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143088 - Johnson v Recca


In 2004, Penny Jo Johnson, a pedestrian, was hit by a pickup truck driven by John Recca. At the time, Johnson lived with her ex-mother-in-law, Harrietta Johnson. According to Johnson, she suffered serious injuries to her brain and spine, making it necessary for her ex-mother-in-law to help her with personal care and take over household chores. Neither woman owned a vehicle; Recca had a no-fault insurance policy with Allstate Property and Casualty Insurance Company.

Johnson sued Allstate and Recca. In her first-party claim against Allstate, Johnson alleged that Allstate had failed to pay personal protection insurance benefits, including expenses for attendant care and replacement services that, Johnson claimed, her ex-mother-in-law had provided for three years. Under the no-fault act, replacement services recoverable from an insurer are limited to three years from the date of the accident. In the third-party claim against Recca, Johnson claimed that she had suffered a serious impairment of body function and that Recca is liable to pay for replacement services that Harrietta provided more than three years after the date of the accident. The third-party claim against Recca is at stake in this appeal.

While the no-fault act abolished most tort liability for drivers, an injured person may recover certain limited damages from a negligent driver. MCL 500.3135 provides, for example, that a negligent driver may be liable to pay damages for noneconomic loss where the injured person died, suffered permanent serious disfigurement, or sustained a serious impairment of body function. MCL 500.3135(c) permits “[d]amages for allowable expenses, work loss, and survivor’s loss as defined in [MCL 500.3107 to MCL 500.3110] in excess of the daily, monthly, and 3-year limitations contained in those sections.” MCL 500.3107(1)(a) defines “allowable expenses” as those “consisting of all reasonable charges incurred for reasonably necessary products, services and accommodation for an injured person’s care, recovery, or rehabilitation.” Replacement services expenses are covered in MCL 500.3107(1)(c).

The trial court dismissed Johnson’s claims against Recca, holding that expenses for replacement services are not recoverable “allowable expenses” under MCL 500.3135(3)(c); the court reasoned that “allowable expenses” is defined in MCL 500.3107(1)(a), while expenses for replacement services are covered in a separate subsection, MCL 500.3107(1)(c). But in a published opinion, the Court of Appeals reversed. The panel explained, “Because replacement services are services for the ‘care’ of an injured person, we conclude that replacement services expenses are not separate and distinct from ‘allowable expenses’; rather, they are merely one category of ‘allowable expenses.’ ” Recca appeals.