Kreiner v. Fischer, Docket No. 124120

Decision Date23 July 2004
Docket NumberDocket No. 124757. Calendar,Docket No. 4,Docket No. 5.,Docket No. 124120
Citation683 N.W.2d 611,471 Mich. 109
PartiesRichard Adam KREINER, Plaintiff-Appellee, v. Robert Oakland FISCHER, Defendant-Appellant. Daniel Lee Straub, Plaintiff-Appellee, v. Phillip Michael Collette and Teresa M. Heil-Wylie, Defendants-Appellants.
CourtMichigan Supreme Court

Sinas, Dramis, Brake, Boughton & McIntyre, P.C. (by George T. Sinas), Lansing, MI, Cochran, Foley & Associates, P.C. (by Terry L. Cochran), Livonia, MI, and Cooper & Kirk, P.L.L.C. (by Charles J. Cooper, Hamish P.M. Hume, and Derek L. Shaffer), Washington, DC, for plaintiff Kreiner.

Law Offices of Lawrence S. Katkowsky, P.C. (by Lawrence S. Katkowsky and Dondi R. Vesprini), Bingham Farms, MI, for plaintiff Straub.

Garan Lucow Miller, P.C. (by Daniel S. Saylor, William J. Brickley, and Beth A. Andrews), Detroit, MI, for defendant Fischer.

Willingham & Cote, P.C. (by John A. Yeager and Curtis R. Hadley), E. Lansing, MI, for defendants Collette and Heil-Wylie.

Gross, Nemeth & Silverman, P.L.C. (by Mary T. Nemeth), Detroit, MI, for amicus curiae the Auto Club Insurance Association in Kreiner.

Miller, Canfield, Paddock and Stone, P.L.C. (by Kevin J. Moody and Jaclyn Shoshana Levine), for amicus curiae the Coalition Protecting Auto No Fault.

Gross, Nemeth & Silverman, P.L.C. (by Mary T. Nemeth), Detroit, MI, for amicus curiae the Insurance Institute of Michigan in Straub.

OPINION

TAYLOR, J.

In these consolidated cases, we granted leave to appeal to consider whether plaintiffs satisfy the "serious impairment of body function" threshold set by the no-fault insurance act in order to be able to maintain an action for noneconomic tort damages. See M.C.L. § 500.3135(1). The trial courts granted defendants' motions for summary disposition, concluding that neither plaintiff has suffered a "serious impairment of body function." The Court of Appeals reversed.1 Because we conclude that plaintiffs do not satisfy the "serious impairment of body function" threshold, we reverse the judgments of the Court of Appeals and reinstate the trial courts' orders granting summary disposition for defendants.

I. Origin and Development of the No-Fault Act

Before 1973, actions seeking damages for injuries resulting from motor vehicle related accidents proceeded, for the most part, pursuant to common-law accident principles in Michigan's courts. However, with the enactment of the no-fault act, 1972 PA 294, effective October 1, 1973, the Legislature abolished tort liability generally in motor vehicle accident cases and replaced it with a regime that established that a person injured in such an accident is entitled to certain economic compensation from his own insurance company regardless of fault. Similarly, the injured person's insurance company is responsible for all expenses incurred for medical care, recovery, and rehabilitation as long as the service, product, or accommodation is reasonably necessary and the charge is reasonable. M.C.L. § 500.3107(1)(a). There is no monetary limit on such expenses, and this entitlement can last for the person's lifetime. An injured person is also entitled to recover from his own insurance company up to three years of earnings loss, i.e., loss of income from work that the person would have performed if he had not been injured. M.C.L. § 500.3107(1)(b).2 An injured person can also recover from his own insurance company up to twenty dollars a day for up to three years in "replacement" expenses, i.e., expenses reasonably incurred in obtaining ordinary and necessary services that the injured person would otherwise have performed. M.C.L. § 500.3107(1)(c).

In exchange for the payment of these no-fault economic loss benefits from one's own insurance company, the Legislature limited an injured person's ability to sue a negligent operator or owner of a motor vehicle for bodily injuries. In particular, the Legislature significantly limited the injured person's ability to sue a third party for noneconomic damages, e.g., pain and suffering. No tort suit against a third party for noneconomic damages is permitted unless the injured person "has suffered death, serious impairment of body function, or permanent serious disfigurement."3 M.C.L. § 500.3135(1).

Following enactment of the no-fault act, Governor Milliken requested of this Court an advisory opinion regarding the act's constitutionality. We issued such an opinion in Advisory Opinion re Constitutionality of 1972 PA 294, 389 Mich. 441, 208 N.W.2d 469 (1973), holding that the significant wording of the statute"serious impairment of body function" and "permanent serious disfigurement" — provided standards sufficient for legal interpretation. We also held that the fact-finding related to these standards was within the province of the jury rather than a judge.

This Court next addressed the no fault act in Shavers v. Attorney General, 402 Mich. 554, 267 N.W.2d 72 (1978). We held that the act was a proper exercise of the police power and that the legislative scheme did not offend either the due process or equal protection guarantees of the Michigan Constitution. We did, however, find the rate-making procedure of the act unconstitutional and allowed the Legislature eighteen months to correct it. As our subsequent order in Shavers demonstrates, the Legislature did correct it through 1979 PA 145 and 1979 PA 147. 412 Mich. 1105, 315 N.W.2d 130 (1982). We also discussed in Shavers the compromise rationale of the act:

The goal of the no-fault insurance system was to provide victims of motor vehicle accidents assured, adequate, and prompt reparation for certain economic losses. The Legislature believed this goal could be most effectively achieved through a system of compulsory insurance, whereby every Michigan motorist would be required to purchase no-fault insurance or be unable to operate a motor vehicle legally in this state. Under this system victims of motor vehicle accidents would receive insurance benefits for their injuries as a substitute for their common-law remedy in tort.
... The act's personal injury protection insurance scheme, with its comprehensive and expeditious benefit system, reasonably relates to the evidence advanced at trial that under the tort liability system the doctrine of contributory negligence denied benefits to a high percentage of motor vehicle accident victims, minor injuries were over-compensated, serious injuries were undercompensated, long payment delays were commonplace, the court system was overburdened, and those with low income and little education suffered discrimination. [402 Mich. at 578-579, 267 N.W.2d 72.] [4]

Six years later, after the phrase "serious impairment of body function" and other phrases in the act, such as "permanent serious disfigurement," had been placed before juries as questions of fact pursuant to the 1976 advisory opinion, this Court in Cassidy v. McGovern, 415 Mich. 483, 330 N.W.2d 22 (1982), retrenched on whether these were issues for the jury. In Cassidy we held that opinions requested under Const. 1963 art. 3, § 8 are only advisory and not precedential and that revisiting the issue was advisable where the Court had before it actual adverse parties to an existing controversy. The Cassidy Court again reiterated the general understanding this Court had of the no-fault act-namely that it was a compromise encompassing the notion of a certain recovery for economic loss in return for reduced tort suit opportunities for noneconomic loss. The Court said:

At least two reasons are evident concerning why the Legislature limited recovery for noneconomic loss, both of which relate to the economic viability of the system. First, there was the problem of the overcompensation of minor injuries. Second, there were the problems incident to the excessive litigation of motor vehicle accident cases. Regarding the second problem, if noneconomic losses were always to be a matter subject to adjudication under the act, the goal of reducing motor vehicle accident litigation would likely be illusory. The combination of the costs of continuing litigation and continuing overcompensation for minor injuries could easily threaten the economic viability, or at least desirability, of providing so many benefits without regard to fault. If every case is subject to the potential of litigation on the question of noneconomic loss, for which recovery is still predicated on negligence, perhaps little has been gained by granting benefits for economic loss without regard to fault. [Cassidy, supra at 500, 330 N.W.2d 22.]

Further, the Court rejected its Advisory Opinion conclusion that juries should find facts and held that trial judges were to decide, as a matter of law, whether the plaintiff had suffered a serious impairment of body function when there was no factual dispute about the nature and extent of the plaintiff's injuries, or when there was a dispute, but it was not material to the determination whether the plaintiff had suffered a serious impairment of body function. Next, the Court held, without reference to textual support but in an apparent effort to effectuate the "goal of reducing motor vehicle accident litigation," that to satisfy the "serious impairment" threshold, an "important" body function must be impaired, that the injury must be an "objectively manifested injury", and that the injury must have an effect "on the person's general ability to live a normal life." Id. at 505, 330 N.W.2d 22.5 The Court, in reading this language into the act, clearly intended its holding to assist in making the compromise at the heart of the no-fault act viable. This judicially created formula, or gloss, in fact became the central inquiry for a court to resolve when a plaintiff alleged that the tort threshold for a third-party tort suit had been met.

Yet, four years after Cassidy was decided, and interestingly after four new justices joined the Court, in DiFranco v. Pickard, 427...

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