Conservator Fees Can Be Recovered as No-Fault Expenses under MCL 500.3107(1)(a)

On April 26, 2011, a unanimous panel of the Michigan Court of Appeals handed down a published (and therefore binding) opinion that a no-fault insurer is liable under MCL 500.3107(1)(a) for conservator fees incurred for the management of an accident victim’s affairs. May v Auto Club Ins Ass’n, __ Mich App __ ; __ NW2d __(2011).

Carroll was seriously injured in a traffic accident. A conservator was appointed when Carroll's wife was not longer able to manage his affairs.  The conservator (May) petitioned for fees amounting to $6,816.70. The No Fault insurer (Auto Club) opposed the petition. The probate court determined that the majority of May’s claims were not allowable expenses under MCL 500.3107(1)(a) and that Auto Club was obligated to pay only $99.  May appealed.

On appeal, the Auto Club argued that the conservatorship fees did not relate to Carroll's care and recovery from the accident and therefore (1) were not allowable in light of Griffith v State Farm Mut Auto Ins Co, 472 Mich 521; 697 NW2d 895 (2005), or (2) if allowable, were replacement services (which are available for only three years and are subject to a daily maximum).

The Court of Appeals followed Heinz v Auto Club Ins Ass’n, 214 Mich App 195; 543 NW2d 4 (1995), in which the guardian and conservator of a person injured in an automobile accident sought to recover the fees and expenses associated with the guardianship under MCL 500.3107(1)(a).  The Heinz Court concluded that the term “care” as used in MCL 500.3107(1)(a) was not restricted to medical care alone, and the May Court found "little basis for distinguishing the ‘care’ provided by a guardian from that provided by a conservator. … " The fees are recoverable under MCL 500.3107(1)(a). They are not replacement services.

This ruling expands the scope of "allowable expenses" as the term is used in MCL 500.3107(1)(a).

It is unknown whether the Michigan Supreme Court will be asked to review the case.