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143503 - Douglas v Allstate Insurance Company

James Douglas,
John H. Bredell
(Appeal from Ct of Appeals
(Washtenaw – Shelton, D.)
Allstate Insurance Company,
P. Kelly O’Dea


​James Douglas was riding a bicycle when he was struck by a hit-and-run driver; Douglas suffered a traumatic brain injury. Allstate Insurance Company was assigned to administer Douglas’ claim for no-fault benefits. In 2005, Douglas sued Allstate, claiming that the insurer had failed to pay all personal protection insurance benefits that were due under the no-fault act. Under MCL 500.3107(1)(a), “allowable expenses” consist of “all reasonable charges incurred for reasonably necessary products, services and accommodations for an injured person’s care, recovery, or rehabilitation.” Under MCL 500.3107(1)(a), family members are entitled to reasonable compensation for healthcare services (referred to as “attendant care services”) they provide at home to an injured person. Douglas argued in his lawsuit that he was entitled to recover benefits for attendant care services provided by his wife, Katherine Douglas. Katherine was employed full time at the Huron Valley Consultation Center as an executive assistant. Douglas contended that Katherine cares for him when she is at home on weekday evenings and weekends. According to Katherine, Douglas needs constant guidance and supervision.

Allstate filed several motions for partial summary disposition, arguing that Douglas was not entitled to benefits because Douglas’ medical care providers had not authorized attendant care services for him. Moreover, Allstate contended, Katherine had not provided attendant care services. In response, Douglas provided the court with an affidavit from Dr. Thomas Rosenbaum, a licensed psychologist, who stated that Douglas needed care during all waking hours. Rosenbaum further opined that Katherine had been providing such care to her husband since the accident. The trial court denied Allstate’s motions.

After a bench trial, the trial court determined that Douglas needed attendant care for all of his waking hours. Katherine was unable to provide such care, the judge ruled, because she worked full-time outside the home and because Allstate refused to pay an appropriate hourly rate. The trial court concluded that Douglas was entitled to attendant care benefits at the rate of $40 per hour. The trial court entered a judgment for $1,163,395.40, which included attorney fees, interest, and costs. The judgment reflects an award of attendant care benefits of $477,040 from May 31, 2004, to November 1, 2007, and $164,686 from November 1, 2007, to November 18, 2009.

Allstate appealed. In an unpublished per curiam opinion, the Court of Appeals affirmed in part, reversed in part, and remanded for further proceedings. The Court of Appeals held that there was no clear error in the trial judge’s finding that attendant care was reasonably necessary, that Katherine was an appropriate person to provide the care, and that $40 per hour was a reasonable rate. The Court of Appeals went on to note, however, that an insurer has no obligation to pay any attendant care until it receives evidence that services were actually rendered with the expectation of payment. The appellate panel noted that the trial judge did not address the requirement that the caregiver reasonably expected payment when performing attendant care services. Moreover, held the panel, the evidence presented at trial did not reflect that Katherine maintained records of the attendant care she claimed to have provided for her husband. While Katherine testified at trial regarding the nature of her care for Douglas, her testimony only accounted for services provided through February 19, 2009, which was approximately nine months before the award period ended on November 18, 2009.

The Court of Appeals ultimately concluded that Allstate had no obligation to make payment until it was provided with documentation of Katherine’s attendant care. Therefore, the Court of Appeals remanded the case to the trial court for further proceedings regarding the amount of incurred expenses for attendant care from November 7, 2006, to November 18, 2009. The Court of Appeals directed the trial judge to determine whether Katherine reasonably expected compensation at the time of performance. On remand, explained the panel, the trial judge could take additional testimony, if necessary, and amend its findings, or make new findings and amend the judgment accordingly. Allstate appeals.