RACHEL A. SLOCUM, Plaintiff-Appellant/Cross-Appellee,
FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN, Defendant/Cross-Plaintiff-Appellee/Cross-Appellant, and UNITED SERVICES AUTOMOBILE ASSOCIATION, Defendant/Cross-Defendant-Appellee/Cross-Appellant. FARM BUREAU GENERAL INSURANCE COMPANY OF MICHIGAN, Plaintiff-Appellee/Cross-Appellant,
RACHEL A. SLOCUM, Individually and as Next Friend of NOAH J. SINKE SLOCUM, a Minor, Defendant-Appellant/Cross-Appellee, and CAROLINE SLOCUM, Next Friend and Conservator of DRAYKE SLOCUM and DAYJA SLOCUM, Minors, Defendant-Appellant/Cross-Appellee.
[Copyrighted Material Omitted]
Circuit Court. LC No. 2017-000375-NF, LC No. 2017-000188-NF.
Judges: Before: METER, P.J., and JANSEN and M. J. KELLY, JJ.
Mich.App. 630] Patrick M. Meter, P.J.
these consolidated cases, the parties challenge the circuit
court's orders requiring the insurers to pay certain
survivor's loss benefits under the no-fault act,
MCL 500.3101 et seq., as well as penalty interest
and attorney fees. In pertinent part, we are called upon to
decide whether a deceased's dependents are entitled to
the replacement cost of obtaining medical and dental benefits
similar to those provided by the deceased's former
employer or to the monetary value of the premiums paid by the
former employer. Recognizing that the survivor's loss
provisions of the no-fault[328 Mich.App. 631] act are
designed to maintain the deceased's support of his
dependents following his death, we conclude that the
dependents are entitled to the cost of obtaining
substantially similar policies to those provided them by the
deceased's former employer. Finding no errors, we affirm
the circuit court's orders.
Slocum was killed in a motorcycle crash on August 4, 2016. At
the time of the crash, Robert was married to Rachel
Slocum. Rachel is the biological mother of one minor child,
Noah, whom Robert had adopted. Robert also had two minor
children— Drayke and Dayja— from his previous
marriage to Amber Floyd. At the time of the crash, all three
of Robert's children lived with him and Rachel. Rachel
and the children depended on Robert for financial support and
medical and dental insurance— among other
support— which Robert received through his employer.
Caroline Slocum is Robert's mother and the children's
paternal grandmother; David Slocum is the children's
paternal grandfather. Farm Bureau General Insurance Company
and United States Automobile Association (USAA) insured
vehicles involved in the fatal crash.
week after the crash, Caroline petitioned for guardianship
over Drayke and Dayja. On August 18, 2016, Rachel submitted a
claim to Farm Bureau and USAA for no-fault and survivor's
loss benefits for her and all three children. Rachel
requested that the insurers pay all benefits to her,
indicating that all three children were living with her at
the time and submitting documentation supporting her request
for[328 Mich.App. 632] immediate payment of Robert's
monthly after-tax income, $2,097.33. Rachel also claimed
entitlement to lost fringe benefits, including medical and
dental insurance. Farm Bureau requested that Rachel authorize
the release of Robert's medical records, which she
completed in late August. The insurers did not immediately
pay Rachel any benefit.
October 5, 2016, Rachel sent Farm Bureau a follow-up letter
with additional documentation of Robert's wages and the
medical and dental insurance previously provided by
Robert's employer. Rachel also included some information
regarding the cost of replacing this insurance for her and
each child. The letter indicated that Rachel was not the
biological mother of Drayke and Dayja, whose paternal
grandparents had recently been appointed temporary
guardians over them. On October 21, 2016, however, the
probate court granted Floyd sole legal and physical
custody of Drayke and Dayja and awarded Caroline and David
grandparenting time with the children.
Bureau requested additional information regarding each
dependent's Social Security benefits. In a November 16,
2016 letter, Rachel informed Farm Bureau that she was
receiving Noah's $467 Social Security benefit, that she
was not personally receiving any Social Security benefits,
and that Floyd was receiving Drayke and Dayja's benefits.
Rachel did not provide information regarding the amount of
Drayke and Dayja's Social Security benefits.
January 2017, Rachel's counsel e-mailed Farm Bureau
additional documentation pertaining to Rachel's
appointment as personal representative of[328 Mich.App. 633]
Robert's estate. The e-mails indicate that Drayke and
Dayja were currently in Caroline and David's custody.
Approximately three weeks later, on February 13, 2017, Farm
Bureau filed a complaint for declaratory relief, asking the
circuit court for a determination of the proper payees of the
survivor's loss benefits and how to distribute the
benefits among Robert's dependents. The complaint
identified Floyd as Drayke and Dayja's next friend.
Bureau acknowledged that it was responsible for paying
survivor's loss benefits under MCL 500.3108 and
agreed that Rachel provided sufficient proof to determine
after-tax income and replacement-services benefits. Farm
Bureau alleged, however, that Rachel did not provide proof of
Robert's employer's contribution to the medical and
dental insurance policies covering Robert and his four
dependents or adequate proof of the amount of Social Security
benefits Robert's dependents' received. Rachel later
filed a complaint against Farm Bureau and USAA. Rachel
alleged that Farm Bureau and USAA failed to pay each
dependent the survivor's loss benefits and requested
penalty interest and reasonable attorney fees connected to
the refusal. The two actions were consolidated by the
June 2017, Floyd's attorney contacted counsel for Farm
Bureau, indicating that Floyd had been granted custody of
Drayke and Dayja that month. Floyd was encouraged to enter
her appearance and participate in the case, but did not do
so. In July 2017, the probate court appointed Caroline as
Drayke's and Dayja's conservator. Eventually, a
default judgment was entered against Floyd, and Caroline was
appointed next friend for Drayke and Dayja in October 2017.
That same month, by Farm Bureau and USAA's stipulation,
the circuit court ordered that each insurer was in equal[328
Mich.App. 634] priority to pay any survivor's loss
benefits owed to Robert's four dependents.
late October 2017, however, the insurers claimed that they
still did not know how to apportion the survivor's loss
benefits or who to pay the benefit to because Caroline had
not yet filed her appearance. The insurers asked the circuit
court to allow them to pay the total amounts owed to the
trial court until the proper payees and apportionment could
be determined. In early November, Rachel's counsel
entered his appearance as Caroline's attorney and filed a
response proposing an apportionment of the wage-loss benefits
between the four dependents and asking the trial court to
order the insurers to pay the amount necessary for the
dependents to obtain equivalent policies. The insurers
disagreed, arguing that they were required to pay only the
amount Robert's previous employer contributed to the
and dental insurance policies, not the cost to replace the
policies. The circuit court ordered the insurers to pay the
amounts that were not disputed to the court ...