Lewis v. Detroit Auto. Inter-Insurance Exchange

• Decision Date: 21 May 1979
• Docket Number: INTER-INSURANCE,Docket No. 78-136
• Parties: John LEWIS, Plaintiff-Appellee-Cross Appellant, v. DETROIT AUTOMOBILEEXCHANGE, Defendant-Appellant-Cross Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 794

282 N.W.2d 794

90 Mich.App. 251

John LEWIS, Plaintiff-Appellee-Cross Appellant, v. DETROIT AUTOMOBILE INTER-INSURANCE EXCHANGE Defendant-Appellant-Cross Appellee.

Docket No. 78-136.

Court of Appeals of Michigan.

May 21, 1979.

Released for Publication Aug. 22, 1979.

Allaben, Massie, Vander Weyden & Timmer by Sam F. Massie, Jr., Grand Rapids, for defendant-appellant-cross appellee.

Bernstein & Bernstein by Harvey M. Howitt, Detroit, for plaintiff-appellee-cross appellant.

Before HOLBROOK, P. J., and R. B. BURNS and BASHARA, JJ.

R. B. BURNS, Judge.

In this action to recover no-fault benefits under an automobile insurance policy issued by defendant to plaintiff, a jury returned a verdict for plaintiff of $25,000. The trial court denied plaintiff attorney fees and 12 per cent interest on the judgment. Defendant's motion for new trial on grounds that the verdict was excessive was denied. Defendant appeals and plaintiff cross-appeals.

Plaintiff was injured in an automobile accident on April 23, 1976. It is undisputed that he was disabled as a result of the accident. Defendant voluntarily paid medical expenses, but denied plaintiff's claim for work loss benefits as not supported by reasonable proof. This action ensued.

Plaintiff presented evidence at trial indicating that he was temporarily laid-off from his employment at American Steel Line Company in December, 1975. Prior to his lay-off he was working 40 hours per week at $3.50 per hour. But for his injury, he would have been called back to work in June, 1976, and up to the date of trial would have worked an additional 10 hours per week overtime at time and a half. Additionally, his base rate of pay would have increased to $3.75 per hour in July, 1976. Defendant sought to prove that plaintiff had actually quit permanently in December, 1976, and would not have returned to work if called back.

Plaintiff also presented evidence tending to establish a loss of income from self-employment. Plaintiff operates a small grocery store. He testified that he had to hire someone at $120 per week to do heavy work, like stocking shelves, which he could no longer do himself. However, he could still do light work, like running the cash register, and spent more hours in the store than he had when working for American Steel Line Company. As a consequence of his increased presence in the store, business had increased. However, plaintiff's bookkeeping was in disarray. Defendant sought to prove that the store was so unprofitable that plaintiff lost no income from the operation of the store as a result of his disability. Additionally, defendant sought to prove that plaintiff had not actually paid anyone to do heavy work in the store.

The primary issue raised by defendant on appeal is whether the verdict was excessive. Before we may reach that issue, however, we must resolve two related issues concerning the correct method for calculating benefits.

M.C.L. § 500.3107(b); M.S.A. § 24.13107(b) provides for two categories of work loss benefits. The first consists 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 had not been injured", reduced generally by 15 per cent to reflect the nontaxable status of the benefit, and subject to a maximum, in this instance $1,213 per 30-day period. The second consists of "expenses not exceeding $20.00 per day, reasonably incurred in obtaining ordinary and necessary services in lieu of those that, if he had not been injured, an injured person would have performed during the first 3 years after the date of the accident, not for income but for the benefit of himself or of his dependent".

The trial court in this case instructed the jury on both types of work loss. Defendant objected to the instruction on expenses because no evidence of expenses was presented. Plaintiff argued to the jury for $120 per week as expenses incurred by plaintiff to hire someone to take over the heavy work in his store.

The trial court should not have instructed the jury on expenses. The $120 per week expenditure was associated with the generation of income, and was a factor to be considered in the calculation of "loss of income". The expenses provision applies only to expenses incurred "not for income", such as lawn maintenance, household cleaning, babysitting and the like. The effect of the instruction was to take some "loss of income" out from under the 15 per cent and maximum provisions associated with "loss of income" work loss.

Under M.C.L. § 500.3107(b); M.S.A. § 24.13107(b), a person temporarily unemployed would receive no work loss benefit for loss of income during the period of unemployment since he would have performed no work had he not been injured. M.C.L. § 500.3107a; M.S.A. § 24.13107(1) expands the general work loss provision of M.C.L. § 500.3107(b); M.S.A. § 24.13107(b) to provide work loss benefits for an injured person who is temporarily unemployed based on earned income for the last month employed full time preceding the accident.

The trial court instructed the jury that, if it found plaintiff was temporarily laid-off from his American Steel Line Company employment, he was entitled to work loss benefits during his disability based on earned income for the last month employed full time prior to the accident. Additionally, if the jury found plaintiff would have returned to work when called back, the jury could consider any increase in wages and overtime plaintiff would have received but for the injury. Defendant objected to jury consideration of increased wages and overtime, citing M.C.L. § 500.3107a; M.S.A. § 24.13107(1). However, this statute merely provides for work loss benefits during unemployment, and does not purport to limit benefits after temporary unemployment would have ended. Rather, the statute is expressly made subject to M.C.L. § 500.3107(b); M.S.A. § 24.13107(b), which allows recovery...