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The Michigan Supreme Court’s ‘supreme’ contradiction on excess economic replacement services

Dissenting justice calls out activist Republican majority for flip-flopping on auto accident victims’ rights to excess replacement services

In the Michigan Supreme Court’s July 30, 2012, ruling in Johnson v. Recca, Justice Diane M. Hathaway has highlighted a remarkable contradiction on the part of her activist Republican colleagues, Chief Justice Robert P. Young Jr. and Justice Stephen J. Markman.

As a result, seriously injured Michigan auto accident victims lose an important No-Fault right, and Michigan No-Fault auto insurance companies gain yet another “trick” for denying claims and, thereby, boosting their profits at the cost of their insureds’ well-being.

In Justice Hathaway’s dissenting opinion in Johnson, where she vehemently disagreed with the activist Republican majority’s ruling that Michigan auto accident victims cannot sue for excess No-Fault replacement services, Justice Hathaway notes a curious “flip-flop” quality to Chief Justice Young’s and Justice Markman’s position on the issue.

According to the July 30, 2012, majority opinion in Johnson, which was authored by Justice Markman and joined by Chief Justice Young:

“[I]n a third-party tort action, damages for replacement services [“in excess of the daily … and 3-year limitations”] are not recoverable pursuant to MCL 500.3135(3)(c) …”

However, as Justice Hathaway points out, her activist Republican colleagues had a very different take on the issue eight years ago. Back then, she notes, then-Justice Young and Justice Markman believed a Michigan auto accident victim could sue for excess No-Fault replacement services:

“In Kreiner v. Fischer [decided on July 23, 2004], Justices YOUNG and MARKMAN agreed that under MCL 500.3135(3)(c), ‘[a]n injured person may file a tort claim against the party at fault seeking to recover excess economic losses ( … replacement [services] expenses beyond the daily … and yearly maximum amounts). MCL 500.3135(3)(c).” (Justice Diane M. Hathaway’s dissent in Johnson v. Recca, page 10)

In their majority opinion in Johnson, Chief Justice Young and Justice Markman admitted to the Kreiner statement that “damages for replacement services are recoverable in tort,” but they said the statement was meaningless or “dictum.”

Justice Hathaway was outraged both by her activist Republicans’ flip-flop and their blasé explanation for it:

“Given the unequivocal nature of the position taken by Justices YOUNG and MARKMAN on this issue, I find it difficult to accept that they now casually disregard that position simply because it was said in dictum.” (Justice Diane M. Hathaway’s dissent in Johnson v. Recca, page 10-11)

No-Fault replacement services and excess replacement services in economic claims

Until the July 30, 2012, ruling in Johnson, seriously injured Michigan auto accident victims could sue to recover No Fault “replacement services” benefits in excess of the daily and yearly amounts provided in Michigan’s No Fault Law.

Under the No Fault Law, auto accident victims are entitled to receive “replacement services” in the amount of $20 per day “during the first 3 years after the date of the accident …” (MCL 500.3107(c))

“Replacement services” are those “ordinary and necessary services” that an auto accident victim “would have performed” “if he or she had not been injured …” (MCL 500.3107(c))

In the event that an auto accident victim’s need for “replacement services” exceeded the $20 daily amount or continued beyond the 3-year duration, the victim previously had the right to file  a third-party tort action (negligence) lawsuit to recover “[d]amages … in excess of the daily … and 3-year limitations …” (MCL 500.3135(3)(c))

Sadly, the majority opinion by the Michigan Supreme Court’s activist Republican justices in Johnson has extinguished that right.

– Steve Gursten is head of Michigan Auto Law. He frequently writes and speaks about Michigan No-Fault law, and is available for comment. Steve also wrote the free book, Guide to Michigan No-Fault Law.

Related information:

The Michigan Supreme Court meets “The Godfather”

Michigan’s excess economic loss law for auto accident victims is broken

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights. Call (800) 777-0028 to speak with one of our lawyers.

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