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146763 - Hannay v Dep't of Transportation

Heather Lynn Hannay,
Mark Granzotto
(Appeal from Ct of Appeals)
(Ct of Claims – Aquilina, R.)
Department of Transportation,
John P. Mack


​In February 2007, plaintiff Heather Lynn Hannay was involved in a car accident involving a salt truck owned by the State of Michigan and driven by Brian Silcox, an employee of the Department of Transportation. Hannay sued, arguing that she suffered a serious impairment of bodily function, and that she was entitled to recover damages, including economic damages for work loss and loss of services.  The trial court agreed, and awarded Hannay $767,076 in work-loss benefits and $153,872 in allowable expenses for ordinary and necessary services. 

The Department of Transportation appealed to the Court of Appeals, which affirmed in a published opinion.  On appeal, the Department argued that the trial court erred in awarding Hannay damages for work loss and loss of services because only damages for “bodily injury” or “property damage” are recoverable under the motor vehicle exception to governmental immunity, MCL 691.1405 (“Governmental agencies shall be liable for bodily injury and property damage resulting from the negligent operation by any . . . employee of the governmental agency, of a motor vehicle of which the governmental agency is owner . . .” (emphasis added)).  In support of this claim, the Department relied on Wesche v Mecosta Co Rd Comm, 480 Mich 75 (2008), which defined “bodily injury” as a “physical or corporeal injury to the body.”

But the Court of Appeals held that the fact that a tort action arising from a motor vehicle accident may be pursued against a governmental entity “does not except the action from the application of the no-fault act,” citing Hardy v Oakland Co, 461 Mich 561 (2000).  The no-fault act specifically permits liability for damages for certain work-loss benefits and expenses for ordinary and necessary services, the panel ruled, citing MCL 500.3135(3)(c).  “Thus, the no-fault act clearly permits the economic damages awarded by the trial court in this case, and there is no reason that the clear expression of recoverable damages set forth in the no-fault act is inapplicable to the government.”  Here, Hannay sustained a bodily injury, and “damages for work loss and loss of services are not independent causes of action, but are merely types or items of damages that may be recovered because of the bodily injury” that she sustained. 

The Court of Appeals then considered the trial court’s decision to base its calculation of wage-loss damages on what Hannay might have earned as a dental hygienist instead of on evidence of what she was actually earning at the time of the accident.  The trial court found that Hannay was enrolled in community college and working toward her degree at the time of the accident; she was also employed at a dental office as a dental assistant.  But for the accident, the trial court ruled, Hannay would have been accepted into a dental hygienist program, would have graduated, and would have obtained employment as a dental hygienist.  It based its damages award on the hourly wage that a dental hygienist would earn if employed part-time in a dental office.  The Court of Appeals rejected the Department’s argument that the trial court’s damages award was purely speculative, ruling that the trial court’s calculation of lost wages was not, under the circumstances, clearly erroneous. The Court of Appeals therefore affirmed the judgment entered by the trial court.

The Department filed an application for leave to appeal.  On September 27, 2013, the Supreme Court granted leave to appeal, limited to the issues:  (1) whether economic loss in the form of wage loss may qualify as a “bodily injury” that permits a plaintiff to avoid the application of governmental immunity from tort liability under the motor vehicle exception to governmental immunity, MCL 691.1405 (see Wesche v Mecosta Co Rd Comm, 480 Mich 75 (2008)); and (2) whether the evidence in this case establishes that the plaintiff incurred a loss of income from work that she would have performed as opposed to a loss of earning capacity.