In Re SHIELDS ESTATE

656 N.W.2d 853 (2002) 254 Mich. App. 367

In the Matter of the ESTATE OF Elizabeth SHIELDS, Minor.
Walter H. Shields, Conservator of the Estate of Elizabeth Shields, a minor, Petitioner-Appellee,
v.
State Farm Mutual Automobile Insurance Company, Respondent-Appellant.

Docket No. 237533.

Court of Appeals of Michigan.

Submitted October 1, 2002, at Marquette. Decided December 6, 2002, at 9:15 a.m. Released for Publication February 20, 2003.

Thomas J. Veum, P.C. (by Thomas J. Veum and Michael T. Veum), Sault Ste. Marie, for the petitioner.

Worsfold Macfarlane McDonald, P.L.L.C. (by David M. Pierangeli), Grand Rapids, for the respondent.

Before: HOOD, P.J., and BANDSTRA and O'CONNELL, JJ.

PER CURIAM.

Respondent State Farm Mutual Automobile Insurance Company appeals as of right the probate court's order requiring it to pay attorney fees incurred by petitioner as conservator of his minor daughter's estate. We reverse.

Elizabeth Shields was an infant when she suffered injuries in an automobile-related accident. Respondent, which insured her father Walter's vehicle, paid her medical expenses and has been paying for her care as part of the family's personal injury protection (PIP) benefits. A claim against the driver of the vehicle that struck Elizabeth was also settled, resulting in a payment to Elizabeth of approximately $30,000. As a result of this payment, Walter established an estate for Elizabeth and was appointed its conservator. At issue here are attorneys fees that were incurred in the filing of the first annual account for the conservatorship.

Respondent first argues on appeal that the probate court lacked jurisdiction to consider the issue whether respondent was responsible for the attorney fees at issue under the parties' contract of insurance. We disagree. This is a question of law that we consider de novo. In re Haque, 237 Mich.App. 295, 299, 602 N.W.2d 622 (1999). Respondent cites In re Kus Estate, 136 Mich.App. 343, 347, 356 N.W.2d 23 (1984), in which this Court held that the probate court did not have jurisdiction to hear a contract claim brought on behalf of an estate. When that case was decided, probate court jurisdiction was governed by M.C.L. § 700.21 and M.C.L. § 700.22. However, after Kus was decided, the Legislature added a statutory provision granting the probate court concurrent jurisdiction over contract claims brought by an estate, see 1989 PA 69, and that provision was retained when the Legislature revised the statutory scheme in 1998, see 1998 PA 386 and M.C.L. § 700.1303(1)(i).

Under M.C.L. § 700.1303(1)(i), the probate court has jurisdiction to "[h]ear and decide a contract proceeding or action by or against an estate, trust, or ward." The statute imposes no limits on the types of contract actions and, further, the Legislature explained in M.C.L. § 700.1303(3) that the purpose of the statute was to simplify the disposition of actions involving estates. The probate court in the present case had exclusive jurisdiction to settle the accounts of a fiduciary under M.C.L. § 700.1302(d), and concurrent jurisdiction to determine respondent's liability for the fiduciary's expenses under M.C.L. § 700.1303(1)(i). Accordingly, the probate court had jurisdiction to decide this case.

Respondent next argues that the probate court erred in finding respondent responsible for the attorney fees. On this point, we agree. This is again a question of law we consider de novo. In re Smith Estate, 252 Mich.App. 120, 123-124, 651 N.W.2d 153 (2002). The scope of PIP benefits is dictated by statute. Rohlman v. Hawkeye-Security Ins. Co., 442 Mich. 520, 524-525, 502 N.W.2d 310 (1993). Under M.C.L. § 500.3105(1), a PIP insurer must pay benefits for accidental bodily injury arising out of the use of motor vehicles. See Nelson v. Transamerica Ins. Services, 441 Mich. 508, 517-518 n. 23, 495 N.W.2d 370 (1992). However, a claimant's recovery under M.C.L. § 500.3105(1) is limited to "allowable expenses," which are defined by M.C.L. § 500.3107(1)(a) as "all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation." See Owens v. Auto Club Ins. Ass'n, 444 Mich. 314, 323, 506 N.W.2d 850 (1993). Although such expenses are not limited to medical care, they must be causally connected to the injured person's care, recovery, or rehabilitation. Hamilton v. AAA Michigan, 248 Mich.App. 535, 544-545, 639 N.W.2d 837 (2001).

Petitioner in the present case relies on Heinz v. Auto Club Ins. Ass'n, 214 Mich.App. 195, 543 N.W.2d 4 (1995). There, this Court held that services performed by a guardian or conservator can be allowable expenses under M.C.L. § 500.3107(1)(a) if a person "is so seriously injured in an automobile accident that it is necessary to appoint a guardian and conservator for that person...." Heinz, supra at 198, 543 N.W.2d 4. However, the conservator in the present case was not needed because of the injuries Elizabeth suffered in the accident. The conservator was needed only because Elizabeth is a minor, unable to oversee her own financial affairs. Thus, in contrast to the situation in Heinz, the conservatorship here, and its related costs, did not "arise out of" the accident for which respondent was obligated to provide PIP benefits. See M.C.L. § 500.3105(1).

It is insufficient that the conservator's expenses would not have been incurred but for the accident; the expenses must be necessary for the injured person's care because of the accident. See Hamilton, supra at 545, 639 N.W.2d 837 (to be recoverable, expenses must be "causally connected" to injuries resulting from an automobile accident). The conservatorship in the present case does not meet that requirement. The probate court erred in ordering respondent to pay the attorney fees at issue.

We reverse.