KAYLA BLACKBURN V AUTO CLUB INS ASSN
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STATE OF MICHIGAN
COURT OF APPEALS
KAYLA BLACKBURN, by her conservator,
LONETTE BLACKBURN,
UNPUBLISHED
June 16, 2005
Plaintiff-Appellee,
v
Nos. 253991; 255366
Ingham Circuit Court
LC No. 01-094550-NF
AUTO CLUB INSURANCE ASSOCIATION,
Defendant-Appellant.
Before: Owens, P.J., and Cavanagh and Neff, JJ.
PER CURIAM.
This is a consolidated appeal in which defendant appeals from two partial directed
verdicts, an award of penalty interest under the no-fault act, MCL 500.3103 et seq, and two
awards of attorney fees, one under the no-fault act and one under MCR 2.403(O). We reverse
and remand.
Defendant first argues that the trial court clearly erred in awarding plaintiff $60,000 in
partial payment of a house more suitable for Kayla, but for which defendant had already paid a
significant amount, when there was no showing that the additional payment was necessary for
her accommodation. We agree.
A trial court’s decision on a motion for a directed verdict is reviewed de novo to
determine whether the evidence and all legitimate inferences from the evidence, when viewed in
the light most favorable to the nonmovant, fail to establish a claim as a matter of law. Sniecinski
v Blue Cross and Blue Shield of Michigan, 469 Mich 124, 131; 666 NW2d 186 (2003). “When
the evidence could lead reasonable jurors to disagree, the trial court may not substitute its
judgment for that of the jury.” Lamson v Martin, 216 Mich App 452, 455; 549 NW2d 878
(1996), citing Lester N Turner, PC v Eyde, 182 Mich App 396, 398; 451 NW2d 644 (1990).
Under MCL 500.3107(1)(a), defendant is required to pay for “[a]llowable expenses consisting of
all reasonable charges incurred for reasonably necessary . . . accommodations.” This Court
explained that the no-fault act does not indicate the extent to which an insurer must supply an
insured with housing; instead, the focus is on reasonableness. Payne v Farm Bureau Ins, 263
Mich App 521, 527; 688 NW2d 327 (2004). Significantly, reasonableness is heavily dependent
on facts. Id. at 528. Moreover, the burden of proving those facts is on the plaintiff. Nasser v
Auto Club Ins Ass’n, 435 Mich 33, 49; 457 NW2d 637 (1990).
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There was no dispute that the original house was unsuitable. Kayla’s parents elected to
construct a new, substantially larger house. Defendant paid for a significant portion of the new
house, and the parents also paid for a significant portion of it from the sale of their original
house. Plaintiff’s request for additional money from defendant was solely limited to the fact
that, after the move was complete, the family’s mortgage increased by approximately $71,000, of
which $11,000 was admittedly for luxuries. It was also admitted that between one-quarter and
one-half of the increased size of the house was not for Kayla’s accommodation.
“As long as housing larger and better equipped is required for the injured person than
would be required if he were not injured, the full cost is an ‘allowable expense’” under the nofault act. Sharp v Preferred Risk Mut Ins Co, 142 Mich App 499, 511; 370 NW2d 619 (1985).
However, in Sharp, the plaintiff was the sole occupant, and the entire cost of the
accommodations was necessarily for the plaintiff’s benefit. Here, the accommodations were for
Kayla’s entire family, which presumably gained some benefit from the additional space. The
difference in mortgage amounts did not, by itself, prove that the accommodations for Kayla were
reasonable. Therefore, the issue should not have been disposed of by directed verdict but, rather,
was a question for the jury. Payne, supra at 529.
Defendant next argues that the trial court erred in granting a directed verdict on whether
Kayla required twenty-four-hour attendant care from February 1, 2002. We agree.
Defendant relied on four expired prescriptions for twelve hours a day of attendant care.
The first prescription predated Kayla’s release from the hospital, and the last expired on January
1, 2002. One doctor refused to estimate the number of attendant care hours required because,
once a patient left the hospital, the number of hours could no longer be predicted without
knowing how long the care provider took to perform certain tasks. The other doctor testified that
his original prescription had been for attendant care hours in addition to those Kayla was already
receiving and opined that she required twenty-four-hour care. Kayla’s parents testified that she
required twenty-four-hour care. Defendant’s claims specialist testified that she had seen nothing
to contradict the prescriptions for twelve hours of care a day, but the rehabilitation nurse
assigned to the case testified that it was solely the doctors’ role to specify attendant-care needs.
Another nurse who investigated the home concluded that Kayla required twenty-four-hour care.
The conflicting testimony could have led reasonable jurors to disagree, and the court improperly
substituted its judgment for that of the jury. Lamson, supra at 455.
Defendant next argues that the trial court inappropriately awarded no-fault penalty
interest. We agree.
“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). The trial court’s award of penalty interest on the $60,000 for the house, and its award of
penalty interest on the attendant care, must be reversed because they have not yet been
determined to be owing. Similarly, the penalty interest on the claim for diaper expenses must be
reversed. Although defendant apparently did not contest awareness of the claim, diaper expenses
were not mentioned until plaintiff’s trial brief under the heading “Miscellaneous medical
expenses.” The pleadings otherwise referred to “other allowable expenses not yet identified.”
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Kayla’s parents testified that they informally asked if diapers were allowable expenses and were
denied. However, defendant’s representative stated that diapers were compensable, and she
would have paid for them if she had been asked. Thus, although both parties agreed at trial that
plaintiff was entitled to the cost of diapers, and the court granted plaintiff judgment on the issue,
the testimony indicated that whether defendant was made aware of the claim was an issue for the
jury. Lamson, supra at 455; Regents of the Univ of Michigan v State Farm Mut Ins Co, 250
Mich App 719, 735; 650 NW2d 129 (2002). Because this was an issue for the jury, an award of
penalty interest was premature. Williams, supra at 265.
Finally, because we reverse the directed verdicts, we reverse the court’s award of no-fault
attorney fees and vacate the award of case evaluation attorney fees. We direct the trial court to
reconsider the matter following resolution of the merits of this case on remand.
Reversed and remanded. We do not retain jurisdiction.
/s/ Donald S. Owens
/s/ Mark J. Cavanagh
/s/ Janet T. Neff
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