Title: EVELYN PROUDFOOT V STATE FARM MUTUAL INSUR CO
Citation: N/A
Docket Number: 123502
State: Michigan
Issuer: Michigan Supreme Court
Date: December 23, 2003

Michigan Supreme Court  
Lansing, Michigan 48909  
Chief Justice 
Justices 
Maura D. Corrigan 
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Opinion 
Stephen J. Markman 
FILED DECEMBER 23, 2003  
EVELYN PROUDFOOT, 
Plaintiff-Appellee, 
V 
No. 123502 
STATE FARM MUTUAL INSURANCE 
COMPANY, 
Defendant-Appellant. 
_______________________________ 
PER CURIAM 
Plaintiff 
sought 
no-fault 
benefits 
for 
injuries 
suffered in a car-pedestrian accident in order to make 
modifications to her house. 
The circuit court granted 
judgment for plaintiff and ordered that certain sums be 
paid to plaintiff and to the court. 
The Court of Appeals 
affirmed in part and reversed in part. 
We reverse in part 
the Court of Appeals decision and remand the case to the 
Washtenaw Circuit Court for further proceedings consistent 
with this opinion. In all other respects, we affirm. 
 
 
 
 
  
 
 
                                                 
I  
Plaintiff sustained serious injuries in November 1995, 
when she was struck by a car during a visit to Michigan 
from her home in England. 
Her leg was amputated above the 
knee, and, because of complications with her prosthesis, 
the use of a wheelchair became necessary. 
In 1997, 
plaintiff’s 
husband 
sent 
defendant 
no-fault 
insurance 
carrier a letter stating that, on the basis of an 
occupational therapy report, significant home modifications 
were required and that an architect had been requested to 
prepare plans and to estimate the cost. 
The architect provided the plans to plaintiff, who 
paid the architect’s bill ($815.101) and forwarded it to 
defendant in March 1999. 
The estimated cost for the home 
modifications, including the value added tax (VAT) of 17.5 
percent, was about $250,000. 
Defendant had its own expert 
evaluate the home, and, on the basis of that evaluation, 
defendant 
claimed 
that 
plaintiff’s 
requests 
were 
unreasonable. 
It also denied plaintiff’s request for 
reimbursement of the architect’s bill. 
Plaintiff sued for breach of contract and declaratory 
relief. 
As the result of a mutually accepted mediation 
1 The monetary figures have been converted from English
pounds to American dollars. 
2  
 
 
  
 
                                                 
 
award, Washtenaw Circuit Judge Timothy P. Connors awarded 
plaintiff partial judgment on January 28, 2000.2
 By its 
terms, the partial judgment did not dispose of plaintiff’s 
claim for home modifications. 
The court held a jury trial on the issues related to 
the proposed home modifications.3
 Responding to questions 
on the jury form, the jury found that plaintiff had 
incurred “allowable expenses” in the amount of $815.10 (the 
architect’s 
bill) 
and 
that 
defendant 
had 
received 
reasonable proof of the expenses on March 2, 1999. 
In a 
portion of the form entitled “Declaratory Judgment,” the 
jury found that the modifications to plaintiff’s home were 
reasonably necessary, that the amount of the allowable 
expense was $220,500 (plus the VAT), and that plaintiff had 
supplied reasonable proof of those expenses on December 2, 
1997. 
Plaintiff moved for entry of a judgment that would 
award her judgment interest, MCL 600.6013, no-fault penalty 
interest, MCL 500.3142, and no-fault attorney fees, MCL 
2 Plaintiff was awarded certain wage loss benefits,
attendant care benefits, mileage benefits, the cost of a
modified van purchase, and no-fault interest, judgment 
interest, and attorney fees on all the benefits awarded. 
3 At the time of trial, the modifications had not yet
been made. 
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500.3148(1). 
The January 5, 2001, judgment awarded 
plaintiff the architectural services fee and no-fault 
interest on that fee from April 1, 1999. The judgment also 
provided: 
IT IS FURTHER ORDERED AND ADJUDGED that 
Plaintiff recover future home modifications as 
awarded by the jury in the amount of $220,500.00
plus value added tax of 17.5% for a total future
home 
modification 
award 
in 
the 
amount 
of 
$259,087.50 is awarded [sic], such amount to be
overseen by the Court as the expenses are 
incurred under the no fault law. 
IT IS FURTHER ORDERED AND ADJUDGED that no 
fault interest on the home modification amount of 
$259,087.50, from the date reasonable proof was
submitted, with the billing April 1, 1999 at the
rate of 1% per month until paid. 
No-fault attorney fees in the amount of $69,300.00 and 
costs of $7,597.23 were awarded. 
The judgment also 
provided: 
IT IS FURTHER ORDERED AND ADJUDGED that 
prejudgment interest or post judgment interest is
owed from November 27, 1997 at the rate of 12%
per annum compounded annually, on the architect’s
bill, the no fault interest on the architect’s 
bill and the future home modifications, the no 
fault attorney fees and costs, and the no fault
interest on home modifications until each of said 
items are paid. 
Defendant appealed, and the Court of Appeals affirmed 
in part and reversed in part. 
254 Mich App 702; 658 NW2d 
838 (2003). 
The Court found that the trial court had 
“appropriately ordered defendant to pay the total amount of 
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home 
modification 
benefits 
to 
the 
trial 
court 
for 
distribution.” 
Id. at 711. 
It reasoned that declaratory 
relief is not exclusive and that a money judgment may be 
appropriate when the parties have had notice and a hearing 
or when future damages are involved, Manley v Detroit 
Automobile Inter-Ins Exch, 425 Mich 140; 388 NW2d 216 
(1986). 
The Court of Appeals also held that the grant of 
attorney fees was appropriate with regard to defendant’s 
failure to pay for both the architectural services and the 
overdue home modifications. It reasoned: 
[P]laintiff was forced to seek legal action
to establish defendant’s obligation to pay for
necessary home modifications. 
Defendant failed 
to provide any assistance to plaintiff. 
Absent 
independent financial means, plaintiff was unable
to 
commence 
or 
obligate 
herself 
for 
these 
modifications. 
The record reveals a lack of any
realistic 
finalized 
plan 
that 
defendant 
was 
prepared to implement at the time of trial. 
Consequently, the trial court properly decided
that plaintiff was also entitled to attorney fees
because 
defendant's 
delay 
in 
proffering 
a 
finalized 
alternative 
plan 
or 
payment 
was 
unreasonable. 
[254 Mich App 715 (emphasis in
original).] 
The Court found that defendant’s premise—“that an insured 
must be able to pay for or have the economic ability to 
obligate oneself for all benefits before they become due”— 
would result in economic disparity wherein only
the wealthy or those with a healthy credit line 
5  
 
 
 
 
  
 
 
would be able to pursue a dispute with their
insurance company over benefits. [Id. at 716.] 
For the same reasons, the Court also found the award of no­
fault interest to be proper. 
Relying on MCL 600.6013(1) and the definition of 
“future damages” in MCL 600.6301, the Court of Appeals 
reversed the trial court on the issue of judgment interest 
on the future home modifications. Judgment interest on the 
architect’s fee, on the no-fault interest, and on the 
attorney fees was upheld. 
The Court of Appeals dissenter would have held that 
the expenses for the home modifications were not overdue 
because plaintiff had not incurred the expenses and because 
the necessity of the modifications was a bona fide factual 
dispute, which was ultimately settled by the jury. 
254 
Mich App 719. 
The dissenter reasoned that although 
plaintiff would not need to pay the costs of the 
modifications out of her own pocket in order to “incur” 
them, she would need to “become liable for them; defendant 
is not obligated to pay for modifications plaintiff may 
never make.” 
Id. at 720. 
The dissenter noted that 
plaintiff could “submit claims to defendant as they are 
incurred.” 
Id. at 722 (emphasis in original). 
The 
dissenter would have found that the expenses related to the 
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proposed modifications were not overdue, and that defendant 
should have been required to pay only the attorney fees and 
interest that were associated with the architect’s bill. 
Defendant has applied to this Court for leave to 
appeal. 
II 
A 
Because this case involves questions of law and issues 
of statutory interpretation, it is reviewed de novo. 
The 
primary rule of statutory construction is to effectuate the 
intent of the Legislature, and where the statutory language 
is clear and unambiguous, it is generally applied as 
written. Cruz v State Farm Mut Automobile Ins Co, 466 Mich 
588, 594; 648 NW2d 591 (2002). 
A statute's language is 
given 
its 
ordinary 
and 
generally 
accepted 
meaning. 
Putkamer v Transamerica Ins Corp, 454 Mich 626, 631; 563 
NW2d 683 (1997), citing Turner v Auto Club Ins Ass'n, 448 
Mich 22, 27; 528 NW2d 681 (1995). 
B 
We agree with the Court of Appeals that plaintiff is 
not entitled to judgment interest on the proposed home 
modifications. MCL 600.6013(1) provides in part that, “for 
complaints filed on or after October 1, 1986, interest is 
not allowed on future damages from the date of filing the 
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complaint to the date of entry of the judgment.” (Emphasis 
added.) 
MCL 600.6301 defines “future damages” as “damages 
arising from personal injury which the trier of fact finds 
will accrue after the damage findings are made . . . .” 
The award of judgment interest on the architect’s fee, on 
the no-fault interest on that fee, and on the attorney fees 
that were associated with the award of the architectural 
services fee, was appropriate. 
C 
We also affirm the Court of Appeals holding concerning 
the 
declaratory 
judgment 
that 
the 
modifications 
to 
plaintiff’s home were reasonably necessary, that the amount 
of the allowable expense was $220,500 (plus the VAT), and 
that plaintiff had supplied reasonable proof of those 
expenses on December 2, 1997. 
Likewise, the judgment 
awarding plaintiff the architectural services fee that 
plaintiff has already paid is affirmed. 
However, we reverse that portion of the Court of 
Appeals judgment that ordered defendant to pay the total 
amount of future home modification expenses to the trial 
court for distribution because the expenses in question 
have not yet been incurred. 
MCL 500.3107 provides in part: 
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(1) Except as provided in subsection (2),
personal 
protection 
insurance 
benefits 
are 
payable for the following: 
(a) Allowable expenses consisting of all 
reasonable 
charges 
incurred 
for 
reasonably
necessary products, services and accommodations
for an injured person’s care, recovery, or 
rehabilitation. [Emphasis added.] 
MCL 
500.3110(4) 
provides 
that 
“[p]ersonal 
protection 
insurance benefits payable for accidental bodily injury 
accrue not when the injury occurs but as the allowable 
expense, 
work 
loss 
or 
survivors' 
loss 
is 
incurred” 
(emphasis added). 
To “incur” means “[t]o become liable or subject to, 
[especially] because of one’s own actions.”4  A trial court 
may enter "a declaratory judgment determining that an 
expense is both necessary and allowable and the amount that 
will be allowed[, but s]uch a declaration does not oblige a 
no-fault insurer to pay for an expense until it is actually 
incurred.” 
Manley, supra at 157. 
At the time of the 
judgment, plaintiff had not yet taken action to become 
liable for the costs of the proposed home modifications. 
4 Webster’s II New College Dictionary (2001). 
An 
insured could be liable for costs by various means,
including paying for costs out of pocket or signing a
contract for products or services. 
Should the insured 
present a contract for products or services rather than a
paid bill, the insurance company may, in order to protect
itself, make its check payable to the insured and the
contractor. 
9  
 
 
 
  
 
 
 
 
Because the expenses in question were not yet “incurred,” 
the Court of Appeals erred in ordering defendant to pay the 
total amount to the trial court. 
See Nasser v Auto Club 
Ins Ass'n, 435 Mich 33, 50; 457 NW2d 637 (1990). 
D 
Similarly, we reverse that portion of the no-fault 
interest awarded on the future home modification expenses. 
Twelve percent simple interest is payable only on “overdue” 
personal protection insurance benefits. 
MCL 500.3142(3). 
Generally, "benefits are payable as loss accrues.” 
MCL 
500.3142(1). MCL 500.3142(2) provides in part that 
benefits are overdue if not paid within 30 days
after an insurer receives reasonable proof of the
fact and of the amount of loss sustained. 
[Emphasis added.] 
Because plaintiff has not sustained a loss associated with 
the actual home modifications (other than the architect’s 
fee), the future home modification benefits are not 
“overdue,” and interest is not payable. 
Therefore, 
plaintiff was entitled to interest on the architect’s fee 
only, and the award of no-fault interest on the home 
modification amount is reversed. 
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E 
With regard to attorney fees, MCL 500.3148(1) provides 
that 
[a]n attorney is entitled to a reasonable fee for
advising and representing a claimant in an action
for personal or property protection insurance 
benefits which are overdue. 
The attorney's fee
shall be a charge against the insurer in addition
to the benefits recovered, if the court finds
that the insurer unreasonably refused to pay the
claim or unreasonably delayed in making proper
payment. [Emphasis added.] 
Thus, attorney fees are payable only on overdue benefits 
for which the insurer has unreasonably refused to pay or 
unreasonably delayed in paying. 
Here, plaintiff was 
entitled only to those reasonable attorney fees that were 
attributable to the $815.10 architect’s fee. 
Claims for 
the modification expenses are not yet “overdue” because 
they are not yet “incurred.” 
IV 
Therefore, we affirm the portion of the Court of 
Appeals judgment denying judgment interest on the future 
home modifications and affirming the award of judgment 
interest relating to the architect’s fee, the no-fault 
interest 
on 
that 
fee, 
and 
the 
attorney 
fees 
award 
associated with that fee. 
We also affirm the declaratory 
portion of the judgment establishing the amount of future 
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home modification benefits, but we vacate the portion of 
the Court of Appeals judgment that orders defendant to 
immediately pay the future home modifications expenses to 
the trial court. 
We also vacate that portion of the 
judgment affirming the award of no-fault interest and 
attorney fees on the future home modification expenses. We 
remand this case to the Washtenaw Circuit Court for further 
proceedings consistent with this opinion. We do not retain 
jurisdiction. 
Maura D. Corrigan
Michael F. Cavanagh
Elizabeth A. Weaver 
Marilyn Kelly
Clifford W. Taylor
Robert P. Young, Jr.
Stephen J. Markman 
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