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Michigan Supreme Court changes its mind about attendant care No-Fault claims – again?

August 14, 2012 by Steven M. Gursten

Activist Republican justices do ‘180’ on ‘reasonable charges’ analysis for attendant care services, but then refuse to commit in Douglas v. Allstate

For nearly 30 years, Michigan courts have considered the rates charged by commercial care giving agencies when determining what constitutes a “reasonable charge” for family-provided attendant care services.

But, now, the Michigan Supreme Court’s activist Republican majority insists the logic behind the rule is all wrong.

Except when it’s not.  Confused?  So are hundreds of victims, families and lawyers who handle attendant care No-Fault claims in Michigan.

In a stunning about-face maneuver in Douglas v. Allstate Insurance Company, July 30, 2012, the four Republicans who form the majority on the Michigan Court purported to disavow the accepted case law  regarding the valuation of No-Fault attendant care benefits provided to an auto accident victim by one or more of the accident victim’s family members.

Since the 1983 ruling by the Michigan Court of Appeals in Manley v. Detroit Automobile Inter-Insurance Exchange (DAIIE), Michigan courts have abided by the following rule:

“[C]omparison to rates charged by institutions provides a valid method for determining whether the amount of an expense was reasonable and for placing a value on comparable services performed by [an auto accident victim’s family members].”

However, in Douglas, Chief Justice Robert P. Young Jr., joined by Justices Stephen J. Markman, Mary Beth Kelly and Brian K. Zahra, abandoned the nearly 30-year-old Manley rule in favor of a rule of their own making:

“[R]ates that commercial agencies charge is based on factors too attenuated from those underlying the rate charged for [“a family member’s”] provision of attendant care services to be adopted as [“a family member’s”] reasonable charge for attendant care services.” (Douglas v. Allstate Insurance Company, Michigan Supreme Court, 7/30/2012, pages 30-31)

Yet, no sooner did the right-leaners lay out their freshly minted rule than they seemed to back-track from it later in the decision:

“[A]gency rates … may in fact be helpful to the fact-finder as a point of comparison in determining a reasonable charge for [“a family member’s”] provision of attendant care services …” (Douglas v. Allstate Insurance Company, Michigan Supreme Court, 7/30/2012, page 32, footnote 79)

The majority’s indecisiveness was not lost on dissenting Justice Michael F. Cavanagh:

“Particularly unpersuasive is the notion that only the hourly rate paid to an attendant-care services provider by an agency is relevant. Indeed, even the majority rejects this perspective.”

Attendant care in Michigan today

Under Michigan’s No-Fault Law, one of the most valuable No-Fault benefits that catastrophically injured Michigan auto accident victims are entitled to are attendant care services.

Frequently described alternatively as “nursing services,” attendant care services are provided either by professional nurses or caregivers, or by family members of the injured auto accident victim.

Attendant care services are those services which are “reasonable necessary … for an injured person’s [accident-related] care …” (MCL 500.3107(1)(a)) The “care” in “attendant care” has been defined by the courts to mean those services which are “necessary because of the accident but that may not restore a person to his preinjury status.”

In return for providing attendant care services, the providers are entitled to recover a “reasonable charge[]” for their services from the auto accident victim’s No Fault auto insurance company. (MCL 500.3107(1)(a))

Our nearly 30-year law on attendant care

Despite opportunities to do so, the Michigan Supreme Court has left the Manley rule intact since it was announced by the Michigan Court of Appeals in 1983.

In 1986, when Manley was before the Michigan Supreme Court, the majority, which included Justice Michael F. Cavanagh, neither criticized, objected to or otherwise specifically overruled the appellate court panel’s rule regarding the use of agency rates in determining a “reasonable charge” for family-provided attendant care services.

Indeed, dissenting Justice Patricia Boyle appeared to approve of the appellate panel’s rule:

“As the Court of Appeals noted, ‘comparison to rates charged by institutions provides a valid method for determining whether the amount of an expense was reasonable and for placing a value on comparable services performed by Mr. and Mrs. Manley …”

Similarly, in 2010, in Bonkowski v. Allstate Insurance Company, when the issue of the Manley rule again came on the Michigan Supreme Court’s radar, courtesy of then-Michigan Court of Appeals Judge Brian K. Zahra’s October 2, 2008, appellate ruling, the high court again failed to criticize, object to or otherwise overrule the Manley.

Aside from any lingering concerns that may have accompanied Justice Zahra on his ascent to the Michigan Supreme Court, there was no indication prior the court’s July 30, 2012, ruling in Douglas that the Michigan Supreme Court questioned the continued soundness of the Manley rule.

Indeed, in the Court of Appeals unpublished ruling in Douglas on June 23, 2011, which was joined by Republican Judges Christopher M. Murray and Joel P. Hoekstra, the Manley rule was applied without objection or hesitation.

Yet, once the case reached the desks of the activist Republican justices on the Supreme Court, everything changed.

By never mentioning the Manley rule in its discussion of how to determine the “reasonable charge” for attendant care services, the right-leaning majority carried on as if the Manley did not exist and, thus, the majority did not obligate itself to having to explain why after nearly 30 years the Manley rule suddenly no longer made sense.

Instead, the activist Republican majority made it easy on itself (and, thus, hard on all present and future auto accident victims who need attendant care help): The justices pretended their new rule was born out of Zahra’s comments in Bonkowski.

And, in doing so, the Douglas majority created the illusion that Zahra’s discussion in Bonkowski had an “issue of first impression” quality to it.

However, in order to pull that off, Young, Markman, Kelly and Zahra had to ignore two important facts that Zahra acknowledged in Bonkowski:

  • The Court of Appeals “has previously embraced” the Manley rule.
  • Allstate Insurance Company, the defendant in Bonkowski “did not argue in the trial court or on appeal in this Court that Manley is wrongly decided.”

In case you forgot, the insurance company  in Douglas, where our  activist Republican majority just effectively erased the nearly 30-year-old Manley rule, is the same insurance company who, in Bonkowski, did not argue that  Manley was “wrongly decided.”

Allstate Insurance Company.

– 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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