In Admire v. Auto-Owners Insurance Company, the Michigan Supreme Court clarified how to determine what expenses insurers must cover for an auto-accident victim's "care, recovery, or rehabilitation" under Michigan's No-Fault Act. The Court specifically decided that an insurer may be required to pay for modifications to a van to make it wheelchair accessible, but is not required to pay for the van itself. Justice Zahra, writing for the majority, stated that a "van is just a van; and while a van may not have been plaintiff's transportation preference, it remains an ordinary means of transportation used by the injured and uninjured alike." The take-away from the Court's ruling is that when an auto-accident victim's injuries require the purchase of a product that combines ordinary life expenses (like transportation), and expenses related to care, recovery, and rehabilitation, if the ordinary life expenses are easily separated, the insurer is only required to pay for the care expenses. If the ordinary life expenses are not easily separated from care expenses, the insurer is required to pay the entire expense.
Justice Cavanagh dissented. Justices McCormack and Viviano did not participate because neither of them were on the supreme court bench when the case was argued.
The Admire case arose after Auto-Owners agreed to pay for modifications to Mr. Admire's van to make it wheelchair accessible but refused to pay for the van itself. Admire was injured in an auto accident in 1987. His injuries left him unable to speak or walk. Three times, Auto-Owners entered into contracts with Admire to purchase wheelchair-accessible vans. In 2007, plaintiff again wished to purchase a new wheelchair-accessible van. This time, however, Auto-Owners said it would only pay for the modifications to the van and not the van itself.
Admire sued, and prevailed in the circuit court and the Michigan Court of Appeals. The Michigan Court of Appeals held that the expenses related to the modifications to the van and the van itself were so blended that the whole cost should be born by Auto-Owners. The Michigan Court of Appeals exacerbated a split among published decisions of the Court of Appeals regarding how to determine what costs related to care, recovery, and rehabilitation were recoverable as personal injury protection benefits under the No Fault Act. Some panels of the Court of Appeals had ruled that courts must compare pre-injury and post-injury costs, and that only the difference was recoverable. Other panels, including the panel in Admire, concluded that expenses that are blended, the entire cost is recoverable.
Auto-Owners sought leave, and after oral argument on the application, the Michigan Supreme Court granted the application. After a second round of argument, the court clarified how to determine what PIP expenses are recoverable:
Postaccident expenses of a wholly new essential character satisfy the statutory required causal connection that expenses be for the injured person's care, recovery, or rehabilitation. Ordinary expenses that are the same for an injured and an uninjured person are not recoverable at all . . . . However, in an expense satisfies the statute, then it is recoverable in full; there is no setoff based on the injured person's preinjury expenses of the same character. Some products, services, or accommodations might otherwise be ordinary but are so integrated with a product, service, or accommodation that is actually for the injured person's care, recovery, or rehabilitation that the entire product, service or accommodation must be included as an allowable expense under MCL 500.3107(1)(a). But if the ordinary expenses is merely combined with the product, service, or accommodation for the inured person's care, recovery, or rehabilitation in a way that is physically and conceptually separable, the ordinary expense fails to satisfy the statute and is not compensable.
Overall, the decision strikes a middle ground between the more insurance-company favorable comparison of pre-injury and post-injury expenses and the Court of Appeals' decision below. That said, it seems likely that the "physically and conceptually separable" standard will spawn significant additional litigation.