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Volume XXVII, No. 27, October 20, 2015        

From the Law Offices of Garan Lucow Miller, P.C.

From the Editor: Sarah Nadeau

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COURT OF APPEALS OFFERS GUIDANCE IN DETERMINING WHETHER RENT IS AN
ALLOWABLE EXPENSE, RATE OF PAY FOR ATTENDANT CARE, AND SCOPE OF AN
INSURER’S PRIVILEGE REGARDING ITS CLAIM FILE

By Paul Gipson

In Prendushi v Farmers Ins Exch, (Docket Nos. Docket Nos. 321348 & 321511), the Court of Appeals provided further insight on the application of Admire v. Auto–Owners Ins Co, 494 Mich. 10, 25–26; 831 NW2d 849 (2013).

In Prendushi, Rajmonda Prendushi suffered a traumatic brain injury and spinal cord injuries as a result of a motor vehicle accident rendering her an incomplete quadriplegic.  This is only the most recent case between Mrs. Prendushi’s guardians and Farmers Insurance Exchange; litigation regarding this accident started in 1999.

Following the subject accident, Mrs. Prendushi and her guardians moved into an apartment where her guardians provided attendant care services to Mrs. Prendushi.  Farmers paid the rent for this apartment with the understanding that it would be modified for Mrs. Prendushi.  A disagreement arose between plaintiffs and Farmers as to whether modifications had been done.  Farmers eventually ceased payment of rent for the apartment.

Plaintiffs filed suit seeking payment for rent, as well as additional payments for attendant care provided by Prendushi’s family members and medical personnel.  Farmers filed a motion for summary disposition regarding plaintiffs’ claim for housing expenses, as well as plaintiffs’ claim for attendant care. Farmers also filed several motions in limine regarding the evidence provided by plaintiffs in support of their claim for attendant care, including an affidavit of plaintiffs’ case manager.  The trial court denied Farmers’ motions

The Court of Appeals found that neither party properly supported their positions at summary disposition regarding whether rent was an “allowable expense.”  The Court of Appeals then went on to provide guidance to the trial court for its determination as to whether the rent being paid by Farmers would be an allowable expense.

The Court of Appeals noted that none of the parties contested that rent, outside of an inpatient facility, was an ordinary living expense.  The Court of Appeals then instructed the trial court to apply the following analysis:

  1. Determine if any modifications had been made.  If no modifications had been made, the rent would not be allowable;
  2. Determine if the modifications were integrated (allowable expenses that cannot be separated from ordinary expenses) or combined (allowable expenses that can be separated from ordinary expenses.)  Consistent with Admire, only integrated modifications could be fully compensable; and
  3. If the modifications were integrated, the court would need to determine if the ongoing rental costs were appropriate.

The Court of Appeals also addressed the parties’ dispute regarding the rate of pay for the attendant care services provided to Ms. Prendushi.  Ms. Prendushi had been prescribed 30 hours of attendant care per day, an increase from 24 hours of attendant care per day for care pertaining to pain management.  Farmers made payments of $12.00 per hour for the additional care as opposed to the $18.00 of care provided during the 24 hours per day.

Plaintiffs sought to use testimony of their case manager regarding the payment rates of skilled nurses.  The Court of Appeals cited Douglas v. Allstate Ins Co, 492 Mich. 241, 259; 821 NW2d 472 (2012), and other cases, wherein the rate of pay for an attendant care provider was based on the services performed and not the credentials of the provider.  The Court determined testimony regarding the rate of pay for skilled nurses would be allowed to be presented to a jury.

Finally, the Court of Appeals addressed the Circuit Court’s Order requiring Farmers to produce its entire litigation file to plaintiffs.  The Court of Appeals found the Circuit Court erred in failing to protect privileged work product from discovery, as required by MCR 2.302(B)(3)(a).  The Court noted, however, the Farmers had failed to identify the scope of the privilege being claimed.  While Farmers had not waived its privilege, the burden on remand was on Farmers to establish the scope of its privilege.

 

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BUCKEYE SEMINAR

The Buckeye Seminar will take place on Thursday, October 22nd, 2015, at the Greater Columbus Convention Center.  Please note, this is a complimentary, full-day seminar for our clients.  In the morning, we will present No-Fault Updates and other topics.  Lunch will then be provided, followed by John Whitman’s Deposition Boot Camp in the afternoon.

Contact Eileen Carty to register: ecarty@garanlucow.com or (800) 875-7600

Click here for the seminar agenda.