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How can a “temporarily unemployed” car accident victim collect No Fault wage loss benefits?

February 13, 2015 by Steven M. Gursten

Jones v. Home-Owners Insurance confirms a person must be ‘actively seeking employment’ but also that his ‘unemployed status’ need not be permanent

temporarily unemployed and wage loss

I regularly sit as a case evaluator for several different counties in Michigan, and I see many different types of legal issues in the personal injury cases arise.  But no area of our law creates more confusion among the plaintiff and insurance defense attorneys who come before me to argue their respective positions than cases involving temporary unemployment.

While most of the attorneys may be confused, Michigan’s No Fault law is actually very clear about what is required for any car accident victim who is injured and  “temporarily unemployed at the time of the accident,” in order to collect No Fault wage loss benefits under a temporary unemployment claim.

There are only two things a person must show (after he has qualified for No Fault PIP benefits by being covered by Michigan No Fault, being injured in a motor vehicle accident, and being unable work because of injuries that his doctors are medically relating to the motor vehicle accident)  These two things are:

  • She was “‘actively seeking employment’” at the time of the accident.
  • Her “‘unemployed status would not have been permanent if the [accident-related] injury [which is disabling her working] had not occurred.’”

Many defense lawyers have tried over the years to argue that there are additional hurdles or obstacles an accident victim must meet on these claims. But the Michigan Court of Appeals has recently issued a decision that should put an end to this. The underlying case involved  Home-Owners Insurance Company trying to muddy the No Fault law’s clear requirements so it could deny wage loss claims based on “temporary unemployment.”

In Jones v. Home-Owners Insurance Company, Home-Owners (who, despite the name also sells automobile insurance) insisted the only way an injured car accident victim could show she was “temporarily unemployed” at the time of her motor vehicle accident was if she had “documentation from a prospective employer that a job was available within [her] skill set.”

In other words, Home-Owners wanted verifiable proof of “an actual job offer” before it would meet its statutory obligation to pay No Fault wage loss benefits under the No Fault law’s legal definition of “temporarily unemployed.”

Fortunately, Home-Owners’s proposed judicial activism failed with the Court of Appeals two-judge majority:

“[W]e reject as legally unfounded Home-Owners’s argument that [wage loss] benefits [for a car accident victim who was temporarily unemployed at the time of the accident] must be paid only when a claimant substantiates receipt of an actual job offer made before an accident.”

Applying the existing law to Angel Jones’s claim for No Fault wage loss benefits, based on her having been “temporarily unemployed” at the time of the car accident that disabled her from working, the judges agreed Ms. Jones had proved her case:

  • “Jones presented evidence of her work history at Origami [Brain Injury Rehabilitation Center], where she had ceased working full-time four months before the accident. In the interim, Jones actively sought full-time work …”
  • “[T]he evidence supported a reasonable inference that Jones would have obtained employment as a parent advocate had the accident not intervened. … Only days before the accident, Jones learned of a promising job opportunity and expressed confidence that she would have been hired. The trial evidence included the job posting and [a] recommendation that Jones ‘would be a good candidate’ for the position. … Jones produced … evidence directly corroborating that she planned to apply and was qualified for the position.”

Bottom line, the Court of Appeals said:

  • “The jury was entitled to infer that based on Jones’s employment record, her qualifications, and the job requirements, the patient advocate position likely would have been offered and accepted.”
  • “[A]  reasonable jury could conclude that Jones was only temporarily unemployed at the time of the accident.”

Accordingly, the Court of Appeals upheld the Wayne County Circuit Court jury verdict awarding Ms. Jones $38,124 in unpaid wage loss benefits – and $42,698.88 in interest for those “overdue benefits.”

Refresher on No Fault wage loss benefits

Under Michigan’s No Fault law, if a car accident victim’s accident-related injuries prevent her from returning to work, then she is entitled to collect No Fault wage loss benefits.

No Fault wage loss benefits cover “loss of income from work an injured person would have performed during the first three years after the date of the accident if he or she had not been injured.” (MCL 500.3107(1)(b))

And, as the above case also shows, our No Fault law in Michigan also takes into consideration the real-life problems of a person who is  “in between jobs” or “temporarily unemployed” at the time that he or she is unfortunately also involved in  a car accident.

In this instance, which effects hundreds of people every year, No Fault wage loss benefits for a  “temporarily unemployed” car accident victim are “based on earned income for the last month” that the car accident victim was “employed full time preceding the accident.” (MCL 500.3107a)

This case is extremely important. If the defense argument had prevailed, it would have been adopted overnight by insurance defense lawyers on hundreds of temporary unemployment cases. Further, this decision would have been used to deny wage loss PIP benefits by every auto insurance company in Michigan to every person with the bad luck of being in-between jobs but without a job offer at the time they’re involved in any sort of automobile accident. Over time, that would have affected thousands of people. And all of these people would have lost the real life line that wage loss benefits are meant to provide.

This case may have involved only a small amount of wage loss at issue, but the larger ramifications and the stakes of Jones v. Home-Owners Insurance Company for thousands of people in this state was enormous.

Related information:
Michigan wage loss rate raised in 2014

Yet another insurance company dirty trick: Home-Owners sells SUV coverage, then insists SUV is not covered

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