Court Opinion

ID: 4109985
Source: CourtListenerOpinion
Date Created: 2016-12-22 08:07:26.625385+00
Date Added: 2024-06-11T14:31:05.990303
License: Public Domain

STATE OF MICHIGAN

                            COURT OF APPEALS

WILLIAM BREWART,                                                       UNPUBLISHED
                                                                       December 20, 2016
               Plaintiff-Appellant,

v                                                                      No. 328022
                                                                       Wayne Circuit Court
MID-CENTURY INSURANCE COMPANY,                                         LC No. 13-010811-NF

               Defendant-Appellee.

Before: GADOLA, P.J., and FORT HOOD and RIORDAN, JJ.

PER CURIAM.

        Plaintiff appeals as of right an order granting defendant’s motion for summary disposition
in this claim for personal injury protection (PIP) benefits. At issue on appeal is the viability of
plaintiff’s claim for work loss benefits pursuant to MCL 500.3107.

        Plaintiff opened Brewart & Sons, LLC, on October 14, 2012, with his son.
Approximately four weeks later, on November 9, 2012, plaintiff was in a car accident. Plaintiff
claims that he managed the LLC, and was paid wages of $3,000 per month. Because plaintiff
could not work, he requested work loss benefits from defendant, his insurer. While defendant
originally paid plaintiff some benefits, it eventually stopped payment. The trial court granted
summary disposition to defendant and plaintiff appeals.1

        Plaintiff argues that the trial court erred in deciding that plaintiff was not entitled to work
loss benefits. Plaintiff complains that the trial court erroneously based its decision on the profit
of plaintiff’s business, and not the wages lost by plaintiff after the accident. Plaintiff further
asserts that no question of fact exists regarding whether he is entitled to work loss benefits, so he
should be granted summary disposition. Ultimately, we disagree and conclude that the trial court

1
  Defendant challenges jurisdiction in this case. While defendant concedes that the order
granting summary disposition was appealable as of right, it argues that plaintiff has not
established jurisdiction because his brief referenced “MCR A(1) and A(2).” However, it is clear
that this was a mere typographical error. Because defendant does not contest the merits of
whether plaintiff has jurisdiction, merely emphasizing one of plaintiff’s many typographical
errors, we are not convinced that this Court lacks jurisdiction.

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did not err in granting defendant summary disposition because plaintiff failed to show
entitlement to work loss benefits.

        This Court reviews de novo a trial court’s decision on a motion for summary disposition.
Alcona Co v Wolverine Environmental Prod, Inc, 233 Mich. App. 238, 245; 590 NW2d 586
(1998). A motion for summary disposition under MCR 2.116(C)(10) “tests the factual
sufficiency of the complaint.” Joseph v Auto Club Ins Ass’n, 491 Mich. 200, 206; 815 NW2d 412
(2012). “In evaluating a motion for summary disposition brought under this subsection, a trial
court considers affidavits, pleadings, depositions, admissions, and other evidence submitted by
the parties, MCR 2.116(G)(5), in the light most favorable to the party opposing the motion.”
Maiden v Rozwood, 461 Mich. 109, 120; 597 NW2d 817 (1999). “Where the proffered evidence
fails to establish a genuine issue regarding any material fact, the moving party is entitled to
judgment as a matter of law.” Id.2

        MCL 500.3107(1)(b) provides that PIP benefits are payable for “[w]ork loss consisting of
loss of income from work an injured person would have performed during the first 3 years after
the date of the accident if he or she had not been injured.” “[W]ork loss benefits are available to
compensate injured persons for the income they would have received but for their accidents.
Accordingly, a party seeking work loss benefits under [MCL 500.3107(1)(b)] must show actual
loss; a mere loss of earning capacity is not sufficient.” Davis v State Farm Mut Auto Ins Co, 159
Mich. App. 734, 738; 407 NW2d 1 (1987). Damages for loss of earning capacity, “wages a
person ‘could have’ earned but for the accident,” are not compensable pursuant to MCL
500.3107(1)(b). Hannay v Dep’t of Transp, 497 Mich. 45, 79-80; 860 NW2d 67 (2014) (citation
omitted).

2
   Plaintiff argues that a different standard of review applies because the trial court misapplied
the law. However, in rendering its decision, the trial court referenced evidence outside of the
record, and granted summary disposition. As stated above, where the “evidence fails to establish
a genuine issue regarding any material fact, the moving party is entitled to judgment as a matter
of law.” Id. (emphasis added). In rendering a decision on summary disposition, the court
necessarily applies the law to the facts. Thus, this issue is properly reviewed as a motion
granting summary disposition pursuant to MCR 2.116(C)(10). Plaintiff alleged that defendant’s
arguments on appeal were unpreserved for the same reason. We likewise reject plaintiff’s
argument in that regard. Plaintiff’s attempts to categorize the court’s holding as anything other
than the grant of summary disposition pursuant to MCR 2.116(C)(10) are flawed. Plaintiff also
argues that this Court should hold that the trial court erred in not granting plaintiff summary
disposition sua sponte pursuant to MCR 2.116(I)(2), even though that was not addressed in the
trial court. Even assuming plaintiff were correct in his above assertions regarding the standard of
review and preservation, we could equally conclude that that the trial court should have granted
summary disposition to defendant based on MCR 2.116(I)(2), further cutting against plaintiff’s
convoluted, technical claims.

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       “The plaintiff bears the burden to prove the damages sought by a preponderance of the
evidence.” Id.; see also Sullivan v North River Ins Co, 238 Mich. App. 433, 437; 606 NW2d 383
(2000) (holding that “the claimant bears the burden of proof of actual loss of earnings.”). In
accordance with case law, specific proof is necessary to demonstrate how much money a person
would have made to be eligible for work loss damages. See Swartout v State Farm Mut Auto Ins
Co, 156 Mich. App. 350, 354; 401 NW2d 364 (1986). Our Supreme Court has cautioned:

       Because work-loss damages are intended to replace the income a person would
       have received but for the accident, prior wages generally are the most relevant and
       reliable evidence for determining what a plaintiff actually would have earned had
       the accident not occurred. Only in certain circumstances may a plaintiff recover
       work-loss damages for wages he or she could not have earned before the accident,
       i.e., wages that are not based on the plaintiff’s wage history. While the statute by
       its terms does not limit a plaintiff’s work-loss award to the plaintiff’s wages at the
       time of the accident, courts must be cautious in considering wages that the
       plaintiff could not have earned before the accident in calculating a work-loss
       award because of the risk that a calculation based on such wages will be
       contingent and speculative and, therefore, barred under Michigan law. [Hannay,
497 Mich. at 82 (citations omitted).]

        Initially, we note that plaintiff produced no evidence to support his work loss claim. As
noted by the trial court, plaintiff attached no documentary evidence in response to the motion for
summary disposition. The trial court held that plaintiff failed to file a responsive brief pursuant
to MCR 2.116(G)(4). However, it appears that plaintiff relied primarily on the documentary
evidence submitted by defendant to establish his case. Accordingly, we address the merits of
plaintiff’s claim.

        We first note that we disagree with the manner in which plaintiff frames the trial court
decision and the issue on appeal. Plaintiff argues that the effect of the trial court’s ruling was
that when a claimant is employed by an LLC the claimant owns, the amount of work loss
available to the claimant depends on whether the LLC made a business profit at the end of the
year. We disagree that the trial court made such a firm, expansive rule in rendering its decision.
In considering the definition of work loss and the proper analysis, a determination requires the
court to consider whether plaintiff would have earned the claimed income but for the accident.
Plaintiff bears the burden of showing actual loss of earnings. Hannay, 497 Mich. at 79-80.
Contingent and speculative proof of income is not sufficient. Id. at 82. Based on the specific
circumstances and evidence presented here, or rather lack thereof, we do not agree the trial court
erred in considering the LLC’s end-of-year losses.

        Plaintiff fails to fully accept the circumstances presented by his alleged business and
claim for work loss. The LLC at issue was formed on October 14, 2012. Plaintiff’s accident
occurred on November 9, 2012. Thus, the LLC was operational for only four weeks before
plaintiff’s accident. Plaintiff claims that he was paid wages of $1,500 every two weeks for
managing the business. Frankly, the documentary evidence supporting this claim is weak and
troubling. Indeed, while plaintiff claims to have made over $26,000 in profit during the four
weeks the business was operational, there was no documentation of any sales. All
documentation related to the LLC is based merely on plaintiff’s own averments. By way of

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example, consider the sales sheet submitted to defendant during discovery which was merely
plaintiff’s own summary of sales, supported with no details or records. The infancy of the LLC
and the lack of documentation required the court to look at additional circumstances to evaluate
plaintiff’s work loss claim, leading the court to consider the LLC’s tax return and business loss
in 2012. The report prepared by defendant’s certified public accountant (CPA) further supports
this approach. The report provided that “since [plaintiff was] the primary owner of the business,
his work loss benefits should be based upon the income he would have earned as the owner, had
it not been for the accident. As discussed throughout this report, there [were] significant issues
in this matter, resulting in our inability to verify any of the claimed earnings from either the
business or [plaintiff.]”

       Based on the overall loss to the business, as well as plaintiff’s own testimony, we are not
convinced that plaintiff would have actually paid himself the claimed wages prior to having the
accident. Initially, we note that the circumstances of plaintiff’s allegations regarding the
business are suspicious. Despite the claims of profit, minimal deposits were made in the
business’s bank account.3 Further, the alleged wages plaintiff was paid were not issued or
deposited until after his accident occurred. These facts not only fail to support plaintiff’s claim
for work loss, but suggest that plaintiff’s claims of “actual income” were indeed speculative.

        Furthermore, plaintiff admitted during his deposition that his wages would depend on
whether he was making a profit. “If it was not making a profit, how could I pay myself[?]”
While plaintiff vehemently argues against using the business’s losses as a basis for determining
the validity of his work loss claim, his own statement directly mirrors the same logic he argues
against. Plaintiff’s very new business ultimately lost money based on the income tax returns.
The trial court held that this cut against plaintiff’s claim that he would have earned the wages
claimed, a holding reinforced by plaintiff’s own testimony. Plaintiff does not agree the trial
court should have considered the business’s loss, but, as explained, we do not agree that the loss
to the business was an inappropriate consideration. While perhaps such a consideration may not
be appropriate in every case, it was certainly relevant here, where the evidence was lacking.4
Ultimately, the law requires plaintiff to produce actual proof that he would have earned the
income at issue, which plaintiff lacked. Accordingly, the trial court did not err in granting
defendant summary disposition because plaintiff failed to show entitlement to work loss benefits.

       Affirmed.

                                                             /s/ Michael F. Gadola
                                                             /s/ Karen M. Fort Hood
                                                             /s/ Michael J. Riordan

3
  In his deposition, plaintiff explained that he kept the cash profits on hand for expenses incurred
from the startup of the business.
4
 Defendant argues that MCL 450.4307 supports the trial court’s holding. Because this argument
was raised for the first time on appeal, and there were other grounds for affirming the trial
court’s order, we decline to address the applicability of MCL 450.4307.

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