No Replacement? No Problem! Minnesota Supreme Court Holds That No-Fault Claimant Can Recover The Value of Services Not Replaced.

The Minnesota Supreme Court recently held that Minnesota’s No-Fault Automobile Insurance Act allows an injured person who provides care and maintenance of a home as a full-time responsibility to recover the reasonable value of care and maintenance services, regardless of whether the services were actually replaced.  In Schroeder v. Western National Mut. Ins. Co., — N.W.2d —, No. A13-2289 (Minn. June 17, 2015), Carmen Schroeder suffered a spinal injury in a motor vehicle accident and was totally disabled for six months. During her period of disability, Schroeder owned and maintained her own home, but was unable to perform most household duties, such as vacuuming, laundry, and yard work. Schroeder had no close family living nearby to help with household duties, she did not purchase replacement home care services, and nobody volunteered to perform the services for her.

Schroeder filed a no-fault claim for $3,400 in replacement services loss benefits with her insurance provider, Western National. She stated that, because she was primarily responsible for household care and maintenance and was unable to perform household duties until her disability ended, she was entitled to the “reasonable value” of the home care and maintenance services she was unable to perform. Minn. Stat. § 65B.44, subd. 5. Western National refused to reimburse Schroeder for household services that were not replaced.

The parties proceeded to arbitration, and the arbitrator awarded Schroeder’s entire claim of $3,400, plus interest and costs. The district court denied Western National’s motion to vacate the arbitration award. The court of appeals affirmed, concluding that Minn. Stat. § 65B.44, subd. 5, does not require replacement of household services when the injured person is primarily responsible for household duties.

The Minnesota Supreme Court affirmed. Western National argued Schroeder could not recover replacement services loss benefits because there was no economic loss, she did not replace the services. The court disagreed, holding the No-Fault Act does not require an injured person to independently prove economic detriment, or actually replace the services. Rather, to recover replacement services loss benefits, a claimant merely needs to demonstrate that he or she is primarily responsible for household duties and suffered replacement services loss under Minn. Stat. § 65B.44, subd. 5. No expense or replacement help is required to claim the reasonable value of those services in a no-fault context.

This case is significant for its holding that replacement services are compensable, even if the services are not replaced. If you have any questions concerning this case or insurance law, please contact one of our attorneys.