When a person is injured and receives compensation from their no-fault auto insurance carrier, are they entitled to reimbursement for “replacement services loss” if no one cleans their home, either for pay or out of generosity?
Can a person, who works outside the home and who is injured in a motor vehicle accident, recover for the value of home cleaning/maintenance services never performed during the time they are unable to do the work themselves? The Minnesota Supreme Court has answered this question with a resounding “yes” in its recent decision Schroeder v. Western Nat’l Mut. Ins. Co., ___ N.W.2d ___, A13-2289, (Minn. June 17, 2015). Relying on precedent interpreting the Minnesota No-Fault Act, the Court seems to have eliminated any ambiguity about whether the value of those services can be compensable regardless of whether those services occurred at all, in certain circumstances.
The Supreme Court in Schroeder interpreted Minn. Stat. § 65B.44, subd. 5, a provision of the Minnesota No-Fault Act. The title of the subdivision is “Replacement service and loss.” It provides that “if the nonfatally injured person normally, as a full time responsibility, provides care and maintenance of a home with or without children, the benefit to be provided under this subdivision shall be the reasonable value of such care and maintenance or the reasonable expenses incurred in obtaining usual and necessary substitute care and maintenance of the home, whichever is greater.” In other words, the injured party is entitled to recover the “reasonable value of such care and maintenance” as they would theoretically spend to replace their own efforts.
In the case at hand, the insured suffered a significant spinal injury in a motor vehicle accident on May 10, 2012, and was totally disabled until October 3, 2012. During her disability, she could not perform most household duties. No one performed those duties for her, either paid or donated. She filed a claim for $3,400.00 in replacement services loss and this award was upheld on appeal all the way to the Minnesota Supreme Court.
At the heart of the dispute was whether Minn. Stat. § 65B.44, subd. 5 allows compensation for “loss” that results in no incurred expense or received donation on the part of the insured. The Court neatly identified two subcategories of “replacement service loss” in their analysis: first, the reasonable expenses incurred in obtaining substitute services; and second, the reasonable value of such care and maintenance, regardless of whether it was obtained. This second subcategory is only triggered if the insured “normally, as a full time responsibility, provides care and maintenance of a home” In this case, the Court did not expound on whether or not the insured maintained her home “as a full time responsibility.” In order to understand why, it is necessary to go back to the precedent.
In Rindahl v. Nat’l Farmers Union Ins. Cos., the Court interpreted “‘full time responsibility,’” as used in section 65B.44, subd. 5, “[to mean] primary responsibility for management of the household.” 373 N.W.2d 294 (Minn. 1985). In this most recent case, relying on Rindahl, the meaning of “full time responsibility” was presumed to include a broader category of people, including those who merely do the chores but otherwise have full time employment (in the colloquial sense) elsewhere. In effect then, if an insured is “primarily responsible for household services,” or can successfully present that fact, the benefits will most likely be compensable.
If you have any questions about economic loss benefits under the Minnesota No-Fault Act, or any other matter regarding the No-Fault Act generally, please feel free to call or e-mail any one of our many experienced attorneys – www.hansendordell.com / 651-482-8900.