaum averred that defendant eventually paid all of
TheraSupport’s bills.
Defendant’s medical expert, Dr. Charles Seigerman, testified that he conducted a
battery of cognitive tests on plaintiff and concluded that two hours of attendant care
services a day are needed to help plaintiff organize the logistics of his treatment and
ensure that he takes his medicine. Dr. Seigerman also testified that an appropriate hourly
rate for these services was “around $10.00 an hour,” or “[p]erhaps a little higher,”
although he acknowledged on cross-examination that he was not an expert on the
appropriate rate of compensation for this service.
The circuit court awarded PIP benefits to plaintiff, explaining that he “needs aide
care for all of his waking hours.” The circuit court calculated that plaintiff was entitled to
a total of 67 hours a week of attendant care for the period between May 31, 2004, and
November 1, 2007, and 40 hours a week after November 1, 2007.14 The court established
13
Dr. Rosenbaum also noted that another of plaintiff’s medical providers had
recommended in 1997 that plaintiff receive 24-hour supervisory care.
14
The 67-hour week corresponded to 7 hours each weekday and 32 hours during the
weekend (16 hours each on Saturday and Sunday), while the 40-hour week corresponded
to Dr. Rosenbaum’s subsequent recommendation.
8
a $40 hourly rate for those services. The judgment entered on November 18, 2009, and
totaled $1,163,395.40, which included attorney fees, no-fault interest, costs, and
judgment interest.
The Court of Appeals affirmed in part, reversed in part, and remanded for further
proceedings. First, the panel rejected defendant’s claim that the circuit court had erred by
denying its final two motions for summary disposition. In particular, the panel concluded
that Dr. Rosenbaum’s affidavit created a question of fact regarding whether attendant
care services were “reasonably necessary” for the period before Dr. Rosenbaum began
treating plaintiff on November 7, 2006.15 The panel also rejected defendant’s claim that
the circuit court had erred by awarding plaintiff benefits for replacement services because
the award “was not intended to compensate Katherine for her mere presence in the
home,” but instead was intended to compensate for “plaintiff[’s] required supervision,”
and “Katherine was the appropriate person to provide it.”16
The Court of Appeals reversed the circuit court’s award, however, because “the
trial evidence in this case did not reflect that Katherine maintained records of her claimed
attendant care.”17 Although Mrs. Douglas had submitted several forms, each labeled
“AFFIDAVIT OF ATTENDANT CARE SERVICES,” the panel concluded that when
the descriptions on the forms had not been “left blank,” they were “vague” and only
15
MCL 500.3107(1)(a).
16
Douglas v Allstate Ins Co, unpublished opinion per curiam of the Court of Appeals,
issued June 23, 2011 (Docket No. 295484), p 5.
17
Id. at 6.
9
constituted “an effort to reconstruct her time.”18 Thus, the panel remanded for further
proceedings “regarding the amount of incurred expenses for attendant care from
November 7, 2006, to November 18, 2009,” and to determine “whether Katherine
reasonably expected compensation at the time of performance.”19 Finally, the panel
upheld the circuit court’s $40 hourly rate because that rate “is supported by Rosenbaum’s
testimony regarding the rate charged by his TheraSupport program for attendant care and
also the testimony of defendant’s adjuster regarding rates charged by commercial
agencies for home attendant care.”20
This Court granted defendant’s application for leave to appeal and ordered the
parties to brief the following issues:
(1) whether the Court of Appeals erred in remanding this case to the
trial court for further proceedings regarding the amount of incurred
expenses for attendant care from November 7, 2006, to November 18,
2009, after finding that the trial court clearly erred in awarding attendant
care benefits to the plaintiff without requiring sufficient documentation to
support the daily and weekly hours underlying the award; (2) whether the
plaintiff presented sufficient proofs at trial to support the trial court’s award
of attendant care benefits for the period before November 7, 2006; (3)
whether activities performed by Katherine Douglas constituted attendant
care under MCL 500.3107(1)(a) or replacement services under MCL
500.3107(1)(c); and (4) whether the trial court clearly erred in awarding
attendant care benefits at the rate of $40 per hour.[21]
18
Id. at 6-7.
19
Id. at 7.
20
Id.
21
Douglas v Allstate Ins Co, 490 Mich. 927 (2011).
10
II. STANDARD OF REVIEW
This case involves the interpretation of the no-fault act. “Issues of statutory
interpretation are questions of law that this Court reviews de novo.”22 When interpreting
a statute, we must “ascertain the legislative intent that may reasonably be inferred from
the words expressed in the statute.”23 This requires courts to consider “the plain meaning
of the critical word or phrase as well as ‘its placement and purpose in the statutory
scheme.’”24 If the statutory language is unambiguous, “the Legislature’s intent is clear
and judicial construction is neither necessary nor permitted.”25
We review de novo the denial of a motion for summary disposition.26 A motion
for summary disposition under MCR 2.116(C)(10) requires the reviewing court to
consider “the pleadings, admissions, and other evidence submitted by the parties in the
light most favorable to the nonmoving party. Summary disposition is appropriate if there
is no genuine issue regarding any material fact and the moving party is entitled to
judgment as a matter of law.”27
22
Griffith, 472 Mich. at 525-526.
23
Koontz v Ameritech Services, Inc, 466 Mich. 304, 312; 645 NW2d 34 (2002).
24
Sun Valley Foods Co v Ward, 460 Mich. 230, 237; 596 NW2d 119 (1999), quoting
Bailey v United States, 516 U.S. 137, 145; 116 S. Ct. 501; 133 L. Ed. 2d 472 (1995).
25
Griffith, 472 Mich. at 526, citing Koontz, 466 Mich. at 312.
26
Saffian v Simmons, 477 Mich. 8, 12; 727 NW2d 132 (2007).
27
Brown v Brown, 478 Mich. 545, 551-552; 739 NW2d 313 (2007).
11
In civil actions tried without a jury, MCR 2.517(A)(1) requires the court to “find
the facts specially, state separately its conclusions of law, and direct entry of the
appropriate judgment.” We review these findings of fact for clear error,28 which occurs
when “‘the reviewing court is left with a definite and firm conviction that a mistake has
been made.’”29
III. ANALYSIS
A. LEGAL BACKGROUND OF THE NO-FAULT ACT
MCL 500.3105(1) establishes that a personal protection insurance provider is
liable under the no-fault act “to pay benefits for accidental bodily injury arising out of the
ownership, operation, maintenance or use of a motor vehicle as a motor vehicle, subject
to the provisions of this chapter.” Accordingly, MCL 500.3105(1) imposes two threshold
causation requirements for PIP benefits:
First, an insurer is liable only if benefits are “for accidental bodily
injury . . . .” “[F]or” implies a causal connection. “[A]ccidental bodily
injury” therefore triggers an insurer’s liability and defines the scope of that
liability. Accordingly, a no-fault insurer is liable to pay benefits only to the
extent that the claimed benefits are causally connected to the accidental
bodily injury arising out of an automobile accident.
Second, an insurer is liable to pay benefits for accidental bodily
injury only if those injuries “aris[e] out of” or are caused by “the
ownership, operation, maintenance or use of a motor vehicle . . . .” It is not
any bodily injury that triggers an insurer’s liability under the no-fault act.
28
MCR 2.613(C); Adams Outdoor Advertising, Inc v City of Holland, 463 Mich. 675,
681; 625 NW2d 377 (2001).
29
Ross v Auto Club Group, 481 Mich. 1, 7; 748 NW2d 552 (2008), quoting Kitchen v
Kitchen, 465 Mich. 654, 661-662; 641 NW2d 245 (2002).
12
Rather, it is only those injuries that are caused by the insured’s use of a
motor vehicle.[30]
MCL 500.3107(1) further limits what benefits are compensable as PIP benefits,
allowing unlimited lifetime benefits for “allowable expenses” but limiting “ordinary and
necessary services” to a three-year period after the accident and to a $20 daily limit:
Except as provided in subsection (2), personal protection insurance
benefits are payable for the following:
(a) Allowable expenses consisting of all reasonable charges incurred
for reasonably necessary products, services and accommodations for an
injured person’s care, recovery, or rehabilitation. . . .
* * *
(c) Expenses not exceeding $20.00 per day, reasonably incurred in
obtaining ordinary and necessary services in lieu of those that, if he or she
had not been injured, an injured person would have performed during the
first 3 years after the date of the accident, not for income but for the benefit
of himself or herself or of his or her dependent.
This Court’s decision in Johnson v Recca clarified that the “ordinary and necessary
services” contemplated in subsection (1)(c)—commonly referred to as “replacement
services”—constitute a category of expenses distinct from the “allowable expenses”
contemplated in subsection (1)(a).31
This case requires this Court to consider whether the specific services at issue here
were “allowable expenses”32 or whether they were replacement services.33 The
30
Griffith, 472 Mich. at 531 (alterations in original).
31
Johnson v Recca, 492 Mich ___; ___ NW2d ___ (Docket No. 143088, issued July 30,
2012).
32
MCL 500.3107(1)(a).
33
MCL 500.3107(1)(c).
13
distinction between allowable expenses and replacement services is important in this case
because the operation of the one-year-back rule, MCL 500.3145(1), prevents plaintiff
from recovering benefits for otherwise allowable expenses incurred more than one year
before the filing of the lawsuit. Thus, plaintiff cannot recover benefits for otherwise
allowable expenses incurred before May 31, 2004, which was nearly eight years after
plaintiff’s July 1996 accident. Because recovery for replacement services is limited to
those services provided in the first three years after the accident, plaintiff cannot recover
any benefits for replacement services. Accordingly, in this case, plaintiff can only
recover benefits for services to the extent that the services were allowable expenses
within the meaning of MCL 500.3107(1)(a) and incurred after May 31, 2004. It is to the
definition of “allowable expenses” that we now turn.
B. ALLOWABLE EXPENSES
MCL 500.3107(1)(a) defines “allowable expenses” as “all reasonable charges
incurred for reasonably necessary products, services and accommodations for an injured
person’s care, recovery, or rehabilitation.” We have recognized that the plain language of
this provision imposes four requirements that a PIP claimant must prove before
recovering benefits for allowable expenses: (1) the expense must be for an injured
person’s care, recovery, or rehabilitation, (2) the expense must be reasonably necessary,
(3) the expense must be incurred, and (4) the charge must be reasonable.34 We will
address these requirements seriatim as we apply them to the facts of this case.
34
See Griffith, 472 Mich. at 532 n 8.
14
1. SERVICES “FOR” AN INSURED’S CARE, RECOVERY, OR REHABILITATION
MCL 500.3107(1)(a) requires that allowable expenses must be “for an injured
person’s care, recovery, or rehabilitation.” As we explained in Griffith v State Farm
Mutual Automobile Insurance Co, “expenses for ‘recovery’ or ‘rehabilitation’ are costs
expended in order to bring an insured to a condition of health or ability sufficient to
resume his preinjury life,” while expenses for “care” “may not restore a person to his
preinjury state.”35 While the dictionary definition of “care” “can be broadly construed to
encompass anything that is reasonably necessary to the provision of a person’s protection
or charge,”36 because MCL 500.3107(1)(a) “specifically limits compensation to charges
for products or services that are reasonably necessary for an injured person’s care,
recovery, or rehabilitation[,] . . . [t]his context suggests that ‘care’ must be related to the
insured’s injuries.”37 In comparing the definition of “care” to the definitions of
“recovery” and “rehabilitation,” we concluded that
“[c]are” must have a meaning that is broader than “recovery” and
“rehabilitation” but is not so broad as to render those terms nugatory. . . .
“[R]ecovery” 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
35
Id. at 535.
36
Id. at 533.
37
Id. at 534 (quotation marks omitted).
15
because of the accident but that may not restore a person to his preinjury
state.[38]
We reaffirm here Griffith’s definition of “care” as it relates to the scope of allowable
expenses: although services for an insured’s care need not restore a person to his
preinjury state, the services must be related to the insured’s injuries to be considered
allowable expenses.
In analyzing this requirement as applied to the particular services claimed in this
case, we note that prior panels of the Court of Appeals examined the extent to which a
family member’s services can be considered allowable expenses under the no-fault act.
In Visconti v Detroit Automobile Inter-Insurance Exchange, the panel analogized no-fault
benefits to worker’s compensation benefits and ruled that “‘[o]rdinary household tasks’”
that a family member performs are not allowable expenses, but “‘[s]erving meals in bed
and bathing, dressing, and escorting a disabled person are not ordinary household
tasks’”39 and can therefore be considered allowable expenses pursuant to MCL 500.3107.
A subsequent Court of Appeals panel applied Visconti and allowed the plaintiff to
recover no-fault benefits when a family member was “required to serve his meals in bed,
bathe him, escort him to the doctor’s office, exercise him in conformity with his doctor’s
instructions, assist in formulating his diet, administer medication, and assist him with
speech and associational therapy.”40 The Court also held that, even though the family
38
Id. at 535.
39
Visconti, 90 Mich. App. at 481, quoting Kushay, 394 Mich. at 74.
40
Van Marter v American Fidelity Fire Ins Co, 114 Mich. App. 171, 180; 318 NW2d 679
(1982).
16
member who provided these services was not a licensed medical care provider, “[t]he
statute does not require that these services be supplied by ‘trained medical personnel’.”41
In other words, while the no-fault act specifies and limits what types of expenses are
compensable, it places no limitation on who may perform what is otherwise an allowable
expense.
The statutory language of MCL 500.3107 confirms the distinction between a
family member providing attendant care to an injured person—which is “for an injured
person’s care”42—and a family member providing replacement services to benefit the
entire household—which are “ordinary and necessary services” that replace services that
the injured person would have performed “for the benefit of himself or herself or of his or
her dependent.”43 Accordingly, we reiterate this Court’s recent holding in Johnson that
replacement services as described in MCL 500.3107(1)(c) are distinct from allowable
expenses under MCL 500.3107(1)(a).44 Allowable expenses cannot be for “ordinary and
necessary services” because ordinary and necessary services are not “for an injured
person’s care, recovery, or rehabilitation.”
In this case, defendant claims that a judgment of no cause of action should be
entered because Mrs. Douglas did not perform any compensable allowable expenses,
only replacement services, which are not compensable in this case because of the three-
41
Id.
42
MCL 500.3107(1)(a).
43
MCL 500.3107(1)(c).
44
Johnson, 492 Mich at ___; slip op at 5-6.
17
year time limit of MCL 500.3107(1)(c). We disagree with defendant’s claim and
conclude that defendant is not entitled to relief on this issue.
Defendant is correct that Mrs. Douglas’s testimony and attendant care forms
indicate that she provided many services that are properly considered replacement
services, including daily organization of family life; preparation of family meals; yard,
house, and car maintenance; and daily chores. These services are prototypical “ordinary
and necessary” services that every Michigan household must undertake.45 While
replacement services for the household might be necessitated by the injury if the injured
person otherwise would have performed them himself, they are not for his care and
therefore do not fall within the definition of allowable expenses. Nevertheless, the fact
that Mrs. Douglas performed some replacement services does not preclude recovery for
the allowable expenses that actually were incurred, including attendant care services.
The fact that her attendant care forms list certain replacement services is not dispositive
on this issue, especially given that other services listed on those forms can reasonably be
considered attendant care services, including traveling to and communicating with
plaintiff’s medical providers and managing plaintiff’s medication.
45
Plaintiff also argues that while some of Mrs. Douglas’s tasks might be considered
replacement services, there is therapeutic value in ensuring that plaintiff is involved with
these activities, although they require Mrs. Douglas’s supervision. However, the
testimony adduced at trial undermines this rationale because Mrs. Douglas explained that
during the week, when she spent time cooking, washing dishes, cleaning the house, and
caring for her children, plaintiff did “[v]ery little” to assist her in these chores, but instead
often watched television.
18
The circuit court ruled that Mrs. Douglas “is Plaintiff’s caretaker and basically
spends her free time making sure that Plaintiff is cared for, and does not harm himself as
he tried to do in a suicide attempt.” This factual finding is not clearly erroneous because
it is consistent with Mrs. Douglas’s testimony that she was “watching James” even while
she was performing household chores by herself. Furthermore, it suggests that the circuit
court adopted plaintiff’s argument that Mrs. Douglas’s supervision constituted attendant
care services.
The Court of Appeals rejected defendant’s claim that Mrs. Douglas only provided
replacement services and compared the claimed supervision with this state’s workers’
compensation caselaw that allows “on-call” supervision,46 even when the care provider is
pursuing other tasks while on call.47 We affirm the result of the Court of Appeals on this
issue and hold that defendant is not entitled to a verdict of no cause of action on the basis
of its claim that Mrs. Douglas only provided replacement services because there was
testimony given at trial that at least some of the services she said she had provided were
consistent with the requirement of MCL 500.3107(1)(a) that allowable expenses be for an
injured person’s care as necessitated by the injury sustained in the motor vehicle
accident.48 For instance, even if Mrs. Douglas’s claimed supervision of plaintiff does not
46
Morris v Detroit Bd of Ed, 243 Mich. App. 189, 197; 622 NW2d 66 (2000) (“[O]n-call
care is compensable under the [workers’ compensation] statute.”).
47
Brown v Eller Outdoor Advertising Co, 111 Mich. App. 538, 543; 314 NW2d 685
(1981) (“The fact that Mrs. Brown might use her ‘on call’ time to perform household
tasks does not alter the ‘nature of the service provided’ or the ‘need’ for the service.”).
48
See Griffith, 472 Mich. at 535.
19
restore plaintiff to his preinjury state, testimony given at trial indicates that arguably at
least some of this claimed supervision was for plaintiff’s care as necessitated by the
injury sustained in the motor vehicle accident and not for ordinary and necessary services
that every Michigan household must undertake. Accordingly, defendant is not entitled to
relief on the claim that none of Mrs. Douglas’s claimed services could be considered
attendant care services within the meaning of MCL 500.3107(1)(a).
2. REASONABLY NECESSARY EXPENSES
MCL 500.3107(1)(a) also requires allowable expenses to be “reasonably
necessary.” In Krohn v Home-Owners Insurance Co, this Court clarified that this
requirement “must be assessed by using an objective standard.”49 Defendant questions
the reasonable necessity of attendant care services for the period before November 7,
2006, because there was no medical prescription for attendant care services before that
date.
Before the circuit court’s ruling on defendant’s third motion for summary
disposition, plaintiff offered the affidavit of Dr. Rosenbaum, who explained that plaintiff
“is in need of [attendant] care during all waking hours” and that Mrs. Douglas had
provided that care “since [the time of] the motor vehicle accident.” The circuit court
based its denial of defendant’s motion in part on Dr. Rosenbaum’s affidavit. In
reviewing that decision, the Court of Appeals determined that “the affiant relied on the
statements of the parties to determine what activity plaintiff’s wife engaged in during the
subject period and subsequently evaluated those activities and found them to meet the
49
Krohn v Home-Owners Ins Co, 490 Mich. 145, 163; 802 NW2d 281 (2011).
20
definition of attendant care.”50 Thus, the panel held that the circuit court did not err by
concluding that there were questions of fact sufficient to defeat defendant’s motion for
partial summary disposition. We agree with the Court of Appeals that questions of fact
precluded summary disposition on this issue.
Moreover, we conclude that it was not clear error for the circuit court as fact-
finder to conclude that attendant care services were, in fact, reasonably necessary for the
period before November 7, 2006. There is a factual basis in the record to support the
circuit court’s conclusion: Dr. Rosenbaum testified at trial that, as early as 1997,
plaintiff’s doctors had recommended that plaintiff receive 24-hour supervision.51
Furthermore, defendant’s claims adjuster agreed with the statement of plaintiff’s counsel
that, if plaintiff needed attendant care services at the time of trial, “he would have needed
[those services] back when the lawsuit first began[.]” This evidence was sufficient for
the circuit court to conclude that because attendant care services were reasonably
necessary after November 7, 2006 (a point that defendant does not dispute), they were
50
Douglas, unpub op at 4.
51
Although the circuit court’s opinion following the trial referred to Dr. Rosenbaum’s
affidavit in its conclusion that attendant care services were reasonably necessary, during
trial the court had sustained defendant’s objection to the admission of that affidavit.
However, its reason for granting defendant’s objection was that the court had “heard [Dr.
Rosenbaum’s] live testimony.” Because that live testimony clearly supports the circuit
court’s factual finding, and because the circuit court specifically concluded that Dr.
Rosenbaum’s “opinion as to the reasonable attendant care needs of [p]laintiff is both
appropriate and convincing,” the circuit court’s error in referring to Dr. Rosenbaum’s
affidavit, rather than his live testimony, is harmless. See MCR 2.613(A) (“[A]n error in a
ruling or order . . . is not ground for granting a new trial, for setting aside a verdict, or for
vacating, modifying, or otherwise disturbing a judgment or order, unless refusal to take
this action appears to the court inconsistent with substantial justice.”).
21
also reasonably necessary before that date. As a result, defendant has not established that
the circuit court clearly erred by concluding that plaintiff proved this element of the
allowable expenses analysis.
3. INCURRED EXPENSES
MCL 500.3107(1)(a) also limits allowable expenses to “charges incurred.” That
is, even if a claimant can show that services were for his care and were reasonably
necessary, an insurer “is not obliged to pay any amount except upon submission of
evidence that services were actually rendered and of the actual cost expended.”52
Because an insurer’s liability
cannot be detached from the specific payments involved, or expenses
incurred, . . . [w]here a plaintiff is unable to show that a particular,
reasonable expense has been incurred for a reasonably necessary product
and service, there can be no finding of a breach of the insurer’s duty to pay
that expense, and thus no finding of liability with regard to that expense.[53]
This Court has defined “incur” as it appears in MCL 500.3107(1)(a) as “‘[t]o
become liable or subject to, [especially] because of one’s own actions.’”54 Similarly, a
“charge” is a “[p]ecuniary burden, cost” or “[a] price required or demanded for service
rendered or goods supplied.”55 Thus, the statutory requirement that “charges” be
52
Manley, 425 Mich. at 159 (emphasis added); see also Proudfoot v State Farm Mut Ins
Co, 469 Mich. 476, 484; 673 NW2d 739 (2003) (holding that “[b]ecause the expenses in
question were not yet ‘incurred,’ the Court of Appeals erred in ordering defendant to pay
the total amount to the trial court” for disbursal to plaintiff as expenses are incurred).
53
Nasser v Auto Club Ins Ass’n, 435 Mich. 33, 50; 457 NW2d 637 (1990).
54
Proudfoot, 469 Mich. at 484, quoting Webster’s II New College Dictionary (2001)
(alterations in original).
55
1 Shorter Oxford English Dictionary (6th ed), p 385.
22
“incurred” requires some degree of liability that exists as a result of the insured’s actually
having received the underlying goods or services. Put differently, because a charge is
something “required or demanded,” the caregiver must have an expectation that she be
compensated because there is no “charge[] incurred” when a good or service is provided
with no expectation of compensation from the insurer.56 Accordingly, this Court noted in
Burris v Allstate Insurance Co that caregivers must have “expected compensation for
their services.”57 Without the expectation of compensation, “the evidence fail[s] to
establish that the plaintiff ‘incurred’ attendant-care expenses.”58
56
Of course, a caregiver who provides services to a family member need not present a
formal bill to the family member or enter into a formal contract with that family member
in order to satisfy the requirement that the caregiver have an expectation of payment from
the insurer (although those arrangements will, of course, satisfy the evidentiary
requirements). However, even in the absence of a formal bill or contract, there must be
some evidence that the family member expected compensation for providing the services
and of the actual services rendered. In other words, there must be some basis for a fact-
finder to conclude that the caregiver had some expectation of compensation from the
insurer, even if the expectation of compensation was not the primary motivation for
providing the care. Contrary to the dissent’s suggestion, a family member’s
determination to provide care even in the absence of an insurer’s payment is not
inconsistent with expecting compensation from the insurer, but the expectation must
nevertheless be present for a charge to be incurred within the meaning of MCL
500.3107(1)(a). This expectation of compensation at the time the services were provided
simply applies the dictionary definitions of the statutory phrase “charges incurred.”
57
Burris v Allstate Ins Co, 480 Mich. 1081 (2008).
58
Id. The dissent reintroduces the Burris dissent’s claim that the interpretation of the
word “incur” in Proudfoot “was limited to the facts of that case, in which the plaintiff
sought advance payment for future expenses.” Post at 3, citing Burris, 480 Mich. at 1088
(WEAVER, J., dissenting). However, the Burris concurrence correctly explained that
“[t]his factual distinction . . . is irrelevant to the Proudfoot Court’s discussion of the
meaning of the term ‘incur.’” Burris, 480 Mich. at 1084 (CORRIGAN, J., concurring).
Proudfoot adopted the dictionary definition of the word “incur,” which requires “a legal
or equitable obligation to pay.” Id. Because “there is no basis to treat family members
23
The fact that charges have been incurred can be shown “by various means,”
including “a contract for products and services” or “a paid bill.”59 The requirement of
proof is not extinguished simply because a family member, rather than a commercial
health care provider, acts as a claimant’s caregiver. Indeed, MCL 500.3107(1)(a) does
not distinguish a “charge[] incurred” when a family member provides care from one
incurred when an unrelated medical professional provides care.60 As a result, there is
only one evidentiary standard to determine whether expenses were incurred regardless of
who provided the underlying services. Any insured who incurs charges for services must
present proof of those charges in order to establish, by a preponderance of evidence, that
he is entitled to PIP benefits.61
differently than hired attendant-care-service workers . . . , the insured’s family members
and friends, just like any other provider, must perform the services with a reasonable
expectation of payment.” Id. at 1085. For these reasons, we reject the dissent’s
characterization of Proudfoot.
59
Proudfoot, 469 Mich. at 484 n 4.
60
Because MCL 500.3107(1)(a) does not distinguish “charges incurred” for a family
member’s services from “charges incurred” for a professional healthcare provider’s
services, it is the dissent’s position that lacks support in the statutory language. Put
simply, “charges” must be “incurred” in order to be compensable under the no-fault act.
It is this statutory language that we must consider as the expression of legislative intent
because “a court may read nothing into an unambiguous statute that is not within the
manifest intent of the Legislature as derived from the words of the statute itself.” Roberts
v Mecosta Co Gen Hosp, 466 Mich. 57, 63; 642 NW2d 663 (2002).
61
See Advocacy Org for Patients & Providers v Auto Club Ins Ass’n, 257 Mich. App. 365,
380; 670 NW2d 569 (2003) (noting the preponderance of the evidence standard for proof
that an allowable expense is reasonable and necessary), aff’d 472 Mich. 91 (2005).
24
This evidentiary requirement is most easily satisfied when an insured or a
caregiver submits itemized statements, bills, contracts, or logs listing the nature of
services provided with sufficient detail for the insurer to determine whether they are
compensable.62 Indeed, the best way of proving that a caregiver actually “expected
compensation for [her] services” at the time the services were rendered63 is for the
caregiver to document the incurred charges contemporaneously with providing them—
whether in a formal bill or in another memorialized statement that logs with specificity
the nature and amount of services rendered—and submit that documentation to the
insurer within a reasonable amount of time after the services were rendered. While no
statutory provision requires that this method be used to establish entitlement to allowable
expenses—a caregiver’s testimony can allow a fact-finder to conclude that expenses have
been incurred—a claimant’s failure to request reimbursement for allowable expenses in a
timely fashion runs the risk that the one-year-back rule will limit the claimant’s
entitlement to benefits, as occurred here when plaintiff commenced a lawsuit to recover
allowable expenses that were alleged to have been incurred more than one year earlier.64
62
In Proudfoot, we reiterated that payments for future services and products are not due
until the expenses are actually incurred. For instance, we explained that while “[a] trial
court may enter ‘a declaratory judgment determining that an expense is both necessary
and allowable and the amount that will be allowed[,] . . . [s]uch a declaration does not
oblige a no-fault insurer to pay for an expense until it is actually incurred.’” Proudfoot,
469 Mich. at 484, quoting Manley, 425 Mich. at 157.
63
Burris, 480 Mich. at 1081.
64
As noted previously, it would seem to be inherent in the notion of expectation of
compensation that there is some requirement for the caregiver to give notice to the insurer
that payment is being sought for particular compensable services. However, MCL
500.3107(1)(a) does not require a claim for allowable expenses to occur within any
25
Moreover, once a claimant seeks payment from the insurer for providing ongoing
services, the insurer can request regular statements logging the nature and amount of
those services to ensure that the claimed services are compensable.
The problem of a caregiver’s failure to provide contemporaneous documentary
evidence of allowable expenses is aptly illustrated in this case, in which Mrs. Douglas
submitted documents constructed in one day as proof of services rendered over the course
of approximately three years. The lack of contemporaneous documentation implicates
her credibility regarding whether the services were actually rendered in the manner
documented.65 Moreover, this failure to provide contemporaneous documentation may
also be relevant to the fact-finder’s determination whether Mrs. Douglas actually
expected payment for providing those services. In this case, the circuit court failed to
make a finding regarding whether the charges were actually incurred, including whether
Mrs. Douglas expected compensation or reimbursement at the time she provided the
services. Nevertheless, the circuit court awarded plaintiff attendant care benefits for 67
hours a week for the period between May 31, 2004, and November 1, 2007, and 40 hours
a week for the period between November 1, 2007, and November 18, 2009. The Court of
particular time. Nevertheless, the one-year-back rule may preclude recovery for a
claimant who sits on his or her entitlement to benefits without doing anything to attempt
recovery (including commencing a lawsuit). Thus, MCL 500.3145(1) states that a
claimant “may not recover benefits for any portion of the loss incurred more than 1 year
before the date on which the action was commenced.”
65
Contrary to the dissent’s suggestion, this observation does not in any way invade the
province of the fact-finder, who remains in the best position to weigh the credibility of all
the evidence that a claimant presents to support a claim of entitlement to benefits.
26
Appeals remanded this case to the circuit court and allowed the circuit court to “take
additional testimony, if necessary, and amend its findings or render new findings, and
amend the judgment accordingly.”66 The panel identified three problems with the circuit
court’s award of attendant care benefits: the circuit court “clearly erred in awarding
attendant care benefits to plaintiff without requiring sufficient documentation to support
the daily or weekly hours underlying the award”;67 it erred by failing to consider
“whether [Mrs. Douglas] reasonably expected compensation at the time of
performance”;68 and it erred by failing to account for payments made to Dr. Rosenbaum’s
agency, TheraSupport, which employed Mrs. Douglas as plaintiff’s attendant care
provider.69
We underscore the importance of the proofs necessary to establish entitlement to
benefits. The circuit court issued a judgment in favor of plaintiff without finding that the
expenses were actually incurred given that its determination of the number of hours to
award plaintiff had no discernible basis in the evidence presented at trial and did not
examine whether Mrs. Douglas had the expectation of payment for her services. While it
awarded plaintiff benefits for 40 hours a week of attendant care services for the period
beginning November 1, 2007, in accord with Dr. Rosenbaum’s prescription, there is no
66
Douglas, unpub op at 7.
67
Id.
68
Id.
69
Id. Plaintiff did not cross-appeal the Court of Appeals’ determination that the circuit
court clearly erred by awarding PIP benefits for allowable expenses without sufficient
proof to support the underlying award.
27
basis for its findings that Mrs. Douglas actually provided 40 hours of care each week
during that period. Indeed, because she was unavailable to provide services during her
working hours, there is no basis for compensating her for any hours that she spent
working outside the home.70 Similarly, the award for the period before November 1,
2007, was made with no discernible basis in the record. Therefore, the Court of Appeals
properly recognized that that award could not be sustained and appropriately remanded
this case for findings of fact based on the evidence.71
Although the Court of Appeals established the scope of the determination of
remand to the period after November 7, 2006, we direct the circuit court to make findings
of fact as they pertain to the entire period of the lawsuit. The Court of Appeals did not
70
The court explained, for instance, that “Katherine is the person to [provide care], but
she cannot because she is employed full-time outside of the home and because
[d]efendant will not pay the appropriate care rate for any hours of her care for [p]laintiff.”
71
Defendant claims that the Court of Appeals’ decision to remand was improper because
plaintiff already had an opportunity to present proofs regarding the attendant care
services that Mrs. Douglas provided. Instead, defendant claims that since the Court of
Appeals’ ruling that the circuit court did not “requir[e] sufficient documentation to
support the daily or weekly hours underlying the award” is uncontested, a verdict of no
cause of action should be entered. Douglas, unpub op at 7. We disagree. The Court of
Appeals acknowledged that “the trial evidence in this case did not reflect that Katherine
maintained records of her claimed attendant care” and that, “[a]t most, there was
evidence that Katherine completed ‘affidavit of attendant care services’ forms on June
25, 2007, for certain past months in an effort to reconstruct her time.” Id. at 6-7. The
holding of the Court of Appeals emphasized the fact that the circuit court’s findings were
legally insufficient, and the Court of Appeals’ decision, while highly critical of some of
the proofs provided, did not indicate that the circuit court could not sustain any award for
attendant care services. Accordingly, we affirm the Court of Appeals’ decision to
remand for findings of fact regarding whether, and to what extent, allowable expenses
were actually incurred in this case, and we do not disturb the Court of Appeals’ ruling
that the circuit court may take additional testimony on remand. See MCR 7.216(A)(5).
28
explain how it decided that only the period after November 7, 2006, should be considered
on remand, and more important, there is nothing in the Court of Appeals’ opinion or in
the circuit court record that indicates that the circuit court’s award for the period between
May 31, 2004, and November 7, 2006, falls outside the ruling of the Court of Appeals
that the circuit court “award[ed] attendant care benefits to plaintiff without requiring
sufficient documentation to support the daily or weekly hours underlying the award.”72
Accordingly, we vacate the entire award of attendant care benefits and clarify that on
remand the circuit court must examine the entire period to determine whether plaintiff
submitted sufficient proofs that allowable expenses were incurred but not reimbursed.73
4. REASONABLE CHARGE FOR EXPENSES
Once a fact-finder has concluded that a plaintiff incurred allowable expenses in
receiving care from a family member, the fact-finder must determine whether the charge
is “reasonable.”74 In this case, the circuit court awarded attendant care benefits to
plaintiff at a $40 hourly rate. Although the circuit court did not explicitly state the basis
72
Douglas, unpub op at 7. The only discernable significance of that date in the record is
that November 7, 2006, represents the date plaintiff began treatment with Dr.
Rosenbaum. While we considered the significance of this date in determining whether
services were “reasonably necessary” in the absence of a specific prescription for
attendant care, this date has no independent significance in determining whether services
were actually incurred.
73
We also note the observation of the Court of Appeals that the circuit court failed to
consider the extent to which defendant had already paid benefits for the attendant care
services that Mrs. Douglas performed while serving as Dr. Rosenbaum’s employee. Any
award issued on remand must not include services that have already been reimbursed.
74
MCL 500.3107(1)(a).
29
of its hourly rate, the Court of Appeals identified two pieces of evidence adduced at trial
as justification for the circuit court’s ruling: Dr. Rosenbaum’s testimony that his
company charges $40 an hour for attendant care and the testimony of defendant’s
adjuster regarding the rates that commercial agencies charge for attendant care services.
We conclude that this testimony regarding the rates that commercial agencies charge is
based on factors too attenuated from those underlying the rate charged for an individual’s
provision of attendant care services to be adopted as an individual’s reasonable charge for
attendant care services. This is a particularly erroneous circuit court finding given that
Mrs. Douglas was actually paid $10 an hour by Dr. Rosenbaum’s company for providing
attendant care services to her husband. Why the circuit court believed that the
commercial rate Dr. Rosenbaum charged was more relevant than what he paid Mrs.
Douglas is unstated and unjustified on this record. Accordingly, the circuit court’s $40
hourly rate is clearly erroneous.
Although this Court has not ruled on the issue, the Court of Appeals in Bonkowski
v Allstate Insurance Co stated that a commercial agency’s rate for attendant care services
is irrelevant to the fact-finder’s determination of what constitutes a reasonable rate for a
family member’s provision of those services. Then Judge ZAHRA, writing for the court,
noted that “[i]n determining reasonable compensation for an unlicensed person who
provides health care services, a fact-finder may consider the compensation paid to
licensed health care professionals who provide similar services.”75 The opinion went on
75
Bonkowski v Allstate Ins Co, 281 Mich. App. 154, 164; 761 NW2d 784 (2008), citing
Van Marter, 114 Mich. App. at 180-181.
30
to state that the fact-finder’s “focus should be on the compensation provided to the person
providing the services, not the charge associated by an agency that hires health care
professionals to provide such services.”76
The compensation actually paid to caregivers who provide similar services is
necessarily relevant to the fact-finder’s determination of a reasonable charge for a family
member’s provision of these services because it helps the fact-finder to determine what
the caregivers could receive on the open market. While a commercial agency’s fee
incorporates this relevant piece of data—the compensation it pays to its caregivers—it
also incorporates additional costs into its charge that family members who provide
services do not incur, particularly the overhead costs inherent in the agency’s provision of
services. Thus, the total agency rate is too attenuated from the particular component of
the agency rate that the fact-finder must determine in the instant case—“the
compensation provided to the person providing the services . . . .”77
While we do not adopt the reasoning in Bonkowski in its entirety, we agree with
Bonkowski that the fact-finder’s focus must be on an individual’s compensation.
Accordingly, we hold that a fact-finder may base the hourly rate for a family member’s
provision of attendant care services on what health care agencies compensate their
employees, but what health care agencies charge their patients is too attenuated from the
appropriate hourly rate for a family member’s services to be controlling.78 Rather, the
76
Bonkowski, 281 Mich. App. at 165.
77
Id.
78
Contrary to the dissent’s suggestion, we believe that in appropriate circumstances the
fact-finder should consider benefits that a full-time attendant care services employee
31
fact-finder must determine what is a reasonable charge for an individual’s provision of
services, not an agency’s. While an agency rate might bear some relation to an
individual’s rate, it cannot be uncritically adopted as an individual’s rate in the absence of
specific circumstances that warrant such a rate—for instance, when the individual
caregiver has overhead and administrative costs similar to those of a commercial
agency.79
This case does not reflect such circumstances. Rather, there is undisputed
testimony that Mrs. Douglas actually received $10 an hour in providing attendant care
services to plaintiff during the time she served as Dr. Rosenbaum’s employee. Because
this figure is the rate she actually received for providing attendant care services, it is
highly probative of what constitutes a reasonable charge for her services. Therefore, we
agree with defendant that the circuit court clearly erred by ruling that plaintiff is entitled
to a $40 hourly rate for Mrs. Douglas’s attendant care services. The only evidentiary
basis for that figure is the rate that commercial agencies charge for attendant care
services, and that rate is far too attenuated from an individual caregiver’s actual rate of
would receive as part of her total compensation package. Indeed, Bonkowski’s use of the
term “compensation,” rather than “wage,” further supports this conclusion. Bonkowski,
281 Mich. App. at 165.
79
While this case is not about the admissibility of the agency rates, which may in fact be
helpful to the fact-finder as a point of comparison in determining a reasonable charge for
an individual’s provision of attendant care services, in this instance, we conclude that the
fact-finder clearly erred by adopting that rate as the appropriate hourly rate for Mrs.
Douglas’s provision of attendant care services.
32
compensation to serve as the sole basis for the award of benefits in these circumstances.80
Therefore, if the circuit court concludes on remand that plaintiff has proved his
entitlement to benefits for Mrs. Douglas’s services, the circuit court, as fact-finder, must
establish a new hourly rate based on an individual caregiver’s hourly rate.
IV. CONCLUSION
Today, we reaffirm that MCL 500.3107(1)(a) imposes four requirements that an
insured must prove before recovering PIP benefits for allowable expenses: (1) the
expense must be for an injured person’s care, recovery, or rehabilitation, (2) the expense
must be reasonably necessary, (3) the expense must be incurred, and (4) the charge must
be reasonable.81 Allowable expenses are distinguished from replacement services in that
allowable expenses are for the insured’s care as it “relate[s] to the insured’s injuries.”82
Defendant is not entitled to relief on its claim that Mrs. Douglas provided only
replacement services, not allowable expenses, because the circuit court did not clearly err
by ruling that Mrs. Douglas is plaintiff’s caretaker. Defendant is also not entitled to relief
on its claim that plaintiff’s attendant care was not reasonably necessary in the absence of
a specific prescription for attendant care services because the testimony of Dr.
80
The dissent’s claim that “the trial court heard testimony from which it could conclude
that Mrs. Douglas would need to quit her job outside the home in order to provide
plaintiff with the attendant care his doctor prescribed” is simply irrelevant to determining
the reasonable charge for attendant care services that were provided while Mrs. Douglas
was employed outside the home. Post at 15-16.
81
See Griffith, 472 Mich. at 532 n 8.
82
Id. at 534.
33
Rosenbaum and defendant’s claims adjuster provided a factual basis for the reasonable
necessity of those services at all times relevant in this case.
We affirm the Court of Appeals’ decision to remand this case for further
proceedings, but we hold that the consideration on remand must encompass the entire
period for which charges are claimed. We also emphasize the necessity that the circuit
court, as the fact-finder, must base its ruling on proofs that show the extent to which Mrs.
Douglas actually provided compensable attendant care services. Therefore, on remand,
the circuit court must apply the standard of proof outlined in this opinion to determine
whether plaintiff has proved that “charges” were “incurred” for his care. In particular,
the circuit court must determine the extent to which plaintiff has proved the number of
hours that Mrs. Douglas actually provided attendant care services and whether she
actually expected compensation for those services. Finally, we reverse the Court of
Appeals’ decision regarding the circuit court’s assessment of an hourly rate of $40 and
conclude that that hourly rate is clearly erroneous because it is unrelated to an individual
caregiver’s hourly rate. While we do not establish an hourly rate in this case, the circuit
court must establish a rate that is consistent with an individual caregiver’s rate for
services, rather than a commercial agency’s rate.
Affirmed in part, reversed in part, award of attendant care benefits vacated and
case remanded for further proceedings consistent with this opinion.
Robert P. Young, Jr.
Stephen J. Markman
Mary Beth Kelly
Brian K. Zahra
34
STATE OF MICHIGAN
SUPREME COURT
JAMES DOUGLAS,
Plaintiff-Appellee,
v No. 143503
ALLSTATE INSURANCE COMPANY,
Defendant-Appellant.
CAVANAGH, J. (dissenting).
I dissent from the majority’s erroneous interpretation of the phrase “charges
incurred” in MCL 500.3107(1)(a) and the resulting creation of evidentiary requirements
that lack any basis in the statutory language. Likewise, I dissent from the majority’s
misguided limitation on the scope of evidence that may be considered when determining
whether a charge is “reasonable” under MCL 500.3107(1)(a).1
Although the rules of statutory interpretation are well established, a brief review is
warranted, given the majority’s failure to adhere to these principles. This Court’s
primary goal is to “discern and give effect to the intent of the Legislature.” Sun Valley
Foods Co v Ward, 460 Mich. 230, 236; 596 NW2d 119 (1999). “The words of a statute
1
Additionally, I continue to believe that the interpretation of MCL 500.3105 and MCL
500.3107 from the majority opinion in Griffith v State Farm Mut Auto Ins Co, 472 Mich.
521; 697 NW2d 895 (2005), which the majority applies in this case, is incorrect for the
reasons provided in Justice MARILYN KELLY’s Griffith dissent. See id. at 542-554
(MARILYN KELLY, J., dissenting).
provide the most reliable evidence of its intent . . . .” Id. (quotation marks and citation
omitted). When the language of a statute is unambiguous, “the Legislature must have
intended the meaning clearly expressed, and the statute must be enforced as written.” Id.
Accordingly, “[n]o further judicial construction is required or permitted.” Id.
I. “CHARGES INCURRED”
Under MCL 500.3107(1)(a), personal protection insurance (PIP) benefits include
“allowable expenses.” The statute goes on to explain that an “allowable expense”
consists of, among other things, “charges incurred” for certain qualifying products or
services. From the words “charges incurred,” the majority mysteriously divines new
evidentiary requirements that an insured must satisfy in order to obtain PIP benefits.
Specifically, the majority determines that, in order to show that charges were incurred, an
insured must establish (1) that the caregiver expected compensation for the services
rendered, see ante at 23, and (2) that the caregiver’s expectation of payment arose “at the
time [the caregiver] provided the services,” see ante at 26.2 Neither of the majority’s
newly created requirements are supported by the statutory language at issue.
A. CAREGIVER’S EXPECTATION OF COMPENSATION
I disagree with the majority’s conclusion that MCL 500.3107(1)(a) requires a
showing that the caregiver expected compensation. Rather, I continue to believe that the
caregiver’s expectation of payment is irrelevant because the obligation to pay “charges
2
Included within the majority’s conclusion that a caregiver must expect payment is an
additional preference that documentation of the charges be provided in a “memorialized
statement” because the majority considers such documentation to be the “best way of
proving” entitlement to PIP benefits. Ante at 25. For the reasons discussed in part I(A), I
disagree.
2
incurred” under MCL 500.3107(1)(a) lies with the insurer rather than the insured. Burris
v Allstate Ins Co, 480 Mich. 1081, 1088-1089 (2008) (WEAVER, J., dissenting). I also
disagree with the majority’s reliance on the definition of “incur” that was adopted in
Proudfoot v State Farm Mut Ins Co, 469 Mich. 476; 673 NW2d 739 (2003), because, as
Justice WEAVER explained in her Burris dissent, Proudfoot’s definition of “incur” was
limited to the facts of that case, in which the plaintiff sought advance payment for future
expenses. Burris, 480 Mich. at 1088 (WEAVER, J., dissenting). Accordingly, in
Proudfoot, no one had incurred an expense because no service had been provided, and an
insurer “is not obligated to pay any amount except upon submission of evidence that
services were actually rendered . . . .” Manley v Detroit Auto Inter-Ins Exch, 425 Mich.
140, 159; 388 NW2d 216 (1986). In this case, however, plaintiff seeks benefits for past
expenses resulting from services that have already been provided. Accordingly, as long
as the services were actually rendered and reasonably necessary and the amount of the
charges was reasonable, defendant, as the insurer, has incurred the charges because of its
statutory obligation to provide PIP benefits under MCL 500.3107(1). Unlike the
majority’s interpretation, Justice WEAVER’s approach in Burris is consistent with the
Legislature’s intent that the no-fault act be construed liberally in favor of the insured.
Turner v Auto Club Ins Ass’n, 448 Mich. 22, 28; 528 NW2d 681 (1995).
In addition, I disagree with the majority’s effort to further hamstring insureds’
ability to recover PIP benefits to which they are entitled by imposing burdensome and
statutorily unsupported preferences for specific documentary evidence. See ante at 25
(stating that the “best way of proving” that a caregiver expected payment is a “formal
3
bill” or “memorialized statement”).3 To begin with, the majority’s determination that
certain forms of evidence are always more persuasive than others is faulty because it is
premised on the majority’s conclusion that the caregiver must expect compensation.
However, even accepting arguendo that compensation must be expected in order for a
charge to be incurred for purposes of MCL 500.3107(1)(a), nothing in the statutory
language supports the majority’s gradation of the persuasiveness of various forms of
evidence or the majority’s resulting preference for a formal bill or memorialized
statement. Particularly telling is the majority’s failure to cite any authority in support of
this preference for certain types of evidence. Indeed, the majority flatly admits that “no
statutory provision requires” what the majority considers to be the “best” evidence. Ante
at 25. Accordingly, although I agree that “itemized statements, bills, contracts, or logs
listing the nature of services provided,” ante at 25, would be more than enough to
establish entitlement to PIP benefits, simple testimony or any other form of admissible
evidence should also be sufficient.4 See, generally, MRE 402 (providing that “[a]ll
3
As the majority opinion states, a formal bill or memorialized statement is not the only
method sufficient to show that an insured is entitled to PIP benefits. See ante at 25
(acknowledging that “a caregiver’s testimony can allow a fact-finder to conclude that
expenses have been incurred”). Accordingly, despite the majority’s unsupported
conclusion that documentary evidence is “best,” any form of admissible evidence could
be equally sufficient to meet an insured’s burden to prove that services were actually
rendered.
4
The majority apparently interprets my dissent as asserting that when a family member
provides care, the insured need not provide any evidence that attendant care was actually
provided. See ante at 24 n 60. This is not an accurate characterization of my dissent,
however, because I agree that an insurer “is not obligated to pay any amount except upon
submission of evidence that services were actually rendered . . . .” Manley, 425 Mich. at
159. Rather, as I previously stated, I disagree with the majority’s unsupported preference
4
relevant evidence is admissible . . .”) and MRE 401 (defining “relevant evidence” as
“evidence having any tendency to make the existence of any fact that is of consequence
to the determination of the action more probable or less probable than it would be without
the evidence”).
Although the majority may be correct that certain types of evidence may be more
persuasive under the specific circumstances of a particular case, by discussing the
persuasiveness of various forms of evidence in absolutes, the majority invades the
province of the fact-finder. See People v Wolfe, 440 Mich. 508, 514; 489 NW2d 748
(1992) (“[A]ppellate courts are not juries, and . . . they must not interfere with the jury’s
role[.]”). Indeed, this error in the majority’s approach is exposed in its discussion of the
specific facts of this case, particularly the majority’s statement that failure to provide
certain documents “implicates [the caregiver’s] credibility . . . .” Ante at 26. However,
contrary to the majority’s willingness to weigh in on witness credibility, this Court has
frequently stated that appellate courts
must remember that the jury is the sole judge of the facts. It is the function
of the jury alone to listen to testimony, weigh the evidence and decide the
questions of fact. . . . Juries, not appellate courts, see and hear witnesses
and are in a much better position to decide the weight and credibility to be
given to their testimony. [Wolfe, 440 Mich. at 514-515 (quotation marks
and citation omitted).]
In summary, I disagree with the majority’s conclusion that an insured must prove
that a family caregiver expected compensation in order to prove that charges were
for specific documentary evidence because, in my view, any form of admissible evidence
could be equally sufficient to meet an insured’s burden to prove that services were
actually rendered.
5
incurred for purposes of MCL 500.3107(1)(a). In my view, the insurer incurs the charge
by way of its statutory obligation to provide PIP benefits under MCL 500.3107(1)(a)
when the insured proves that the services were reasonably necessary and actually
rendered and that the amount of the charge is reasonable. Furthermore, accepting
arguendo the majority’s declaration that an insured must prove that his or her caregiver
expected compensation, I disagree with the majority’s implication that certain forms of
evidence will always be the “best way” to establish entitlement to PIP benefits. Not only
does the majority admit that there is no statutory support for its conclusion, see ante at
25, the idea that an appellate court can determine the best evidence in a case has been
consistently rejected as an improper invasion of the fact-finder’s role as “the sole judge of
the facts.” Wolfe, 440 Mich. at 514 (quotation marks and citation omitted; emphasis
added).
B. TIMING OF EXPECTATION AND REQUEST FOR PAYMENT
The majority creates another unsupported and previously nonexistent requirement
when it states that a caregiver must expect compensation “at the time the services were
rendered.” Ante at 25; see, also, ante at 26 (stating that the “circuit court failed to make a
finding regarding . . . whether Mrs. Douglas expected compensation or reimbursement at
the time she provided the services”) (emphasis added). Again, the majority fails to
identify any support for this new timing requirement in either the caselaw or the statutory
language of MCL 500.3107(1)(a). The reason for the majority’s failure to do so is
obvious: there simply is no support for the majority’s judicially created requirement.
This is particularly notable given that members of the majority have often railed against
extratextual requirements. See, e.g., People v Schaefer, 473 Mich. 418, 432; 703 NW2d
6
774 (2005).5 Indeed, in People v Wager, 460 Mich. 118, 123-124; 594 NW2d 487 (1999),
the majority opinion expressly overruled a previous Court of Appeals opinion that had
inserted a “reasonable time” requirement into the statute at issue in that case, stating
“[N]o sound reason exists to engraft the ‘reasonable time’ element onto the clear
language of the statute.” Accordingly, I am at a loss about why the majority believes it is
appropriate to engraft a time requirement onto MCL 500.3107(1)(a) despite the lack of
any such requirement in the actual language of the statute.6
Although the lack of support in the statutory language is reason enough to reject
the majority’s analysis, the practical implications of the majority’s burdensome new
requirement is also worth consideration. Specifically, by requiring that a family
5
See, also, Johnson v Recca, 492 Mich ___, ___; ___ NW2d ___; slip op, pp 25-26
(Docket No. 143088, issued July 30, 2012), stating that
it must be assumed that the language and organization of the statute better
embody the “obvious intent” of the Legislature than does some broad
characterization surmised or divined by judges. . . . It is not for this Court
to “enhance” or to “improve upon” the work of the lawmakers where we
believe this can be done, for it will always be easier for 7 judges on this
Court to reach agreement on the merits of a law than 110 state
representatives or 38 state senators representing highly diverse and
disparate constituencies. Therefore, this Court must . . . rest its analysis on
the language and organization of the statute.
6
The majority also expresses its belief that an insured should submit evidence “to the
insurer within a reasonable amount of time after the services were rendered,” ante at 25
(emphasis added). See, also, ante at 25 (discussing the “risk” of “fail[ing] to request
reimbursement for allowable expenses in a timely fashion . . . .”) (emphasis added).
However, the majority admits that “MCL 500.3107(1)(a) does not require a claim for
allowable expenses to occur within any particular time.” Ante at 25 n 64. Thus, it is
unclear to me why the majority chooses to create potential confusion by injecting the
statutorily unsupported phrases “within a reasonable amount of time” and “in a timely
fashion” into its application of MCL 500.3107(1)(a).
7
caregiver expect compensation, not only does the majority punish a family member who
nobly acts to provide care to a loved one in a time of need, the majority also rewards the
insurer, rather than the caregiver, for this act of kindness by allowing the insurer to avoid
providing PIP benefits that it would otherwise be required to provide. This result is not
only ethically troubling, but it also turns on its head the Legislature’s intent that the no-
fault act be construed liberally in favor of the insured. Turner, 448 Mich. at 28.
Additionally, by requiring that the caregiver expect compensation at the time the
services are provided, the majority fails to recognize the reality of situations in which
attendant-care services are needed. Specifically, claims for PIP benefits arise out of
automobile-related accidents, which were typically sudden, unexpected events.
Accordingly, family members may unexpectedly be called upon to immediately provide
care to a loved one. Given the nature of most families, I believe that in the vast majority
of situations, the family member would be willing to provide the care, at least initially,
without any contemporaneous expectation of compensation from anyone. Thus, I believe
that it may be fairly common that the caregiver is initially not even aware of the
possibility of compensation and the process that must be completed in order to recover
that compensation. Indeed, not every citizen is an attorney well versed in the intricacies
of the no-fault act. As a result, at the time the services were provided, the caregiver
would have no expectation that anyone will provide compensation. Yet under the
majority’s analysis, if a family member did not expect compensation at the time the
services were provided, despite the sudden and chaotic circumstances of the situation, he
or she is not entitled to retroactively expect compensation for services provided in the
past after discovering that compensation is a realistic possibility. This approach rewards
8
the insurer by allowing it to avoid providing PIP benefits that it would otherwise be
obligated to provide under MCL 500.3107(1)(a) merely because the caregiver does not
immediately demand compensation.7
II. DETERMINING WHAT IS A “REASONABLE CHARGE”
Under MCL 500.3107(1)(a), PIP benefits are payable for “allowable expenses” as
long as the charge is “reasonable.”8 In this case, the trial court, acting as the fact-finder
in a bench trial, heard testimony from two sources regarding the rate typically charged by
7
The majority dismisses as unfounded my concerns regarding the practicalities of the
majority’s new requirements, stating that “[c]ontrary to the dissent’s suggestion, a family
member’s determination to provide care even in the absence of an insurer’s payment is
not inconsistent with expecting compensation from the insurer, but the expectation must
nevertheless be present for a charge to be incurred within the meaning of MCL
500.3107(1)(a).” Ante at 23 n 56. However, this statement only addresses the source of
the compensation, not the timing of when the caregiver developed the expectation of
payment, regardless of the source. Under the circumstances that I discuss, the family
caregiver does not expect compensation “at the time the services were rendered,” ante at
25, which is an express requirement of the majority’s erroneous interpretation of MCL
500.3107(1)(a). The majority claims that its requirement that compensation be expected
at the time the services were provided “simply applies the dictionary definitions of the
statutory phrase ‘charges incurred.’” Ante at 23 n 56. However, even accepting the
dictionary definitions that the majority selects, there is clearly no time component to
those definitions. See ante at 22 (defining “incur” as “[t]o become liable or subject to,
[especially] because of one’s own actions,” and “charge” as a “[p]ecuniary burden, cost”
or “[a] price required or demanded for service rendered or goods supplied”) (quotation
marks and citations omitted). Indeed, applying these definitions, it is clear that a person
could “become liable” for “a price demanded for services” after the services are rendered.
8
The majority incorrectly states that “the fact-finder must determine what is a reasonable
charge for an individual’s provision of services . . . .” Ante at 31-32. Rather, the plain
language of MCL 500.3107(1)(a) simply requires that the charge be “reasonable.”
Accordingly, although what an individual on the open market may be able to obtain as
compensation is relevant, it is but one factor in a multifactor analysis to determine what is
a “reasonable charge” under the circumstances of a particular case.
9
an agency to provide the care that Katherine Douglas provided. Additionally, the trial
court heard testimony that while Dr. Thomas Rosenbaum’s company employed Mrs.
Douglas, she was paid at a rate of $10 an hour. Furthermore, the trial court heard
testimony that Mrs. Douglas was unable to provide the hours of attendant care that
plaintiff’s doctor prescribed because she worked outside the home. After considering
that testimony, the trial court awarded plaintiff PIP benefits at the rate of $40 an hour. In
my view, agency rates are relevant to determining the proper rate of compensation for
PIP benefits, and the trial court in this case properly considered the agency rates along
with the other evidence submitted by the parties. Accordingly, I disagree with the
majority that the trial court clearly erred in this case, and I would affirm the Court of
Appeals on this issue.
Although the majority concludes that agency rates are both relevant and
admissible in determining a “reasonable charge” under MCL 500.3107(1)(a), see ante at
32 n 79 (stating that “this case is not about the admissibility of the agency rates” because
agency rates “may in fact be helpful to the fact-finder as a point of comparison in
determining a reasonable charge for an individual’s provision of attendant care
services”); and ante at 32 (stating that “an agency rate might bear some relation to an
individual’s rate”), the majority nevertheless relies exclusively on the Court of Appeals’
opinion in Bonkowski v Allstate Ins Co, 281 Mich. App. 154, 165; 761 NW2d 784 (2008),
which expressly stated that agency rates are “not relevant.” I disagree with the majority’s
reliance on Bonkowski for several reasons.
To begin with, Bonkowski readily admitted that its entire discussion of the rate of
compensation was dictum, stating that issue was not “squarely before” the Court. Id. at
10
164. Moreover, without justification, Bonkowski admittedly ignored caselaw that found
agency rates relevant to determining the proper rate of compensation for a family
member’s provision of care. Id. (acknowledging that the Court of Appeals had
“previously embraced the notion that ‘comparison to rates charged by institutions
provides a valid method for determining whether the amount of an expense was
reasonable and for placing a value on comparable services performed [by family
members]’”), quoting Manley v Detroit Auto Inter-Ins Exch, 127 Mich. App. 444, 455; 339
NW2d 205 (1983) (alteration in original). Further, Bonkowski cited no authority in
support of its preferred approach to determining the proper rate of compensation for
attendant care provided by unlicensed family members.
Most importantly, however, Bonkowski is poorly reasoned and, as a result,
unpersuasive. Particularly unpersuasive is the notion that only the hourly rate paid to an
attendant-care-services provider by an agency is relevant. Indeed, even the majority
rejects this perspective. See ante at 32 n 79 (acknowledging that agency rates “may in
fact be helpful to the fact-finder”).9 Accordingly, the majority is unwise to rely on
Bonkowski’s analysis of this issue. Rather, I would adopt the reasoning from Judge
9
The majority, however, also risks creating confusion when it states that the amount Mrs.
Douglas was paid while employed by Dr. Rosenbaum “is highly probative of what
constitutes a reasonable charge for her services” because “this figure is the rate she
actually received for providing attendant care services . . . .” Ante at 32. This statement
could be misinterpreted and lead lower courts to conclude that a professional caregiver’s
hourly rate is the only relevant evidence. Thus, to clarify, I agree with the majority that
agency rates may be considered by the fact-finder in determining what constitutes a
“reasonable charge” under MCL 500.3107(1)(a).
11
GLEICHER’s majority opinion in Hardrick v Auto Club Ins Ass’n, 294 Mich. App. 651; ___
NW2d ___ (2011).
Hardrick, 294 Mich. App. at 678-679, first noted that the question whether
expenses are reasonable is generally a question for the fact-finder, as this Court stated in
Nasser, 435 Mich. at 55. Second, Hardrick agreed with Bonkowski that “the rates charged
by an agency to provide attendant-care services are not dispositive of the reasonable rate
chargeable by a relative caregiver,” but the opinion also concluded that “this does not
detract from the relevance of such evidence.” Hardrick, 294 Mich. App. at 666.
Accordingly, I find persuasive Hardrick’s decision to review the issue through the lens of
the admissibility of evidence. Hardrick explained that evidence is “relevant” and thus
“material” when it helps prove a proposition that is a “material fact at issue.” Id. at 667-
668. Because the “material fact at issue” is the reasonable rate for attendant-care services
for an insured, and insurers routinely pay agency rates for attendant-care services,
Hardrick concluded that agency rates are relevant to determining the proper
compensation for relative caregivers. Hardrick emphasized that the issue “is not whether
an agency rate is reasonable per se under the circumstances, but whether evidence of an
agency rate may assist a jury in determining a reasonable charge for family-provided
attendant-care services.” Id. at 669. Accordingly, because an agency rate commonly
paid by insurers “‘throws some light, however faint,’ on the reasonableness of a charge
for attendant-care services,” it is admissible. Id., citing Beaubien v Cicotte, 12 Mich. 459,
484 (1864).
Moreover, Hardrick explained that the fact-finder “may ultimately decide that an
agency rate carries less weight than the rate charged by an independent contractor, or no
12
weight at all. But the fact that different charges for the same service exist in the
marketplace hardly renders one charge irrelevant as a matter of law.” Hardrick, 294
Mich. App. at 669. Indeed, the insurer would be free to introduce evidence showing the
actual pay received by professional attendant-care-services providers and the overhead
costs incurred by agencies that provide the care along with any other relevant evidence.
In fact, in this case, defendant was permitted to counter plaintiff’s evidence of the agency
rate paid by Dr. Rosenbaum’s company by showing that Mrs. Douglas was paid $10 an
hour and with testimony from both defendant’s medical expert and its claims adjuster.
This is the critical error in the majority’s reasoning: it fails to recognize that evidence of
agency rates is only one of the various types of evidence that the fact-finder may consider
in determining what constitutes a “reasonable charge,” and the decision of which
evidence is most relevant should be left to the fact-finder. Accordingly, I disagree with
the majority’s decision to opine regarding the weight that the fact-finder should give
agency rates relative to other types of evidence when determining what constitutes a
“reasonable charge.” By doing so, the majority again forgets that “appellate courts are
not juries, and . . . they must not interfere with the jury’s role[.]” See Wolfe, 440 Mich. at
514 (1992).
Indeed, by adopting Bonkowski’s emphasis on an individual caregiver’s hourly
rate, the majority’s approach ignores other relevant considerations. For example, the
family member might be forced to abandon a more lucrative career or move a great
distance in order to be able to provide long hours of care to a loved one over an extended
period. Additionally, the majority’s approach marginalizes the fact that a family member
who provides attendant-care services may be left without an array of benefits that a
13
professional attendant-care-services provider would ordinarily receive. For example, a
professional attendant-care-services provider who is employed by an agency might
receive health insurance benefits, vacation and sick leave, and retirement benefits, among
other things. None of these benefits are represented in the professional attendant-care-
services provider’s hourly wage.10 Thus, by singularly focusing on the rate paid to an
attendant-care-services professional in order to determine what is a “reasonable charge”
for family-provided care under MCL 500.3107(1)(a), the majority fails to recognize the
complexity of the inquiry at hand and reduces the determination to a purely economic
decision when that is simply not the reality of the situation.
Furthermore, by implying that certain evidence is deserving of greater
consideration when determining a “reasonable charge,” the majority risks making the
possibility of family-provided attendant care unattainable for a large number of no-fault
insureds because their family members simply cannot afford to suffer the financial
ramifications of that decision. This result not only potentially places families in the
unenviable position of being forced to institutionalize a family member in order to make
a fair living, but it also runs counter to one of the goals of the no-fault act: to keep no-
fault insurance affordable. See Shavers v Attorney General, 402 Mich. 554, 627-628; 267
10
I recognize that the majority briefly considers the issue of fringe benefits, see ante at
27 n 69, but the majority relegates the issue to a mere secondary consideration by
repeatedly emphasizing that “Mrs. Douglas actually received $10 an hour in providing
attendant care services to plaintiff,” ante at 32. See, also, ante at 32 (stating that the $10
an hour rate is “highly probative” of what is a reasonable charge under MCL
500.3107(1)(a) because it was “the rate [Mrs. Douglas] actually received for providing
attendant care services”).
14
NW2d 72 (1978). Specifically, if a family member cannot afford to provide attendant
care at the lower rate that the majority opinion essentially mandates, the insured may be
forced into an institution, which will potentially increase the cost of attendant care and,
therefore, the amount of PIP benefits that insurers must pay.
Finally, although the majority is correct that this Court has not previously
considered this exact issue, the Court of Appeals’ approach in Hardrick is more
consistent with this Court’s opinion in Manley, 425 Mich. at 154, which considered the
“reasonable charge” aspect of MCL 500.3107(1)(a) and held that evidence of a daily
charge by facilities for “room and board” is admissible to determine a parent’s costs for
room and board of a disabled child in the parent-caregiver’s home. See, also, Manley,
425 Mich. at 169 (BOYLE, J., concurring in part and dissenting in part) (stating that
“comparison to rates charged by institutions provides a valid method for determining
whether the amount of an expense was reasonable and for placing a value on comparable
services performed by [a family member]”) (quotation marks and citation omitted).
Thus, given this Court’s guidance on the issue in Manley, and because I believe that
Hardrick’s analysis is more thorough and well reasoned than Bonkowski’s, I would adopt
Hardrick’s analysis
Applying Hardrick’s approach to this case, I would affirm the trial court’s
conclusion that $40 an hour is a “reasonable charge.” The majority claims that the trial
court’s finding is “unjustified on this record”; however, the majority fails to consider a
variety of factors that were before the fact-finder in this case. Specifically, the trial court
heard testimony from which it could conclude that Mrs. Douglas would need to quit her
job outside the home in order to provide plaintiff with the attendant care his doctor
15
prescribed. Moreover, the trial court heard testimony regarding both the agency rate and
individual rate of pay for the type of care that Mrs. Douglas was providing. Notably,
defendant could have submitted additional evidence in support of its claim for a lower
hourly rate, but it chose not to do so. Thus, while the majority is correct that it is
“undisputed” that “Mrs. Douglas actually received $10 an hour in providing attendant
care services to plaintiff,” ante at 32, it is also undisputed that agencies receive a higher
rate of compensation for the same services, and it is also undisputed that Mrs. Douglas
could not provide the attendant care that plaintiff needed while maintaining her
employment outside the home. Thus, the rate paid to an individual caregiver fails to
encompass all the ramifications of Mrs. Douglas’s provision of attendant care to plaintiff.
Accordingly, because “[t]he trier of facts is permitted to draw natural inferences from all
the evidence and testimony,” Kostamo v Marquette Iron Mining Co, 405 Mich. 105, 120-
121; 274 NW2d 411 (1979), I cannot agree with the majority’s conclusion that the trial
court in this case “uncritically adopted” the agency rates or that agency rates were “the
sole basis for the award of benefits in these circumstances.” Ante at 32-33. As a result, I
am not “left with the definite and firm conviction that a mistake has been made,” Detroit
v Ambassador Bridge Co, 481 Mich. 29, 35; 748 NW2d 221 (2008) (quotation marks and
citation omitted), and, thus, in my view, the trial court did not clearly err on this issue.
III. CONCLUSION
In summary, I dissent from the majority’s effort to extend the erroneous
interpretation of MCL 500.3107 from Griffith. Specifically, I disagree with the
majority’s judicially created requirements regarding what is necessary to show that a
charge was incurred because those requirements are unsupported by the statutory
16
language at issue and, thus, contrary to the Legislature’s intent with regard to MCL
500.3107(1)(a). Moreover, the majority’s decision to rely, at least in part, on the
reasoning from Bonkowski, 281 Mich. App. 154, is ill conceived because Bonkowski is
poorly reasoned, particularly in comparison to the persuasive analysis in Hardrick, 294
Mich. App. 651. Furthermore, Bonkowski is contrary to this Court’s opinion in Manley,
425 Mich. 140. Accordingly, I dissent.
Michael F. Cavanagh
Marilyn Kelly
Diane M. Hathaway
17