Supreme Court Grants to Consider Whether Governmental Entities are Liable for “Wage Loss” Damages Under No-Fault Act

The Michigan Supreme Court has granted leave to appeal to address whether the “motor vehicle” exception to governmental immunity allows parties to seek economic damages in the form of “wage loss”, for bodily injuries arising out of motor vehicle accidents in which a governmental entity is involved.  The Governmental Tort Liability Act (GTLA) allows suit for “bodily injury and property damage” arising out of negligent operation of a motor vehicle by a governmental party.  MCL 691.1405.  Michigan’s No-Fault Act allows for the recovery of economic damages,  including wage loss.  MCL 500.3135(3)(c).

Plaintiff was injured in an accident with a salt truck operated by the state of Michigan, Michigan Department of Transportation (MDOT).  Plaintiff sued the state claiming economic damages, including “wage loss”, and non-economic damages for serious impairment of a bodily function, both of which are ordinarily recoverable under the No-Fault Act.

MDOT argued the GTLA waives the government’s suit immunity for “bodily injury” claims only, not any broader claims associated with such injury.  MDOT cited Weschler v. Mecosta County Rd. Comm’n, 480 Mich. 75, 85 (2008), which defined the term “bodily injury” under the GTLA’s motor vehicle exception as “physical or corporeal injury to the body”.  Weschler held “loss of consortium” was not recoverable under the “motor vehicle exception”.  Id.

In a published opinion, the Court of Appeals held that work-loss benefits and benefits for ordinary and necessary services that exceed the statutory personal protection insurance benefit maximum pursuant to MCL 500.3135(3) are awardable against governmental entities. (Under the No-Fault Act there is a provision allowing for recovery of damages in excess of the daily, monthly, and three-year limitations contained in the No-Fault Act (MCL 500.3107 through MCL 500.3110)).

The Court of Appeals also affirmed the trial court’s determination to award Plaintiff “lost earning potential” as a dental hygienist even though, before her injury, she had not yet completed her education in that field of study.  Hannay v. MDOT.COA.Opinion

In its grant order, the Supreme Court requests briefing on the issues of whether economic damages in the form of “wage loss” are recoverable under the GTLA’s motor vehicle exception (citing Weschler), and, if so, referring to the Court of Appeals ruling affirming the trial court’s award of “projected earnings”, whether loss of income from work, only, or lost earning capacity may be awarded.  Read the Court’s order here:  Hannay v. MDOT

This is a significant case likely to garner much attention.  MDOT’s argument is in line with the jurisdictional principle adhered to in Michigan concerning governmental immunity, and with the strict interpretation to be given to provisions waiving the government’s suit immunity.  If one adheres strictly to these principles, then the No-Fault Act would likely yield to the narrow confines of liability that can be imposed against the government under the GTLA.

The Court invites Insurance Institute of Michigan, Michigan Association of Justice, and the Michigan Defense Trial Counsel to submit briefs amicus curiae to address the question.

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