Ouellette v. Kenealy, Docket Nos. 75371

• Decision Date: 10 December 1985
• Docket Number: Docket Nos. 75371,74598
• Parties: Betty M. OUELLETTE, Plaintiff-Appellant, v. John E. KENEALY, Defendant-Appellee. Robert ARGENTA, Plaintiff-Appellant Cross-Appellee, v. Opal SHAHAN, Defendant-Appellee Cross-Appellant. 424 Mich. 83, 378 N.W.2d 470
• Court: Michigan Supreme Court

Page 470

378 N.W.2d 470

Betty M. OUELLETTE, Plaintiff-Appellant, v. John E. KENEALY, Defendant-Appellee.

Robert ARGENTA, Plaintiff-Appellant Cross-Appellee, v. Opal SHAHAN, Defendant-Appellee Cross-Appellant.

Docket Nos. 75371, 74598.

424 Mich. 83, 378 N.W.2d 470

Supreme Court of Michigan.

Argued June 25, 1985.

Decided Dec. 10, 1985.

Released for Publication Dec. 10, 1985.

Lacey & Jones by Phillip G. Rosenberg, Detroit, for Ouellette.

Dickinson, Brandt, Hanlon, Becker & Lanctot by Sarah Wildgen Sweet, Gromek, Bendure & Thomas by Nancy L. Bosh, Detroit, for Kenealy.

Frederick W. Lauck, P.C. by Frederick W. Lauck, Farmington Hills, for Argenta.

Conrad J. Ceglowski, Daniel Zolkower, Southfield, for Shahan.

LEVIN, Justice.

We granted leave to appeal in these cases to resolve a conflict in the Court of Appeals concerning whether damages for loss of earning capacity are recoverable in tort under the no-fault automobile liability act. ¹ We hold that such damages are not recoverable.

In Ouellette v. Kenealy, 141 Mich.App. 562, 564, 367 N.W.2d 353 (1984), the Court of Appeals affirmed the decision of the trial court withdrawing the loss of earning capacity issue from the jury on the basis that such damages are not recoverable under the no-fault act. It declined to follow the decisions of another panel in Argenta v. Shahan, 135 Mich.App. 477, 354 N.W.2d 796 (1984).

In Argenta v. Shahan, the Court of Appeals, affirming a special verdict reduced by remittitur for damages for loss of earning capacity, held that damages for loss of earning capacity are recoverable where the plaintiff suffers a serious impairment of body function.

The no-fault act, in Sec. 3135, abolishes tort liability arising from the ownership, maintenance, or use of a motor vehicle except, in relevant part, as to "[d]amages for noneconomic loss" "if the injured person has suffered death, serious impairment of body function, or permanent serious disfigurement," and "[d]amages for allowable expenses, work loss, and survivor's loss as defined in sections 3107 and 3110 in excess of the daily, monthly, and 3-year limitations contained in those sections." ²

It thus appears that under the no-fault act, damages for loss of earning capacity are not damages for noneconomic loss recoverable if the injured person is found to have suffered serious impairment of body function. ³ Damage for work loss, as defined in Sec. 3107, in excess of the daily, monthly and three-year limitations are, however, recoverable in tort under the no-fault act without regard to whether the injured person suffered death, serious impairment of body function, or permanent serious disfigurement.

Section 3107 of the no-fault act provides that personal protection benefits are payable 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...." ⁴

In MacDonald v. State Farm Mutual Ins. Co., 419 Mich. 146, 350 N.W.2d 233 (1984), this Court held that where a person suffers an unrelated injury, a heart attack, after an automobile accident and is rendered unable to work, eligibility for work-loss benefits cease because no income would have been earned even if the accident had not occurred.

We said:

"Our no-fault act is patterned after the Uniform Motor Vehicle Accident Reparations Act, and Sec. 3107(b) of our act, in relevant part, is virtually identical to Sec. 1(a)(5)(ii) of that act. See 14 ULA, 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 Sec. 1(a)(5) of the UMVARA, and by extension to Sec. 3107(b) of the no-fault act, are 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 Sec. 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...