Don’t Take Their Word for It – Injured Parties Need More Than Their Own Testimony and Subjective Beliefs to Establish Incurred No-Fault Expenses as “Reasonably Necessary”

Don’t Take Their Word for It – Injured Parties Need More Than Their Own Testimony and Subjective Beliefs to Establish Incurred No-Fault Expenses as “Reasonably Necessary”


The showing an injured party must make for an incurred no-fault expense to be “reasonably necessary” under MCL 500.3107(1)(a) is not always clear. It becomes increasingly difficult to establish reasonable necessity as more time passes after an accident and objective evidence of an injury wanes. This was the precise situation the Court of Appeals addressed in a recent unpublished opinion. In Pepaj v Allstate Ins Co (Docket No. 352498), the Court declined to take the plaintiff’s word that ongoing treatment and services were reasonably necessary. It affirmed summary disposition based on the lack of evidence demonstrating reasonable necessity. Background of Pepaj Plaintiff Gjok Pepaj claimed that he was injured in a motor vehicle accident on September 8, 2014. He filed a lawsuit against his insurer, Defendant Allstate Insurance Company. That suit was settled in 2016. The settlement and release included all expenses incurred up to December 8, 2016, and all future replacement services. Pepaj then filed suit a second time against Allstate, seeking payment for medical bills and attendant care expenses incurred after December 8, 2016. Allstate moved for summary disposition under MCR 2.116(C)(10), asserting that there was no genuine issue of material fact that Pepaj had not incurred “reasonably necessary” medical and attendant care expenses after the settlement. In response to Allstate’s motion, Pepaj presented (1) pre-settlement medical records, (2) post-settlement medical bills (some of which referenced “cervicalgia” and his primary care physician), (3) Pepaj’s testimony that his injuries and need for attendant care persisted after the 2016 settlement, and (4) his testimony that a physician told him that he needed weekly attendant care. Pepaj argued that this evidence created a genuine issue of material fact because it revealed that he sustained injuries in the accident, continued to experience symptoms from those injuries, and incurred medical and attendant care expenses post-settlement. The trial court disagreed with Pepaj and granted summary disposition in favor of Allstate, finding that Pepaj had not established that his claimed expenses were reasonably necessary under MCL 500.3107(1)(a). Pepaj appealed as of right. How Pepaj’s Claim Failed In its unpublished opinion affirming the trial court’s grant of summary disposition, the Court of Appeals provided a framework for how to evaluate reasonable necessity under MCL 500.3107(1)(a). Starting at the foundation, the Court cited Nasser v ACIA, 435 Mich 33; 457 NW2d 637 (1990), to establish that reasonableness and necessity are required elements of an injured party’s no-fault claim. The claim is lost when the injured party cannot show both. For the definition of “reasonably necessary,” the Court relied on Krohn v Home-Owners Ins Co, 490 Mich 145; 802 NW2d 281 (2011). In Krohn, the Supreme Court held that “reasonably” denotes an objective standard that requires “externally verifiable phenomena,” not simply “the subjective perception that a service is necessary for an injured person’s care, recovery or rehabilitation.” Id. at 159-160 (quotation marks and citation omitted). Unfortunately for Pepaj, he supported his medical and attendant care claims with:

  • his deposition testimony about his post-settlement medical treatment and his doctor’s opinions, which the Court rejected as subjective or disregarded as hearsay;
  • his deposition testimony concerning his need for post-settlement attendant care, which the Court discounted as subjective and vague;
  • pre-settlement medical records, which the Court discounted as providing no insight into his treatment or conditions post-settlement; and
  • post-settlement medical billing statements with references to “cervicalgia,” which the Court rejected as merely showing that Pepaj received services and incurred costs. The bills did not show that the condition was an objective finding of a doctor (as opposed to a reference to Pepaj’s subjective complaints) or that the condition was related to the motor vehicle accident.

To survive summary disposition, Pepaj needed to provide evidence of “externally verifiable phenomena” from “an objective viewpoint,” like an objective medical finding that his post-settlement complaints were related to the accident and that his post-settlement medical treatment and attendant care were reasonable. In the end, Pepaj asked the Court of Appeals to take his word for it—he relied on his own subjective perception or belief that he needed continued medical treatment and attendant care. But the Court held that this wasn’t enough. Pepaj’s word didn’t create a genuine issue of material fact sufficient to defeat Allstate’s motion for summary disposition.   If you have questions about the application of MCL 500.3107(1)(a) in no-fault cases, please feel free to contact the author, Patrick K. McGlinn. More information about Collins Einhorn’s General and Automotive Liability Practice Group is available here.

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