LUIGI CHIRCO V FRANKENMUTH MUTUAL INSUR CO
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STATE OF MICHIGAN
COURT OF APPEALS
LUIGI CHIRCO,
UNPUBLISHED
May 23, 1997
Plaintiff-Appellant,
v
No. 181345
Wayne Circuit Court
LC No. 93-305733-NF
FRANKENMUTH MUTUAL INSURANCE
COMPANY, a Michigan Corporation,
Defendant-Appellee.
Before: Taylor, P.J., and Markey and N. O. Holowka,* JJ.
PER CURIAM.
Plaintiff appeals as of right from the trial court’s decision granting defendant’s motion for
summary disposition pursuant to MCR 2.116(C)(10) with respect to plaintiff’s claim for no-fault work
loss benefits under MCL 500.3107(1)(b); MSA 24.13107(1)(b). We affirm.
Plaintiff argues that summary disposition was erroneously granted because genuine issues of
material fact existed. We disagree.
We review de novo an order granting summary disposition pursuant to MCR 2.116(C)(10),
examining the entire record, including pleadings, affidavits, depositions, admissions and other
documentary evidence, and construing all reasonable inferences arising from the evidence in a light most
favorable to the nonmoving party. Skinner v Square D Co, 445 Mich 153, 161; 516 NW2d 475
(1994); Fitch v State Farm Fire & Casualty Co, 211 Mich App 468, 470-471; 536 NW2d 273
(1995). Once the moving party has shown that no genuine issues of material fact exist, the opposing
party has the burden of establishing through evidentiary materials that a genuine issue of disputed fact
does exist. Skinner, supra at 160. We will uphold the grant of summary disposition if we are satisfied
that the claim or defense cannot be proven at trial. Fitch, supra at 471.
* Circuit judge, sitting on the Court of Appeals by assignment.
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Plaintiff filed a lawsuit against defendant seeking to recover work-loss benefits pursuant to MCL
500.3107(1)(b); MSA 13107(1)(b), which states in pertinent part:
(1) Except as provided in subsection (2), personal protection insurance benefits are
payable for the following:
***
(b) 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. . . . [T]he benefits payable for work loss sustained
in a single 30-day period and the income earned by an injured person for
work during the same period together shall not exceed [the statutory
maximum], which maximum shall apply pro rata to any lesser period of
work loss.
“The legislative purpose in providing work-loss benefits to an injured person . . . is to compensate him
(and his dependents) by providing protection from economic hardship caused by the loss of the wage
earner’s income as a result of an automobile accident.” Marquis v Hartford Accident & Indemnity
(After Remand), 444 Mich 638, 644; 513 NW2d 799 (1994), citing Perez v State Farm Mutual
Automobile Ins Co, 418 Mich 634, 640; 344 NW2d 773 (1984). Indeed, work-loss benefits paid
pursuant to MCL 500.3107(1)(b); MSA 24.13107(1)(b) only compensate the injured person for
income that he or she would have received but for the accident. Marquis, supra at 645. Thus, in order
to be compensable, the lost income must be a direct consequence of the injury that the plaintiff
sustained. Id. at 646; Nawrocki v Hawkeye Security Ins Co, 83 Mich App 135, 144; 268 NW2d
317 (1979).
In February 1992, the maximum monthly amount for work-loss benefits was set at $3,077,
pursuant to MCL 500.3107(1)(b); MSA 24.13107(1)(b) and Insurance Bureau Bulletin 93-95.
Plaintiff paid a higher premium, however, to contract for an additional $1,000 of work-loss benefits, so
plaintiff was potentially entitled to $4,077 in work-loss benefits a month under § 3107(1)(b). This
Court has consistently interpreted the language of § 3107(1)(b) as requiring that “ ‘income earned by an
injured person’ [is] to be deducted from the statutory maximum payable as no-fault work-loss benefits
during a single thirty-day period.” Snellenberger v Celina Mutual Ins Co, 167 Mich App 83, 87;
421 NW2d 579 (1998); see also Bak v Citizens Ins Co of America, 199 Mich App 730, 733; 503
NW2d 94 (1993) (Corrigan, J.). Only income that plaintiff earns for work performed will be
discounted against plaintiff’s work-loss benefits under § 3107(1)(b). However, any income a plaintiff
receives as a gratuity that is passive, or pursuant to a formal wage continuation policy is not discounted
or set-off against the benefits cap; rather, such income constitutes a collateral source payment that is not
attributed to the injured party for purposes of §3107(1)(b). Spencer v Hartford Accident &
Indemnity Co, 179 Mich App 389, 392-393; 445 NW2d 520 (1989); Brashear v DAIIE, 144 Mich
App 667, 671-672; 375 NW2d 785 (1985).
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Plaintiff asserts that his income dropped from $273,000 in 1991 to $114,000 in 1992 as the
direct result of the accident and his subsequent inability to perform his job duties at his land development
and residential construction company. His duties included making repairs, such as fixing mortar,
carpentry and plumbing problems. As a result of his inability to work, plaintiff increased the job
responsibilities and pay of other contractors. Additionally, plaintiff claims his inability to be at work and
push productivity at the construction sites or to inspect subcontractors’ work also resulted in a loss of
income. In contrast, defendant’s expert certified public accountant, who reviewed plaintiff’s books and
tax returns, testified that plaintiff’s lower income in 1
992 resulted from decreased home sales and
increased land costs, interest expenses, property taxes, and other expenses. He did not attribute the
diminished income to plaintiff’s injuries or construction inefficiencies stemming from his absence from job
sites. Defendant’s expert also noted that plaintiff’s payments to replacement workers actually
decreased in 1992. Given this testimony, a genuine issue of fact existed regarding whether plaintiff’s
income loss was attributable to his injury, because “where the truth of a material factual assertion of a
moving party’s affidavit depends on the affiant’s credibility, there exists a genuine issue to be decided at
a trial by the trier of fact and a motion for summary judgment cannot be granted.” Metropolitan Life
Ins Co v Reist, 167 Mich App 112, 121; 421 NW2d 592 (1988).
However, rather than determining whether plaintiff’s lost income was attributable to the injuries
he sustained in the February 1992 automobile accident, the trial court granted summary disposition on
the basis that plaintiff’s net income exceeded the statutory cap under § 3107(1)(b), so that plaintiff was
not entitled to wage-loss benefits from defendant.1
From February 27, 1992, through the end of April 1992, plaintiff contends that he was “totally
unable to attend to any business responsibilities.” Defendant alleges, however, that excerpts from
plaintiff’s deposition2 establish that he was working at approximately fifty percent of his capacity within
one month of his accident. Notwithstanding this dispute, there is no genuine issue of material fact that
the monies plaintiff received during this period constituted earned income that was in excess of the
applicable benefit cap. The monies plaintiff received during this short period was earned income,
although a smaller amount, the same as the monies he received before the car accident. The monies
received during this time was not a gratuitous collateral payment or passive income. Accordingly, with
respect to this brief window of time, the trial court did not err in granting summary disposition.
Considering the period following April, 1992, it was the case that plaintiff’s average monthly
income was $9,500. This was based on an annual income of $114,000. This exceeded the maximum
work-loss benefits that can be paid to an individual. Indeed, § 3107(1)(b) clearly states that “the
benefits payable for work loss sustained in a single 30-day period and the income earned by an injured
person for work during the same period together shall not exceed,” in this case, $4,077 (emphasis
added). After plaintiff returned to work in May 1992, even though his injuries precluded him from
performing all of his regular duties, he still received earned income for work that he performed. But
because his monthly income earned as profit attributable to plaintiff’s personal efforts and self
employment exceeded $4,077, plaintiff was not entitled to work-loss benefits under § 3107(1)(b) for
lost income after April 1992.
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We also find no merit in plaintiff’s assertion that his income is not subject to being set off against
the work-loss maximum benefit because self-employed individuals will always have gross revenues
providing the business owner with net profits exceeding the statutory cap, even though the earnings are
derived in spite of the owner’s disability, not as a result of the owner’s efforts. Nothing in MCL
500.3107(1)(b); MSA 24.13107(1)(b) suggests that the cap is inapplicable to the self-employed, and
plaintiff provides no authority supporting his interpretation of §3107(1)(b). Indeed, it is counter-intuitive
for plaintiff to argue that his business is a one-man operation but that income generated by ongoing
construction projects started before the accident and generating income after the accident are not the
result of his individual efforts.
Affirmed. Defendant, being the prevailing part, may tax costs pursuant to MCR 7.219.
/s/ Clifford W. Taylor
/s/ Nick O. Holowka
1
Although the court did not state specifically the amount of income it attributed to plaintiff, it appears
that the court accepted plaintiff’s assertion that he earned only $114,000 in 1992, a $159,000 reduction
from his 1991 income.
2
An entire copy of plaintiff ’s deposition was not filed with the trial court. This Court may only review
the record developed in the trial court and cannot consider portions of the deposition not filed with the
trial court. MCR 7.210(A)(1); Isagholian v Transamerica Ins Co, 208 Mich App 9, 18; 527 NW2d
13 (1994).
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