Ms. Williams testified that the owner of Rainbow, Mike Meinzinger, asked if she would like to be a full-time employee in the future, and that she answered affirmatively.

Mr. Meinzinger characterized Ms. Williams as a temporary employee whom he paid in cash. He testified that Ms. Williams did not apply for employment, was never interviewed or put through a background check, did not receive a formal offer of part-or full-time employment, was issued no tax forms, was not in the company's payroll system, and did not receive a uniform. He further explained that the company kept no personnel file or other record relating to her temporary employment. Mr. Meinzinger noted that the company neither paid unemployment insurance for Ms. Williams nor withheld taxes from her payments.

The trial court concluded that Ms. Williams failed to offer sufficient evidence to create a genuine question of material fact whether the injuries resulting from her auto accident actually had caused her to suffer any work loss for purposes of benefits under the no-fault act.

Ms. Williams appealed, arguing that the trial court had erroneously failed to recognize that there was a genuine question of material fact concerning whether her employment status with Rainbow, and other interrupted employment options, would have generated income but for her injuries sustained in the auto accident.

The Appellate Court's Decision

The appellate court affirmed.

In its decision, the appellate court explained that, under Michigan's no-fault law, a no-fault insurer was liable for payment of work-loss benefits “consisting of loss of income from work an injured person would have performed during the first 3 years after the date of the accident if he or she had not been injured.” The appellate court added that a party seeking work loss benefits “must show actual loss” and that a mere loss of earning capacity was “not sufficient.”

The appellate court then rejected Ms. Williams' argument that she had suffered an actual loss of income from work she would have performed for Rainbow if she had not been injured in the auto accident.

It found that she was not a Rainbow employee and that the only evidence to counter Mr. Meinzinger's testimony that he had firmly decided against engaging Ms. Williams further, for reasons unrelated to the accident, was her “speculative and wishful testimony.”

Ms. Williams “was neither full-time nor part-time with Rainbow, but worked only in a 'temporary' capacity,” the appellate court added.

Accordingly, the appellate court ruled, because Ms. Williams' work with Rainbow “did not have the trappings of a traditional employer-employee relationship,” and because her status with Rainbow “was only that of an ad hoc, temporary worker,” Ms. Williams failed to show that any stream of income from employment was interrupted because of the injuries resulting from her auto accident.

The appellate court found that, to the extent that Ms. Williams sought work-loss benefits to cover income she might have earned, from either Rainbow or any other potential employer, had her injuries not prevented her from acting on potential employment opportunities, she was “erroneously conflating work loss with loss of earning capacity.”

The distinction was important, the appellate court concluded, because, although the no-fault act provides remedies for work loss, damages for loss of earning capacity are “not recoverable under the no-fault act.”

The case is Williams v. Auto-Owners Ins. Co., No. 341473 (Mich. Ct. App. April 16, 2019).