FROM THE LAW OFFICES OF GARAN LUCOW MILLER, P.C.
Volume XXIII, No. 11
April 14, 2011

From the Co-Editors
James L. Borin & Simeon R. Orlowski

COURT OF APPEALS PERMITS RECOVERY OF DAMAGES
FOR EXCESS REPLACEMENT IN THIRD-PARTY NO-FAULT SUITS
CONTRIBUTOR – CHRISTIAN C. HUFFMAN

The Michigan Court of Appeals recently ruled in the published decision of Johnson v Recca, ____
Mich App ____ (2011) (Docket #294363, released 4/5/11), that the compensation an injured person may receive for replacement services following an automobile accident is not limited to the $20 per day for three years recoverable as PIP benefits under MCL 500.3107(1)(c). Rather, any cost of replacement services over and above what the PIP insurer must pay may be recovered from the at-fault driver in a third-party tort action, since such damages fall within one of the narrow exceptions to the no-fault act’s general abolition of tort liability.
Plaintiff Penny Jo Johnson filed a third-party automobile negligence action against Defendant John Recca
seeking, among other damages, recovery for the cost of replacement services rendered by her mother-in-law
more than three years after the accident occurred. The Defendant moved for summary disposition on the
excess replacement services claim, asserting that recovery for such damages is not permitted by MCL
500.3135(3)(c). That provision creates an exception to the no-fault act’s general abolition of tort liability for:
Damages for allowable expenses, work loss, and survivor’s loss as defined in sections 3107 to
3110 in excess of the daily, monthly, and 3-year limitations contained in those sections.
The Circuit Court granted the motion, agreeing that the above-quoted exception, by its plain terms, does
not specifically create an exception for excess replacement services. Furthermore, the Circuit Court rejected
the Plaintiff’s assertion that the exception for excess allowable expenses permits recovery of excess
replacement services. Specifically, the Circuit Court noted that allowable expenses are defined by MCL
500.3107(1)(a) as:
Allowable expenses consisting of all reasonable charges incurred for reasonably necessary
products, services and accommodations for an injured person’s care, recovery, or rehabilitation.
. . .
The Circuit Court agreed with the Defendant that this definition does not include replacement services,
which are specifically defined in another provision of the statute, MCL 500.3107(1)(c), as:
Expenses not exceeding $20.00 per day, reasonably incurred in obtaining ordinary and necessary
services in lieu of those that, if he or she had not been injured, an injured person would have
performed during the first 3 years after the date of the accident, not for income but for the benefit
of himself or herself or of his or her dependent.
In reversing the Circuit Court, the Court of Appeals conceded that MCL 500.3135(3)(c) references only
allowable expenses, not expenses for replacement services. It further conceded that the definition of allowable expenses in MCL 500.3107(1)(a) does not specifically encompass expenses for replacement services and that expenses for replacement services are specifically addressed by MCL 500.3107(1)(c).
Nonetheless, the Court of Appeals proceeded to read expenses for replacement services into the
definition of allowable expenses. Specifically, the Court noted that the definition of allowable expenses includes expenses for an injured person’s “care.” It then noted that the Michigan Supreme Court’s decision in Griffith v State Farm Mutual Automobile Ins Co, 472 Mich 521, 535 (2005), states that “care” refers to “those products, services, or accommodations whose provision is necessitated by the injury sustained in the motor vehicle accident.” Accordingly, the Court of Appeals reasoned that since expenses for excess replacement services are necessitated by the injury sustained in the automobile accident, then they constitute an allowable expense and thus fall within MCL 500.3135(3)(c)’s exception to tort immunity.
It is presently unknown whether the Defendant will file an application for leave to the Michigan Supreme
Court.

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GARAN LUCOW MILLER
INDY CITY SEMINAR – INDIANA & MICHIGAN LAW
May 18, 2011 at the Marriott Downtown Indianapolis

Garan Lucow Miller, P.C. is pleased to present our sixth annual seminar covering Indiana and
Michigan Law on May 18, 2011 at the Marriott Downtown Indianapolis, 350 W. Maryland Street,
Indianapolis, IN 46225 (317) 822-3500.
The day will begin with a continental breakfast and registration at
8:30 a.m. followed by the program. Comprehensive written materials will be distributed to all seminar
attendees.
If you are able to attend this complimentary event, please register via e-mail to Eileen Carty at:
ecarty@garanlucow.com or phone Ms. Carty at (800) 875-7600 for reservations.
We hope to see you there!

8:30 – 8:55 Continental Breakfast & Registration
8:55 – 9:00 Welcome and Introduction
Speaker: David A. Couch
9:00 – 9:30 First Party Indiana Law Updates
Speaker: Gregory M. Bokota
9:30 – 10:00 Third Party Indiana Law Updates
Speaker: Jennifer L. McCloskey
10:00 – 10:30 Using Social Networking Sites as a Discovery Tool
Speaker: David A. Couch
10:30 – 10:45 Break
10:45 – 11:15 Michigan First Party No-Fault (PIP) Updates
Speaker: David N. Campos
11: 15 – 11:45 Criminal Defense in Catastrophic Injury Cases,
& the Impact of Criminal Restitution on Civil Liability and Subrogation
Speaker: L. Ladd Culbertson
11:45 – 12:00 Michigan Third Party Automobile Negligence Updates
Speaker: David A. Couch
12:00 – 12:30 Panel Discussion on Deposition Strategies and Tips for Testifying Effectively
Moderator: David A. Couch
12:30 – 1:00 Question and Answer Session

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UPCOMING SEMINARS
The Troy Breakfast Seminar will be held on Thursday October 27, 2011 at the Troy Marriott.
Please watch Law Fax for further information.