DINAH ROSE V STATE FARM MUTUAL AUTO INSURANCE
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STATE OF MICHIGAN
COURT OF APPEALS
DINAH ROSE,
UNPUBLISHED
December 19, 2006
APPROVED FOR
PUBLICATION
February 15, 2007
9:05 a.m.
Plaintiff-Appellee/
Cross-Appellee,
v
STATE FARM MUTUAL AUTOMOBILE
INSURANCE COMPANY,
No. 262606
Washtenaw Circuit Court
LC No. 01-000493-NF
Defendant-Appellant,
and
TITAN INSURANCE COMPANY,
Defendant/Cross-Appellant,
and
Official Reported Version
FARMERS INSURANCE EXCHANGE,
Defendant/Cross-Appellant.
Before: Whitbeck, C.J., and Saad and Schuette, JJ.
PER CURIAM.
Defendants, State Farm Mutual Automobile Insurance Company (State Farm), Titan
Insurance Company (Titan), and Farmers Insurance Exchange (Farmers), appeal as of right a
declaratory judgment allowing for future personal protection insurance (PIP) benefits for
plaintiff, Dinah Rose. We reverse and remand for a new trial on the issue of future benefits. On
remand, in accordance with Manley v Detroit Automobile Inter-Ins Exch, 425 Mich 140; 388
NW2d 216 (1986), the jury must specifically determine what future benefits are reasonable and
necessary given the facts and circumstances of the case.
I. FACTS
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This first-party no-fault case arises out of three motor-vehicle accidents involving
plaintiff that occurred between 1982 and 2001. Plaintiff was involved in the first motor-vehicle
accident on February 9, 1982. State Farm was the no-fault insurer. Plaintiff reported a loss of
consciousness at the scene, and she suffered multiple contusions and abrasions on the left side of
her face, hemarthosis of the right knee, and a comminuted fracture of her left ulna. Plaintiff was
involved in a second motor-vehicle accident on June 3, 1995, and Titan was the no-fault insurer.
After this accident, plaintiff was diagnosed with a closed head injury. Plaintiff was involved in a
third motor-vehicle accident on April 4, 2001, and Farmers was the no-fault insurer. Plaintiff
was not evaluated at the hospital following this accident, but rather was driven home in the
vehicle.
At trial, plaintiff had numerous physicians and neuropsychologists—represented by the
various parties—testify that she suffered a closed head injury in one or more of the accidents in
which she was involved. The jury concluded that plaintiff sustained a closed head injury in the
accidents, and it awarded her $132,341.66 of the $613,000 that she was seeking for past
expenses incurred. This reduced award was first attributable to the jury deciding that plaintiff
was not owed interest on the payment of expenses that she was due. The jury then decided that
one-third of plaintiff 's complications were attributable to the accident, one-third were
attributable to substance abuse, and one-third were attributable to psychiatric or emotional
instability.
The trial court entered a judgment on the jury award and for declaratory relief, which
reads, in pertinent part, as follows:
IT IS HEREBY ORDERED AND ADJUDGED as follows:
* * *
3. The jury further awards, by declaratory judgment relief, finding in
favor of the Plaintiff, that DINAH ROSE is entitled to treatment in the future for
care related to the automobile accidents to be overseen by the trial court.
IT IS FURTHER ORDERED AND ADJUDGED:
That a judgment in favor of Plaintiff on declaratory relief is hereby entered
and that Plaintiff is entitled to future treatment for care related to the automobile
accidents, in particular, closed head injury and related sequella to be overseen by
this Court with continuing jurisdiction until there is substantial change in
condition necessitating a new trial on some future issue.
Defendants now appeal this declaratory judgment.
II. STANDARD OF REVIEW
This Court reviews de novo the proper interpretation of a statute. Hamade v Sunoco, Inc
(R & M), 271 Mich App 145, 153; 721 NW2d 233 (2006). We also review de novo claims of
instructional error. Case v Consumers Power Co, 463 Mich 1, 6; 615 NW2d 17 (2000).
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III. ANALYSIS
Defendants argue that the trial court violated the no-fault act, MCL 500.3101 et seq., by
submitting the issue of future benefits to the jury without requiring it to specify what benefits
were reasonable and necessary. We agree.
The power to grant declaratory relief is established by court rule. MCR 2.605(A)(1)
provides: "In a case of actual controversy within its jurisdiction, a Michigan court of record may
declare the rights and other legal relations of an interested party seeking a declaratory judgment,
whether or not other relief is or could be sought or granted."
The purpose of a declaratory judgment is to enable the parties to obtain adjudication of
rights before an actual injury occurs, to settle a matter before it ripens into a violation of the law
or a breach of contract, or to avoid multiplicity of actions by affording a remedy for declaring in
expedient action the rights and obligations of all litigants. Skiera v Nat'l Indemnity Co, 165 Mich
App 184, 189; 418 NW2d 424 (1987). Our Supreme Court has previously approved of
declaratory relief for future expenses in a no-fault action. Manley, supra at 149-150. However,
under the no-fault act, an insurance company is only liable to pay for reasonable costs incurred
as a result of a motor-vehicle accident. MCL 500.3107(1)(a).1
In Manley, a declaratory judgment was entered requiring the no-fault insurer to pay for
room and board and attendant-care services in the future, at a specified rate. This Court reversed
this portion of the judgment because the declaration regarding future benefits was "'without
regard to whether such expenses were actually incurred.'" Manley, supra at 148, quoting Manley
v Detroit Automobile Inter-Ins Exch, 127 Mich App 444, 451; 339 NW2d 205 (1983), rev'd 425
Mich 140 (1986). Our Supreme Court reinstated this portion of the declaratory judgment, but
modified it to provide that no-fault insurers would not be charged for payment until they had the
bills to substantiate the charges. Id. at 149-150. This ruling by our Supreme Court is in accord
with the portion of the no-fault act that states that the charges must be "incurred." It does not
preclude the possibility of awarding future benefits payments, but rather allows insurers to be
free from the responsibility to make payments until the charges have actually been incurred.
Our Supreme Court in Manley also noted that a grant for future benefits is appropriate as
long as the court makes a specific determination regarding the reasonable costs for necessary
1
MCL 500.3107 reads, in part:
(1) Except as provided in subsection (2), 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.
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services. In Manley, the jury decided that the cost of nurse's aides may be more or less than $128
a day and that $30 a day should be paid for room and board. Id. at 158. Manley also allowed for
a right of "redetermination" of future expenses that have already been determined as reasonable
and necessary. The right to request redetermination belongs to both the plaintiff and the insurer.
Id. at 158-159. Likewise, in Moghis v Citizens Ins Co of America, 187 Mich App 245, 249; 466
NW2d 290 (1991), this Court stated that the jury award of $4,000 a month was appropriate "until
modified by the trial court."
In Manley and Moghis, the amount and type of benefit that the plaintiff received was
clearly indicated at the trial court level, which established a basis for the plaintiff and the insurer
to determine if the benefits would be reasonable and necessary in the future. The only issue to
be addressed by the court in the future is whether there has been a material change in the
plaintiff 's physical condition, which would warrant a change in the amount of attendant-care
compensation, or an increase or decrease in the cost of the services due to the passage of time.
Here, the trial court submitted the issue to the jury. However, the jury was not asked to
make a specific determination regarding the future benefits that are reasonable and necessary.
The jury was asked, "Is Dinah Rose entitled to treatment in the future for care related to auto
accidents? (Please note future care will be overseen by the trial court)." The trial court submitted
the issue of future benefits to the jury as a blanket claim, asking if plaintiff was entitled to care in
the future. Contrary to Manley and Moghis, this left the trial court, instead of the jury, to
determine the amount of future benefits to be awarded to plaintiff. However, whether PIP
expenses are reasonable and necessary is generally considered a question of fact for the jury.
Nasser v Auto Club Ins Ass'n, 435 Mich 33, 55; 457 NW2d 637 (1990). If the jury, as in Manley
and Moghis, does not specifically determine the award of future benefits, neither the plaintiff nor
the insurer can ascertain if the expenses incurred are reasonable and necessary.
We reverse the trial court's declaratory judgment and remand this case for a new trial for
the jury to determine what future benefits are reasonable and necessary. The final judgment of
the court should make clear that if either the insured or the insurer believes that a change in the
insured's condition warrants a modification of what expenses are reasonable and necessary and if
the parties are unable to agree on what are reasonable and necessary expenses, then the parties
may petition the court for appropriate relief under the no-fault act. We do not retain jurisdiction.
/s/ William C. Whitbeck
/s/ Henry William Saad
/s/ Bill Schuette
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