IN THE MATTER OF EDWARD CARROLL PP
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STATE OF MICHIGAN
COURT OF APPEALS
ALAN A. MAY, Conservator of the Estate of
EDWARD CARROLL, a Protected Person,
FOR PUBLICATION
April 26, 2011
9:05 a.m.
Petitioner-Appellant,
v
No. 292649
Macomb Probate Court
LC No. 2008-195574-CA
AUTO CLUB INSURANCE ASSOCIATION,
Respondent-Appellee.
Before: BECKERING, P.J., and WHITBECK and M. J. KELLY, JJ.
M. J. KELLY, J.
Petitioner Alan A. May, acting as the conservator of the Estate of Edward Carroll,
appeals as of right the Probate Court’s opinion and order apportioning the fee for his services
between Mr. Carroll’s estate and respondent Auto Club Insurance Association. The order
obliged Auto Club to pay $99.00 and Carroll’s estate to pay the remaining $6,816.70 of Mr.
May’s fee. On appeal, May argues that the trial court erred to the extent that it determined that
only $99.00 of the fee was for a reasonably necessary service for Carroll’s care and recovery
under MCL 500.3107(1)(a). Because Mr. Carroll would not have needed a conservator but for
the injuries he sustained in an automobile accident, May maintains that Auto Club must pay the
full amount of the conservator’s fees as a reasonably necessary service for Carroll’s care. We
agree that Auto Club was obligated to pay the entire fee for May’s services as a reasonably
necessary expense for Carroll’s care. For that reason, we reverse.
I. BASIC FACTS AND PROCEDURAL HISTORY
Mr. Carroll was involved in an automobile accident in 1982 that left him in a seriously
debilitated condition. In the petition for appointment of a conservator, it is stated that he suffered
a closed head injury and the guardian ad litem’s report indicates that Carroll was hospitalized for
two and one-half years following the accident. Auto Club was Carroll’s no-fault insurer. For
approximately 26 years, Auto Club paid $7000 to $8500 per month to Carroll’s wife for the 24hour care she gave to Carroll. Carroll’s wife died in November 2008. Just prior to Mrs.
Carroll’s death, the Carrolls’ daughter committed him to a psychiatric ward. Upon his release,
she placed him in an adult foster care home.
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Carroll’s daughter sought a formal guardianship, but he had concerns with her handling
of his finances. A lawyer filed a petition for the appointment of a conservator on Carroll’s behalf
and, in December 2008, the probate court appointed May to be Carroll’s conservator.
On March 19, 2009, May filed a petition for fees. He averred that Auto Club refused to
pay his conservator fee of $6816.70. He attached an itemized billing to the petition and asked
the court to approve the fee and order Auto Club to pay it. Auto Club opposed the petition,
arguing that the fees were not allowable expenses under MCL 500.3107(1)(a) of the no-fault act,
see MCL 500.3101 et seq., because they did not relate to Carroll’s care and recovery arising out
of the accident. In a subsequent reply, Auto Club indicated that Carroll had moved to assisted
living and that the conservator fees related to efforts to rent or sell Carroll’s residence, liquidate
his personal property, and sell his car.
In its June 2009 opinion and order, the probate court stated that the majority of May’s
claims involved “marshalling assets, paying bills, meetings, and administrative and legal services
on Mr. Carroll’s behalf.” The court further noted that under MCL 500.3107(1)(a), personal
protection benefits were payable for “allowable expenses”, which were expenses related to a
person’s care, recovery, or rehabilitation. The court concluded that, although the majority of the
fees were related to conservator duties, the services were for the most part not related to Carroll’s
care, recovery, or rehabilitation, as required under MCL 500.3107(1)(a). The court determined
that Auto Club was obligated to pay $99.00 dollars of the fees, and that Carroll’s estate was
liable for the remainder.
This appeal followed.1
II. PERSONAL PROTECTION INSURANCE BENEFITS
A. STANDARD OF REVIEW
On appeal, we must determine whether the trial court erred when it concluded that the
majority of Mr. May’s fees for serving as Mr. Carroll’s conservator did not constitute
“reasonable charges incurred for reasonably necessary products, services and accommodations
for an injured person’s care, recovery, or rehabilitation” under MCL 500.3107(1)(a). We must
also determine whether May’s fees were, in the alternative, replacement services within the
meaning of MCL 500.3107(1)(c), which are barred because Carroll incurred the expenses more
than three years after the date of his accident.2 This Court reviews de novo the proper
1
This Court originally held this appeal in abeyance pending our Supreme Court’s decision in
Wilcox v State Farm Mut Automobile Ins Co. See In re Carroll, unpublished order of the Court
of Appeals, entered June 23, 2010 (Docket No. 292649). However, on November 9, 2010, the
Supreme Court vacated its earlier order and denied leave to appeal. See Wilcox v State Farm
Mut Automobile Ins Co, 488 Mich 930 (2010).
2
We note that Auto-Club raised the argument that the conservator’s fees were for replacement
services within the meaning of MCL 500.3107(1)(c) for the first time on appeal. Although this
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interpretation of statutes such as MCL 500.3107. Griffith v State Farm Mut Auto Ins Co, 472
Mich 521, 525-526; 697 NW2d 895 (2005).
B. EXPENSES FOR CARE, RECOVERY, OR REHABILITATION
A person injured in an automobile accident is entitled to a variety of personal protection
insurance benefits—often referred to as PIP benefits—from his or her insurance carrier under
MCL 500.3107. An injured person is entitled to “all reasonable charges incurred for reasonably
necessary products, services and accommodations for an injured person’s care, recovery, or
rehabilitation.” MCL 500.3107(1)(a). In addition, the injured person is entitled to expenses,
“not exceeding $20.00 per day, reasonably incurred in obtaining ordinary and necessary
services” that he or she “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.”
MCL 500.3107(1)(c). At issue here is whether May’s services as a conservator were reasonably
necessary for Carroll’s “care, recovery or rehabilitation” under MCL 500.3107(1)(a), or whether
the services were for “ordinary and necessary services” that Carroll would have performed
within the meaning of MCL 500.3107(1)(c).
Although this Court has not directly addressed whether a conservator’s services are
compensable as services reasonably necessary for an injured person’s care, recovery or
rehabilitation, this Court has addressed whether a fee for services by a guardian were
compensable under MCL 500.3107(1)(a). In Heinz v Auto Club Ins Ass’n, 214 Mich App 195,
196; 543 NW2d 4 (1995), the guardian and conservator of a person injured in an automobile
accident sought to recover the fees and expenses associated with the guardianship under MCL
500.3107(1)(a). On appeal, the defendant insurer argued that MCL 500.3107(1)(a) applied only
to medical care. Id. at 197. This Court determined that MCL 500.3107(1)(a) was not so limited:
In short, § 3107(1)(a) provides for the payment of expenses incurred for
the reasonably necessary services for an injured person’s care. It is clear to us
that if a person is so seriously injured in an automobile accident that it is
necessary to appoint a guardian and conservator for that person, the services
performed by the guardian and conservator are reasonably necessary to provide
for the person’s care. Therefore, they are allowable expenses under § 3107.
[Heinz, 214 Mich App at 198.]
Because the question in Heinz involved only the fees charged by the guardian, the court’s
references to conservators was arguably dicta. Nevertheless, the court in Heinz clearly
concluded that the term “care”, as used in MCL 500.3107(1)(a), was not restricted to medical
Court will normally not consider issues that were not properly preserved by raising them in the
lower court, we “may overlook preservation requirements if the failure to consider the issue
would result in manifest injustice, if consideration is necessary for a proper determination of the
case, or if the issue involves a question of law and the facts necessary for its resolution have been
presented.” Smith v Foerster-Bolser Constr, Inc, 269 Mich App 424, 427; 711 NW2d 421
(2006). Because the facts are sufficient to determine this question of law, we shall address this
issue.
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care alone. Rather, it concluded that the type of care provided by a guardian could constitute
“care” within the meaning of MCL 500.3107(1)(a). And we conclude that there is little basis for
distinguishing the “care” provided by a guardian from that provided by a conservator.3
MCL 700.5306 governs the appointment of a guardian for an incapacitated person. To
appoint a guardian, the court must find that a person is incapacitated and “that the appointment is
necessary as a means of providing continuing care and supervision of the incapacitated
individual[.]” MCL 700.5306(1) (emphasis added). Moreover, the guardian must “make
provision for the ward’s care, comfort, and maintenance” and must “secure services to restore the
ward to the best possible state of mental and physical well-being so that the ward can return to
self-management at the earliest possible time.” MCL 700.5314(b). If the guardian’s ward does
not have a conservator, the guardian may institute support proceedings and “receive money and
tangible property for the ward’s support, care, and education.” MCL 700.5314(d). If the ward
has a conservator, the guardian must “pay to the conservator, for management as provided in this
act, the amount of the ward’s estate received by the guardian in excess of the amount the
guardian expends for the ward’s current support, care, and education[]” and must “account to the
conservator for the amount expended.” MCL 700.5314(f).
A probate court may appoint a conservator if the court determines that the “individual is
unable to manage property and business affairs effectively,” in relevant part, because of “mental
illness, mental deficiency, physical illness or disability” and the individual has “property that
will be wasted or dissipated unless proper management is provided, or money is needed for the
individual’s support, care, and welfare or for those entitled to the individual’s support, and that
protection is necessary to obtain or provide money.” MCL 700.5401(3). A probate court may
also “appoint a conservator” for “an individual who is mentally competent, but due to age or
physical infirmity is unable to manage his or her property and affairs effectively and who,
recognizing this disability, requests a conservator’s appointment.” MCL 700.5401(4).
3
This Court has addressed the recovery of conservator expenses in two other cases. But those
cases are distinguishable from the issue present here. In Shields v State Farm Mut Auto Ins Co,
254 Mich App 367; 656 NW2d 853 (2002), this Court noted the holding of Heinz. However, the
issue in that case concerned whether the holding applied to conservator fees where the
conservator was appointed due to a minor’s status and not because of injuries incurred in an
accident. Id. at 370-371. In Freeman v Colonial Penn Ins Co, 138 Mich App 444; 361 NW2d
356 (1984), the question was whether a conservator, who managed the investments of his ward,
could collect work loss benefits under MCL 500.3107(1)(b). The Freeman Court made a
reference to “‘work loss benefits’ for the replacement services of plaintiff”, but was not
addressing compensation for replacement services under MCL 500.3107(1)(c).
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In the present case, May petitioned the probate court, as Carroll’s nominee, for a
conservatorship for Mr. Carroll. He represented that Carroll could not manage his property and
business affairs due to physical illness or disability and a closed head injury. Similar to a
guardianship, the conservatorship was necessary as part of Carroll’s “care”, because he could no
longer manage his own affairs as a result of a closed head injury.
Auto Club makes two arguments against treating a conservatorship as “care” under
Heinz. It argues that a conservatorship is really a replacement service under MCL
500.3107(1)(c) or that it no longer constitutes an “allowable expense” for a service for an injured
person’s care under MCL 500.3107(1)(a) after our Supreme Court’s decision in Griffith. Neither
of these arguments is availing.
C. REPLACEMENT SERVICES
As already noted, Heinz stands for the proposition that the term “care”, as used in MCL
500.3107(1)(a), is not limited to medical care. Under Heinz, the term “care” encompasses
guardian services which, under MCL 700.5306(1), are for the purpose of providing “continuing
care and supervision of the incapacitated individual.” In contrast, conservator services are for an
individual who is unable to “manage property and business affairs.” While a guardianship would
qualify as a service for a person’s “care”, a closer question is whether the service of managing
property and business affairs is “care.”
This question is complicated by the definition of what have traditionally been recognized
as replacement services: “ordinary and necessary services in lieu of those that . . . an injured
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.” MCL 500.3107(1)(c)
(emphasis added). Before an accident, an injured person would presumably manage his or her
own property and business affairs without compensation. Thus, the duties of a conservator could
be construed to be a replacement service. However, this is not a situation involving ordinary
living activities that can be performed by family, friends, or unskilled laborers. This is not a case
where Mr. Carroll might be able to hire a family member or friend to write checks and pay his
bills at his direction. Rather, Carroll is so incapacitated by his injuries that he cannot manage his
own affairs and cannot offer direction to those who might act on his behalf; indeed, he had to
petition a court to appoint and approve a conservator—complete with fiduciary responsibilities—
to manage his affairs. Under these circumstances, the services provided transcend “ordinary”
services akin to cooking, cleaning or doing yard work and thus are not replacement services
within the meaning of MCL 500.3107(1)(c). Instead, we conclude that the services are
extraordinary professional services related to Carroll’s care. See In re Geror, 286 Mich App
132, 135-136; 779 NW2d 316 (2009) (holding that services provided by a lawyer to a disabled
person were compensable under MCL 500.3107(1)(a) because the services were provided to
ensure that the disabled person was receiving necessary care and—as such—were also related to
the injured person’s “care.”).
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D. ALLOWABLE EXPENSES AFTER GRIFFITH
Since the decision in Heinz, our Supreme Court examined the type of expenses that are
allowed under MCL 500.3107(1)(a) in Griffith, 472 Mich 521 (2005). The Griffith Court
addressed whether food expenses fall within the provisions of MCL 500.3107(1)(a) as expenses
for an injured person’s “care.” Griffith, 472 Mich at 525. In that case, the insured was living at
home but had been incapacitated as the result of an automobile accident. The Court held that
whether an expense was allowable depended on whether it was causally connected to an
accidental bodily injury arising out of an automobile accident under MCL 500.3105(1). Griffith,
472 Mich at 531. The Court determined that the plaintiff failed to establish that the costs were
for an accidental bodily injury where the diet was not different from an uninjured person’s diet,
was not part of a treatment plan, and was not related to the injuries. Id. at 531-532. Further, the
Court held that whether these ordinary food expenses were allowable expenses under MCL
500.3107(1)(a) depended on whether they were reasonably necessary for an injured person’s
care, recovery, or rehabilitation. The Court concluded that the care, recovery, or rehabilitation at
issue had to be related to the injury. Griffith, 472 Mich at 534. The Court noted that recovery
and rehabilitation were intended to restore a person to his pre-injury state and were therefore
necessary because of the injuries sustained. Id. at 534-535. As for care, it noted that some
expenses might be necessary because of an accident but might not restore a person to his preinjury state. The Court concluded that the food expenses at issue were not related to the injured
person’s care:
Griffith’s food costs here are not related to his “care, recovery, or
rehabilitation.” There has been no evidence introduced that he now requires
different food than he did before sustaining his injuries as part of his treatment
plan. While such expenses are no doubt necessary for his survival, they are not
necessary for his recovery or rehabilitation from the injuries suffered in the
accident, nor are they necessary for his care because of the injuries he sustained in
the accident. Unlike prescription medications or nursing care, the food that
Griffith consumes is simply an ordinary means of sustenance rather than a
treatment for his “care, recovery, or rehabilitation.” In fact, if Griffith had never
sustained, or were to fully recover from, his injuries, his dietary needs would be
no different than they are now. We conclude, therefore, that his food costs are
completely unrelated to his “care, recovery, or rehabilitation” and are not
“allowable expenses” under MCL 500.3107(1)(a). [Griffith, 472 Mich at 535536.]
Here, Mr. Carroll had a closed head injury that prevented him from being able to manage
his own affairs—that is, Carroll’s need for a conservator was causally related to the injuries
Carroll sustained in an accident. Admittedly, even if Carroll had not been in the accident, he
would have needed to pay his bills and manage his accounts and assets. The question therefore
becomes whether the conservator’s actions were needed for Carroll’s care, recovery, or
rehabilitation from the injury. Unlike the case in Griffith, petitioner here was not seeking
payment of the actual expenses that he would have incurred—such as the cost of food—nor was
he seeking to recover the cost of engaging a real estate agent to sell his home or the cost of
advertisements. These expenses would likely have been incurred regardless of the accident.
Instead, the claim here is for the service of having a conservator manage these matters; and this
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would not have been necessary but for the accident-related injury. The conservator’s services
here are more akin to attendant care provided by a nursing assistant who handles an injured
person’s intimate hygiene needs; although the injured person would normally have handled those
needs on his or her own, as a result of the injury he or she is no longer able to do so. Because
expenses incurred to have someone perform those hygiene services are reasonably incurred for
the injured person’s care, recovery, or rehabilitation, the nursing assistant’s services are
compensable under MCL 500.3107(1)(a). See Reed v Citizens Ins Co, 198 Mich App 443, 453;
499 NW2d 22 (1993). Similarly, because the need for the conservator was causally connected to
Carroll’s injury and the expense is reasonably necessary for his “care,” it too is compensable
under MCL 500.3107(1)(a). Accordingly, Griffith does not bar recovery of the conservator’s
fee.
The expenses for the service provided by the conservator were not expenses for ordinary
and necessary replacement services—they were expenses incurred for Mr. Carroll’s care under
MCL 500.3107(1)(a). For that reason, the probate court erred when it concluded that Auto-Club
was not liable to pay the full amount of the conservator’s fee.
Reversed and remanded for further proceedings consistent with this opinion. We do not
retain jurisdiction. As the prevailing party, petitioner may tax costs. MCR 7.219(A).
/s/ Michael J. Kelly
/s/ Jane M. Beckering
/s/ William C. Whitbeck
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