Michigan law imposes a statutory limit on the amount of money an injured person may be compensated for work-loss resulting from a motor vehicle accident. According to MCL 500.3107(1)(b), “the benefits payable for work loss sustained in a single 30-day period and the income earned by an injured person for work during the same period together shall not exceed [$4,878], which maximum shall apply pro rata to any lesser period of work loss.” In Agnone v. Home-Owners Insurance Co., the Michigan Court of Appeals was asked to determine how a work-loss benefit should be calculated relative to the statutory cap.
The plaintiff was injured when his vehicle was rear-ended in a 2009 automobile accident. At the time of the injury, he owned and operated his own business, and earned an average of more than $196,000 per year in gross income. He alleged that as a result of the accident, he was unable to perform at the same levels; his gross income dropped gradually to approximately $135,000 by the end of 2012.
The plaintiff then sued Home-Owners for breach of his motor vehicle insurance policy, claiming that Home-Owners refused to pay certain personal protection insurance benefits. Specifically, he argued that he was entitled to a work-loss benefit equal to the difference between his average annual income before the accident and his actual annual income in the years after the accident. He alleged that his lost income was approximately $100,000 in total for 2011 and 2012, a calculation with which the presiding Wayne County Circuit Court judge agreed, denying Home-Owners’ motion for partial summary disposition. Home-Owners then appealed.
Citing a 1988 decision, the Court of Appeals reasoned:
“In the years before the 2009 accident, Agnone made substantially more each month than the applicable statutory maximum of $4,878. Therefore, under the formulation from Snellenberger, we would use the statutory maximum as his base potential benefit. We would then subtract from that base wage-loss benefit the income that he earned in the same 30-day period to derive his compensable work-loss benefit for that period. Because he continues to make more than $4,878 in every 30-day period even after his injury, his work-loss benefit is zero.”
Accordingly, the Court of Appeals held that the trial court misconstrued MCL 500.3107(1)(b) “as a limit on the total amount of work-loss that is compensable, rather than as a limit on the combined work-loss benefit and income earned in the same period as the work-loss benefit.” Finding that the plaintiff’s earnings exceeded the statutory maximum, the Court reversed the trial judge’s decision, holding that Home-Owners’ motion for partial summary disposition should have been granted.