Marquis v. Hartford Acc. & Indem., 94617

• Decision Date: 01 October 1993
• Docket Number: No. 94617,No. 9,94617,9
• Citation: 444 Mich. 638,513 N.W.2d 799
• Parties: Marie MARQUIS, Plaintiff-Appellee, v. HARTFORD ACCIDENT & INDEMNITY, Defendant-Appellant. Calendar,
• Court: Michigan Supreme Court

Page 799

513 N.W.2d 799

444 Mich. 638

Marie MARQUIS, Plaintiff-Appellee, v. HARTFORD ACCIDENT & INDEMNITY, Defendant-Appellant.

No. 94617.

Calendar No. 9, October Term, 1993.

Supreme Court of Michigan.

Argued Oct. 6, 1993.

Decided March 15, 1994.

Michael McNamee and Nancy C. Bates, Port Huron, for plaintiff/appellee

Cummings, McClorey, Davis & Acho, P.C. by Marcia L. Howe and Anne M. McLaughlin, Livonia, for defendant/appellant, Hartford Acc. & Indem.

OPINION

ROBERT P. GRIFFIN, Justice.

We must determine the meaning of the "work loss" provision ¹ of the no-fault insurance act ² in a situation in which plaintiff, after recovering from automobile accident injuries, found that she could not return to her job because it had been filled with a permanent replacement. Six months later she located another job that paid substantially less, but, finding it unsuitable, she quit after two months.

The Court of Appeals ruled that the no-fault act entitles plaintiff to work-loss benefits based on the wage differential between the two jobs, not only for the two months she worked on the second job, but also for the remainder of a statutory three-year period following the accident. We affirm in part, reverse in part, and remand to the trial court for further proceedings.

I

Before the automobile accident on November 16, 1985, in which plaintiff Marie Marquis suffered disabling injuries, she was employed as office manager by the Eugene Welding Company. When she recovered and was released for return to work by her physician on March 17, 1986, she found that she had no job because her position at Eugene Welding had been filled. For the period of about six months that followed, during which she looked for other employment, plaintiff received work-loss benefits from her no-fault insurer, based on the wages she earned at the time of the accident, $514 per week.

Thereafter, on August 12, 1986, plaintiff found another job with the Boddy Construction Company, and accepted it even though the new position paid only $280 a week. At that point, despite the income differential of $234 per week, her insurer terminated payment to plaintiff of all work-loss benefits. Two months later, on October 12, 1986, plaintiff quit the job at Boddy Construction because, as she explained, the work assigned was "not my type of work"; the "work described to me and [in] the ad in the paper was not the work given to me." ³

Plaintiff brought this suit in district court against her insurer, claiming work-loss benefits under the no-fault act. Opining that plaintiff was seeking damages for lost earning capacity rather than actual work loss, the district court granted a motion by defendant for summary disposition pursuant to MCR 2.116(C)(10).

On appeal to the St. Clair Circuit Court, plaintiff contended that she was entitled to wage-loss benefits for two months based on the difference between her earnings at Eugene Welding and Boddy and that she should receive full benefits for the remainder of the statutory three-year period because the work at Boddy was not appropriate and she had not unreasonably failed to find substitute employment. In the alternative, plaintiff claimed benefits for the period following her termination of the postaccident job based on the wage differential. The circuit judge agreed with respect to the two-month period, but ruled that plaintiff was entitled to no benefits after she quit the second job "as this loss was not a direct consequence of her auto accident."

Subsequently, a divided panel ⁴ of the Court of Appeals, after remand from this Court, ⁵ reversed that portion of the circuit court's decision that denied benefits following termination of plaintiff's postaccident job, explaining:

"Our decision in this case, to continue benefits based on the pay differential, does not reward plaintiff for quitting; it also does not reward defendant for the happenstance that plaintiff's new job did not work out. Furthermore, it implicitly recognizes that plaintiff was forced to take the new job because of accident-related injuries. The benefits which plaintiff is eligible for are those which resulted from wage loss due to her injuries and which continued regardless of whether she kept the new job." 195 Mich.App. 286, 290, 489 N.W.2d 207 (1992).

We then granted defendant's application for leave to appeal. 442 Mich. 926, 503 N.W.2d 902 (1993).

II

This appeal requires us to determine the meaning of "work loss" as that term is used in § 3107 of the no-fault act. In addition to other personal protection insurance benefits that may be due from an insurer for accidental bodily injury, § 3107(1)(b), in part, requires payment for:

"(b) 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 or she had not been injured." M.C.L. § 500.3107(1)(b); M.S.A. § 24.13107(1)(b). ⁶

In construing the statutory language at issue, we must seek to give effect to the intent of the Legislature, Lafayette Transfer & Storage Co. v. Michigan Public Utilities Comm., 287 Mich. 488, 283 N.W. 659 (1939), and in that effort we are guided by the rules of statutory construction. Where the language of a statute is of doubtful meaning, a court must look to the object of the statute in light of the harm it is designed to remedy, and strive to apply a reasonable construction that will best accomplish the Legislature's purpose. Webster v. Rotary Electric Steel Co., 321 Mich. 526, 33 N.W.2d 69 (1948). In this endeavor, a court should not abandon the canons of common sense. Bay Trust Co. v. Agricultural Life Ins. Co., 279 Mich. 248, 271 N.W. 749 (1937).

In general, as Justice Levin stated in Perez v. State Farm Mutual Automobile Ins. Co., 418 Mich. 634, 640, 344 N.W.2d 773 (1984):

"The legislative purpose in providing work-loss benefits to an injured person ... is to compensate him (and his dependents) by providing protection from economic hardship caused by the loss of the wage earner's income as a result of an automobile accident." (Citations omitted.)

Elaborating on the origins of § 3107(1)(b), Justice Brickley, writing for the Court in MacDonald v. State Farm Mutual Ins. Co., 419 Mich. 146, 350 N.W.2d 233 (1984), explained that in large measure our no-fault act, including § 3107(1)(b), is patterned after the Uniform Motor Vehicle Accident Reparations Act (UMVARA). ⁷ While acknowledging that our Legislature did not adopt UMVARA word for word, the MacDonald Court found instructive the parallel UMVARA "work loss" provision, ⁸ and particularly the drafter's comment:

" ' "Work loss," as are other components of loss, is restricted to accrued loss, and this 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 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.' " 419 Mich. at 151, 350 N.W.2d 233.

Reading the words of § 3107(1)(b) in our no-fault act in the light of its legislative history, including the drafter's comment to the uniform act, the MacDonald Court found it clear that "work-loss benefits compensate the injured person for income he would have received but for the accident." ⁹ 419 Mich. at 152, 350 N.W.2d 233.

No challenge is presented by this appeal to the ruling in Nawrocki v. Hawkeye Security Ins. Co., 83 Mich.App. 135, 286 N.W.2d 317 (1978), that an injured person's right to work-loss benefits under § 3107(1)(b) is not necessarily limited to the period of his disability. Indeed, as already noted, defendant insurer continued in this case to pay work-loss benefits, based on plaintiff's wage level at the time of the accident, for a period of about six months after plaintiff no longer was disabled.

In Nawrocki, after being disabled by an automobile accident for nearly two years, the plaintiff was advised by his doctor that he could return to work, only to find, as in this case, that his job had been filled and no other work was available. The Court of Appeals held, and it has been settled law since then, that eligibility for § 3107(1)(b) work-loss benefits, while subject to other statutory limitations, is not restricted to the period of disability if the insured's continued loss of income is attributable to injury incurred in the accident. Writing for the Nawrocki, panel, Judge (now Chief Justice) Cavanagh explained that when it passed the no-fault act,

"the Legislature had the workers' compensation act before it, and, had it chosen to do so, could easily have adopted that act's limitation of benefits to the period of disability.... The Legislature chose not to so limit its act, and instead created a statute which requires no more than that the work be lost as a direct consequence of the injury." 83 Mich.App. at 144, 286 N.W.2d 317.

Against that background, we turn now to consider issues raised by defendant in this appeal.

III

Defendant first asserts that its obligation to plaintiff for work-loss benefits ended once she accepted other employment. Relying on Ouellette v. Kenealy, 424 Mich. 83, 85, 378 N.W.2d 470 (1985), that holds that damages for loss of "earning capacity" are not recoverable under the no-fault act, defendant argues that plaintiff's claim to differential benefits for any period beyond the point of her reemployment amounts to a claim for loss of "earning capacity."

We disagree. Rather than providing de...