“No-Fault” Wage-Loss Benefits Required to Be Paid to Unemployed Claimant Suffering Disabling Injury at the Time of Auto Accident

In Jones v. Home Owners Ins. Co.COA, a 2-1 unpublished opinion, the Michigan Court of Appeals held that a claimant suffering disabling injury in an auto accident was entitled to no-fault wage-loss benefits under Michigan’s No-Fault Act, characterizing her as “temporarily unemployed” under MCL 500.3107a.

MCL 500.3107 of the No-Fault Act provides for first-party insurer “work-loss benefits” for up to three years after a claimant suffers injury in an automobile accident.  MCL 500.3107(1)(b) defines “work loss” as “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.”  A party claiming work-loss benefits under this provision must show actual wage loss; a mere loss of earning capacity is not sufficient.  MCL 500.3107(1)(b); Davis v. State Farm Mutual Auto Ins. Co., 159 Mich. App. 734 (1987).

MCL 500.3107a takes this measured definition of work loss and applies it to the “temporarily unemployed”.  Thus, an insured may be found to be “temporarily unemployed” where he or she is, or would have been, but for the accident, actively seeking employment and there is evidence showing the unemployed status would not have been permanent.

A claimant seeking benefits under this provision must provide “independent corroboration” of both intent and actions taken to secure employment during the period of “temporary unemployment”.  Bare assertions of such intent are insufficient to invoke the right to these specific no-fault benefits.

In the instant case, the claimant was unemployed when she was injured in an automobile accident.  She sought first-party “wage-loss benefits” from her no-fault insurance carrier.  The insurer denied benefits on the basis that she was unemployed at the time of the accident and her circumstances did not meet the definition of “temporarily unemployed” within the meaning of MCL 500.3107(b)(1) and MCL 500.3107a.  The insurer conceded the plaintiff had been actively seeking work at the time of her injury, and during the period thereafter.  However, the insurer argued there was no evidence of any actual job offer and thus the evidence failed to establish she was only “temporarily unemployed” before the accident.

The question was presented to a jury.  The jury found that the plaintiff satisfied the requirement of “temporary unemployment” under the No-Fault Act and ordered benefits to be paid by the insurer.

The Court of Appeals affirmed, holding that plaintiff presented sufficient evidence of her job search efforts, and there was a reasonable likelihood that she would have been hired for a particular job opportunity she was contacted about days before the disabling accident.

Judge Saad dissents.  His opinion points out the problem with this provision of the No-Fault Act, which appears to allow wage-loss benefits to be awarded based only on speculation that a particular job opportunity would have come to fruition.

Judge Saad concludes that because the plaintiff could not prove a causal connection between the accident and an actual loss of income, benefits should not have been awarded.  Under MCL 500.3107(1)(b) a claimant seeking work-loss benefits must suffer wage loss or loss of income they would have earned but for the accident.  Judge Saad contends that this “measured definition” of “work loss benefits” then must be read in conjunction with the “special category” of accident victims:  the “temporarily unemployed”.  That provision allows wage loss benefits to be awarded where a person is “temporarily unemployed at the time of the accident or during the period of disability….”  MCL 500.3107a.

Reading the two provisions together, Judge Saad contends a person’s search for employment before and after an accident does not establish the prerequisite causal connection between the accident and the wage loss.  Because plaintiff’s evidence that she was a candidate for a potential job was not demonstrable proof that she would have actually secured such employment, she could not demonstrate she was temporarily unemployed, or as Judge Saad puts it “she provided no ‘evidence showing [her] unemployed status would not have been permanent if the injury had not occurred.'”  Slip Op. at 3.

This is an important decision, but it does little to aid the apparent gap in the statutory language that appears to allow wage-loss benefits to be awarded to someone who is in fact, like Plaintiff, unemployed (whether temporarily or not) at the time of the accident.  The statute provides no guidance on the necessity of showing a status other than unemployed before the accident, and whether that status was close in time to the accident, or, as in some cases, years prior.  In other words, the statute appears to allow an award of wage-loss benefits based merely upon the fact of a prior job, and a claimant’s assertions that they were seeking employment at the time of the accident.

Although the majority appears to follow the law in this case, and the facts appear to fulfill existing judicial interpretation of the meaning of “temporarily unemployed” under MCL 500.3107a, there are cases in which this provision can be abused precisely for the reasons set forth in Judge Saad’s dissent.

How can an insurer counter evidence proffered to demonstrate that a claimant ‘s “unemployed status would not have been permanent”?

Perhaps more searching inquiry should be made regarding the diligence and scope of the job search effort, the individual’s post-injury wage-earning capacity, and job availability in general.  What if the economic downturn makes it impossible for even the most qualified individual to obtain a job paying wages similar to those upon which the award is based, i.e., the last preceding job?  In such circumstances, how “temporary” is “temporary unemployment” if not for the entire three-year period that no-fault benefits are available under the No-Fault Act?

Perhaps vocational and rehabilitation expert evidence should be used to establish these factors, as with worker’s compensation claimant’s burden to prove an entitlement to total, as opposed to partial, or no, wage-loss benefits, i.e., the “disability and wage loss” provisions of MCL 418.301 of the Workers Disability Compensation Act.

I suspect the decision will be appealed to the Supreme Court for further evaluation.

Effective appellate representation demands different skills than those required by litigation attorneys.  Appellate attorneys are adept at analyzing the intricacies of each case from an objective and critical perspective.  From reviewing and preparing the lower court record, identifying errors for appeal, and developing a strategy to raise those issues that will be addressed by appellate courts, appellate attorneys are capable of handling the most complex appeals from the application stage to oral advocacy before the highest courts.  Our research abilities and knowledge of current issues in nearly all major subject-matter areas of the law provide our clients with efficient and immediate assistance with complex and high-exposure cases.

We are also experienced at navigating through all appellate courts to shepherd the appeal in the most expeditious fashion possible so that it can be reviewed and quickly ruled upon.

Below are some of the recent significant cases prosecuted by the Appeals and Legal Research Group.

  • Omian v. Chrysler, LLC, Michigan Court of Appeals Docket No. 310743, remanded by Supreme Court as on leave granted, Supreme Court No. 146908, oral argument presented July 16, 2014 by Carson J. Tucker for Chrsyler, LLC
  • Moore v. Nolff’s Construction and Travelers Ins., Michigan Court of Appeals Docket No. 313478 and 313440 (consolidated), application and cross-application granted and oral argument in Court of Appeals presented July 2014 by Carson J. Tucker for Nolff’s Construction and Travelers Insurance
  • Arbuckle v. GM, Michigan Court of Appeals Docket No. 310611, oral argument in Court of Appeals presented May 2014 by Carson J. Tucker for GM
  • Yono v. MDOT, ___ Mich. App. ___ (201_), amicus curiae brief filed for Michigan Municipal League and Michigan Townships Association on June 16, 2014, after remand by Carson J. Tucker
  • Estate of Truett v. Wayne County, Unpublished Opinion of the Michigan Court of Appeals, dated May 6, 2014 (Docket No. 313638), briefed and argued by Carson J. Tucker for Wayne County
  • Omian v. Chrysler Group, LLC, 495 Mich. 859 (2013), application filed by Carson J. Tucker, Supreme Court remand to Court of Appeals on leave granted, oral argument to be held in July 2014
  • Ghanam v. John Does, 303 Mich. App. 522 (2013), application to appeal filed in Supreme Court by Carson J. Tucker
  • State Farm v. MMRMA, ___ Mich App ___ (2013), amicus curiae for Oakland County in support of MMRMA application, by Carson J. Tucker
  • Hannay v MDOT, ___ Mich ___ 201_), application granted, amicus curiae filed for Michigan Townships Association, Macomb County, Oakland County and Wayne County, et al., by Carson J. Tucker
  • Yono v. MDOT, ___ Mich ___ (201_), oral argument on application granted, amicus curiae for Oakland, Macomb and Wayne County filed by Carson J. Tucker in support of the state’s application
  • Huddleston v. Trinity Health, et al., 495 Mich. 976 (2014), oral argument on application granted, amicus curiae with Lawrence Garcia, Esq., for MDTC
  • Ashley, LLC v Pittsfield Twp., 494 Mich 875 (2013), application granted, for Pittsfield Township by Carson J. Tucker (resolved by settlement)
  • Bailey v. Schaaf, ___ Mich ___ (2013), amicus curiae for MDTC by Carson J. Tucker
  • Atkins v. SMART, 492 Mich 707 (2012), oral argument on application, Court of Appeals case reversed by opinion, Carson J. Tucker
  • Hagerty v Manistee, 493 Mich 933 (2013), amicus curiae for Michigan Municipal League, et al., by Carson J. Tucker
  • McMurtrie v Eaton Corp, 490 Mich 976 (2011)
  • Findley v DaimlerChrysler Corp., 490 Mich 928 (2011)
  • Brewer v. AD.Transport Express, Inc, 486 Mich 50 (2010)
  • Stokes v Chrysler, 481 Mich 266 (2008)
  • Brackett v Focus Hope, Inc, 482 Mich 269 (2008)
  • Rakestraw v Gen Dynamics, 469 Mich 220 (2003)

 

 

About cjtucker06

Owner of law firm since July 2014; Handles all types of appellate matters and assists other lawyers with complex litigation and insurance coverage issues; Admitted to the Supreme Court of the United States, the Sixth Circuit Court of Appeals and the State Bar of Michigan; Expertise in prosecuting and defending appeals with several significant successes in the Sixth Circuit Court of Appeals, the Michigan Supreme Court and the Michigan Court of Appeals; Author of briefs amicus curiae in the Michigan Supreme Court for the Michigan Defense Trial Counsel and the Insurance Institute of Michigan; Represents Insurance Companies, Major International Business, Governmental Entities, Law Enforcement Officers and County Sheriffs. Board of Directors, Michigan Defense Trial Counsel Amicus Committee Co-Chair, Michigan Defense Trial Counsel Military - Retired Major in the Judge Advocate General (JAG) Corps of the United States Army, Brigade Judge Advocate and Staff JAG officer for the Maneuver Training Center, Camp Grayling, Michigan; Recipient of the Army's Meritorious Service Medal (the highest medal of honor available to Soldiers serving in non-combat roles); 2012 Graduate of the Judge Advocate Officer Advanced Course, at The Judge Advocate Legal Center and School, Charlottesville, Virginia. United States Navy Reserves, Combat Warfare Qualification, January 1989 to July 2003 Former law clerk to Justice Stephen J. Markman, Michigan Supreme Court, Research Attorney, Michigan Court of Appeals. Insurance Coverage Associate Plunkett Cooney; Environmental Law Attorney at Squire Sanders, now Squire Patton Boggs; Master's Degree in Environmental Law; Environmental Law Scholar, ALI/ABA Washington, D.C., Juris Doctorate, Vermont Law School, Environmental Editor, Vermont Law Review; Treasurer and Finalist, Moot Court Advisory Board.
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