Author(s): Emily Lee Partridge

A REFRESHER ON WELL ESTABLISHED PRINCIPLES REGARDING PIP WAGE LOSS BENEFITS AND A TEMPORARILY UNEMPLOYED PERSON

The Michigan appellate court recently ruled on several PIP wage loss related issues in Dobbyn v Progressive Michigan Ins Co, unpublished opinion per curiam of the Court of Appeals, issued September 18, 2008 (Docket No. 278661). Unfortunately, the appellate court ruled in favor of the plaintiff on all of the issues. However, this opinion does provide valuable analysis on the application of MCL 500.3107(1)(b) and MCL 500.3107a to a certain set of facts.

On September 20, 2003, the plaintiff was involved in a motor vehicle accident and suffered back injuries that required surgical repair. At the time of the accident, the plaintiff had been unemployed. However, he had worked as a laborer at Graham Construction from May 12, 2003 to July 18, 2003, before he was let go. Prior to working as a laborer, he had worked consistently since he was 16 years old, and presented tax records to support this allegation. After getting let go from Graham Construction, he allegedly applied for several different jobs, but had no documentary evidence supporting this claim.

As you know, MCL 500.3107(1)(b) provides PIP 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 or she had not been injured”. Furthermore, MCL 500.3107a provides that “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”.

The appellate court held that the evidence submitted in this case established that the plaintiff was physically able to work at the time of the accident, that he was seeking employment but was not working because there was no work available, and that plaintiff’s unemployed status was not permanent in nature. Therefore, they held that there was enough evidence to defeat a motion for summary disposition and to present to a jury the argument that the plaintiff was temporarily unemployed.

Moreover, the appellate court held it was not an abuse of discretion for the trial court to deny Progressive’s request for a supplemental jury instruction. Progressive requested that the trial court instruct the jury as follows: “[T]he bare assertion of an intent to secure employment without any corroboration of such intent or actions taken to obtain employment during the period of unemployment is insufficient to render an injured party temporarily unemployed and thus entitled to wage loss benefits under the no-fault insurance act.” Progressive cited Frazier v Allstate Ins Co, 231 Mich App 172 (1998) in support of its request.

However, the trial court held and the appellate court agreed that because the facts in Frazier were that the plaintiff was last gainfully employed four years prior to the accident and that he had last sought employment eight months before the accident, wherein in the present case, Mr. Dobbyn had only been unemployed for 44 days before the accident and had a significant and consistent work history, the requested supplemental instruction would be misleading and confusing to the jury.

Finally, Progressive also argued that because the plaintiff was terminated from employment for just cause following the accident, the termination was a superseding event that extinguished his right to wage loss benefits. As you recall, MacDonald v State Farm Mut Ins Co, 419 Mich 146 (1984) held that a subsequent, independent event which would have prevented an insured from working even if the motor vehicle accident had not occurred extinguishes the “but for” chain of causation and an insurer’s liability for wage loss benefits.

In this case, on March 10, 2004, Mr. Dobbyn got a job as a machinist at a manufacturing company. However, the job was physically difficult for him to do, and on June 3, 2004, he was terminated because of “performance issues and lack of work”. The appellate court held that the plaintiff’s termination here did not constitute a supervening, independent event that severed the “but for” chain of causation.

Again, this unpublished opinion does not establish any new law, but rather applies well established principles to a certain set of facts.