Admire v. Auto-Owners Ins. Co.

• Court: Michigan Supreme Court
• Writing for the Court: ZAHRA
• Citation: Admire v. Auto-Owners Ins. Co., 831 N.W.2d 849, 494 Mich. 10 (Mich. 2013)
• Decision Date: 23 May 2013
• Docket Number: Calendar No. 2.,Docket No. 142842.
• Parties: ADMIRE v. AUTO–OWNERS INSURANCE COMPANY.

494 Mich. 10

831 N.W.2d 849

ADMIRE

v.AUTO–OWNERS INSURANCE COMPANY.

Docket No. 142842.

Calendar No. 2.

Supreme Court of Michigan.

Argued Nov. 14, 2012.

Decided May 23, 2013.

Sinas, Dramis, Brake, Boughton & McIntyre, P.C., Lansing (by George T. Sinas and Stephen H. Sinas), for Kenneth Admire.

Willingham & Coté, P.C., East Lansing (by John A. Yeager and Kimberlee A. Hillock), for Auto–Owners Insurance Company.

Kerr Russell and Weber PLC, Detroit (by Daniel J. Schulte and Joanne Geha Swanson) for amicus curiae the Coalition Protecting Auto No–Fault.

Dykema Gossett PLLC, Lansing (by Lori McAllister) for amicus curiae the Michigan Insurance Coalition and the Insurance Institute of Michigan.

Dykema Gossett PLLC, Ann Arbor (by Jill M. Wheaton and Joseph Erhardt) for amicus curiae the Michigan Catastrophic Claims Association.

ZAHRA, J.

At issue in this case is whether Michigan's no-fault insurance act ¹ requires defendant, Auto–Owners Insurance Company, to pay the entire cost of a van modified to accommodate the plaintiff's wheelchair, including both the base price of the van and the separately introduced modifications. We conclude that defendant is only required to pay for the modifications because only the modifications are allowable expenses “for an injured person's care, recovery, or rehabilitation” under MCL 500.3107(1)(a). Because the base price of the van is an ordinary transportation expense—an expense that is as necessary for the uninjured as the injured—and is easily separated from the modifications, defendant is not required to pay for it under the no-fault insurance act. Accordingly, we reverse the Court of Appeals' decision to the extent it held otherwise. Furthermore, at the trial court, plaintiff, Kenneth Admire, never argued that defendant had contractually agreed to reimburse him for the base price of the van, thereby waiving that issue. Thus, we need not determine whether the Court of Appeals correctly concluded that the parties' agreement was ambiguous, and we vacate that portion of the Court of Appeals' judgment. Plaintiff's application for leave to appeal as cross-appellant is denied, and the case is remanded to the trial court for entry of summary disposition in defendant's favor.

I. FACTS AND PROCEEDINGS

In 1987, plaintiff suffered catastrophic injuries when the motorcycle he was riding collided with a car being operated by an insured of defendant. Plaintiff's injuries left him unable to speak or walk and rendered his entire right side virtually useless. A family member tends to all of plaintiff's personal and financial affairs.

Plaintiff requires wheelchair-accessible transportation to go to work five days a week, visit his family, attend medical appointments, and get around the community. On three prior occasions, defendant agreed to pay the full cost of purchasing a van large enough for plaintiff to get in and out while remaining in his wheelchair. Defendant also agreed to pay the cost of modifying the vehicle to make it wheelchair-accessible. In 1988, 1994, and 2000, plaintiff and defendant entered into contracts under which defendant purchased a van and paid for the necessary modifications with the expectation that the van would last for seven years. At the end of the van's life, plaintiff would give defendant notice of his intent to purchase a new van, and the parties would enter a new agreement. The most recent “Transportation Purchase Agreement” was executed on April 26, 2000. It specified that plaintiff was to notify defendant 60 days before purchasing a new van and that the old van's value would be applied to the purchase price of the new van.

In December 2006, plaintiff, through his guardian, notified defendant that it was time to purchase a new van. In January 2007, defendant informed plaintiff by letter that it had determined that it was not obligated to pay the base purchase price of a new van under the transportation purchase agreement or the no-fault insurance act. Defendant acknowledged that, pursuant to the transportation purchase agreement, the “current van should be traded in toward the price of a new van” should plaintiff choose to purchase a new van himself. Defendant further stated that it would “pay for the necessary medical modifications needed on any vehicle purchased ... as well as ... any medical mileage incurred in relation to Mr. Admire's motor vehicle accident....” Plaintiff's guardian purchased the van for him, and after the modifications were reimbursed and the trade-in value was applied, plaintiff was left with out-of-pocket expenses of $18,388.50.

Plaintiff sued defendant for reimbursement of the $18,388.50, claiming that it was an allowable expense under Michigan's no-fault insurance act. Defendant moved for summary disposition, arguing that this Court's decision in Griffith v. State Farm Mutual Automobile Insurance Co.² required it to pay for medically necessary modifications, but not the base price of the van. Plaintiff argued that conflicting precedent interpreted the no-fault insurance act to require reimbursement for the entire modified van. The Ingham Circuit Court denied defendant's motion for summary disposition and instead granted summary disposition in favor of plaintiff.

Defendant appealed by right in the Court of Appeals, which affirmed in an unpublished decision.³ In dicta, the Court of Appeals panel concluded that the transportation purchase agreement was ambiguous regarding who had the responsibility to pay the base price of a new van:

On its face, the contract does not provide that defendant is required to buy a new van. It says that the van shall be traded in on a replacement van but it does not say that defendant will pay for the replacement. However, the contract also does not say that plaintiff is responsible for buying the new van.⁴

Accordingly, the panel held that “the trial court erred in evidently concluding that the transportation purchase agreement mandated that it grant summary disposition to plaintiff.” ⁵

The Court of Appeals panel then proceeded to address whether Michigan's no-fault insurance act required reimbursement for both the purchase price of a van and the modifications to accommodate the insured's disability. Defendant again relied primarily on this Court's decision in Griffith, which held that the no-fault insurance act did not require the insurer to reimburse the insured for food costs absent evidence that the food was somehow different than what was required before the plaintiff's accident.⁶ So, reasoned defendant, the base price of the van was not compensable because plaintiff required transportation before and after the accident; the modifications were, however, compensable because they were not required before the accident.

The panel disagreed with defendant's characterization of Griffith, instead relying on its own decision in Begin v. Michigan Bell Telephone Co.⁷ As in this case, Begin involved an insurer that had refused to compensatea claimant for a modified van. The panel in this case agreed with the reasoning in Begin that a van and its modifications are “so blended ... that the whole cost is an allowable expense if it satisfies the statutory criteria for being sufficiently related to injuries sustained in a motor vehicle accident....” ⁸ Thus, like the Begin Court, the panel reasoned that a modified van was more like food provided at a care facility (which Griffith acknowledged was covered by the no-fault insurance act) than ordinary food eaten at home by an injured person (which Griffith determined was not covered). The panel concluded that because plaintiff could not drive an unmodified vehicle, unlike the Griffith plaintiff who could still eat ordinary food, the modified vehicle must be covered in its entirety.⁹

Defendant sought leave to appeal. After hearing oral arguments on the application,¹⁰ we granted leave to appeal to determine whether the no-fault insurance act requires reimbursement for the entire cost of the modified vehicle.¹¹

II. STANDARD OF REVIEW

Whether MCL 500.3107(1)(a) requires an insurer to reimburse an insured claimant for the full cost of a vehicle and modifications necessary to accommodate the insured claimant's disability is a question of statutory interpretation that this Court reviews de novo.¹²

III. ANALYSIS

A. LEGAL BACKGROUND

MCL 500.3107(1)(a) permits an injured person to recover personal injury protection (PIP) benefits from an insurer for “[a]llowable expenses consisting of all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation.” This Court has often been called on to determine the reach of this provision. ¹³ This case particularlyimplicates our 2005 decision in Griffith, in which we interpreted the clause “for an injured person's care, recovery, or rehabilitation.” ¹⁴ The plaintiff's husband in Griffith, Douglas Griffith, suffered from severe brain damage stemming from a motor vehicle accident.¹⁵ For the duration of Griffith's hospitalization and his stay at a 24–hour nursing facility, his insurer, State Farm Mutual Automobile Insurance Company, covered ordinary expenses, including Griffith's food.¹⁶ On his return home he still required assistance with basic tasks like eating and bathing. State Farm refused to reimburse the plaintiff for Griffith's food because it determined that the food costs were not an “allowable expense” under MCL 500.3107(1)(a).¹⁷

In determining whether the particular expense was for “ ‘reasonably necessary products, services and accommodations for an injured person's care, recovery, or rehabilitation,’ ” this Court defined the terms “care,” “recovery,” and “rehabilitation.” ¹⁸ This Court gave “recovery” and “rehabilitation” their dictionary definitions, defining “recovery” as “ ‘restoration or return to any former and better condition, [especially] to health from sickness, injury, addiction, etc.,’ ” and “rehabilitate” as “ ‘to restore or...