McCollum v. Community Service Insurance

V. J. Brennan, P.J.

Plaintiff brought this complaint in Wayne County Circuit Court before Judge Henry J. Szymanski. Judge Szymanski entered summary judgment in defendants’ favor on September 9, 1983. Plaintiff appeals as of right.

Plaintiff, Florence McCollum, is the mother of the defendants’ insured, Laurel Miller, and is the guardian ad litem of Ms. Miller’s three surviving minor children. Laurel Miller was insured with Community Service Insurance, a division of the Farm Bureau Insurance Group under a no-fault insurance policy when she was involved in a motor vehicle accident on March 22, 1981. Ms. Miller was killed as a result of the accident. The following statement of facts is drawn primarily from the parties’ briefs arid the deposition of Florence Mc-Collum taken on February 15, 1983.

Laurel Miller arrived in Michigan from Tennessee in October, 1980, after separating from her husband. Divorce proceedings were finalized in February, 1981. Ms. Miller applied for and received Aid to Dependent Children from the State of Michigan in the amount of $173 every two weeks. At the time of her accident, Ms. Miller was unemployed but had been actively seeking employment. It is uncontested that she was unemployed for the five months preceding her death.

Because of the distressed financial circumstances of her daughter and grandchildren, Florence Mc-Collum permitted Ms. Miller and the three children to live in a second home on the family farm with the understanding that Ms. Miller would pay rent of $200 per month plus utilities when she obtained employment. Ms. McCollum also testified that Ms. Miller promised to pay back rent for the period in which she remained in the house, but was unemployed. She also testified that she loaned Ms. Miller "sometimes as much as $300” per month to meet the financial needs of her daughter’s family. Again, according to Mrs. McCollum, those amounts were to be repaid when Ms. Miller secured gainful employment.

Following Ms. Miller’s death, the three children moved into the McCollum home. They do not contribute to their support.

The parties filed cross motions for summary judgment. The trial court ruled that Laurel Miller was not providing "tangible things of economic value” to her dependents at the time of the accident. Accordingly, the court ruled that there was no basis to award survivors’ loss benefits above and beyond the replacement service expense which the defendant Farm Bureau Insurance Group was voluntarily paying. Plaintiff appeals.

The question is whether a no-fault insurer should consider a series of intra-family loans to an unemployed person who sustains a fatal injury in an automobile accident as contributions of tangible things of economic value that dependents of the deceased would have received for their support from the deceased if the deceased had not sustained the fatal injury.

The trial court granted defendants’ motion for summary judgment under GCR 1963, 117.2(3). In passing on a motion under this subrule, a trial court must consider all admissible evidence to determine whether a genuine issue of fact exists as to any material fact. Riverside Ins Co v Kolonich, 122 Mich App 51; 329 NW2d 528 (1982). If the nonmoving party fails to establish that he has "a case on the law and that there are some evidentiary proofs to support his allegations as to any material fact”, the moving party is entitled to a judgment as a matter of law. Durant v Stahlin, 375 Mich 628, 638; 135 NW2d 392 (1965).

The plaintiff seeks to recover survivors’ loss benefits for the children. Such loss is defined in MCL 500.3108(1); MSA 24.13108(1) as:

"a survivor’s loss which consists of a loss, after the date on which the deceased died, or 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”.

Defendants argue that survivors’ loss benefits are dependent upon an economic loss which is sustained by the dependents as a result of the deceased’s death. Defendants point out that the maternal grandparents continue to provide financial support and rent-free housing to Laurel Miller’s three children. The defendants conclude from this fact that the three children have not sustained the requisite loss.

Defendants misinterpret the statute. The language of the statute indicates that a survivors’ loss consists of "a loss * * * of contributions of tangible things of economic value * * * from the deceased”. MCL 500.3108(1); MSA 24.13108(1) (emphasis added). The statute does not mention a set-off of contributions received from concerned relatives following the death of the insured. Under defendants’ proposition, the children would be ineligible for survivors’ loss benefits unless they became wards of the state, and then the insurance benefits would be offset by government benefits. See MCL 500.3109(1); MSA 24.13109(1); O’Donnell v State Farm Mutual Automobile Ins Co, 404 Mich 524; 273 NW2d 829 (1979). The Legislature could not have intended such a harsh "zero-sum” proposition.

The actual issue before this Court is whether "contributions of tangible things of economic value * * * that dependents of the deceased * * * would have received for support * * * from the deceased” includes amounts loaned by family members to the deceased while she was unemployed to be used for the care and support of her children until she secured employment. The issue is a question of first impression in this state. In Daniels v State Farm Mutual Automobile Ins Co, 283 Pa Super 336; 423 A2d 1284; 12 ALR4th 968 (1980), the deceased had separated from his wife less than one month after the birth of their son, Robert. At the time of the fatal accident, the couple were in the final stage of obtaining a divorce. The deceased never supported the child. The precise issue before the court was whether the minor child should as a matter of law be considered dependent upon his father, and, therefore, entitled to survivors’ loss benefits under the Pennsylvania No-Fault Motor Vehicle Insurance Act.

The Pennsylvania no-fault act defines survivors’ loss as the "loss of income of a deceased victim which would probably have been contributed to a survivor or survivors, if such victim had not sustained the fatal injury”. 40 Pa Cons Stat Ann § 1009.103 (Purdon). The court considered this statutory language in light of the parental duty of the deceased to support his child and the scope of recovery in an analogous situation under the wrongful death act. These considerations, together with the broad remedial purpose of the no-fault act, led the court to hold as follows:

"It may be that before his father’s death, Robert was receiving less than he was entitled to. At most he will now be more nearly in the position he should have been in all along. To deny him survivors’ loss benefits because his father failed to support him would be to say that a parent’s failure to fulfil the legal duty of child support should redound to the benefit of a no fault insurance carrier.” 283 Pa Super 336, 341; 423 A2d 1287; 12 ALR4th 968, 972.

The Daniels court, therefore, went beyond the eligibility issue and held that the child should recover the survivors’ loss benefits in light of the child’s position or relationship with his father and the broad remedial purpose embodied within the no-fault act. We realize that the Daniels holding converts the language in the Pennsylvania statute from "would probably have received” to "should have received”, but the policy and rationale still apply in the instant case because the children actually received some type of support from their mother. The question is whether the statute recognizes the type of support that Ms. Miller provided as a "contribution of tangible things of economic value”. We find that it does.

The initial rule which must be kept in mind is that the focus of the analysis is upon the dependents; that is, whether the surviving dependents have suffered an economic loss which had been supplied by the deceased before the accident. See Belcher v Aetna Casualty & Surety Co, 409 Mich 231; 293 NW2d 594 (1980). From this vantage point, Ms. Miller was more than a mere conduit through whom Mrs. McCollum supported the children. Rather, Ms. Miller received the loans and then exercised her independent judgment upon how these funds could best be used to support her children. She purchased food and clothing the children received. She paid for the children’s school supplies and extracurricular activities. Moreover, the defendants do not contest the true nature of the transactions between Mrs. McCollum and Ms. Miller; in fact, defendants admit that Ms. Miller agreed to repay the loans and back rent.

While the actual funds originated from Mrs. McCollum, the deceased had undertaken an obligation to repay these loans and use the funds to support her children. The children lost this guarantee of repayment security. The support that these minor children received sufficiently bore Ms. Miller’s "signature” such that we conclude that the children received "contributions of tangible things of economic value” from the deceased. Defendants have said that they recognize "tangible things of economic value” could be based upon factors other than earned income. The children have suffered the loss of these contributions from their mother by virtue of the fatal automobile accident. Therefore, they are entitled to receive survivors’ loss benefits.

To deny the children survivors’ loss benefits because their mother supported them with intrafamily loans would be to say that a parent’s failure to obtain employment and receive "take home wages” should redound to the benefit of a no-fault insurance carrier. See Daniels, supra. The notion of "contributions of tangible things of economic value” is greater than the notion of "income”. See Miller v State Farm Mutual Automobile Ins Co, 410 Mich 538; 302 NW2d 537 (1981), reh den 411 Mich 1154 (1981). An insurance carrier which receives its premiums from the funds of these intra-family loans should not be heard to complain that these loans make the dependents of the deceased ineligible for survivors’ loss benefits.

Summary judgment is reversed and this matter is remanded to the trial court for entry of judgment in favor of plaintiff. Costs to be awarded to plaintiff.