MacDonald v. State Farm Mut. Ins. Co.

• Citation: 419 Mich. 146,350 N.W.2d 233
• Decision Date: 25 June 1984
• Docket Number: No. 6,Docket No. 68139,6
• Parties: Donald A. MacDONALD, Plaintiff-Appellee v. STATE FARM MUTUAL INSURANCE COMPANY, Defendant-Appellant. Calendar
• Court: Michigan Supreme Court

Page 233

350 N.W.2d 233

419 Mich. 146

Donald A. MacDONALD, Plaintiff-Appellee v. STATE FARM MUTUAL INSURANCE COMPANY, Defendant-Appellant.

Docket No. 68139.

Calendar No. 6.

Supreme Court of Michigan.

Argued Oct. 4, 1983.

Decided June 25, 1984.

Robb, Dettmer, Messing & Thompson, P.C. by George R. Thompson, Traverse City, for plaintiff-appellee.

Willingham, Cote, Hanslovsky, Griffith & Foresman, P.C. by Frederick M. Baker, Jr., East Lansing, for defendant-appellant.

Dickinson, Mourad, Brandt, Hanlon & Becker by Daniel R. Siefer, Detroit, for amicus curiae Auto Club Ins. Ass'n.

Lopatin, Miller, Freedman, Bluestone, Erlich, Rosen & Bartnick by Richard E. Shaw, Detroit, for amicus curiae Mich. Trial Lawyers Ass'n.

BRICKLEY, Justice.

This case presents the question whether a person receiving work-loss benefits under the no-fault act, M.C.L. § 500.3101 et seq.; M.S.A. § 24.13101 et seq., may continue to receive those benefits despite having suffered an unrelated heart attack which independently renders the person unable to work. The Court of Appeals held that statutory entitlement to work-loss benefits continued in such a situation. 108 Mich.App. 705, 310 N.W.2d 848 (1981). We reverse.

The parties have stipulated to the following facts:

"This is an action brought by plaintiff Donald A. MacDonald seeking first party benefits under the Michigan no-fault insurance act from his insurer, State Farm Mutual Insurance Company.

"Plaintiff, a 56-year-old self-employed carpenter, while in the course of driving his vehicle, insured through State Farm Policy No. 4650-286-821-228, was involved in a single-car accident in Kalkaska County, Michigan. The date of the occurrence was November 10, 1976.

"From the accident plaintiff received injuries to his neck and shoulders from which he was disabled from gainful employment as defined under the Michigan no-fault insurance act for a period of 28 months.

"Plaintiff, during the pendency of his disability resulting from the automobile accident, was subsequently disabled as a result of the unrelated myocardial infarction which occurred November 25, 1976; that disability continues as of this point in time.

"Either occurrence acting independently of the other would give plaintiff a work-loss disability.

* * *

* * * "The plaintiff claims he is entitled to work-loss benefits pursuant to § 3107(b) for the period of disability causally related to the automobile accident.

"The defendant claims plaintiff is only entitled to work-loss benefits pursuant to § 3107(b) from the date of the automobile accident to the date of the subsequent disability, in this case being approximately 15 days."

Resolution of this case is dependent on the meaning of two sections of the no-fault act, § 3107(b) and § 3107a.

Section 3107(b) provides that a no-fault insurer is liable to pay benefits for:

"Work loss 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 had not been injured".

If § 3107(b) stood alone, work-loss benefits would clearly be unavailable to plaintiff for the period after his heart attack. Our no-fault act is patterned after the Uniform Motor Vehicle Accident Reparations Act, and § 3107(b) of our act, in relevant part, is virtually identical to § 1(a)(5)(ii) of that act. See 14 Civil Procedural & Remedial Laws, Uniform Motor Vehicle Accident Reparations Act, pp. 50, 54. As we have explained previously, by adopting the language of such a model act, it is evident that the Legislature "was cognizant of, and in agreement with, the policies which underlie the model acts' language". Miller v. State Farm Mutual Automobile Ins. Co., 410 Mich. 538, 559, 302 N.W.2d 537 (1981). The drafter's comments to § 1(a)(5) of the UMVARA, and by extension to § 3107(b) of the no-fault act, is in part, as follows:

" 'Work loss', as are the other components of loss, is restricted to accrued loss, and thus covers only actual loss of earnings as contrasted to loss of earning capacity. Thus, an unemployed person suffers no work loss from injury until the time he would have been employed but for his injury. On the other hand, an employed person who loses time from work he would have performed had he not been injured has suffered work loss * * *. Work loss is not restricted to the injured person's wage level at the time of injury. For example, an unemployed college student who was permanently disabled could claim loss, at an appropriate time after the injury, for work he would then be performing had he not been injured. Conversely, an employed person's claim for work loss would be appropriately adjusted at the time he would have retired from his employment."

A reading of both the clear language of § 3107(b) and the drafter's comment to the uniform act leads us to conclude that work-loss benefits are available to compensate only for that amount that the injured person would have received had his automobile accident not occurred. Stated otherwise, work-loss benefits compensate the injured person for income he would have received but for the accident. In the present case, plaintiff would have worked and earned wages for two weeks, until the date of his heart attack. After that date plaintiff would have earned no wage even had the accident not occurred and, therefore, is ineligible for work-loss benefits after that date under § 3107(b).

The meaning of § 3107(b), however, does not end our inquiry. Plaintiff contends, and the Court of Appeals found, that plaintiff had an independent statutory right to recover work-loss benefits under § 3107a of the no-fault act. We find that § 3107a does not support that position.

Section 3107a was added to the no-fault act by 1975 PA 311, and provides:

"Subject to the provisions of section 3107(b), work loss for an injured person who is temporarily unemployed at the time of the accident or during the period of disability shall be based on earned income for the last month employed full time preceding the accident."

It was added to the no-fault act for the reason that

"[the lack of a concise definition of loss of income in § 3107(b)] has given rise to certain problems in connection with persons who are seasonally employed or temporarily unemployed as a result of lay-offs, and who are disabled as a result of an auto accident. In the case of a worker who is unemployed at the time of an accident or during the period of disability, the law might be construed as providing for no work loss benefits since the worker would have had no income at that time, had he/she not been injured. In addition, disabled workers are not entitled to unemployment compensation since benefits are not payable to a person who is unable to work. An unemployed worker who is disabled in an auto accident may thus find him/herself without benefits of either sort." Analysis, HB 4221, November 21, 1975.

Although § 3107a was added to the no-fault act to allow temporarily unemployed persons to recover work-loss benefits, we cannot find that § 3107a provides an independent source of benefits for plaintiff. Section 3107a identifies an amount which is deemed by that section to be the work loss for temporarily unemployed persons. It allows persons temporarily unemployed at the time of an automobile accident to recover benefits notwithstanding that they have no existing wage, and it allows those already receiving work-loss benefits to continue receiving benefits for those temporary periods when they would have had no wage had the accident not occurred. But § 3107a does not expressly state that persons unable to work for physical reasons are temporarily unemployed, and we cannot read such a meaning into the statute.

The phrase "temporarily unemployed", it is evident to us, refers to the unavailability of employment, not the physical inability to perform work. The legislative analysis of HB 4221 reveals a legislative concern with those who but for their disability could have received unemployment compensation as a substitute income. That concern evaporates with those already disabled, who lose no unemployment compensation when they receive a second disabling injury, and with those who suffer a second disability after being disabled in an automobile accident.

In short, those who are temporarily unemployed in the colloquial sense by a disability unrelated to an automobile accident are not "temporarily unemployed" in the statutory sense because they have no income from work or its equivalent to lose. Benefits for "work loss", therefore, are unavailable.

Our result is consistent with the overall purpose of the no-fault act, "to accomplish the goal of providing an equitable and prompt method of redressing injuries in a way which made the mandatory coverage affordable to all motorists". Tebo v. Havlik, 418 Mich. 350, 366, 343 N.W.2d 181 (1984). That goal could hardly be accomplished with an interpretation which required automobile insurers to pay work-loss benefits to persons who would be disabled from working regardless of whether there was an automobile accident. And notwithstanding plaintiff's contention to the contrary, our interpretation of §§ 3107(b) and 3107a will lead to no less prompt awards or any greater administrative morass than was contemplated in the creation of the no-fault system. The act already provides for the periodic examinations of claimants and requires payment by the insurer only as the work loss to the claimant accrues. See §§ 3110(4), 3142(1), 3151. Our decision today will merely allow insurers to use the act as it was intended and avoid paying compensation not due the claimant.

Reversed.

RYAN, LEVIN and KAVANAGH, JJ., concur.

CAVANAGH, Justice (dissenting).

The question presented in this case is one of first impression in Michigan. Although we would affirm the Court of Appeals holding that the plaintiff is entitled to continued work-loss benefits during the period of his disability related to the...