AC, et al. v. State Farm Automobile Insurance Company
Filing
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ORDER denying 54 Motion for Partial Summary Judgment. Signed by District Judge Lawrence P. Zatkoff. (MVer)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
AC, a minor and by her Next Friend,
MICHELLE WHITE,
Plaintiff,
and
Case No. 12-13896
Hon. Lawrence P. Zatkoff
QUALITY CARE CONSULTING, INC.,
Intervening Plaintiff,
v.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY, a foreign insurance
company,
Defendant.
_______________________________/
OPINION AND ORDER
AT A SESSION of said Court, held in the United States Courthouse,
in the City of Port Huron, State of Michigan, on October 18, 2013
PRESENT: THE HONORABLE LAWRENCE P. ZATKOFF
UNITED STATES DISTRICT JUDGE
I. INTRODUCTION
This matter is before the Court on Defendant’s Motion for Partial Summary Judgment [dkt 54].
The motion has been fully briefed. The Court finds that the facts and legal arguments are adequately
presented in the parties’ papers such that the decision process would not be significantly aided by oral
argument. Therefore, pursuant to E.D. Mich. L.R. 7.1(f)(2), it is hereby ORDERED that the motion be
resolved on the briefs submitted. For the following reasons, Defendant’s Motion for Partial Summary
Judgment is DENIED.
II. BACKGROUND
A. FACTUAL BACKGROUND
On March 10, 2006, AC—an eight-month-old infant at the time—and her mother, Michelle
White, were involved in a motor vehicle accident. Despite being restrained in a car seat, AC suffered
numerous injuries, including a severe traumatic brain injury that left her permanently disabled with
physical and cognitive impairments. On the date of the accident, AC was insured under a no-fault
insurance policy with Defendant State Farm Mutual Automobile Insurance Company (“Defendant”).1
B. PROCEDURAL BACKGROUND
On June 1, 2012, Michelle White, as next friend to AC, filed a complaint against Defendant in
Macomb County Circuit Court. Defendant timely removed the matter to this Court on September 4,
2012.
Plaintiff’s complaint seeks recovery of, among other things, allowable expenses pursuant the
Michigan No-Fault Automobile Insurance Act (“No-Fault Act”), Mich. Comp. Laws § 500.3101 et seq.
Defendant filed the instant motion arguing that certain of the claimed allowable expenses are improperly
categorized as such, and therefore cannot be recovered.
III. LEGAL STANDARD
“The court shall grant summary judgment if the movant shows that there is no genuine dispute as
to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). See
also Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (“[T]he plain language of Rule 56[] mandates the
entry of summary judgment . . . against a party who fails to make a showing sufficient to establish the
existence of an element essential to that party’s case, and on which that party will bear the burden of proof
at trial.”). A party must support its assertions by:
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Intervening Plaintiff—Quality Care Consulting, Inc.—has filed a claim against Defendant for reimbursement of services
provided to AC. That claim is not the subject of the instant motion.
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(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information, affidavits or
declarations, stipulations (including those made for purposes of the
motion only), admissions, interrogatory answers, or other materials; or
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.
Fed. R. Civ. P. 56(c)(1). “The court need consider only the cited materials, but it may consider other
materials in the record.” Fed. R. Civ. P. 56(c)(3).
The moving party bears the initial burden of demonstrating the absence of any genuine dispute as
to a material fact, and all inferences should be made in favor of the nonmoving party. Celotex, 477 U.S.
at 323. The moving party discharges its burden by “‘showing’–that is, pointing out to the district court–
that there is an absence of evidence to support the nonmoving party’s case.” Horton v. Potter, 369 F.3d
906, 909 (6th Cir. 2004) (citing Celotex, 477 U.S. at 325)).
Once the moving party has met its initial burden, the burden then shifts to the nonmoving party,
who “must do more than simply show that there is some metaphysical doubt as to the material facts.”
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “[T]he mere existence of a
scintilla of evidence in support of the [nonmoving party’s] position will be insufficient [to defeat a motion
for summary judgment]; there must be evidence on which the jury could reasonably find for the
[nonmoving party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986).
IV. ANALYSIS
Defendant’s motion argues that it should be granted partial summary judgment on certain of
Plaintiff’s claimed allowable expenses, which comprise the following: (1) driving; (2) preparing
breakfast, lunch and dinner; (3) assistance with homework; (4) assistance with educational activities; (5)
laundry (washing bedding and clothes); (6) watching television with AC; and (7) preparing AC’s bed.
These expenses, as Defendant would have it, are not allowable expenses within the purview of the No3
Fault Act, but rather are household replacement services. And, the argument goes, because the expenses
are household replacement services, recovery of such services is barred by the three-year recovery
limitation.
In response, Plaintiff argues that the services provided by Michelle White to AC are allowable
expenses pursuant to Mich. Comp. Laws § 500.3107(1)(a). According to Plaintiff, the expert medical
opinions of AC’s treating physicians corroborate the argument that the above-mentioned services are
necessitated by the injuries AC sustained in the motor vehicle accident. As such, Plaintiff contends that
the claimed allowable expenses are for AC’s “care, recovery or rehabilitation.”
A. NO-FAULT ACT
Mich. Comp. Laws § 500.3105(1) establishes that a personal protection insurance provider is
compelled under the No-Fault Act “to pay benefits for accidental bodily injury arising out of the
ownership, operation, maintenance or use of a motor vehicle as a motor vehicle, subject to the provisions
of this chapter.” That statute thus imposes two threshold causation requirements for personal injury
protection (“PIP”) benefits: (1) the insurer is liable only if benefits are “for accidental bodily injury,” (2)
that “aris[es] out of the ownership, operation, maintenance or use of a motor vehicle.” It appears neither
party disputes that AC suffered accidental bodily injuries caused by the use of a motor vehicle.
The parties diverge, however, on whether the services at issue here should be labeled as allowable
expenses or household replacement services. “Allowable expenses” are defined as “all reasonable
charges incurred for reasonably necessary products, services and accommodations for an injured person’s
care, recovery, or rehabilitation . . . .” Mich. Comp. Laws § 500.3107(1)(a).2 On the other hand,
household replacement services are “[e]xpenses 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
2
The No-Fault Act provides for unlimited lifetime benefits for allowable expenses, subject to operation of the one-year-back
rule, Mich. Comp. Laws § 500.3145. This rule is not presently at issue.
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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.” Id. at § 500.3107(1)(c). Because recovery
for replacement services is limited to those services provided in the first three years after the accident,
Plaintiff’s current claim for benefits—from May 21, 2012 to present—would be unrecoverable as
replacement services. Accordingly, the distinction between allowable expenses and replacement services
is critical to Plaintiff’s case to the extent that Plaintiff can only recover benefits for the services recounted
above if they constitute allowable expenses within the meaning of the No-Fault Act.
B. MICHIGAN SUPREME COURT’S INTERPRETATION
The Michigan Supreme Court has recently been called on to determine the reach of the allowable
expenses provision. The applicable decisions will be briefly discussed below.
The state supreme court first interpreted the clause, “for an injured person’s care, recovery or
rehabilitation,” in Griffith v. State Farm Mutual Automobile Insurance Co., 472 Mich. 521 (2005). There,
the court concluded that the term “care” included only “products, services, or accommodations whose
provision is necessitated by the injury sustained in the motor vehicle accident.” Griffith, 472 Mich. at
535. In the end, the court held that food expenses were not compensable as allowable expenses because
food was the plaintiff’s “ordinary means of sustenance” and if he “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.
In Johnson v. Recca, the court reiterated Griffith’s holding that the No-Fault Act requires
payment of allowable expenses only for care that is “related to the insured’s injuries.” 492 Mich. 169,
179 (2012).
If expenses for products or services are required after the injury “in a manner
indistinguishable” from those required prior to the injury, the court explained, then those services cannot
properly be characterized as “allowable expenses.” Id. at 180. Thus, the Johnson decision stands for the
following edict: “Services that were required both before and after the injury, but after the injury can no
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longer be provided by the injured person himself or herself because of the injury, are ‘replacement
services,’ not ‘allowable expenses.’” Id.
On the same day as the Johnson decision, the supreme court also issued its opinion in Douglas v.
Allstate Insurance Co., 492 Mich. 241 (2012), a case that further delineated the dichotomy between
allowable expenses and the separate and distinct category of replacement services. The Douglas court
favorably approved Griffith’s definition of “care” by stating: “[A]lthough services for an insured’s care
need not restore a person to his preinjury state, the services must be related to the insured’s injuries to be
considered allowable expenses.” Douglas, 492 Mich. at 260. And, while acknowledging that family
members could perform the services for an injured person, the court cautioned that services provided by
family members must be carefully distinguished from those that would constitute replacement services
under Mich. Comp. Laws § 500.3107(1)(c). Id. at 262–63. In other words, the family member must
perform services for the injured person’s care to fall within the scope of allowable expenses. Id.
Finally, in Admire v. Auto-Owners Insurance Co., the court clarified when a particular product,
service, or accommodation is actually “for” the injured person’s “care, recovery, or rehabilitation.” 494
Mich. 10 (2013). The court found Mich. Comp. Laws § 500.3107(1)(a) to “only require[] an insurer to
pay for products, services, and accommodations that are reasonably necessary to the object or purpose of
‘an injured person’s care, recovery, or rehabilitation.’” Id. at 30 (emphasis added). By way of example,
“postaccident expenses of a wholly new essential character” provide the statutory causal connection that
the expenses are for the injured person’s care, recovery, or rehabilitation. Id.
C. APPLICATION
Here, Defendant claims that the Court should grant it partial summary judgment because the
services at issue are not compensable allowable expenses, but instead are only replacement services,
which Plaintiff is foreclosed from recovering due to the three-year time limit of Mich. Comp. Laws §
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500.3107(1)(c). The Court finds Defendant’s over-simplistic position without merit and denies its motion
for several reasons.
First, Defendant’s motion seeks a ruling that the contested services—driving; preparing breakfast,
lunch and dinner; assistance with homework; assistance with educational activities; laundry (washing
bedding and clothes); watching television with AC; and preparing AC’s bed—are simply “ordinary and
necessary services” undertaken by every household. Yet, were the Court to adopt Defendant’s broad
argument, the result would undoubtedly deny Plaintiff of properly compensable benefits for allowable
expenses under Mich. Comp. Laws § 500.3107(1)(a). For example, while the general activity of
“driving” AC can likely be labeled as a replacement service provided “in a manner indistinguishable”
before and after the injury, categorically precluding Plaintiff from recovering any allowable expenses for
transportation would be erroneous. Even just a cursory review of Plaintiff’s attendant care log sheets
reveals that Michelle White drove AC to myriad physician and therapy appointments, all of which were
“necessitated by the injury sustained in the motor vehicle accident.” See Griffith, 472 Mich. at 535. Any
attempt by Defendant to argue that such transportation—or “driving”—services were not for AC’s “care,
recovery, or rehabilitation” is disingenuous at best. Accordingly, reasonable minds could differ on
whether “driving” constitutes an allowable expense.
Examination of another service at issue likewise demonstrates the deficiencies in Defendant’s
position. Defendant contends that assistance with homework and educational activities constitutes
“ordinary parenting” for an eight-year-old child. Again, when dealing with an ordinary eight-year-old
child that may be accurate, but such is not the case here. Dr. Holly Gilmer—a pediatric neurosurgeon and
one of AC’s treating physicians—testified that AC requires assistance with “learning, staying at any
particular task, completing a task, [and] completing her homework.” Moreover, a neuropsychological
assessment conducted by Angela DeBastos, Ph.D., notes that AC “learns best when there are
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opportunities for repeated exposure to the material and when the information is presented in multiple
formats (e.g., verbally and visually/pictures);” that AC has difficulty “learning how to identify and
produce letters and numbers,” and is “not yet able to produce meaningful written output;” and that she is
performing “well below expectation for her age and current grade level” based on several psychological
tests administered. Thus, Plaintiff has presented evidence sufficient to create a factual question on
whether assistance with homework and education activities are “related” to AC’s injuries such that these
services can be considered allowable expenses under Mich. Comp. Laws § 500.3107(1)(a).3
In sum, Defendant is not entitled to summary judgment as factual issues exist regarding the
services Defendant seeks to characterize as replacement services. As such, the Court denies Defendant’s
motion.
V. CONCLUSION
Accordingly, for the reasons stated above, IT IS HEREBY ORDERED that Defendant’s Motion
for Partial Summary Judgment [dkt 54] is DENIED.
IT IS SO ORDERED.
s/Lawrence P. Zatkoff
Hon. Lawrence P. Zatkoff
U.S. District Judge
Dated: October 18, 2013
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The Court need not address every service. There is ample evidence in the record to support Plaintiff’s viewpoint that the
services at issue—or, at a minimum, certain aspects of the services—are for AC’s care, recovery, or rehabilitation. Because
Plaintiff has presented proper summary judgment evidence to refute Defendant’s motion, the Court declines to grant partial
summary judgment to Defendant.
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