Kenneth Admire was injured in a motor vehicle accident in 1987, leaving him bound to a wheelchair. The driver of the other vehicle was insured by Auto-Owners Insurance Company. Under the Michigan no-fault act (MCL 500.3103 et seq.), Auto-Owners became responsible for paying personal protection insurance benefits to Admire.
Because of his injuries, Admire cannot get in or out of a standard vehicle, and needs hand controls for accelerations and braking. To accommodate Admire’s special needs, Auto-Owners paid the full cost of three modified vans at seven-year intervals. Under the most recent transportation agreement, in April 2000, Auto-Owners agreed to pay $37,807.76 for a van. In December 2006, Admire’s guardian, Russell Admire, notified Auto-Owners that it was time to purchase a new handicap-accessible van. Auto-Owners responded that it was not obligated to pay for a new van under either the transportation agreement or the no-fault act, but Auto-Owners advised Admire that he could trade in the 2000 van for a new one and that the insurer would cover the cost of “necessary medical modifications.” In February 2007, Russell Admire purchased a new van and received $6,000 for the trade-in of the 2000 van, leaving a balance of $18,388.50, not including modifications. Auto-Owners later paid $19,405.00 for modifications.
Admire sued Auto-Owners, seeking reimbursement of the full cost of the replacement van ($18,388.50) as an allowable expense under MCL 500.3107(1)(a). Under this provision of the no-fault act, no-fault benefits are payable for “all reasonable charges incurred for reasonably necessary products, services, and accommodations for an injured person’s care, recovery, or rehabilitation.” Auto-Owners filed a motion for summary disposition under MCR 2.116(C)(10), citing Griffith v State Farm Mutual Automobile Ins Co, 472 Mich 521 (2005), and Weakland v Toledo Engineering Co, 467 Mich 344 (2003), for the proposition that it was not obligated under the no-fault act to pay the base purchase price of the van, but was only required to pay for modifications required because of Admire’s injuries. The trial judge denied Auto-Owners’ motion, ruling that the insurer was obligated under the parties’ 2000 agreement to pay the full price of the new van.
The Court of Appeals affirmed in an unpublished per curiam opinion. The appellate court did not agree with the trial court that the parties’ 2000 agreement obligated Auto-Owners to purchase a new van; the contract was ambiguous in that regard, the Court of Appeals said. But the Court of Appeals did conclude that the no-fault act imposed such an obligation on Auto-Owners. Admire had established that he could not drive a standard vehicle and needed a modified van for his transportation needs, the Court of Appeals stated. Moreover, Auto-Owners did not show that Admire could use alternative transportation or that the amount requested for reimbursement was unreasonable; accordingly, MCL 500.3107(1)(a) obligated Auto-Owners to purchase a van for Admire, the Court of Appeals concluded.
Auto-Owners appealed, and on March 7, 2012, the Michigan Supreme Court heard oral argument on Auto-Owners’ application for leave to appeal. In an order dated March 23, 2012, the Supreme Court granted leave to appeal. The Court directed the parties to address “(1) whether MCL 500.3107(1)(a) allows the plaintiff to recover the full cost of handicap-accessible transportation or whether the plaintiff’s recovery is offset to the extent that the handicap-accessible transportation replaces the plaintiff’s other transportation costs; (2) if the plaintiff’s recovery is offset, what procedure a factfinder must undertake in calculating the amount of the plaintiff’s recovery and what evidence is relevant to that calculation; (3) whether there is any basis in MCL
500.3107(1)(a) to treat transportation costs differently from other household expenses, such as food or housing, that every person incurs whether injured or not; and (4) whether the principles and standards articulated in Griffith v State Farm Mutual Automobile Insurance, 472 Mich 521 (2005), are sufficient to resolve this dispute.”