Here’s my formula as an attorney who handles car accident and No Fault wage loss cases
When it comes to Michigan’s No Fault laws, I’ve seen first-hand that the way things are aren’t always the way they were intended when the law was enacted.
A perfect example is the way No Fault wage loss benefits are calculated for auto accident victims who have returned to work.
Yesterday, I talked about the Michigan Court of Appeals recent decision in Agnone v. Home-Owners Insurance Company and the “formula” the judges used to determine that the auto accident victim in the case was entitled to zero wage loss benefits. This was despite the fact that he had clearly lost thousands of dollars each month as a result of his crash-related injuries.
Today, I want to talk about why I believe that, as an experienced auto accident attorney, the Court of Appeals’ wage loss “formula” in Agnone is neither fair nor logical.
This is an important discussion because the Agnone ruling was a “published” decision by the Michigan Court of Appeals (and it was based on a 1988 published Court of Appeals opinion), which means that it’s now the law and it must be followed by other appellate judges, trial judges, lawyers, auto insurance companies and auto accident victims.
But as with many things under Michigan’s No Fault law, just because a rule must be followed doesn’t mean it was the right result. And with Agnone, it doesn’t necessarily mean the rule is fair or logical.
In contrast to the No Fault wage loss “formula” used by the Court of Appeals in Agnone, here’s my “formula” for how No Fault wage loss benefits SHOULD be calculated after a victim has returned to work.
- First, determine the auto accident victim’s total monthly income at the time of his or her accident, i.e., pre-accident income or “benefits payable.”
- Second, reduce this “benefits payable” amount by 15% to adjust for the fact that No Fault wage loss benefits are “not taxable income.”
- Third, subtract from the monthly “benefits payable” amount the monthly income earned by the auto accident victim since having returned to work after the accident, i.e., post-accident income.
- Fourth, compare the difference calculated above to the monthly statutory maximum for No Fault wage loss benefits.
- Fifth, the lesser of the two amounts will be the compensable work-loss benefits, payable to the auto accident victim as No Fault wage loss benefits.
Significantly, it’s my opinion that my “formula,” as opposed to the Court of Appeals “formula,” more closely tracks the specific language and requirements of the No Fault Law’s wage loss statute:
- “Work loss consisting of loss of income from work an injured person would have performed during the first 3 years after the date of the accident if he or she had not been injured.”
- “Because the benefits received from personal protection insurance for loss of income are not taxable income, the benefits payable for such loss of income shall be reduced 15% …”
- “[T]he benefits payable for work loss sustained in a single 30-day period and the income earned by an injured person for work during the same period together shall not exceed” the statutory monthly “maximum.” (MCL 500.3107(1)(b))