JORGE MORALES V STATE FARM MUTUAL AUTO INSAnnotate this Case
STATE OF MICHIGAN
COURT OF APPEALS
May 27, 2008
July 24, 2008
Macomb Circuit Court
LC No. 04-003337-NO
STATE FARM MUTUAL AUTOMOBILE
Advance Sheets Version
Before: Bandstra, P.J., and Fitzgerald and Markey, JJ.
Defendant State Farm Mutual Automobile Insurance Company appeals by right the
judgment entered on a jury award of no-fault benefits under MCL 500.3107 for the plaintiff,
Jorge Morales. No-fault personal protection insurance benefits (so-called “PIP benefits”) are
payable for “accidental bodily injury arising out of the ownership, operation, maintenance or use
of a motor vehicle as a motor vehicle.” MCL 500.3105(1). The jury found that plaintiff
sustained an injury in an automobile accident thereby incurring reasonable and reasonably
necessary allowable expenses of $216,000, work loss of $76,032, and replacement services
expenses of $21,900. The jury also awarded $62,786 as penalty interest under MCL 500.3142.
Subsequently, the trial court awarded plaintiff attorney fees of $148,562.50 under MCL
500.3148(1), taxable costs of $12,478.54, and judgment interest. The court entered judgment for
plaintiff in the amount of $597,351.40. We affirm.
I. Factual Background
Plaintiff was injured in a rollover accident on June 12, 2002, while driving a boom truck
in the course of his electric-sign-repair business. Before the accident, plaintiff had various health
problems: he had a heart attack in 1993, was an insulin-dependent diabetic, and suffered
hypertension and arteriosclerosis. Plaintiff’s family doctor, Dr. Robert Brateman, diagnosed
plaintiff with a closed head injury as a result of the accident, but on November 11, 2002, Dr.
Brateman released plaintiff to return to work. Plaintiff and his wife maintain that he tried to
return to work in a supervisory capacity, but the attempt lasted only one or two weeks because
plaintiff experienced dizziness, could not distinguish color-coded wiring, made unsafe decisions,
and argued with employees. Defendant initially paid plaintiff work-loss benefits but stopped
after three months and did not pay any further no-fault benefits.1
On December 17, 2002, plaintiff experienced an acute cardiac event resulting in his
hospitalization. Although this was initially thought to have been another myocardial infarction
(heart attack), the incident was diagnosed as unstable angina and treated with angioplasty.
Plaintiff does not dispute that this incident was temporarily disabling for the period of
hospitalization and few days of recovery.
In February 2003, plaintiff suffered an incident of confusion and disorientation, which
was attributed to a transient ischemic attack (TIA). Dr. Brateman testified that the TIA had only
temporary effects and would not permanently disable plaintiff. Dr. Brateman conceded that
plaintiff might also have small vessel disease of the brain caused by his diabetes and
arteriosclerosis, which could produce similar symptoms of confusion, memory loss, dizziness, or
sometimes a TIA.
On November 3, 2003, plaintiff signed an application for a pension or compensation from
the federal Department of Veterans Affairs (VA). Plaintiff testified that his wife filled out all the
forms for him. Plaintiff’s wife testified that someone had suggested to her that because her
husband was a veteran, the VA might provide benefits. Plaintiff’s wife asked Dr. Brateman to
write letters supporting the benefit application. Dr. Brateman wrote a letter for the purpose of
the VA-benefits application on November 3, 2003, that listed, among plaintiff’s other ailments,
“ischemic heart disease, post myocardial infarction with congestive heart failure and a second
myocardial infarction in 2002,” and indicated plaintiff’s “inability to work secondary to ischemic
heart disease, diabetes neuropathy, and peripheral vascular occlusive disease.” This letter did not
mention plaintiff’s motor vehicle accident or plaintiff’s having a closed head injury. Apparently,
the VA responded to the application with a letter dated December 3, 2003, which requested that
plaintiff sign medical releases and submit additional information to support his claim. Dr.
Brateman wrote a second letter on December 14, 2003, that was sent directly to the VA
Defendant did pay plaintiff three years of benefits under a separate disability policy.
representative processing plaintiff’s claim. In this letter, Dr. Brateman listed plaintiff’s problems
as “1) ischemic heart disease, post myocardial infarction x2 with congestive heart failure; 2)
motor vehicle accident 6/12/02 with closed head injury, memory impairment, and subsequent
inability to work; 3) chronic vertigo, caused by the auto accident note above; 4) type I, diabetes
mellitus; 5) CVA (stroke); 6) diabetic neuropathy; 7) hypertension; 8) traumatic brain injury, as
above.” Plaintiff also signed a form dated December 15, 2003, which said that he had signed
medical releases at the local veterans’ office to release all his medical records and asked that his
claim be processed on the basis of his medical records.
Plaintiff and his wife met several times with a VA representative. Several different VA
doctors examined plaintiff. Plaintiff’s wife testified that plaintiff’s eligibility for VA benefits
arose from plaintiff’s service in Vietnam and exposure to Agent Orange, which was believed to
be a causative factor in plaintiff’s diabetes and related circulatory problems. At some point
before September 15, 2004, the VA had evidently awarded plaintiff benefits, because on that
date, the VA issued a decision increasing plaintiff’s disability rating as follows:
1. Evaluation of coronary artery disease status post two myocardial
infarctions; with stent placement, which is currently 60 percent disabling, is
increased to 100 percent effective November 19, 2002.
2. Service connection for peripheral vascular disease of the right lower
extremity is granted with an evaluation of 40 percent effective November 19,
3. Service connection for peripheral vascular disease of the left lower
extremity is granted with an evaluation of 20 percent effective November 19,
4. Entitlement to special monthly compensation based on Housebound
criteria being met is granted from November 19, 2002.
5. Evaluation of diabetic retinopathy, which is currently 0 percent
disabling, is increased to 30 percent effective November 19, 2002. Entitlement to
increased evaluation is deferred.
6. A decision on entitlement to compensation for Meniere's syndrome is
The VA decision listed the evidence on which the decision was based: (1) claims file
review; (2) the medical report of Dr. Bruce R. Garretson, dated August 13, 2004; and (3)
outpatient treatment reports from the VA hospital in Detroit from January 13, 2004, through July
Against this background, the major issue of this case was tried: were plaintiff’s inability
to work and his need for attendant care causally related to injuries he received in the June 12,
2002, rollover accident, or had he recovered from any auto-accident injuries by November 2002
and subsequently become disabled by his preexisting diabetes-related diseases that gave rise to
the 100 percent VA disability rating? Defendant’s theory of the case was the latter. Plaintiff’s
theory of the case was that while he had serious preexisting diabetes-related ailments, they did
not prevent him from working before the accident, and, but for the accident, he would have
continued working except for the brief hospitalization and recovery days after his December
2002 heart incident and February 2003 TIA. Plaintiff argued his preexisting condition made him
more susceptible to the disabling effects of a closed head injury. Plaintiff also theorized that
defendant should have had his claim reviewed after November 2002 by properly qualified
medical personnel, such as a neuropsychologist who specialized in closed head injuries, and that
its failure to do so was improper and unfair. A summary of the expert testimony presented at
trial on the major issue of the case follows.
Dr. Brateman, plaintiff’s family physician, diagnosed plaintiff as sustaining a closed head
injury in the accident, noting that plaintiff suffered from dizziness, confusion, memory loss,
chronic vertigo, and headaches. According to Dr. Brateman, plaintiff’s closed head injury
disabled him from working. Dr. Brateman also noted a change in plaintiff’s personality after the
accident. Dr. Brateman further testified that plaintiff required constant attendant care. With
respect to the December 2002 heart incident requiring angioplasty, Dr. Brateman testified that,
absent the closed head injury from the auto accident, plaintiff would have only been off work for
a “number of days to maybe a few weeks.” Similarly, Dr. Brateman testified that the TIA
plaintiff suffered in February 2003 had temporary effects that resolved quickly, unlike the closed
head injury from the accident “with an actual bruise to the brain” that caused long-lasting
In July 2003, plaintiff’s treating neurologist referred him to clinical neuropsychologist
Dr. Michael Vredevoogd for an evaluation. Dr. Vredevoogd testified at trial that after reviewing
plaintiff’s medical history and performing numerous tests, he had concluded that plaintiff’s
closed head injury interacted with his diabetes-related vascular condition so as to disable him.
Dr. Vredevoogd opined that plaintiff’s vascular condition alone would not have been disabling
but it made plaintiff more susceptible to being disabled by his closed head injury. Although he
learned of the closed head injury from plaintiff’s medical history, Dr. Vredevoogd reached the
same diagnosis from his own testing data.
Plaintiff’s neurologist also referred plaintiff to speech pathologist Debra Thomas in
September 2003. After conducting a cognitive assessment of plaintiff’s speech and language,
Ms. Thomas concluded that plaintiff had mild to moderate deficits resulting from a closed head
injury sustained in an automobile accident.
Dr. John Blase, another neuropsychologist, examined plaintiff in June 2005. Dr. Blase
opined at trial that a TIA would not have a lasting disabling effect. After administering a battery
of tests to plaintiff, Dr. Blase formed the opinion that plaintiff suffered from a traumatic brain
injury. He further opined that plaintiff’s brain injury was disabling with regard to plaintiff’s
ability to work and to care for his own needs, and that plaintiff required constant supervision.
Although Dr. Blase administered a different battery of tests to plaintiff than did Dr. Vredevoogd
in 2003, he reached the same conclusion relative to plaintiff’s preexisting diabetes-related
vascular condition. Plaintiff’s diabetes, hypertension, and vascular disease, which were not
disabling before the accident, rendered plaintiff subject to greater behavioral impairment as a
result of the traumatic brain injury received in the accident.
Defendant required plaintiff to submit to an independent medical examination by Dr.
Choo Sun Rim, a neurologist, who did not testify at trial. Dr. Rim’s report, apparently admitted
at trial as part of the defendant’s claim records, indicated that plaintiff had suffered a head injury
in the accident but that it appeared to be relatively minor. The head injury was noted as possibly
explaining the dizziness and headaches plaintiff experienced. Dr. Rim also opined in his report
that the intellectual and behavioral alteration plaintiff experienced did not seem to be related to
brain injury but to small vessel disease of the brain.
Defendant did present at trial the deposition testimony of Dr. Gerald Levinson, a
cardiologist who examined plaintiff at defendant’s request. Dr. Levinson claimed to have not
found any indication in plaintiff’s medical records, other than Dr. Brateman’s opinion, to
document plaintiff having a closed head injury. But Dr. Levinson admitted that he did not have
the expertise to diagnose a closed head injury and that he would defer to a neuropsychologist in
After the proofs were closed and counsel argued their positions, the trial court instructed
the jury with M Civ JI 35.02 regarding plaintiff’s burden of proof on the critical issue of the case.
Specifically, the court instructed the jury that the plaintiff had the burden of proving that his
injuries arose out of the operation or use of a motor vehicle as a motor vehicle and that plaintiff
suffered a loss of income from work that he would have performed during the first three years
after the accident had he not been injured. Counsel for both parties expressed satisfaction with
the trial court’s instructions to the jury. The jury was also provided a detailed jury-verdict form
approved by both parties. The jury completed the verdict form and found in plaintiff’s favor, and
judgment was entered accordingly.
II. Evidentiary Issues
Defendant first argues that it was denied a fair trial by the admission of irrelevant and
prejudicial evidence regarding the manner in which it processed plaintiff’s claim for no-fault
benefits. This evidence came through the testimony of a former claims executive for defendant
who was qualified as an expert in handling insurance claims and from cross-examination of those
of defendant’s employees who were involved with plaintiff’s claim. The trial court ruled that the
testimony of plaintiff’s expert was relevant to whether plaintiff submitted reasonable proof of
loss to defendant, thus rendering plaintiff’s claimed benefits overdue and entitling plaintiff to
statutory penalty interest. We conclude the trial court did not abuse its discretion by admitting
the claims-handling evidence and, even if it did, reversal is not warranted.
A trial court’s decision whether to admit or exclude evidence will not be disturbed on
appeal absent an abuse of discretion. Elezovic v Ford Motor Co, 472 Mich 408, 419; 697 NW2d
851 (2005). The trial court abuses its discretion if its decision is outside the range of principled
outcomes. People v Orr, 275 Mich App 587, 588-589; 739 NW2d 385 (2007). “A decision on a
close evidentiary question ordinarily cannot be an abuse of discretion.” Lewis v LeGrow, 258
Mich App 175, 200, 214; 670 NW2d 675 (2003). Moreover, even if a court abuses its discretion
in admitting or excluding evidence, the error will not merit reversal unless a substantial right of a
party is affected, MRE 103(a), and it affirmatively appears that the failure to grant relief is
inconsistent with substantial justice, MCR 2.613(A). See Chastain v Gen Motors Corp, 467
Mich 888 (2002); Lewis, supra at 200.
Generally, all relevant evidence is admissible and irrelevant evidence is not. MRE 402;
Waknin v Chamberlain, 467 Mich 329, 333; 653 NW2d 176 (2002). Evidence is relevant if it
has any tendency to make the existence of a fact that is of consequence to the action more
probable or less probable than it would be without the evidence. MRE 401; Waknin, supra at
333. The trial court also has discretion to exclude even relevant evidence if its probative value is
substantially outweighed by the danger of unfair prejudice, confusion of the issues, misleading
the jury, undue delay, waste of time, or needless presentation of cumulative evidence. MRE 403;
Lewis, supra at 199. “‘Evidence is unfairly prejudicial when there exists a danger that
marginally probative evidence will be given undue or preemptive weight by the jury.’” Waknin,
supra at 334 n 3, quoting People v Crawford, 458 Mich 376, 398; 582 NW2d 785 (1998).
Defendant argues that the claims-handling evidence was not relevant to penalty interest
under MCL 500.3142 because an insurer is liable for penalty interest if benefits are overdue
regardless of the reason the insurer does not timely pay the benefits. “Penalty interest must be
assessed against a no-fault insurer if the insurer refused to pay benefits and is later determined to
be liable, irrespective of the insurer’s good faith in not promptly paying the benefits.” Williams v
AAA Michigan, 250 Mich App 249, 265; 646 NW2d 476 (2002), citing Davis v Citizens Ins Co
of America, 195 Mich App 323, 328; 489 NW2d 214 (1992). While we agree with the premise
of defendant’s argument, it does not follow that the claims-handing evidence was irrelevant.
MCL 500.3142(2) provides in part: “Personal protection insurance benefits are overdue if not
paid within 30 days after an insurer receives reasonable proof of the fact and of the amount of
loss sustained.” Whether plaintiff provided reasonable proofs of loss and whether after do doing,
the defendant failed to pay the claims within 30 days were questions before the jury that plaintiff
bore the burden of proving. See M Civ JI 35.04. The focus of the evidence in this regard was on
what plaintiff provided defendant and whether it constituted “reasonable proof of the fact and of
the amount of loss sustained.” The claims-handling evidence was therefore relevant to facts that
were of consequence to the action, whether plaintiff provided defendant reasonable proof of the
fact and amount of the loss sustained for purpose of penalty interest under MCL 500.3142(2).
Additionally, defendant’s view of relevancy with respect to the main causation issue in
this case is too narrow. A material fact need not directly prove an element of a claim or defense
provided it is within the range of litigated matters in controversy. People v Mills, 450 Mich 61,
67-68; 537 NW2d 909, modified 450 Mich 1212 (1995). To be relevant under MRE 401, a fact
must be material, i.e., it must be of consequence to the action. Id. at 66-67. “‘Materiality looks
to the relation between the propositions for which the evidence is offered and the issues in the
case. If the evidence is offered to help prove a proposition which is not a matter in issue, the
evidence is immaterial.’” Id. at 67, quoting 1 McCormick, Evidence (4th ed), § 185, p 773. A
fact at issue in this case was whether defendant fairly reviewed plaintiff’s claim. Plaintiff’s
theory of the case was that defendant had not fairly reviewed plaintiff’s claim. Defendant, on the
other hand, believed that not only had it fairly reviewed and denied plaintiff’s no-fault claim, but
also that it had overpaid it. Consequently, whether defendant fairly reviewed plaintiff’s claim
was within the range of the litigated controversy and was a fact of consequence to the action.
Although the evidence does not directly prove an element of plaintiff’s claim for PIP benefits, it
is still consequential because, if believed, it makes plaintiff’s theory of the case more probable
than it would be without the evidence. The evidence was relevant to whether plaintiff’s claim
was denied because it was not causally related to the accident (defendant’s position) or because it
was a valid claim that was not handled fairly (plaintiff’s theory). The evidence was a brick in the
wall that was plaintiff’s case. See, e.g., People v Brooks, 453 Mich 511, 519; 557 NW2d 106
(1996), quoting 1 McCormick, Evidence (4th ed), § 185, p 776.
Defendant also argues that even if the evidence were relevant, and therefore properly
admitted into evidence, its probative value was substantially outweighed by the danger of unfair
prejudice. MRE 403. Defendant conflates with this argument alleged improper argument by
plaintiff’s counsel. But other than moving for a mistrial after plaintiff’s opening statement,
which was denied and not appealed, defendant has neither properly preserved nor appealed a
claim of misconduct by counsel. Further, the jury verdict of only 40 percent of what plaintiff
requested does not reflect a decision based on passion or bias. Moreover, to the extent that the
trial court abused its discretion either by admitting the claims-handling evidence, or failing to
exclude the evidence under MRE 403, our review of the trial record as a whole convinces us that
reversal is not warranted because it does not affirmatively appear that the failure to grant relief is
inconsistent with substantial justice. MCR 2.613(A); Chastain, supra; Lewis, supra at 200.
Defendant next takes issue with the testimony of registered nurse Laura Kling regarding
the cost of attendant care. Defendant contends that Kling testified as an expert, and her
testimony was supported by inadmissible hearsay contrary to MRE 703, which now requires that
the facts underlying an expert’s opinion be in evidence. Defendant argues that because this
testimony was inadmissible and the only evidence regarding the cost of attendant care, the trial
court should have granted defendant a judgment notwithstanding the verdict (JNOV). We
We review de novo the trial court’s ruling on a motion for JNOV. Wiley v Henry Ford
Cottage Hosp, 257 Mich App 488, 491; 668 NW2d 402 (2003). The trial court should grant a
JNOV motion only when the evidence and all legitimate inferences viewed in a light most
favorable to the nonmoving party fail to establish a claim as a matter of law. Foreman v
Foreman, 266 Mich App 132, 136; 701 NW2d 167 (2005). To succeed on this issue, defendant
must establish not only that the trial court abused its discretion by admitting Kling’s testimony
but also that there was no other admissible evidence to support the jury’s award of benefits for
The trial court denied defendant’s motion for JNOV on this issue, reasoning that Kling’s
testimony was admissible under MRE 703 because it was based on Kling’s own direct, personal
knowledge, citing Brzozowski v Wondrasek, unpublished opinion per curiam of the Court of
Appeals, issued November 10, 2005 (Docket Nos. 256701, 259098), p 5.
Having reviewed the record de novo, we find no error of law in the trial court’s analysis
and no abuse of discretion in admitting Kling’s testimony. Moreover, contrary to defendant’s
argument on appeal, the testimony of plaintiff’s economist, Nitin Paranjpe, corroborated Kling’s
testimony regarding the cost of attendant care. Although Paranjpe based his calculation for
attendant care on Kling’s numbers, he testified about independent sources, which it may fairly be
inferred Paranjpe found were consistent with Kling’s testimony.
Kling testified that she was a registered nurse with 20 years’ experience working in
rehabilitation settings in hospitals, homes, and other facilities. She had worked for many years
with clients who had closed head injuries, providing case management and life care planning.
She had personally reviewed plaintiff’s care needs and determined he needed 24-hour daily care
by a home health aide. Kling then testified:
Q. All right. Now, you have experience or background in the home health
aide agency setting, correct?
Q. You understand what they charge?
A. That’s correct.
Q. Are here [sic] good agencies and bad agencies?
A. There are good agencies, there are bad agencies, there is bad home health
aide, there’s good home health aid[e]s. My experience when I provide
attendant care to a client, we have to make some changes along the way. We
have to really—a case manager has to monitor the situation closely.
Q. All right. Now, with these home health agencies they have rates they
Q. And do they vary?
Q. Do you have experience with what they charge?
Defendant then interposed an objection to Kling’s testifying about the cost of homehealth-care aides on the bases of lack of foundation and hearsay. With respect to the former,
defendant clarified that Kling had not specified to what agencies she was referring. With respect
to the hearsay objection, defense counsel argued that Kling’s knowledge had to be based on
hearsay. But defense counsel did not request an opportunity to voir dire the witness to confirm
his assumption regarding the source of Kling’s knowledge. Nor did counsel specifically object
on the basis of MRE 703 that the facts or data on which Kling based her opinion be in evidence.
Viewing the existing record in the light most favorable to plaintiff, the trial court did not err by
inferring that Kling had personal, nonhearsay knowledge on which to base her testimony that
aides in 2005 were paid in the range of $18 to $24 an hour.2 MRE 703 does not preclude an
expert from basing an opinion on the expert’s personal knowledge. Brzozowski, supra at 5; see
also Dubin, Weissenberger, & Stephani, Michigan Evidence: 2008 Courtroom Manual, pp 251252. So, the trial court’s decision to admit Kling’s testimony was within the range of reasonable
and principled outcomes. Orr, supra at 588-589. It follows that the trial court properly denied
defendant’s motion for JNOV. Foreman, supra at 136; Wiley, supra at 492.
In addition, Paranjpe, an economist and statistician employed by an econometrics and
employment research firm, testified that his company had conducted surveys regarding home
health aides in 2002 and 2005. Paranjpe also obtained information from the state of Michigan’s
website that the state paid home health aides at the rate $17.50 an hour in 2002. These sources,
Paranjpe testified, were “indications as to what the market rate might be.” Thus, although
Paranjpe used Kling’s numbers to calculate attendant care benefits, it is fair to infer from his
testimony that he independently verified Kling’s data. Defendant argues that Paranjpe also relied
on hearsay, but his own company’s surveys would not be hearsay and, if they were, they would
be admissible under MRE 803(17), which excepts from the rule against hearsay “[m]arket
quotations, tabulations, lists, directories, or other published compilations, generally used and
relied upon by the public or by persons in particular occupations.” This same hearsay exception
applies to government information on wages for different occupations such as a health-care aide,
even though the information was obtained from the Internet. See State v Erickstad, 620 NW2d
136, 145-146 (ND, 2000) (affirming the admission in evidence under the identical hearsay
exception of a police officer’s testimony regarding the value of a pickup truck based on
accessing the Kelley Blue Book Internet website).
III. Judicial Estoppel
Defendant argues that plaintiff is judicially estopped from asserting a claim for work-loss
benefits or replacement services after his December 17, 2002, heart incident because he
successfully asserted a claim for VA disability benefits based on causes unrelated to his motor
vehicle accident. Because defendant raised this issue on a motion for directed verdict and on its
motion for JNOV and because it presents a question of law, our review is de novo. James v
Alberts, 464 Mich 12, 14; 626 NW2d 158 (2001); Wiley, supra at 491.
The doctrine of judicial estoppel is intended to maintain the consistency of court rulings
and to keep litigants from playing “fast and loose” with the legal system. See Paschke v Retool
Industries, 445 Mich 502, 509-510; 519 NW2d 441 (1994). Under the doctrine of judicial
estoppel, “‘a party who has successfully and unequivocally asserted a position in a prior
Contrary to defendant’s argument on appeal, viewed in the light most favorable to plaintiff,
Kling’s personal knowledge regarding home health aides was not 20 years old, but, rather, she
had more than 20 years’ experience in case management and life care planning.
proceeding is estopped from asserting an inconsistent position in a subsequent proceeding.’” Id.
at 509, quoting Lichon v American Univ Ins Co, 435 Mich 408, 416; 459 NW2d 288 (1990)
(emphasis omitted). The “prior success” model of the doctrine applies in Michigan. Paschke,
supra at 509.
Under the “prior success” model, the mere assertion of inconsistent positions is
not sufficient to invoke estoppel; rather, there must be some indication that the
court in the earlier proceeding accepted that party’s position as true. Further, in
order for the doctrine of judicial estoppel to apply, the claims must be wholly
inconsistent. [Id. at 510 (citations omitted).]
As in Paschke, we conclude that the doctrine of judicial estoppel has no application to the
facts of this case because the position plaintiff took with respect to his application for benefits
from the VA was not “wholly inconsistent” with his position in claiming no-fault benefits.
Veterans’ benefits are dependent on establishing a service-connected disability. The application
plaintiff submitted to the VA was for benefits based on plaintiff’s service in Vietnam and
exposure to Agent Orange, which is allegedly causally linked to diabetes and vascular disease.
Plaintiff signed an application for benefits, signed medical releases for his medical records, and
requested that the VA review his medical records and award benefits. Other than an initial letter
written by plaintiff’s family doctor that does not mention the motor vehicle accident, defendant
does not identify any evidence plaintiff ever asserted to the VA that he was not also injured in a
motor vehicle accident. In fact, Dr. Brateman’s second letter to the VA on December 14, 2003,
clearly notes that plaintiff received a closed head injury in the June 12, 2002, motor vehicle
accident. The fact that the VA, on the bases of plaintiff’s medical records and its own treatment
reports regarding plaintiff, determined that plaintiff’s coronary artery disease was 100 percent
disabling does not preclude plaintiff from being disabled by other factors as well. Indeed, the
VA determination also lists plaintiff as having other service-connected disabilities based on other
ailments such as peripheral vascular disease (40 percent right lower – 20 percent left lower) and
diabetic retinopathy (30 percent). Similarly, plaintiff did not assert in the present case for nofault benefits that his closed head injury was the sole factor causing his disability. Rather, he
asserted that his preexisting condition made him more susceptible to the disabling effects of the
closed head injury he suffered in the accident. In sum, plaintiff’s position in his application for
VA benefits is not “wholly inconsistent” with his claim for no-fault benefits. Therefore, judicial
estoppel does not apply. Paschke, supra at 509-510.
Moreover, defendant relies on MacDonald v State Farm Mut Ins Co, 419 Mich 146; 350
NW2d 233 (1984), for its argument on this issue. That case was not decided on the ground of
judicial estoppel but rather on the basis that MCL 500.3107(1)(b) relieves an insurer from
liability for work-loss benefits if a supervening cause would have prevented the claimant from
working even if the motor vehicle accident had not occurred. In MacDonald’s case, he suffered
a heart attack two weeks after the auto accident, and “[a]fter that date [MacDonald] would have
earned no wage even had the accident not occurred and, therefore, is ineligible for work-loss
benefits after that date under § 3107(b).” MacDonald, supra at 152. The Court held that this
result was not altered by MCL 500.3107a, which concerns those who are temporarily
unemployed. MacDonald, supra at 152-154. In sum, under § 3107(b) as interpreted by
MacDonald, a supervening cause may apply to preclude work-loss benefits if the claimant would
not have been able to work even if no auto accident had occurred. Stated otherwise, there is a
“but for” factual issue like proximate causation: if, but for the accident, plaintiff would have
been able to work, work-loss benefits are payable. On the other hand, even if no accident had
occurred, plaintiff would not have been able to work, then no work-loss benefits are payable.
The essence of defendant’s defense at trial was that plaintiff’s preexisting medical
conditions became disabling after, but not because of, any injuries he received in the motor
But plaintiff presented testimony from his family doctor, two
neuropsychologists, and other health professionals that it was plaintiff’s closed head injury from
his motor vehicle accident interacting with plaintiff’s susceptible diabetes-caused condition that
kept him from working. One of defendant’s own experts conceded that plaintiff suffered a
closed head injury in the accident, albeit a mild one, and defendant’s other expert, cardiologistinternist Dr. Levinson, testified that he would defer to a neuropsychologist to diagnose a closed
head injury. Although defense counsel ably contested plaintiff’s case by presenting evidence
that plaintiff’s symptoms could be explained by small vessel brain disease, in the end, this was a
factual question for the jury to decide. All the medical evidence and the VA decision regarding
plaintiff’s service-connected disabilities went to the jury. The trial court instructed the jury
regarding the statutory element of plaintiff’s work-loss claim and the “but for” test that formed
the basis for the MacDonald decision: “That Jorge Morales suffered a work loss which consists
of a loss of income from work the plaintiff would have performed during the first three years
after the accident had he not been injured.” Defendant requested no additional instruction based
on MacDonald and, in fact, expressed satisfaction with the trial court’s instructions. The jury
decided this issue in plaintiff’s favor, and there is no reason to set aside the jury’s verdict.
IV. Attorney Fees
After the jury’s verdict, plaintiff moved the trial court for attorney fees pursuant to MCL
500.3148(1), which provides that an attorney representing a claimant for no-fault benefits may
be awarded a reasonable fee as a charge against the no-fault insurer “if the court finds that the
insurer unreasonably refused to pay the claim or unreasonably delayed in making proper
payment.” The trial court made such a finding in this case and granted plaintiff’s motion for a
reasonable attorney fee, which the court determined to be $148,562.50 under the facts and
circumstances of this case. Defendant does not contest the substantive merits of the attorney-fee
award. Instead, defendant only argues that this Court should vacate the attorney-fee award if the
Court grants relief on one or more of the other issues defendant raises on appeal. Because we
have found no error warranting reversal or other relief, defendant’s request for relief on this issue
/s/ Richard A. Bandstra
/s/ E. Thomas Fitzgerald
/s/ Jane E. Markey