Michigan Court of Appeals; Docket # 343587; Unpublished
Judges Gadola, Boonstra, and Swartzle; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Resident Relatives [§3114(1)]
TOPICAL INDEXING:
Actual Fraud
Cancellation and Rescission of Insurance Policies
Fraud/Misrepresentation
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s denial of the defendant’s motion for summary disposition seeking dismissal of the plaintiff’s underlying action for PIP, UIM, and UM benefits. The plaintiff, Robert Tate, was uninsured and living with his mother at the time of the subject motor vehicle collision, after which he sought no-fault PIP benefits under his mother’s automobile insurance policy with the defendant, Farm Bureau General Insurance Company of Michigan. Farm Bureau denied Tate’s claim for benefits, alleging that Tate had committed multiple acts of fraud in violation of the anti-fraud provision in his mother’s policy. The Court of Appeals held that, pursuant to its previous holding in Meemic Ins. Co. v. Fortson, 324 Mich. App. 467 (2019), Farm Bureau could not rely on the anti-fraud provision in Tate’s mother’s policy to deny Tate the benefits to which he was statutorily entitled under MCL 500.3114(1). UM and UIM claims, however, are not governed by statute, and therefore, the anti-fraud provision could bar those claims if, in fact, Tate committed the alleged fraud.
At the time Robert Tate was injured in the subject motor vehicle collision, he was uninsured and living with his mother. His mother had an automobile insurance policy with Farm Bureau, thus entitling Tate to no-fault PIP benefits under her policy as a resident relative pursuant to MCL 500.3114(1). After the collision, Tate filed this action against Farm Bureau for PIP, UM, and UIM benefits, and Farm Bureau moved for summary disposition, arguing that Tate had committed multiple acts of fraud in violation of the anti-fraud provision in his mother’s policy. The trial court denied Farm Bureau’s motion, reasoning that Tate was not a party to the policy, and not personally responsible for at least one of the acts of fraud. The trial court neither addressed nor decided whether Tate had committed the other acts of fraud.
On Appeal, Farm Bureau first argued that the fraud provision in Tate’s mother’s policy did, in fact, bar Tate’s claims for PIP, UM, and UIM benefits. The Court of Appeals disagreed, at least in regard to the PIP benefits. In Meemic, the Court of Appeals had held that a similar fraud provision was invalid as to an innocent third-party’s claims to benefits because it attempted to bar the innocent party from collecting benefits to which he was statutorily entitled. In effect, contractual provisions that conflict with statutes are invalid.
UM and UIM claims, however, are not governed by statute; rather, those claims are governed entirely by contract. The Court of Appeals declined to address all but one of the allegations of fraud made by Farm Bureau, “given the detailed nature of the conflicting proofs regarding those claims, and given that the trial court neither considered nor decided whether a genuine issue of material fact existed regarding plaintiff’s participation in the alleged fraud.” As for the one allegation the Court of Appeals did address, however, it was held that the plaintiff clearly did not commit fraud.
With regard to defendant’s claim that plaintiff committed fraud by listing his former employer on his application for benefits, we conclude that there is no genuine issue of material fact. On this claim, we elect to overlook the applicable preservation requirements because all the facts necessary for its resolution have been presented. See id. Plaintiff initially listed his prior employer on the application form, but then crossed out the entry, clearly indicating that he did not want defendant to rely on that information in determining benefits. Plaintiff did not list any other information on the form to suggest that he was then employed or had suffered wage loss because of the accident. There is no question of material fact that plaintiff’s action of listing a prior employer, and then crossing it out, was not (1) a material misrepresentation, (2) that was false, (3) that plaintiff knew was false when he completed the form, and (4) that plaintiff made the material misrepresentation with the intention that defendant would pay him wage-loss benefits related to his former employment.
Separate from Farm Bureau’s arguments regarding fraud, Farm Bureau also argued on appeal that it was entitled to summary disposition as to Tate’s UM and UIM benefits because Tate:
did not provide acceptable proof that [the at-fault driver] was not covered by an insurance policy at the time of the accident. Alternatively, [Farm Bureau] argues that it did not receive a final declaratory judgment against [the at-fault driver] or the owner of the vehicle she was driving, establishing that both the owner and operator of the vehicle were not covered by a liability policy at the time of the accident.
Farm Bureau highlighted various portions of Tate’s mother’s policy that it argued barred the Tate’s claims for UM and UIM benefits. First, Farm Bureau argued that the policy barred Tate’s claim for UM benefits because there may yet have been an unidentified person or organization who might be legally liable for the same bodily injuries. The Court disposed of this argument, stating:
This contract clause does not state, however, that plaintiff’s UM claim against defendant is barred if such a person or organization exists. This contract clause simply provides that plaintiff’s recovery against defendant must be reduced by any amounts paid or payable by another person or organization, such as an insurer. Because defendant has provided no evidence of any amounts paid or payable from another person or insurer related to this accident, defendant is not entitled to summary disposition of plaintiff’s claims for UM benefits under this contractual language.
Farm Bureau next argued that the policy barred Tate’s claim for UM benefits because Tate failed to provide proof that the other vehicle involved in the collision and its operator were not covered by insurance at the time of the accident. Because Farm Bureau failed to present any evidence, however, that the vehicle was owned by someone other than the at-fault driver, the Court of Appeals determined that the trial court did not err when it also dispensed with this argument.
Lastly, Farm Bureau argued that the policy barred Tate’s claim for UIM coverage because Tate did not exhaust the limits of liability under other applicable insurance policies before filing the underlying lawsuit. Farm Bureau failed to present any evidence, however, that any other liability policies applied to Tate’s accident. Thus, Court of Appeals determined that the trial court properly determined that Farm Bureau was not entitled to summary disposition as to the plaintiff’s claim for UIM benefits.
The Court of Appeals remanded for further proceedings consistent with its opinion and affirmed that the plaintiff, having prevailed in full, was entitled to tax costs under MCR 7.219(F).
