LAWRENCE TOPIK V AUTO CLUB INSURANCE ASSOC
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STATE OF MICHIGAN
COURT OF APPEALS
LAWRENCE TOPIK
UNPUBLISHED
November 8, 1996
Plaintiff-Appellee,
v
No. 186000
LC No. 91-104141-CK
AUTO CLUB INSURANCE ASSOCIATION, a
Michigan corporation,
Defendant-Appellant.
Before: Markman, P.J. and Smolenski and G. S. Buth,* JJ.
PER CURIAM.
Defendant, appeals by right a circuit court order confirming an arbitration award in favor of
plaintiff and denying defendant’s motion to vacate the award. We reverse.
The case at bar arises out of a February 16, 1990, automobile accident. Plaintiff was driving his
car and his ex-wife was in the front passenger seat. A large sign over the freeway fell onto the roof of
the car and tragically killed plaintiff’s ex-wife. Defendant paid funeral benefits and survivor’s loss
benefits to plaintiff’s children and paid for the property damage to defendant’s car.
At the time of the accident, plaintiff was employed but on medical disability leave. He was
eventually terminated in July 1990 because he was absent without leave. He was hospitalized for
psychiatric problems for two weeks in August 1990 and from September 1991 through February 1992.
In May 1990, plaintiff applied for social security benefits. On the application he listed his
“disabling condition” as “irritable bowel syndrome, prescription drug addiction [and] ruptured umbilical
cord.” While the application was submitted after the accident at issue, in it plaintiff indicated that he was
first disabled from working on January 2, 1990 -- six weeks before the accident. In the application,
plaintiff made no mention of the accident at issue or of any post-traumatic stress disorder. In October
1990, the Social Security Administration determined, on the basis of an independent medical
examination, that plaintiff suffered from affective disorder and substance addiction disorder and that he
* Circuit judge, sitting on the Court of Appeals by assignment.
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was disabled from work as of January 2, 1990. It subsequently awarded him benefits based on these
determinations.
In September 1990, plaintiff submitted an application for no-fault work loss benefits to
defendant, listing an “emotional injury.” “Under personal protection insurance an insurer is liable to pay
benefits 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); MSA 24.13105(1). Defendant denied
plaintiff’s claim on the basis of its determination that his pre- and post- accident medical records
indicated that his mental disability did not arise out of the accident.
On February 15, 1991, plaintiff filed suit seeking no-fault benefits for wage loss and unpaid
medical expenses. The parties agreed to submit the matter to arbitration pursuant to the arbitration
clause in the insurance policy. At arbitration, plaintiff acknowledged a substantial pre-accident history
of psychological problems. However, he claimed that he suffered from post-traumatic stress disorder
arising out of witnessing his ex-wife’s violent death and that this was a separate and disabling “bodily
injury.” The arbitrators found that plaintiff sustained “bodily injury arising out of the use of a motor
vehicle as a motor vehicle on February 16, 1990”; that he sustained wage loss; and that he was “totally
disabled from his employment from and including February 16, 1990, for the full three-year period for
which statutory benefits are payable.” They awarded a total arbitration award of $172,854.50.
Plaintiff moved the circuit court to convert the arbitration award to a judgment and defendant moved to
vacate the arbitration award. The circuit court confirmed the arbitration award and denied defendant’s
motion to vacate the arbitration award.
On appeal, defendant contends that plaintiff’s no-fault claim should have failed as a matter of
law. An appellate court has the authority to set aside an arbitration award because an arbitrator
exceeds his power only “[w]here it clearly appears on the face of the award or the reasons for the
decision as stated, being substantially a part of the award, that the arbitrators through an error in law
have been led to a wrong conclusion, and that, but for such error, a substantially different award must
have been made.” Detroit Automobile Inter-Insurance Exchange v Gavin, 416 Mich 407, 443;
331 NW2d 418 (1982).
In supporting its position that plaintiff’s claim here fails as a matter of law, defendant makes
several arguments. First, it argues that plaintiff’s psychological/psychiatric injury did not arise of the use
of a motor vehicle, rather it resulted from witnessing the death of his ex-wife. See Keller v Citizens Ins
Co, 199 Mich App 714, 715-716; 502 NW2d 329 (1993). Second, defendant argues that plaintiff’s
psychological/psychiatric injuries did not constitute a “bodily injury.” “[A]bsent physical manifestations,
the phrase “bodily injury” does not include a claim for psychiatric damage.” State Farm Fire &
Casualty Co v Basham, 206 Mich App 240, 243; 520 NW2d 713 (1994). Third, defendant argues
that no-fault work loss benefits were unavailable to plaintiff because he was totally disabled from
working prior to the accident at issue. Finally, in connection with the third argument, defendant argues
that plaintiff’s representations on his social security application estop him from claiming that his total
work disability began on the date of the accident.
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We begin with plaintiff’s third argument. MCL 500.3107(1)(b); MSA 24.13107(1)(b) states in
pertinent part that work loss benefits are limited to:
Work loss consisting of loss of income from work an injured person would have
performed during the first 3 years after the date of the accident if he or she had not been
injured.
In MacDonald v State Farm Mutual Ins Co, 419 Mich 146, 152; 350 NW2d 233 (1984), the Court
held:
[W]ork-loss benefits are available to compensate only for that amount that the injured
person would have received had his automobile accident not occurred. Stated
otherwise, work-loss benefits compensate the injured person for income he would have
received but for the accident.
Work loss benefits are unavailable to persons unable to work because of disabilities unrelated to an
automobile accident because “they have no income from work or its equivalent to lose.” MacDonald,
supra at 154. See also Marquis v Hartford Accident & Indemnity (After Remand), 444 Mich 638,
645; 513 NW2d 799 (1994). Here, plaintiff’s medical records and work records indicated that he had
missed work on numerous occasions prior to this accident due to various psychological, personal and
physical problems. In his application for social security benefits, plaintiff alleged that he was disabled
from working on January 2, 1990. The Social Security Administration’s award of benefits to plaintiff
was explicitly based on a determination, resulting from an independent medical examination, that he was
disabled from working on January 2, 1990 -- six weeks before the accident. This evidence
demonstrated that plaintiff was disabled from work for reasons pre-existing and unrelated to the
automobile accident at issue. Accordingly, the accident could not have resulted in the loss of income
plaintiff would have otherwise received. Therefore, the arbitrators erred as a matter of law in
concluding that plaintiff was entitled to work-loss benefits here and the circuit court erred in denying
defendant’s motion to vacate the arbitration award.
Our resolution of this issue is dispositive of this appeal.
defendant’s other claims.
Accordingly, we not address
We reverse the order confirming the arbitration award and denying defendant’s motion to
vacate the award and remand this matter to the circuit court. We do not retain jurisdiction.
/s/ Stephen J. Markman
/s/ Michael R. Smolenski
/s/ George S. Buth
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