Johnson v. Recca

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
PENNY JO JOHNSON,
Plaintiff-Appellee,
v No. 143088
JOHN RECCA,
Defendant-Appellant.
BEFORE THE ENTIRE BENCH
MARKMAN, J.
We granted leave to appeal to consider whether, in a third-party tort action,
damages for replacement services are recoverable pursuant to MCL 500.3135(3)(c).1
Because “replacement services” is not among the categories listed in MCL
500.3135(3)(c), damages for replacement services are not recoverable in such an action.
1
We note that on June 7, 2012, the Governor signed 2012 PA 158, which, effective
October 1, 2012, amends MCL 500.3135 to increase the amount of motor vehicle damage
not covered by insurance for which a person may sue the responsible party. The
amendatory act does not affect our analysis here.
Accordingly, we reverse the Court of Appeals’ judgment in part and reinstate the trial
court’s grant of summary disposition in defendant’s favor on plaintiff’s economic
damages claim for replacement services expenses.
I. FACTS AND HISTORY
In July 2004, while walking through a gas station parking lot, plaintiff was struck
by a motor vehicle driven by defendant, who was insured by Allstate Property and
Casualty Insurance Company. At the time, plaintiff lived with Harrietta Johnson, her ex-
mother-in-law. Neither woman owned a vehicle, and neither was insured. Plaintiff filed
a third-party tort claim against defendant, seeking damages for replacement services
pursuant to MCL 500.3135(3)(c). The trial court granted summary disposition in
defendant’s favor, concluding that plaintiff could not recover damages for replacement
services pursuant to MCL 500.3135(3)(c). The Court of Appeals reversed, concluding
that plaintiff could recover damages for replacement services under MCL 500.3135(3)(c).
Johnson v Recca, 292 Mich. App. 238, 249; 807 NW2d 363 (2011). Defendant appealed,
and we granted leave, limited to the issue whether MCL 500.3135(3)(c) includes within
its scope the cost of replacement services rendered more than three years after the date of
the motor vehicle accident. Johnson v Recca, 490 Mich. 926 (2011).2
II. STANDARD OF REVIEW
We review de novo motions for summary disposition brought under MCR
2.116(C)(10). Dressel v Ameribank, 468 Mich. 557, 561; 664 NW2d 151 (2003). We
2
With respect to defendant’s remaining issue, leave to appeal is denied, because we are
not persuaded that the question presented should be reviewed by this Court.
2
also review de novo issues of statutory interpretation. Eggleston v Bio-Med Applications
of Detroit, Inc, 468 Mich. 29, 32; 658 NW2d 139 (2003).
III. ANALYSIS
At issue is whether, in a third-party tort action, damages for replacement services
are recoverable pursuant to MCL 500.3135(3)(c). Under the no-fault automobile
insurance act, MCL 500.3101 et seq., insurance companies are required to provide first-
party insurance benefits, referred to as personal protection insurance (PIP) benefits for
certain expenses and losses. MCL 500.3107; MCL 500.3108. PIP benefits are payable
for four general categories of expenses and losses: survivor’s loss, allowable expenses,
work loss, and replacement services. “Survivor’s loss” is defined in MCL 500.3108(1),
and “allowable expenses,” “work loss,” and replacement services are defined as follows
in MCL 500.3107(1):3
(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. Allowable expenses
within personal protection insurance coverage shall not include charges for
a hospital room in excess of a reasonable and customary charge for
semiprivate accommodations except if the injured person requires special or
intensive care, or for funeral and burial expenses in the amount set forth in
the policy which shall not be less than $1,750.00 or more than $5,000.00.
(b) Work loss consisting of loss of income from work an injured
person would have performed during the first 3 years after the date of the
3
The term “replacement services” originates from the Uniform Motor Vehicle Accident
Reparations Act (UMVARA), which provides:
“Replacement services loss” means expenses reasonably incurred in
obtaining ordinary and necessary services in lieu of those the injured person
would have performed, not for income but for the benefit of himself or his
family, if he had not been injured. [UMVARA, § 1(a)(5)(iii); 14 ULA 44.]
3
accident if he or she had not been injured. Work loss does not include any
loss after the date on which the injured person dies. Because the benefits
received from personal protection insurance for loss of income are not
taxable income, the benefits payable for such loss of income shall be
reduced 15% unless the claimant presents to the insurer in support of his or
her claim reasonable proof of a lower value of the income tax advantage in
his or her case, in which case the lower value shall apply. Beginning
March 30, 1973, the benefits payable for work loss sustained in a single 30-
day period and the income earned by an injured person for work during the
same period together shall not exceed $1,000.00, which maximum shall
apply pro rata to any lesser period of work loss. Beginning October 1,
1974, the maximum shall be adjusted annually to reflect changes in the cost
of living under rules prescribed by the commissioner [of the Office of
Financial and Insurance Regulation] but any change in the maximum shall
apply only to benefits arising out of accidents occurring subsequent to the
date of change in the maximum.
(c) [Replacement services] 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.
[Emphasis added.]
Although the no-fault act generally abolishes tort liability arising from the
ownership, maintenance, or use of a motor vehicle, MCL 500.3135 provides several
exceptions to the general rule. One such exception is set forth in MCL 500.3135(3),
which provides in relevant part:
Notwithstanding any other provision of law, tort liability arising
from the ownership, maintenance, or use within this state of a motor vehicle
with respect to which the security required by [MCL 500.3101] was in
effect is abolished except as to:
* * *
(c) Damages for allowable expenses, work loss, and survivor’s loss
as defined in [MCL 500.3107 to MCL 500.3110] in excess of the daily,
monthly, and 3-year limitations contained in those sections. The party
liable for damages is entitled to an exemption reducing his or her liability
4
by the amount of taxes that would have been payable on account of income
the injured person would have received if he or she had not been injured.
[Emphasis added.]
“An overarching rule of statutory construction is that this Court must enforce clear and
unambiguous statutory provisions as written.” United States Fidelity & Guaranty Co v
Mich Catastrophic Claims Ass’n (On Rehearing), 484 Mich. 1, 12; 795 NW2d 101 (2009)
(USF&G) (quotation marks and citation omitted). MCL 500.3135(3)(c) is a clear and
unambiguous provision, providing that “[d]amages for allowable expenses, work loss,
and survivor’s loss” are recoverable in a third-party tort action. MCL 500.3135(3)(c)
does not mention damages for replacement services. Therefore, in a third-party tort
action, damages for replacement services are not recoverable pursuant to MCL
500.3135(3)(c),4 and the Court of Appeals erred by holding otherwise.
IV. THE COURT OF APPEALS ERRED
Contrary to our present holding, the Court of Appeals held that damages for
replacement services are recoverable in a third-party tort action. Johnson, 292 Mich. App.
at 249. Apparently in agreement with our conclusion that only damages for those
categories of PIP benefits actually mentioned in MCL 500.3135(3)(c) are recoverable, it
grounded its holding in the observation that “replacement services” constitutes “merely
one category of allowable expenses.” Id. at 247. For the reasons explained in this
4
This conclusion is supported by the traditional legal maxim expressio unius est exclusio
alterius, “the expression of one thing suggests the exclusion of all others,” Pittsfield
Charter Twp v Washtenaw Co, 468 Mich. 702, 712; 664 NW2d 193 (2003), which is
reinforced here because MCL 500.3135(3) provides that tort liability is abolished
“except” with regard to those damages listed in MCL 500.3135(3).
5
opinion, we disagree. Instead, we believe that “replacement services” and “allowable
expenses” constitute separate and distinct categories of PIP benefits under the statute.
A. STATUTORY ORGANIZATION
The first and most obvious criticism of the Court of Appeals’ conclusion that
replacement services constitutes a subcategory of allowable expenses is that this simply
overlooks the Legislature’s own statutory organization, which makes clear that allowable
expenses and replacement services constitute separate and distinct categories of PIP
benefits. “Allowable expenses” are described in MCL 500.3107(1)(a), “replacement
services” are described in MCL 500.3107(1)(c), and “work loss” expenses are described
in-between in MCL 500.3107(1)(b). “Replacement services” are not described or
referred to in the same subdivision as “allowable expenses,” nor are “replacement
services” described in any subpart of “allowable expenses.” This organization of MCL
500.3107 clearly indicates that “replacement services” constitutes a category of PIP
benefits that is separate and distinct from “allowable expenses.”
“We interpret th[e] words in [the statute in] light of their ordinary meaning and
their context within the statute and read them harmoniously to give effect to the statute as
a whole.” People v Peltola, 489 Mich. 174, 181; 803 NW2d 140 (2011). Statutory
interpretation requires courts to consider the placement of the critical language in the
statutory scheme. USF&G, 484 Mich. at 13. In doing so, courts “must give effect to
every word, phrase, and clause in a statute and avoid an interpretation that would render
any part of the statute surplusage or nugatory.” State Farm Fire & Cas Co v Old
Republic Ins Co, 466 Mich. 142, 146; 644 NW2d 715 (2002). The Court of Appeals’
interpretation improperly rendered the Legislature’s organization nugatory by giving no
6
effective meaning to the Legislature’s compartmentalization of “allowable expenses” and
“replacement services.”5
B. GRIFFITH v STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
The Court of Appeals also misread our decision in Griffith v State Farm Mut Auto
Ins Co, 472 Mich. 521; 697 NW2d 895 (2005). In Griffith, the plaintiff was severely
injured in a motor vehicle accident. After the plaintiff returned home from a nursing
facility, the defendant insurance company denied the plaintiff’s claim for food costs,6 and
the plaintiff brought suit, alleging that food costs constituted allowable expenses. This
Court rejected that argument, explaining that in MCL 500.3107(1)(a), “recovery” and
“rehabilitation” refer to restoring an injured person back to the condition he or she was in
before sustaining the injuries, while the term “care” has a broader and more
encompassing meaning. Id. at 534-535. That is, “care” “may encompass expenses for
products, services, and accommodations that are necessary because of the accident but
that may not restore a person to his preinjury state.” Id. at 535. However, we clarified
that
5
The Court of Appeals attempted to explain why the Legislature separately addressed
“allowable expenses” and “replacement services” by asserting that the statutory
separation of these categories of expenses enabled the Legislature to place limits on the
amount of replacement services that must be paid by a no-fault insurer. Johnson, 292
Mich. App. at 247. However, nothing would have prevented the Legislature from
establishing those limits even if replacement services had been included in the same
subdivision as allowable expenses. Indeed, the Legislature was able to accomplish that
result where replacement services were formerly placed in the same subdivision as work
loss. See part IV(C) of this opinion.
6
Relevant to both Griffith and this case, the food costs at issue in Griffith were for
“ordinary, everyday food expenses” and not for special dietary or nutritional expenses
that were necessitated by the injury. Griffith, 472 Mich. at 531-532.
7
the statute does not require compensation for any item that is reasonably
necessary to a person’s care in general. Instead, the statute specifically
limits compensation to charges for products or services that are reasonably
necessary “for an injured person’s care, recovery, or rehabilitation.”
(Emphasis added.) This context suggests that “care” must be related to the
insured’s injuries. [Id. at 534.]
We further clarified:
[I]f Griffith had never sustained, or were to fully recover from, his
injuries, his dietary needs would be no different than they are now. We
conclude, therefore, that his food costs are completely unrelated to his
“care, recovery, or rehabilitation” and are not “allowable expenses” under
MCL 500.3107(1)(a). [Id. at 536.]
Citing Griffith, the Court of Appeals reasoned:
Considered within the definition of “care” in § 3107(1)(a) provided
by the Supreme Court in Griffith, replacement services are services for the
“care” of an injured person. Replacement services are those services
performed by another that the injured person would have performed for his
or her benefit or the benefit of dependents had the person not been injured.
MCL 500.3107(1)(c). Consequently, replacement services are services that
are needed as the result of an injury sustained in the motor vehicle accident.
See Griffith, 472 Mich. at 535. . . . Because replacement services are
services for the “care” of an injured person, we conclude that replacement-
services expenses are not separate and distinct from allowable expenses;
rather, they are merely one category of allowable expenses. [Johnson, 292
Mich. App. at 246-247.]
The Court of Appeals’ wholesale inclusion of “replacement services” as a subcategory of
“allowable expenses” rests on its overly expansive reading of Griffith. Although it can be
fairly said that “replacement services are services that are needed as the result of an
injury,” id., at 246, it does not follow that they fall within the definition of “care” set
forth in Griffith. Accordingly, it does not follow that replacement services constitutes
merely a subcategory of allowable expenses.
8
As we noted in Griffith, “the statute does not require compensation for any item
that is reasonably necessary to a person’s care in general.” Griffith, 472 Mich. at 534
(emphasis added). Rather, such care “must be related to the insured’s injuries.” Id. In
Griffith, the plaintiff’s food costs were not allowable expenses because “if Griffith had
never sustained, or were to fully recover from, his injuries, his dietary needs would be no
different than they are now.” Id. at 536. Accordingly, allowable expenses do not include
expenses for products or services that are required after the injury in a manner
indistinguishable from those required before the injury. Those services are not properly
characterized as “related to the insured’s injuries.”
Services that were required both before and after the injury, but after the injury
can no longer be provided by the injured person himself or herself because of the injury,
are “replacement services,” not “allowable expenses.” They are services “in lieu of those
that, if he or she had not been injured, an injured person would have performed . . . for
the benefit of himself or herself . . . .” MCL 500.3107(1)(c). Thus, contrary to the Court
of Appeals’ interpretation of Griffith’s definition of “care,” replacement services is not
“merely one category of allowable expenses”; rather, allowable expenses and
replacement services are separate and distinct categories of PIP benefits.
In support of its interpretation, the Court of Appeals provided the following
example:
[P]laintiff claims that before the accident she prepared her own
meals, but since the accident and because of the back injury she sustained
in the accident, she is no longer able to cook and [her ex-mother-in-law]
does so for her. If a person injured in a motor vehicle accident cooked his
or her food before being injured, but because of the injury sustained is no
longer able to cook, any expense incurred in paying someone to cook for
9
him or her is a replacement-service expense. But the expense is also
conceptually an “allowable expense” because the cooking service is “care”
as defined in Griffith; it was necessitated by the injury sustained in the
accident. [Johnson, 292 Mich. App. at 246-247 (emphasis added).]
The Court of Appeals was correct that because someone else must now, because of the
injury, cook plaintiff’s meals, cooking constitutes a replacement service. That is, it is an
“ordinary and necessary service[] in lieu of [one] that, if he or she had not been injured,
[plaintiff] would have performed” for her own benefit. MCL 500.3107(1)(c). However,
the Court of Appeals was incorrect that “the expense is also . . . an ‘allowable expense’
because the cooking service is ‘care’ as defined in Griffith[.]” Johnson, 292 Mich. App. at
247. The cooking service is not “care” as defined in Griffith.
As with the food in Griffith, there is no doubt that cooking is necessary for
plaintiff’s survival. However, cooking is not “care” pursuant to MCL 500.3107(1)(a)
because if plaintiff “had never sustained, or were to fully recover from, [her] injuries,”
her need to have food cooked “would be no different” than it is now. Griffith, 472 Mich.
at 536. Cooking was required both before and after plaintiff’s injury. Thus, cooking is
necessary to plaintiff’s care in general, but is not specifically “related to the insured’s
injuries” which places it outside the scope of “allowable expenses.” Id. at 534. Rather,
cooking in this instance is solely a “replacement service,” something that must now be
done on behalf of an injured person.7
7
On the other hand, if a person sustains injuries that necessitate that someone actually
feed the person, this service would constitute “care” pursuant to MCL 500.3107(1)(a).
The need to have someone feed the injured person would not have existed absent the
injuries, and this service would then be specifically related to the person’s injuries.
10
For these reasons, our definition of “care” in Griffith does not support, but refutes,
the Court of Appeals’ conclusion that “replacement services” constitutes a subcategory of
“allowable expenses.”
C. OTHER NO-FAULT PROVISIONS
The other provisions of the no-fault act cited by the Court of Appeals in support of
its interpretation of MCL 500.3107(1) do not provide any basis, in our judgment, for
concluding that replacement services constitutes a subcategory of allowable expenses.
These statutes, MCL 500.3110(4),8 MCL 500.3116(4),9 MCL 500.3135(3)(c), and MCL
500.3145(1),10 contain general rules regarding the recovery of economic losses. Thus,
8
MCL 500.3110(4) provides:
Personal protection insurance benefits payable for accidental bodily
injury accrue not when the injury occurs but as the allowable expense, work
loss or survivors’ loss is incurred. [Emphasis added.]
9
MCL 500.3116(4) provides:
A subtraction or reimbursement shall not be due the claimant’s
insurer from that portion of any recovery to the extent that recovery is
realized for noneconomic loss as provided in [MCL 500.3135(1)] and
(2)(b) or for allowable expenses, work loss, and survivor’s loss as defined
in [MCL 500.3107 to MCL 500.3110] in excess of the amount recovered by
the claimant from his or her insurer. [Emphasis added.]
10
MCL 500.3145(1) provides:
An action for recovery of personal protection insurance benefits
payable under this chapter for accidental bodily injury may not be
commenced later than 1 year after the date of the accident causing the
injury unless written notice of injury as provided herein has been given to
the insurer within 1 year after the accident or unless the insurer has
previously made a payment of personal protection insurance benefits for the
injury. If the notice has been given or a payment has been made, the action
may be commenced at any time within 1 year after the most recent
11
argued the Court of Appeals, replacement services, as economic losses, should be
included whenever the phrase “allowable expenses, work loss, and/or survivor’s loss” is
used in the no-fault act.11 If replacement services are included among “allowable
expenses, work loss, and survivor’s loss,” all economic losses are covered by the
foregoing provisions. If not, replacement services would be the only economic losses
excluded. That is, replacement services, and only replacement services, would be
excluded from the accrual provision, MCL 500.3110(4); the subtraction-or-
reimbursement provision, MCL 500.3116(4); the residual-tort-liability provision, MCL
500.3135(3)(c); and the exception to the one-year period of limitations in MCL
500.3145(1). This, the Court of Appeals argued, supports the conclusion that
replacement services constitutes a category of allowable expenses. Johnson, 292 Mich
App at 248. Although this argument has superficial appeal, it suffers from two flaws.
allowable expense, work loss or survivor’s loss has been incurred.
However, the 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. The notice of injury required by this subsection may be given
to the insurer or any of its authorized agents by a person claiming to be
entitled to benefits therefor, or by someone in his behalf. The notice shall
give the name and address of the claimant and indicate in ordinary language
the name of the person injured and the time, place and nature of his injury.
[Emphasis added.]
11
The Court of Appeals frames this determination in the negative, explaining: “We find
nothing in the language of the no-fault act to suggest an intent by the Legislature to
exclude replacement services expenses from general rules applying to the recovery of
economic losses.” Johnson, 292 Mich. App. at 248. Yet, as defendant submits, the more
pertinent question is whether the no-fault act includes replacement services within MCL
500.3135(3)(c) as damages spared from the general abolition of tort liability, not whether
there is any reason to exclude them. MCL 500.3135(3)(c) is explicitly exclusive; unless
there is a reason to include replacement services, they must be excluded.
12
First, even if it is true that the foregoing provisions imply that replacement
services should be included among the listed economic losses, nothing in them suggests
that replacement services is a subcategory of allowable expenses, as opposed to work loss
or survivor’s loss. Before 1992, MCL 500.3107 referred to only two types of benefits--
“allowable expenses” and “work loss.” MCL 500.3107, as amended by 1988 PA 312,
provided:
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. Allowable expenses
within personal protection insurance coverage shall not include charges for
a hospital room in excess of a reasonable and customary charge for
semiprivate accommodations except when the injured person requires
special or intensive care, or before October 1, 1988 charges for funeral and
burial expenses in excess of $1,000.00. Beginning October 1, 1988,
benefits for funeral and burial expenses shall be payable in the amount set
forth in the policy but shall not be less than $1,750.00 nor more than
$5,000.
(b) Work loss consisting of loss of income from work an injured
person would have performed during the first 3 years after the date of the
accident if he or she had not been injured and [replacement services]
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. Work loss does not include
any loss after the date on which the injured person dies. Because the
benefits received from personal protection insurance for loss of income are
not taxable income, the benefits payable for such loss of income shall be
reduced 15% unless the claimant presents to the insurer in support of his or
her claim reasonable proof of a lower value of the income tax advantage in
his or her case, in which case the lower value shall apply. Beginning
March 30, 1973, the benefits payable for work loss sustained in a single 30-
day period and the income earned by an injured person for work during the
same period together shall not exceed $1,000.00, which maximum shall
13
apply pro rata to any lesser period of work loss. Beginning October 1,
1974, the maximum shall be adjusted annually to reflect changes in the cost
of living under rules prescribed by the commissioner [of insurance] but any
change in the maximum shall apply only to benefits arising out of accidents
occurring subsequent to the date of the change in the maximum. [Emphasis
added.][12]
The provision governing allowable expenses under the 1988 version of MCL
500.3107 was, for the instant purposes, identical to the corresponding provision in the
current version of MCL 500.3107.13 This, however, is not the case for the provision
governing work loss. Before 1992, work loss benefits included, in addition to loss of
income from work, replacement services, i.e.,
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. [MCL 500.3107(b), as
amended by 1988 PA 312.]
Effective in 1992, the Legislature moved that portion of the work loss provision
describing replacement services into its own subdivision, MCL 500.3107(1)(c), and
otherwise left the remainder of the work loss provision, now MCL 500.3107(1)(b),
unchanged. MCL 500.3107, as amended by 1991 PA 191, effective January 1, 1992.
This suggests that the Legislature never considered replacement services to constitute a
12
MCL 500.3107 was first enacted in 1972 and became effective on March 30, 1973.
1972 PA 294. 1988 PA 312 made only minor changes to the statute, including the
funeral and burial expense-limit adjustment set forth at the end of MCL 500.3107(a) and
the addition of a serial comma to the phrase “care, recovery, or rehabilitation.”
13
The current version of the statute was enacted by 1991 PA 191, effective January 1,
1992. The 1991 amendment did not substantively alter the allowable expenses provision
but merely revised the language concerning funeral and burial expenses.
14
subcategory of allowable expenses. Rather, when replacement services were formerly
included within another category of benefits, those benefits were work loss benefits, not
allowable expenses benefits.14 Given that replacement services was a category of work
loss benefits before 1992, and, thus, clearly not a category of allowable expenses
benefits, the fact that “allowable expenses” is defined in the same way that it was in 1972
and 1988 belies the conclusion that replacement services somehow became a category of
allowable expenses in 1992. In sum, just as the use of the term “allowable expenses” did
not import replacement services into MCL 500.3110(4), MCL 500.3116(4),
500.3135(3)(c), and MCL 500.3145(1) before the effective date of 1991 PA 191, it does
not import them now.
Second, this argument is directed at the wrong branch of government. This Court
only has the constitutional authority to exercise the “judicial power.” Const 1963, art 6,
§ 1. “[O]ur judicial role ‘precludes imposing different policy choices than those selected
by the Legislature . . . .’” Robertson v DaimlerChrysler Corp, 465 Mich. 732, 759; 641
14
The Court of Appeals asserted that because the “expenses” in MCL 500.3107(1)(c) are
not labeled “replacement services expenses,” “it is reasonable to conclude that the
expenses are simply one category of allowable expenses . . . .” Johnson, 292 Mich. App.
at 247-248. This assertion is unavailing for several reasons. First, “allowable expenses”
is a concept that is specifically defined in MCL 500.3107(1)(a). It simply will not do to
say that because MCL 500.3107(1)(c) refers to “expenses” that are allowable under that
subsection, that such expenses can then be considered “allowable expenses” despite the
specific definition of “allowable expenses” in a separate subdivision. Second, as the
foregoing analysis makes clear, replacement services benefits constituted a subcategory
of work loss benefits before 1992, and the same argument-- that because the description
of allowable expenses for replacement services used the term “expenses,” expenses for
replacement services must be “allowable expenses”-- would have applied then. Thus, if
the term “expenses” in the description of replacement services did not render them
“allowable expenses” before 1992, nothing suggests it should do so now.
15
NW2d 567 (2002), quoting People v Sobczak-Obetts, 463 Mich. 687, 694-695; 625 NW2d
764 (2001). “Whether or not a statute is productive of injustice, inconvenience, is
unnecessary, or otherwise, are questions with which courts . . . have no concern.”
Voorhies v Recorder’s Court Judge, 220 Mich. 155, 157; 189 N.W. 1006 (1922) (quotation
marks and citation omitted). “It is to be assumed that the legislature . . . had full
knowledge of the provisions . . . and we have no right to enter the legislative field and,
upon assumption of unintentional omission . . . , supply what we may think might well
have been incorporated.” Reichert v Peoples State Bank, 265 Mich. 668, 672; 252 N.W.
484 (1934). Thus, despite the acknowledged possibility that the Legislature’s failure to
amend MCL 500.3135(3)(c) and the other provisions that employ the phrase “allowable
expenses, work loss, and/or survivor’s loss” to include replacement services may have
been the result of an oversight, that is not self-evident to us, and the judiciary is
powerless to address the problem. Simply stated, the judicial branch cannot amend the
no-fault act to make it “better.” That is an authority reserved solely to the Legislature.
V. RESPONSE TO THE DISSENT
This case is focused on a tension that exists within the no-fault act. On one side,
the language of MCL 500.3135(3)(c) and the organization of MCL 500.3107 indicate that
replacement services are not recoverable in a third-party tort action. See parts III and
IV(A) of this opinion. On the other side, it is not easy to comprehend why the
Legislature would elect to exclude only replacement services from the no-fault provisions
that provide the general rules regarding the recovery of economic losses. See part IV(C)
of this opinion. Thus, in arriving at a decision, this Court is confronted with the task of
16
resolving this tension, and the majority attempts to do so through the analysis previously
set forth.
The dissent, however, elects to ignore this tension and therefore concludes that this
is a simple case. It finds little need to engage in statutory analysis, or to assess the
implications of the statute’s organization, but focuses on the exclusion of replacement
services from the other no-fault provisions concerning economic losses. Thus, it has
minimized exactly those aspects of this case that make it so difficult. By minimizing the
obvious tension that defines the relevant provisions of the no-fault act, the dissent
transforms a difficult interpretive task into an easy one.
To the extent that the dissent can be said to have actually considered the language
and organization of the statute, it does so in the most cursory fashion, largely relying on a
house legislative analysis, a staff-prepared summary of the law that this Court has
previously described as “entitled to little judicial consideration” in the construction of
statutes. In re Certified Question from the United States Court of Appeals for the Sixth
Circuit, 468 Mich. 109, 115 n 5; 659 NW2d 597, 600 (2003). Further, even if in this
instance the house legislative analysis did constitute a reliable indicator of the
Legislature’s intent, the specific analysis invoked by the dissent nonetheless fails to
support its conclusion that replacement services are recoverable in a third-party tort
action. Rather, the dissent strains to make its point from this analysis by relying solely on
its silence regarding other intended changes. See post at 5.
Where the dissent actually engages with the statutory language itself is almost
exclusively in its assertion that the majority’s interpretation renders “allowable expenses”
nugatory in MCL 500.3135(3)(c). The dissent argues that since there are no “daily,
17
monthly or 3-year limitations” on allowable expenses pursuant to MCL 500.3107(1)(a),
the reference in MCL 500.3135(3)(c) to “allowable expenses” is nugatory unless
“allowable expenses” includes replacement services. Although we recognize that the
dissent is correct that there are no limitations on allowable expenses, the dissent’s
argument is unpersuasive. The acknowledgedly nugatory reference to “allowable
expenses” in MCL 500.3135(3)(c) existed before MCL 500.3107 was amended by 1991
PA 191. Because replacement services were included in work loss benefits before the
amendatory act was adopted, the reference to allowable expenses was clearly nugatory at
that time, and there is no indication that the Legislature intended to rectify this problem
when it amended MCL 500.3107 in 1991. See part IV(C) of this opinion. In short, just
as the reference to “allowable expenses” in MCL 500.3135 was essentially an empty
vessel before the 1991 amendment, it remained an empty vessel after the amendment.
That is, the majority’s interpretation here is not what renders the reference to “allowable
expenses” in MCL 500.3135(3)(c) nugatory.15 Even more pertinently, however, the
dissent’s proposal to remedy this admittedly nugatory reference would render nugatory
the overall organization of MCL 500.3107(1), a problematic result that does not seem to
concern the dissent. Thus, there are alternative understandings of this highly imperfect
statute that render nugatory either the reference to “allowable expenses” in MCL
500.3135(3)(c) or the overall organization of the statute. The majority seeks to address
15
The dissent contends that the reference to “allowable expenses” was not nugatory
before the 1991 amendment. See post at 7. However, it fails to explain how that could
have been the case given that, as previously explained, replacement services were
included in work loss benefits at that time. What else apart from “replacement services”
could possibly have been included in “allowable expenses” at the time?
18
and resolve this tension, while the dissent avoids it. Accordingly, although our
interpretation maintains the nugatory reference to “allowable expenses,” a reference that
has been in place since before the 1991 amendment of MCL 500.3107, the dissent’s
proposed interpretation renders the Legislature’s larger structure nugatory.
Moreover, the dissent is internally inconsistent in this regard. On one hand, the
dissent asserts that the reference to “allowable expenses” in MCL 500.3135(3)(c) is
rendered nugatory unless that reference includes replacement services. Thus, it
concludes that “allowable expenses” must include replacement services. On the other
hand, the dissent asserts that the 1991 amendment did not affect the categorization of PIP
benefits in MCL 500.3107(1). Thus, it concludes that “work loss” must include
replacement services. However, replacement services cannot be included in MCL
500.3135(3)(c) simultaneously as both allowable expenses and work loss benefits. The
dissent cannot have it both ways; the 1991 amendment either changed the PIP categories
or it did not.
Perhaps, or perhaps not, recognizing this inconsistency, the dissent then proceeds
to argue that “the more logical interpretation of [MCL 500.3135(3)(c)] is that”
“allowable” modifies “expenses,” “work loss,” and “survivor’s loss.” Post at 7. That is,
the “allowable expenses” defined in MCL 500.3107(1)(a) are different from the
“allowable expenses” referred to in MCL 500.3135(3)(c). Never mind that it would be
entirely superfluous for MCL 500.3135(3)(c) to refer to “allowable work loss” or
“allowable survivor’s loss” “as defined in [MCL 500.3107 to 500.3110]” unless those
sections somehow provided for the recovery of nonallowable benefits, which they
certainly do not. As we explained in response to the Court of Appeals’ similar argument,
19
see note 14 of this opinion, it is simply unreasonable to believe that although the no-fault
act clearly defines the term “allowable expenses” in MCL 500.3107(1)(a), “allowable
expenses” should be given a different definition in other provisions of the same act.
Additionally, replacement services were included in work loss benefits before 1992, and
this same argument would have applied then. Yet replacement services clearly fell within
MCL 500.3135(3)(c)’s reference to “work loss” at that time. Thus, if the term
“expenses” in the description of replacement services did not render replacement services
“allowable expenses” pursuant to MCL 500.3135(3)(c) before 1992, it should not do so
now.
None of these difficulties in giving reasonable and coherent meaning to MCL
500.3135(3)(c) is acknowledged or addressed by the dissent, or causes it to demonstrate
insight into either the imperfections of the statute or its own construction of that statute.
Instead, it is much easier to isolate only those parts of the statute that lend support for the
results the dissent evidently prefers and to characterize as “absurd” any other result. But
although the dissent is selective in the parts of the statute to which it gives attention,
avoiding language that is most troublesome from its perspective, the dissent nonetheless
reveals much by its invocation of the ‘absurd results’ doctrine. One can be quite sure that
the dissent would have felt no need to invoke such an extraordinary doctrine in reaching
its conclusions had the actual language of the statute been in any way sufficient to reach
the same conclusion.
Nevertheless, the dissent concludes that our interpretation is “not consistent with
the legislative intent,” post at 3, but, rather, constitutes “a systematic dismantling of
significant sections of the no-fault act [that] produces absurd results,” post at 4. The
20
dissent premises its conclusions on its idiosyncratic formulation of an “absurd results”
doctrine.16 The rationale for the dissent’s assertion that our analysis produces “absurd
results” is entirely grounded in the fact that our interpretation excludes replacement
services from not only the residual-tort-liability provision, MCL 500.3135(3)(c), which is
at issue in this case, but also the accrual provision, MCL 500.3110(4); the subtraction-or-
reimbursement provision, MCL 500.3116(4); and the exception to the one-year period of
limitations in MCL 500.3145(1).
The justices in the majority have differences concerning whether the “absurd
results” doctrine exists in Michigan.17 See Univ of Mich Regents v Titan Ins Co, 487
16
Although the dissent never actually articulates the standard by which it deems a result
to be “absurd,” it cites Justice MARILYN KELLY’s dissent in Cameron v Auto Club Ins
Ass’n, 476 Mich. 55; 718 NW2d 784 (2006), for the general proposition that “statutes
should be construed to avoid absurd results . . . .” Post at 3 n 6 (citation and quotation
marks omitted). In Cameron, Justice KELLY argued that “a result is absurd where it is
clearly inconsistent with the purposes and policies of the act in question.” Cameron, 476
Mich. at 128-129 (KELLY, J., dissenting). Still, to the extent that the dissent’s standard
can be determined at all, that standard seems to fall well short of even Justice KELLY’s
standard in Cameron, rejecting as “absurd” any results the dissent finds “illogical.” See
post at 1, 8, and 9.
17
Although the dissent claims that it is “ironic” that we are so critical of its use of the
“absurd-results” doctrine given that “members of the majority are in complete
disagreement among themselves regarding the proper use or existence of the absurd-
results doctrine,” post at 8 n 13, there is not the least such “irony.” First, the dissent
invokes a doctrine that it altogether fails to define and indeed flies in the face of contrary
definitions by individual dissenting justices. See note 16 of this opinion. Thus, whether
the dissenting justices are in their own “complete disagreement among themselves”
regarding the doctrine cannot be answered simply because it is impossible to discern
what any one of them believes is required by the doctrine. Second, the majority squarely
acknowledges that there are differences among us regarding the “absurd results” doctrine.
However, regardless of its vitality, the doctrine has no relevance in the instant case. The
dissent thus not only avoids any genuine scrutiny of the unmistakable tensions within the
21
Mich. 289, 346 n 16; 791 NW2d 897 (2010) (MARKMAN, J., dissenting), overruled by
Joseph v Auto Club Ins Ass’n, 491 Mich. 200; 815 NW2d 412 (2012). For those justices
who do not believe the doctrine has a place in our jurisprudence, see People v McIntire,
461 Mich. 147, 152-160; 599 NW2d 102 (1999), whether the dissent is correct or not that
the results here can be characterized as “absurd” is inapposite: the words mean what they
say, replacement services are not listed in MCL 500.3135(3)(c) and, therefore,
replacement services are not recoverable under that provision. For those who do adhere
to the “absurd results” doctrine, the results here are simply not “absurd.” “[A] result is
only absurd if it is quite impossible that [the Legislature] could have intended the
result . . . .” Titan, 487 Mich. at 346 (MARKMAN, J., dissenting) (citation and quotation
marks omitted), quoting Cameron v Auto Club Ins Ass’n, 476 Mich. 55, 85 n 9; 718
NW2d 784 (2006) (MARKMAN, J., concurring). It is not “quite impossible” that the
Legislature could have intended the result here.
To properly invoke the “absurd results” doctrine, the burden rests on the dissent to
show that it is quite impossible that the Legislature could have intended to exclude
replacement services from MCL 500.3110(4), MCL 500.3116(4), MCL 500.3135(3)(c),
and MCL 500.3145(1). Rather than shoulder this burden-- which might require a serious-
minded analysis of the Legislature’s policy objectives in enacting the statutes, the
political realities and disagreements within the Legislature that adopted the statutes, the
necessity for compromise and negotiation leading to enactment of the statutes, and the
statute, but it leaves the bench and bar in the dark concerning the principles by which the
dissent proposes to avoid this tension.
22
public impetus behind the statutes-- the dissent characterizes our interpretation as
“absurd” because the dissent
can see no logical basis to conclude that the Legislature intended this
chaotic and arbitrary approach to the collection of no-fault benefits. . . .
The far more reasonable interpretation recognizes that the Legislature
intended MCL 500.3135(3)(c) to allow excess expenses for ordinary and
necessary services to be recovered in a third-party tort action. [Post at 10.]
However, the “absurd results” doctrine “must not be invoked whenever a court is
merely in disagreement, however strongly felt, with the policy judgments of the
Legislature.” Cameron, 476 Mich. at 80 (MARKMAN, J., concurring). Still, the dissent
fails to grapple with its obligations under the “absurd results” doctrine, preferring instead
to summarily impose on the law its own characterization of the statute’s unstated yet
supposedly “obvious intent,” post at 1, which “obvious intent” should be allowed to
trump the actual words and statutory organization enacted by the Legislature. As in
Cameron, although perhaps the law in question here could have been made more
consistent or more complete in some ways, we cannot conclude that it is “quite
impossible” that the Legislature could have intended its results. At the very least, it is the
burden of plaintiffs, not this Court, to explain why the results reached in this case are
“quite impossible.” In the absence of this burden’s being satisfied, those in the majority
who subscribe to an “absurd results” rule prefer to err on the side of the language and
organization of the statute rather than on the side of a supposedly “obvious intent” that is
nowhere communicated within the vehicle within which “obvious intents” are usually
communicated: the statute itself.
23
Although it is not our burden to suggest conceivable explanations that would
render the instant statute “not absurd,” one possible explanation for the exclusion of
replacement services from MCL 500.3135(3)(c) and other provisions of the no-fault act
concerning economic losses lies in the obvious fact that the four types of benefits
identified in MCL 500.3107 and MCL 500.3108 are defined, operate, and apply
differently. For example, work loss benefits are limited to the first three years after the
date of an accident, MCL 500.3107(1)(b), while allowable expenses are not, MCL
500.3107(1)(a). Survivor’s loss benefits have a ceiling for each 30-day period, MCL
500.3108(1), while replacement services do not, MCL 500.3107(1)(c). Put simply, these
benefits are not fungible or indistinguishable in every particular except for the treatment
of replacement services. Rather, it is entirely possible that the Legislature might have
chosen to include or exclude replacement services from some categories of no-fault
benefits, but not from others, depending on the scope and contours of each of those
benefits. Moreover, although the dissent cites “the chaotic consequences that will result
from” our interpretation as the basis for its “absurd results” conclusion,18 post at 8, the
18
The dissent characterizes our interpretation as a “sudden departure from the historical
rule.” Post at 8. The rule to which the dissent refers is the Court of Appeals’ conclusion
in Swantek v Auto Club of Mich Ins Group, 118 Mich. App. 807, 809; 325 NW2d 588
(1982), that the “right of action against the tortfeasor for excess economic loss exists
in . . . replacement services.” Even if we set aside the facts that this Court is not bound
by decisions of the Court of Appeals and that the statement constitutes dictum from a
case considering whether travel expenses to obtain medical treatment were recoverable as
PIP benefits, Swantek was decided a decade before MCL 500.3107 was materially
amended, at which time replacement services were removed from the work loss
provision. Thus, at the time Swantek was decided, replacement services may have been
recoverable under MCL 500.3135 as work loss.
24
only actual absurdity it contends will arise is that replacement services will be treated
differently than all other no-fault benefits, see post at 8-10. That is true. Yet “treating
things differently” or “treating things alike,” as the case may be, of course, lies at the core
of legislative decision-making and, absent legislative categorizations that implicate the
Constitution, such categorizations are generally no business of this Court, even if some of
its justices may believe that more “reasonable” categories could have been chosen.
Although it may be that the “better” public policy would be to include replacement
services in these other provisions of the no-fault act, this Court is not empowered to act
as the people’s lawmaker-in-chief. Rather, 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. As previously
explained, there are a number of reasons why the Legislature might conceivably have
intended to exclude replacement services from MCL 500.3135(3)(c). It is not for this
Court to “enhance” or to “improve upon” the work of lawmakers where we believe this
The dissent also cites Kreiner v Fischer, 471 Mich. 109, 114 n 2; 683 NW2d 611
(2004), overruled by McCormick v Carrier, 487 Mich. 180 (2010), and the model civil
jury instruction on economic and noneconomic losses in an action for third-party benefits
involving comparative negligence, M Civ JI 36.15, in support of its analysis. While
Kreiner did mention that damages for replacement services are recoverable in tort, the
issue in Kreiner was whether the plaintiffs had satisfied the “serious impairment of body
function” threshold set forth in MCL 500.3135(1), not whether damages for replacement
services were recoverable in tort under MCL 500.3135(3)(c). Therefore, that statement
was dictum. As for the model civil jury instruction, it is axiomatic that those instructions
are not binding law. They are offered merely to assist trial courts. See People v Petrella,
424 Mich. 221, 277; 380 NW2d 11 (1985). The dissent is incorrect that by today’s
decision we depart from some “historical rule,” post at 8, or cast aside a “well-established
interpretation of MCL 500.3135(3)(c),” post at 1.
25
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 and 38 state senators representing
highly diverse and disparate constituencies. Therefore, this Court must, as our
interpretation does, rest its analysis on the language and organization of the statute.
VI. CONCLUSION
In a third-party tort action, damages for excess allowable expenses, work loss, and
survivor’s loss are recoverable pursuant to MCL 500.3135(3)(c). Because replacement
services are not among the categories listed in MCL 500.3135(3)(c), damages for
replacement services are not recoverable in such an action. Accordingly, we reverse the
Court of Appeals’ judgment in part, reinstate the trial court’s grant of summary
disposition in defendant’s favor on plaintiff’s economic damages claim for replacement
services expenses, and remand the case to the trial court for further proceedings not
inconsistent with this opinion.
Stephen J. Markman
Robert P. Young, Jr.
Mary Beth Kelly
Brian K. Zahra
26
STATE OF MICHIGAN
SUPREME COURT
PENNY JO JOHNSON,
Plaintiff-Appellee,
v No. 143088
JOHN RECCA,
Defendant-Appellant.
HATHAWAY, J. (dissenting).
This Court granted leave to examine whether MCL 500.3135(3)(c) permits
recovery of expenses in excess of the limitations contained in MCL 500.3107 to MCL
500.3110 for “ordinary and necessary services”1 under the no-fault act in a third-party
tort action. Despite the fact that nothing in the no-fault act governing “ordinary and
necessary services” has changed since 1991, the majority casts aside the well-established
interpretation of MCL 500.3135(3)(c) and now holds that excess expenses for “ordinary
and necessary services” are no longer recoverable. The majority’s decision is especially
troubling because it ignores the obvious intent of the Legislature and, in doing so, creates
conflicting and illogical rules regarding the collection of no-fault benefits. Because I see
no compelling reason to impose this quagmire on the no-fault system, I respectfully
dissent.
1
“Ordinary and necessary services” are commonly referred to as “replacement services.”
The general rule in third-party tort actions is that only noneconomic expenses are
recoverable. However, certain statutory exceptions to this general rule exist. The issue
before us is whether excess expenses for “ordinary and necessary services,” payable
under MCL 500.3107(1)(c), qualify as a designated exception. MCL 500.3135(3)(c)
governs this issue. It provides:
(3) Notwithstanding any other provision of law, tort liability arising
from the ownership, maintenance, or use within this state of a motor vehicle
with respect to which the security required by [MCL 500.3101] was in
effect is abolished except as to:
* * *
(c) Damages for allowable expenses, work loss, and survivor’s loss
as defined in [MCL 500.3107 to 500.3110] in excess of the daily, monthly,
and 3-year limitations contained in those sections. The party liable for
damages is entitled to an exemption reducing his or her liability by the
amount of taxes that would have been payable on account of income the
injured person would have received if he or she had not been injured.
[Emphasis added.]
Under this subdivision, “[d]amages for allowable expenses, work loss, and
survivor’s loss as defined in [MCL 500.3107 to 500.3110] in excess of the daily,
monthly, and 3-year limitations contained in those sections”2 may be recovered in a third-
party action. The majority holds that because expenses payable for ordinary and
necessary services under MCL 500.3107(1)(c)3 is a separate category of expenses that is
2
MCL 500.3135(3)(c).
3
MCL 500.3107(1)(c) provides:
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
2
not specifically referred to in MCL 500.3135(3)(c), excess expenses for those services
are no longer recoverable in a third-party tort action. I disagree. When the language of
these provisions is read in concert with the no-fault act as a whole, it is clear that the
majority misconstrues the language of the subdivisions involved and interprets them in a
manner that is not consistent with the legislative intent.
The most important task in interpreting a statute is to determine the legislative
intent,4 and “consideration of the whole act should govern in its interpretation.”5 Thus, at
the outset, it is our duty to determine if the Legislature intended to include “ordinary and
necessary services” expenses within the purview of MCL 500.3135(3)(c). Moreover, in
order to give due respect to the Legislature, statutes “‘must be construed to prevent
absurd results . . . .’”6 When the no-fault act is read as a whole,7 it is clear that 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.
4
Potter v McLeary, 484 Mich. 397, 410-411; 774 NW2d 1 (2009), citing Sun Valley
Foods Co v Ward, 460 Mich. 230, 236; 596 NW2d 119 (1999).
5
Harrow v Metro Life Ins Co, 285 Mich. 349, 356; 280 N.W. 785 (1938).
6
People v Tennyson, 487 Mich. 730, 741; 790 NW2d 354 (2010), quoting Rafferty v
Markovitz, 461 Mich. 265, 270; 602 NW2d 367 (1999); see, also, Cameron v Auto Club
Ins Ass’n, 476 Mich. 55, 110; 718 NW2d 784 (2006) (KELLY, J., dissenting) (“The
principle that statutes should be construed to avoid absurd results that are manifestly
inconsistent with legislative intent is not a new or radical innovation.”).
7
In interpreting a statute, this Court avoids a construction that would render any part of
the statute surplusage or nugatory. People v McGraw, 484 Mich. 120, 126; 771 NW2d
655 (2009), citing Baker v Gen Motors Corp, 409 Mich. 639, 665; 297 NW2d 387 (1980).
The statute must be read as a whole. See Sun Valley, 460 Mich. at 237. Individual words
and phrases, while important, should be read in the context of the entire legislative
scheme. Herman v Berrien Co, 481 Mich. 352, 366; 750 NW2d 570 (2008).
3
Legislature intended to allow recovery of excess “ordinary and necessary services”
expenses in tort actions. To interpret MCL 500.3135(3)(c) as the majority does requires a
systematic dismantling of significant sections of the no-fault act and produces absurd
results.
It is undisputed that, before the enactment of 1991 PA 191, expenses for excess
ordinary and necessary services were recoverable in a third-party tort action. Before the
statute was amended, “ordinary and necessary services” were part of “work loss”
damages as defined in MCL 500.3107(b), as added by 1972 PA 294. Swantek v
Automobile Club of Michigan Insurance Group,8 interpreted that version of MCL
500.3107(b) and found that the Legislature clearly intended that excess expenses for
ordinary and necessary services be recoverable in a third-party tort action. The Court
explained:
Under the no-fault act, an insured may collect from his insurer for
limited economic loss, i.e.,work loss, [ordinary and necessary] services, and
medical and funeral expenses without regard to fault. MCL 500.3105(2),
500.3107. An insured may also sue the negligent tortfeasor for excess
economic loss. MCL 500.3135(2)(c). It is clear that the Legislature has
divided an injured person’s economic loss into two categories: loss for
which the no-fault insurer is liable and loss for which the tortfeasor is
liable.
The right of action against the tortfeasor for excess economic loss
exists in all categories in which the insurer’s liability is limited by the
statute: work loss, funeral cost, and [ordinary and necessary] services.[9]
8
Swantek v Auto Club of Mich Ins Group, 118 Mich. App. 807; 325 NW2d 588 (1982).
9
Id. at 809 (emphasis added; citations omitted).
4
In 1991 PA 191, the Legislature separated expenses for “ordinary and necessary
services” from “work loss,” moving them from former MCL 500.3107(b) into a newly
numbered subsection, MCL 500.3107(1)(c). Notably, the Legislature did not amend any
other corresponding provisions within the no-fault act to reflect that it intended to create a
new hybrid category of benefits with different rules applicable to the recovery of those
expenses. In other words, there is no language in 1991 PA 191 that implies or suggests
that the Legislature intended that ordinary and necessary services be treated differently
before and after the amendment.10 While the majority finds that the absence of such
language in the no-fault act creates an “obvious tension,” resulting in a “difficult
interpretive task,” I disagree.11 The 1991 amendment was not complex, nor does it
require a difficult interpretive task. One need only consider the purpose of the
amendment and interpret the provision in a manner that is consistent with the no-fault act
as a whole to come to the inescapable conclusion that the majority simply misconstrues
this statutory provision and in doing so disregards legislative intent.
The amendment of MCL 500.3107 by 1991 PA 191 was only intended to make
changes with regard to work-loss benefits for persons over the age of 60. The
amendatory act added MCL 500.3107(2), which allowed persons 60 years of age or older
to waive coverage for work-loss benefits by signing a waiver on a form provided by the
insurer. Nothing in the legislative history indicates that any change was intended with
10
The no-fault community, including insurers and insureds, has accepted Swantek’s
interpretation as controlling law notwithstanding the enactment of 1991 PA 191.
11
Ante at 17.
5
respect to the recovery of excess expenses in third-party tort actions. The house
legislative analysis explained:
The bill would amend Chapter 31 of the Insurance Code, which
deals with no-fault automobile insurance, to allow people 60 years of age
and older to waive coverage for work loss benefits if they would not be
eligible to receive them in the event of an accidental bodily injury (in an
auto accident). . . . The waiver of coverage would only apply to benefits
payable to the person or persons who had signed the waiver form.
Currently, work loss benefits cover 1) the loss of income from
work . . . and 2) expenses up to $20 per day incurred in obtaining ordinary
and necessary services in lieu of those the injured person would have
performed for himself or herself, or for a dependent, during the three years
following injury. . . . The waiver of work loss benefits permitted under the
bill would only apply to loss of income from work. [House Legislative
Analysis, HB 4041, January 14, 1992, p 1.]
Thus, nothing in the language of the statute itself or in the legislative history
supports the assertion that the Legislature intended to change the way that ordinary and
necessary services were treated merely because benefits for expenses for those services
were separated from benefits for lost work income. The only change intended was
providing a mechanism for individuals over the age of 60 to reduce their premiums by
waiving work-loss benefits.
I also find the majority’s analysis of the text of MCL 500.3135(3)(c) lacking
because it fails to consider all the language in the provision. The majority insists that the
phrase “allowable expenses” in MCL 500.3135(3)(c) can only be read as having the same
precise meaning as the phrase “allowable expenses” has in MCL 500.3107(1)(a).
However, the full language of MCL 500.3135(3)(c) allows recovery in third-party tort
actions of “[d]amages for allowable expenses, work loss, and survivor’s loss as defined in
[MCL 500.3107 to 500.3110] in excess of the daily, monthly, and 3-year limitations
6
contained in those sections.” (Emphasis added.) The majority’s reading of the text
ignores the balance of that sentence, which specifically provides that only those expenses
that are in excess of the prescribed limitations are recoverable. The prescribed limitations
are “daily, monthly, and 3-year limitations.” The majority’s analysis seemingly ignores
the fact that there are no daily, monthly, or three-year limitations imposed on “allowable
expenses” as enumerated in MCL 500.3107(1)(a). Under the majority’s interpretation,
the phrase “allowable expenses” within MCL 500.3135(3)(c) would be rendered
meaningless because there are no allowable expenses, as enumerated in MCL
500.3107(1)(a), in excess of the “daily, monthly or 3-year limitations.” Such damages
simply do not exist.
Thus, the more logical interpretation of the text of MCL 500.3135(3)(c) is that it
permits recovery of any excess expense, as long as the expense is “allowed” under the
no-fault act and is subject to a daily, monthly, or three-year limitation. This
interpretation is not new or novel; rather, it has been used by insureds and insurers since
the adoption of the no-fault act. It is obvious that this interpretation is consistent with the
scheme and organization of the no-fault act. Moreover, I cannot agree with the majority
that the phrase “allowable expenses” as used in MCL 500.3135(3)(c) has been an “empty
vessel” since it was enacted.12 The majority simply fails to acknowledge that the phrase
had meaning until today, and it is only under the majority’s new interpretation of this
subdivision that the phrase becomes meaningless.
12
Ante at 18.
7
Further, the majority’s interpretation transforms expenses for ordinary and
necessary services into some type of phantom category of benefits, subject to no
discernible rules. This illogical and absurd outcome is best illustrated by understanding
the chaotic consequences that will result from the majority’s sudden departure from the
historical rule.13 For example, if expenses for excess ordinary and necessary services are
no longer recoverable in tort actions simply because they are not specifically referred to
in MCL 500.3135(3)(c), then it is also necessary to conclude that claims for “ordinary
and necessary services” do not accrue when they are incurred as set forth in MCL
500.3110(4) because that provision also does not specifically refer to “ordinary and
necessary services.”14 Thus, insureds and insurers are left with no guidance at all
regarding when these benefits accrue.
Similarly, this newly crafted interpretation of MCL 500.3135(3)(c) significantly
affects the mandates of MCL 500.3145(1), which provides:
An action for recovery of personal protection insurance benefits
payable under this chapter for accidental bodily injury may not be
commenced later than 1 year after the date of the accident causing the
injury unless written notice of injury as provided herein has been given to
the insurer within 1 year after the accident or unless the insurer has
previously made a payment of personal protection insurance benefits for the
13
Given that members of the majority are in complete disagreement among themselves
regarding the proper use or existence of the absurd-results doctrine, I find it ironic that
the majority is so highly critical of my use of the concept.
14
MCL 500.3110(4) provides:
Personal protection insurance benefits payable for accidental bodily
injury accrue not when the injury occurs but as the allowable expense, work
loss or survivors’ loss is incurred. [Emphasis added.]
8
injury. If the notice has been given or a payment has been made, the action
may be commenced at any time within 1 year after the most recent
allowable expense, work loss or survivor’s loss has been incurred.
However, the 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. The notice of injury required by this subsection may be given
to the insurer or any of its authorized agents by a person claiming to be
entitled to benefits therefor, or by someone in his behalf. The notice shall
give the name and address of the claimant and indicate in ordinary language
the name of the person injured and the time, place and nature of his injury.
[Emphasis added.]
Under the majority’s analysis of MCL 500.3135(3)(c), expenses for ordinary and
necessary services are no longer subject to the second sentence of MCL 500.3145(1)
because those expenses are not specifically referred to. In practical terms, does this mean
that the time for filing a lawsuit to recover expenses for ordinary and necessary services
is now governed only by the first sentence of MCL 500.3145(1), and that a lawsuit must
be brought within one year from the date of an accident without regard to whether the
benefits are overdue or the services have even been performed? Additionally, MCL
500.3107(1)(c) provides for the payment of PIP benefits for expenses incurred in
obtaining ordinary and necessary services for the first three years after the date of the
accident. Is the majority suggesting that the final two years of services cannot be
recovered in a lawsuit, or is the majority suggesting that an injured party wishing to
preserve his or her rights must bring a lawsuit even before services are rendered? It is
hard to imagine a more chaotic, illogical, and absurd system for insureds and insurers to
navigate.15
15
Under the majority’s interpretation, MCL 500.3116(4) (the subtraction-or-
reimbursement provision for no-fault insurers) is also implicated. Thus, under the
majority’s interpretation, no-fault insurers can no longer seek recoupment of expenses for
9
I can see no logical basis to conclude that the Legislature intended this chaotic and
arbitrary approach to the collection of no-fault benefits. It is our duty to interpret statutes
in accordance with legislative intent, using sound logic and reasoning. The far more
reasonable interpretation recognizes that the Legislature intended MCL 500.3135(3)(c) to
allow excess expenses for ordinary and necessary services to be recovered in a third-party
tort action.
Moreover, it is also important to recognize that the notion of expenses for ordinary
and necessary services being recoverable in third-party tort actions is so well established
and universally accepted that it has been incorporated into our Model Civil Jury
Instructions. M Civ JI 36.15 explicitly recognizes the previously undisputed rule that
excess expenses for ordinary and necessary services are recoverable in third-party tort
actions. While jury instructions are not binding statements of the law, the recognition of
this principle within the Model Civil Jury Instructions speaks loudly to the general
acceptance of, and reliance by all parties on, this interpretation.
Finally, two members of today’s majority found this same position persuasive in
the past. In Kreiner v Fischer,16 Justices YOUNG and MARKMAN agreed that under MCL
500.3135(3)(c), “[a]n injured person may file a tort claim against the party at fault
seeking to recover excess economic losses (wage losses and [ordinary and necessary
services] expenses beyond the daily, monthly, and yearly maximum amounts).” Given
ordinary and necessary services in accordance with MCL 500.3116(4) because it also
does not use the specific phrase “ordinary and necessary services.”
16
Kreiner v Fischer, 471 Mich. 109, 114 n 2; 683 NW2d 611 (2004), overruled by
McCormick v Carrier, 487 Mich. 180 (2010).
10
the unequivocal nature of the position taken by Justices YOUNG and MARKMAN on this
issue, I find it difficult to accept that they now casually disregard that position simply
because it was said in dictum.
While the majority claims it has no choice but to interpret the act in this fashion, I
disagree. It is the duty of this Court to interpret statutes in accordance with the intent of
the Legislature and in a manner that does not produce absurd results. Accordingly, I
respectfully dissent.
Diane M. Hathaway
Marilyn Kelly
CAVANAGH, J. I concur in the result proposed by Justice HATHWAY’s dissenting
opinion.
Michael F. Cavanagh
11