Volume XXIII, No. 7
March 22, 2011

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

APPELLATE COURT HOLDS THAT NO-FAULT INSURER IS LIABLE FOR THE ENTIRE
COST OF A MODIFIED VAN – A SOFTENING OF GRIFFITH
CONTRIBUTOR – EMILY L. PARTRIDGE

The Court of Appeals, in Admire v Auto-Owners Insurance Company, an unpublished opinion
issued February 15, 2011 (Docket No. 289080), discusses whether the complete cost of a modified vehicle is
an allowable expense under MCL 500.3107.
The Plaintiff was injured in a motor vehicle accident in 1987 which left him bound to a wheelchair. The
parties, in 2000, entered into a Transportation Purchase Agreement which stated that Auto-Owners would pay $37,807.76 for the purchase of a modified van. The Transportation Purchase Agreement provided for a release of transportation claims for seven years. The Agreement further stated:

[U]pon expiration of the operational use agreed to above, the van shall be traded in
on a replacement van (i.e. the equity or value of that van shall be applied toward the
purchase price of a replacement). [Plaintiff] will give [Auto-Owners] (60) sixty days
advance written notice of their intent to purchase a replacement van. [Emphasis
added.]

On December 26, 2006, Plaintiff gave Auto-Owners notice of his intent to replace the van. On January
31, 2007, Auto-Owners advised that it did not believe it was obligated to purchase a new van under either the Transportation Purchase Agreement or the Michigan No-Fault Act. However, it stated that the Plaintiff could trade in the existing van and purchase a new van, and that it would pay for the necessary medical modifications to the new van.
The Plaintiff went ahead and did just that. The trade-in value of the van was $6000. The opinion did not
provide the cost of the modifications, but Auto-Owners did pay for those. The issue in the lawsuit then was
whether the Plaintiff was entitled to reimbursement of $18,388.50, the cost to purchase the vehicle after the
application of the $6,000.00 trade-in against the purchase price.
The trial court granted summary disposition in favor of the Plaintiff, apparently basing its ruling on the
Transportation Purchase Agreement entered into in 2000.
The Court of Appeals analyzed the Agreement and stated that there was no provision that spoke to the
question of who was responsible for purchasing a new van after seven years. The Court noted that it implied
that Auto-Owners would pay for the replacement because it compels the purchase of a new van and requires
that Plaintiff would give notice. However, the Court noted that the contract could also be read to mean that
Plaintiff was entitled to use the equity in the old van to buy a new van upon the expiration of seven years. The Court held that there was an ambiguity in the contract, and thus the trial court erred in granting summary disposition for the Plaintiff.
However, the Court of Appeals then examined the issue under the Michigan No-Fault Act. The appellate
court began by stating that pursuant to Begin v Michigan Bell, 284 Mich App 581 (2009), the Supreme Court
case of Griffith v State Farm, 472 Mich 521 (2005) did not specifically overrule Davis v Citizens, 195 Mich App
323 (1993), and therefore Davis remains good law.
The Court of Appeals then quoted the Begin court, stating that in certain instances:
the product, service, or accommodation used by the injured person before the
accident is so blended with another product, service, or accommodation that the
whole cost is an allowable expense if it satisfies the statutory criteria of being
sufficiently related to injuries sustained in the motor vehicle accident and if it is a
reasonable charge and reasonably necessary for the injured person’s care,
recovery, or rehabilitation… [Emphasis added.]
The Admire Court acknowledged that this statement was made in the context of discussing food in an
institutional setting and modified shoes for an amputee following an accident. However, the Admire Court then stated that the Begin court implied that a modified van was analogous to institutional food and modified shoes.
The Admire Court, basically skipping the explanation of their analysis and rationale, went on to conclude
that because the Plaintiff established that he could not drive a standard vehicle and needed a modified van for his transportation needs, that Auto-Owners was liable for paying for the purchase of the new van, along with the modifications for same.
Although not expressly stated in this opinion, it appears that the Admire Court felt that the regular vehicle
which was required before the motor vehicle accident is a product, service or accommodation so blended with
a modified vehicle reasonably necessary after the motor vehicle accident that the entire cost of the
accommodation, the vehicle and the modifications were the liability of the insurer.
It is difficult to reconcile this case with Griffith v State Farm and Hoover v Michigan Mutual Ins Co, 281
Mich App 617 (2008). How can the analysis used in Griffith and Hoover regarding the necessity of a causal
connection to the motor vehicle accident be applicable in home accommodations but not to transportation
accommodations?
This author has learned that Auto-Owners has decided to file an application for leave to the Michigan
Supreme Court.

***************************************
GARAN LUCOW MILLER
GRAND RAPIDS SPRING BREAKFAST SEMINAR
April 13, 2011 at Frederik Meijer Gardens and Sculpture Park

The Grand Rapids office of Garan Lucow Miller P.C. is pleased to present its Annual Spring Breakfast Seminar
on April 13, 2011 at the Frederik Meijer Gardens and Sculpture Park, located at 1000 East Beltline, NE in Grand Rapids {(616) 957-1580}.
Comprehensive written materials will be distributed to all who attend. After the seminar, feel free to
enjoy all of the open indoor and outdoor garden areas as our guest, including the exciting Butterfly Exhibit! In addition, a membership to Frederik Meijer Gardens and Sculpture Park will be presented to two lucky seminar attendees, along with day passes to enjoy this lovely venue.
If you are able to attend this complimentary annual event, please register via e-mail to: lbeatty@garanlucow.com or phone Lynn Beatty at (616) 742-5500 or (800) 494-6312 for reservations.
We look forward to seeing you!

8:00 – 8:25 am Registration and Continental Breakfast
8:25 – 8:30 am Welcome and Introduction
David N. Campos, Moderator
8:30 – 9:00 am The Three Phases of Surveillance
Speaker: Bob Chapman
Blue Diamond Investigations, LLC
9:00 – 9:20 am Premises Liability Update
Lugo v Ameritech – Chinks in the Armor Who will be Deemed an
Owner of an Animal that Causes Injury? Social Host Claims – Narrow
Avenues for Recovery if the Facts are Right
Speaker: David A. Couch
9:20 – 9:40 am Adjusters and Their Estate Planning
How to Avoid the 6 most Common Estate Planning Mistakes Medicaid
Planning Special Needs New Tax Laws
Speaker: Tara L. Velting
9:40 – 10:00am Coverage Issues
Fraud Theft Joyriding Excluded Drivers Excluded Drivers
Priorities Parked Vehicles C Alighting ORV’s C UM/UIM
Speaker: Thomas G. Herman
10:00 – 10:15 am Break
10:15 – 10:35 am The Medical Marihuana Controversy
Overview of Michigan Medical Marihuana Act How to Obtain It Compensable Benefit in
Michigan under the No-Fault Act?
Speaker: Sarah L. Walburn
10:35 – 10:55 am No-Fault Home Accommodation Claims
Griffith v. Wilcox
Speaker: Emily L. Partridge
10:55 – 11:15 am Third-Party Auto Threshold & Renewed Importance of Surveillance
Life After “McCormick” Surveillance and “the Pay Off”
Speaker: L. Ladd Culbertson
11:15 – 11:45 am Michigan Auto No-Fault Update
Case Law Update Year in Review and Anticipated
Future Case Law Development
Speaker: David N. Campos
11:45 – noon Questions and Answers
*************************************
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.