Karen Scugoza v. Metropolitan Direct Property and Casualty Ins Co

STATE OF MICHIGAN
COURT OF APPEALS
KAREN SCUGOZA, FOR PUBLICATION
July 5, 2016
Plaintiff-Appellee, 9:00 a.m.
v No. 327076
Branch Circuit Court
METROPOLITAN DIRECT PROPERTY AND LC No. 14-090510-NF
CASUALTY INSURANCE COMPANY,
Defendant-Appellant.
Before: STEPHENS, P.J., and BECKERING and GLEICHER, JJ.
PER CURIAM.
At issue in this case is whether old-age social security benefits payable pursuant to 42
USC 402 are “tangible things of economic value” as that term is used in MCL 500.3108(1) and
therefore can be considered in a calculation of survivors’ loss benefits under the no-fault act.
The trial court determined that old-age social security benefits were, under the plain language of
MCL 500.3108(1), “tangible things of economic value,” and granted plaintiff partial summary
disposition pursuant to MCR 2.116(C)(10). Defendant appeals that ruling by leave granted.
Because we conclude that the plain language of MCL 500.3108(1) encompasses old-age social
security benefits, we affirm.
I. PERTINENT FACTS AND PROCEDURAL HISTORY
The pertinent facts in this case are undisputed. Plaintiff’s husband, Nicholas Scugoza,
died on September 20, 2013, as a result of injuries he suffered in a car accident in Branch
County. At the time he died, Nicholas was entitled to a gross sum of $1,611.90 per month in
old-age social security benefits.
Plaintiff applied to defendant, Nicholas’s insurer, for survivors’ loss benefits under the
no-fault act, MCL 500.3101 et seq. On September 22, 2014, plaintiff sued defendant for refusing
to pay the “correct and full amount of no-fault motor vehicle insurance [survivors’] loss benefits
for which she is eligible and entitled to receive as the surviving spouse of Nicholas Scugoza.”
On January 14, 2015, plaintiff moved for partial summary disposition, arguing that there were no
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genuine issues of material fact and that as a matter of law, survivors’ loss benefits under MCL
500.3108(1)1 included a calculation of old-age social security benefits a deceased spouse had
been receiving prior to his death. Plaintiff argued that old-age social security benefits were akin
to a pension and were thus a “tangible thing of economic value” under MCL 500.3108(1).
In a written opinion, the trial court examined the plain language of MCL 500.3108(1) in
order to determine whether the statute applied to old-age social security benefits. The court
reasoned that MCL 500.3108(1), which broadly referred to “contributions of tangible things of
economic value” in describing survivors’ loss benefits, encompassed old-age social security
benefits. Accordingly, the trial court granted plaintiff’s motion for partial summary disposition.
II. ANALYSIS
We review de novo a trial court’s decision regarding a motion for summary disposition.
Latham v Barton Malow Co, 480 Mich. 105, 111; 746 NW2d 868 (2008). Summary disposition
is proper under MCR 2.116(C)(10) if there is no genuine issue of material fact and the moving
party is entitled to judgment as a matter of law. Id. Questions of statutory interpretation are
questions of law, which this Court reviews de novo. Shorecrest Lanes & Lounge, Inc v Liquor
Control Comm, 252 Mich. App. 456, 460; 652 NW2d 493 (2002).
“In general, the no-fault act is designed to achieve the expeditious compensation of
damages resulting from motor vehicle accidents and to minimize administrative delays and
factual disputes.” Brown v Home-Owners Ins Co, 298 Mich. App. 678, 685; 828 NW2d 400
(2012). The no-fault act provides that “an insurer is liable 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” the no-fault act. MCL 500.3105(1). As noted above, the
no-fault act includes personal protection insurance (“PIP”) benefits for survivors’ loss, and
provides in pertinent part:
[P]ersonal protection insurance benefits are payable for a survivor’s loss which
consists of a loss, after the date on which the deceased died, of contributions of
tangible things of economic value, not including services, that dependents of the
deceased at the time of the deceased’s death would have received for support
during their dependency from the deceased if the deceased had not suffered the
accidental bodily injury causing death and expenses, not exceeding $20.00 per
day, reasonably incurred by these dependents during their dependency and after
1
MCL 500.3108(1) provides, in pertinent part:
Except as provided in subsection (2), personal protection insurance benefits are
payable for a survivor’s loss which consists of a loss, after the date on which the
deceased died, of contributions of tangible things of economic value, not
including services, that dependents of the deceased at the time of the deceased's
death would have received for support during their dependency from the deceased
if the deceased had not suffered the accidental bodily injury causing death . . . .
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the date on which the deceased died in obtaining ordinary and necessary services
in lieu of those that the deceased would have performed for their benefit if the
deceased had not suffered the injury causing death. [MCL 500.3108(1)
(emphasis added).]
In this case, there is no dispute that plaintiff was a dependent of Nicholas under the no-
fault act. See MCL 500.3110(1)(a). There is no dispute that Nicholas’s death arose “out of the
ownership, operation, maintenance or use of a motor vehicle as a motor vehicle,” MCL
500.3105(1), and that his death constituted an accidental bodily injury under the no-fault act,
MCL 500.3105(3). There is also no dispute that defendant was Nicholas’s insurer. Therefore,
defendant is obligated under the no-fault act to plaintiff for “loss, after the date on which the
deceased died, of contributions of tangible things of economic value” that plaintiff “at the time of
the deceased’s death would have received for support during [her] dependency from the
deceased if the deceased had not suffered the accidental bodily injury causing death[,]” i.e.,
survivors’ loss benefits. MCL 500.3108(1).
The dispute in this case concerns the meaning of the phrase “contributions of tangible
things of economic value,” and whether the plain meaning of the phrase encompasses old-age
social security benefits Nicholas had been receiving.
As with any statutory interpretation, [a reviewing court’s] goal is to give effect to
the Legislature’s intent, focusing first on the statute’s plain language. 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. No
further judicial construction is required or permitted. [Krusac v Covenant Med
Ctr, Inc, 497 Mich. 251, 255-256; 865 NW2d 908 (2015) (citations omitted).]
In short, when the language is unambiguous, statutory interpretation begins and ends with the
words of the statute. See id.
None of the terms in the phrase “contributions of tangible things of economic value” are
defined in the statute; thus, we may consult a dictionary in ascertaining the plain meaning of the
terms. Koontz v Ameritech Servs, Inc, 466 Mich. 304, 312; 645 NW2d 34 (2002). The phrase
“contributions of tangible things of economic value” has no inherent limitation on the type of
contributions received for support other than: (1) the contribution must be tangible; and (2) the
contribution must have economic value. The word “tangible” has been defined to mean “capable
of being appraised at an actual or approximate value . . . .” Meriam Webster’s Collegiate
Dictionary (11th ed). Meanwhile, “economic value”—sometimes referred to as “exchange
value”—means “[t]he rate of worth set on property . . . .” Black’s Law Dictionary (10th ed), p.
1785. Using dictionary definitions, it is apparent that the phrase “tangible things of economic
value” refers to something that is capable of being valued or having its worth ascertained.
Moreover, it is equally apparent that the old-age social security benefits at issue in this
case fit within the plain language of the statute. Indeed, the benefits are capable of being valued
and do in fact have a “rate of worth.” The benefits in this case were distributed on a monthly
basis at a predetermined monthly value, as revealed by letters sent to Nicholas by the Social
Security Administration. “The purpose of the Federal Old Age Benefits of the Social Security
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Act is to provide funds through contributions by employer and employee for the decent support
of elderly workmen who have ceased to labor.” Social Security Bd v Nierotko, 327 U.S. 358, 364;
66 S. Ct. 637; 90 L. Ed. 718 (1946) (emphasis added). Our courts, too, have characterized old-age
social security benefits as a type of income, albeit a type of income not received from
employment. See Jarosz v DAIIE, 418 Mich. 565, 585; 345 NW2d 563 (1984). In other words, it
is apparent that old-age social security benefits are designed as a tangible means of financial
support. And, according to the pleadings in this case, the old-age social security benefits were a
“tangible thing[ ] of economic value” that Nicholas used as support for his dependent, i.e., his
wife, plaintiff Karen Scugoza.
Although it did so in a different context, our Supreme Court has already had occasion to
interpret the phrase “contributions of tangible things of economic value” under MCL
500.3108(1). See Miller v State Farm Mut Auto Ins Co, 410 Mich. 538; 302 NW2d 537 (1981).
Reviewing the plain language of the statute, the Court in Miller concluded that the Legislature
intended for a broad understanding of the phrase “contributions of tangible things of economic
value”:
The language of § 3108 . . . establishes that it is the legislative intention that the
calculation of “contributions of tangible things of economic value” should include
consideration of all demonstrable contributions that would have been made to the
dependents by the deceased but for his death . . . . [Id. at 550 (emphasis added).]
The Court rejected an argument that “contributions of tangible things of economic value”
were limited to wages and salary, and gave a non-exhaustive list of potential “tangible things of
economic value”:
In today’s complex economic system, the “tangible things of economic value”
which many persons contribute to the support of their dependents include hospital
and medical insurance benefits, disability coverage, pensions, investment income,
annuity income and other benefits. Had it been the intent of the Legislature to
limit survivors’ benefits to a sum equal to what eligible dependents would have
received from wages and salary alone, it could be expected to have said so. It
chose instead the far broader category of “contributions of tangible things of
economic value” which, on its face, suggests the inclusion of benefits derived for
family support from other and different sources. [Id. at 556-557.]
Following Miller, this Court has applied the broad construction of “contributions of
tangible things of economic value,” finding that the phrase encompassed loans an unemployed
deceased used to sustain herself and her children, McCollum v Community Serv Ins Co, 137
Mich. App. 805, 811; 359 NW2d 215 (1984), child support payments a deceased was obligated to
make, Fredericksen v State Farm Mut Auto Ins Co, 141 Mich. App. 235, 238-239; 366 NW2d 256
(1985), and funds received from a trust of which the deceased was a beneficiary, Gauntlett v
Auto-Owners Ins Co, 242 Mich. App. 172, 180-181; 617 NW2d 735 (2000).
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We find that the Supreme Court’s interpretation of MCL 500.3108 in Miller supports the
conclusion that old-age social security benefits are to be included in the calculation of survivors’
loss benefits under the no-fault act. As noted, old-age social security benefits are intended to
function as a means of financial support or income for recipients. Therefore, as with “wage or
salary income[, which] is almost always a significant factor in calculating the actual financial
loss incurred by survivors[,]” Nicholas’s old-age social security benefits were “ ‘tangible things
of economic value’ available for dependents’ support . . . .” Miller, 410 Mich. at 561. Old-age
social security benefits end “with the month preceding the month in which” the recipient dies.
42 USC 402(a). Therefore, Nicholas’s old-age social security benefits were “tangible things of
economic value that” were “lost” to plaintiff “by reason of [Nicholas]’s death[.]” Miller, 410
Mich. at 561. As the Supreme Court stated, “the Legislature intended that the measurement of
[MCL 500.]3108 survivors’ loss benefits should include the value of tangible things other than,
and in addition to, wages and salary.” Id. If the Legislature had intended to exclude
governmental benefits from survivors’ loss benefits under MCL 500.3108, “it could be expected
to have said so.” Id. at 557. Thus, we conclude that Nicholas’s old-age social security benefits
are included within plaintiff’s survivors’ loss benefits under MCL 500.3108(1).
Defendant argues that the legislative history of MCL 500.3108(1) demonstrates that old-
age social security benefits are not compensable under MCL 500.3108(1). Defendant argues that
the legislative history of MCL 500.3108 evidences an intent to make survivors’ loss benefits
comparable to compensation available for economic losses under the wrongful death act, MCL
600.2922. In a conclusory and somewhat circular fashion, defendant contends that there is no
authority for the proposition that old-age social security benefits are compensable in a wrongful
death action; hence, there is no authority for the idea that old-age social security benefits are
compensable as part of a survivors’ loss claim under MCL 500.3108(1).
At the outset, we note our Supreme Court’s distaste for legislative history, describing it as
“a feeble indicator of legislative intent and is therefore a generally unpersuasive tool of statutory
construction.” Frank W Lynch & Co v Flex Tech, Inc, 463 Mich. 578, 587; 624 NW2d 180
(2001). Moreover, we find that the legislative history of MCL 500.3108 supports our
conclusion. The Court in Miller examined the legislative history of MCL 500.3108 and
concluded that the Legislature intended “that survivors’ loss benefits should at least roughly
correspond to economic loss damages recoverable under” the wrongful death act. Miller, 410
Mich. at 560, citing MCL 600.2922. The wrongful death act, concluded the Court in Miller,
allows for the recovery of economic losses which include “at a minimum, the loss of financial
support from the deceased” and which “focus upon the financial loss actually incurred by the
survivors as a result of their decedent’s death.” Id. at 560-561 (citations omitted). The amount
of financial loss actually incurred, reasoned the Court, included the decedent’s salary, as well as
“the myriad employment-related fringe benefits and other ‘tangible things of economic value’
available for dependents’ support described hereinbefore which are not always reflected in wage
or salary . . . .” Id. at 561. In other words, recovery for economic losses in wrongful death
actions includes, as does recovery for survivors’ loss benefits under MCL 500.3108(1), a broad
category of “tangible things of economic value.” Hence, we do not find any restrictions on what
is compensable under MCL 500.3108(1) as survivors’ loss benefits—at least not with regard to
what is sought in the instant case—from any references to wrongful death actions in MCL
500.3108’s legislative history. Moreover, contrary to defendant’s contentions, this Court has
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found that social security benefits are compensable in a wrongful death action. See Hoffman v
Rengo Oil Co, 20 Mich. App. 575, 577; 174 NW2d 155 (1969) (holding that a verdict in a
wrongful death action was not excessive where the deceased’s income was determined according
to, among other things, the deceased’s monthly social security benefits).
Defendant also argues that old-age social security benefits should not be included as
survivors’ loss benefits because they are not employment-related; rather, they are government
benefits. This argument fails. First, there is no language in MCL 500.3108(1) indicating that the
Legislature intended to limit survivors’ loss benefits to benefits provided only by employers, and
this Court “cannot and should not add requirements to the statute that are not found there.”
Empire Iron Mining Partnership v Orhanen, 211 Mich. App. 130, 135; 535 NW2d 228 (1995).
Second, the Supreme Court stated that survivors’ loss benefits include “the myriad employment-
related fringe benefits and other ‘tangible things of economic value’ available for dependents’
support . . . .” Miller, 410 Mich. at 561 (emphasis added). Indeed, this Court has held that even
things of tangible value without any relation whatsoever to employment may be compensable
under MCL 500.3108(1). See Gauntlett, 242 Mich. App. at 181; McCollum, 137 Mich. App. at
811-812.
Defendant cites Jarosz, 418 Mich. at 580-581, a case which dealt with old-age social
security benefits in the context of MCL 500.3109, and argues that our caselaw treats old-age
social security benefits differently from private employment benefits. Defendant’s citation to
Jarosz is unavailing, as that case did not discuss MCL 500.3108 or “tangible things of economic
value.” Moreover, the citation to Jarosz appears to implicate setoffs under MCL 500.3109,
which is an entirely different matter and which is not before this Court in the instant case. As the
trial court aptly noted, our Supreme Court has directed that in calculating survivors’ loss
benefits,2 “one first determines what personal protection benefits are payable”; those benefits
cannot exceed the statutory maximum set forth in MCL 500.3108(1). Wood v Auto-Owners Ins
Co, 469 Mich. 401, 405; 668 NW2d 353 (2003). This determination under MCL 500.3108 must
occur before determining the amount, if any, by which survivors’ loss benefits should be offset
under MCL 500.3109, and “applying the setoff provision before completing the MCL 500.3108
analysis” constitutes error. Wood, 469 Mich. at 406. Therefore, this Court’s determination of
whether old-age social security benefits are compensable under MCL 500.3108 must be made
without regard to MCL 500.3109, and we do not weigh in on any matters pertaining to set-offs,
or whether a set-off would even be appropriate in this case. Id.
2
Survivors’ loss benefits include economic loss, which is at issue in this case, as well as
replacement services, which are not at issue in this appeal. MCL 500.3108(1); Wood, 469 Mich.
at 404.
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Lastly, given our conclusion that the plain language of MCL 500.3108(1) encompasses
old-age social security benefits, we decline plaintiff’s invitation to determine whether old-age
social security benefits are the equivalent of a “pension.”3
Affirmed.
/s/ Cynthia Diane Stephens
/s/ Jane M. Beckering
/s/ Elizabeth L. Gleicher
3
Citing an article that has not been supplied to this Court, plaintiff argues that old-age social
security benefits are a type of pension. According to plaintiff, because our Supreme Court in
Miller, 410 Mich. at 561, used the word “pensions” in describing “tangible things of economic
value,” Miller conclusively resolves this case. We need not entertain this argument because of
our conclusion that the plain language of MCL 500.3108(1) is broad enough to include old-age
social security benefits regardless of plaintiff’s contentions that such benefits constitute a
pension.
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