Michigan Court of Appeals; Docket # 343639; Unpublished
Judges Borrello, Kelly, and Servitto; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Actual Fraud
Fraud/Misrepresentation
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing the plaintiff’s first-party action for no-fault benefits, specifically replacement services benefits. The plaintiff, Faydra Nelson, claimed replacement services for several dates on which she was actually vacationing, and misrepresented her pre-existing injury history on her application for benefits. The Court of Appeals agreed with the trial court that Nelson’s actions constituted fraud, and that the defendant, GEICO Indemnity Company, could therefore void her policy altogether.
Nelson was involved in a motor vehicle collision in which she suffered injuries to her head, neck, and back. For a period of approximately three years after the collision, Nelson claimed to be unable to perform household services, and thus had her son come over to clean, cook, and do the laundry, etc. Nelson submitted an application for no-fault PIP benefits to GEICO, in which she claimed to have never suffered injuries to her head, neck, or back prior to the collision. GEICO refused to pay Nelson’s benefits, however, and moved for summary disposition in her subsequent first-party action, claiming that it was entitled to void Nelson’s policy because she had committed fraud by submitting claims for replacement services for dates on which she was actually vacationing. The trial court granted GEICO’s motion, concluding that “replacement services [are] intended to benefit the injured person who cannot take care of himself or herself . . . [and that Nelson] would not have performed the chores herself while on vacation.”
The Court of Appeals affirmed the trial court’s summary disposition order in favor of GEICO, because MCL 500.3107(1)(c) provides that replacement services only include household chores that an injured person would have performed by himself or herself if not for his or her injuries. It is impossible that the plaintiff “would have performed” any household chores while on vacation, and therefore, the Court concluded that she misrepresented her claims.
According to MCL 500.3107(1)(c), an injured person may recover PIP benefits for replacement services that, “if he or she had not been injured, an injured person would have performed . . . .” (Emphasis added). Plaintiff’s argument that the replacement services Butler provided needed to be done, regardless of whether plaintiff was home, contradicts the plain language of MCL 500.3107(1)(c). While plaintiff was on her vacations, she would not have taken the garbage out, done the laundry, vacuumed, cooked, washed the dishes, or performed any of the other household services that Butler purportedly performed at her home and in her stead while she was on those vacations. In accordance with MCL 500.3107(1)(c), it is irrelevant which replacement services Butler performed while plaintiff was on vacation because it is impossible that plaintiff “would have performed” any of the claimed services herself while she was in New Orleans, Las Vegas, Cancun, or Minneapolis. Therefore, plaintiff misrepresented her claims for replacement services.
The Court also noted that on Nelson’s application for benefits, she checked the box “no” next to the question, “have you ever had the same or similar injuries?”—with respect to her back, neck, and head injuries. She further testified that she never had a head, neck, or back injury prior to the subject collision, despite her medical records showing that she complained of nonstop back pain as well as upper neck issues several years prior. The Court determined that these misrepresentations “allow[ed] [GEICO] to void its policy because all elements necessary to establish fraud are present.”
Plaintiff’s representations concerning her injuries and need for replacement services were material because they were directly relevant to defendant’s payment for the replacement services and to whether the accident caused or exacerbated a previous condition. Bahri, 308 Mich App at 424. The representations were false, as indicated above, and plaintiff knew that the representations were false or, at the very least, plaintiff recklessly made the misrepresentations without knowledge of their truth. Id. Plaintiff clearly had back and neck issues prior to the accident, and it was unreasonable that plaintiff would expect replacement services during her vacations because she would not be expected to vacuum, take out the garbage at her home, cut the grass at her home, or wash dishes at home (among other claimed services) herself while she was on vacation. Finally, plaintiff made the material misrepresentations with the intent that defendant would act upon them because plaintiff submitted Butler’s replacement service affidavits so that defendant would pay for the replacement services and submitted a claim for back and neck injuries asserting that she never had a similar back or neck issue prior to the accident with the intention that defendant would approve plaintiff’s application for PIP benefits. Accordingly, “[r]easonable minds could not differ in light of this clear evidence that plaintiff made fraudulent representations for purposes of recovering PIP benefits.” Bahri, 308 Mich App at 426. Therefore, the trial court did not err when it granted summary disposition in favor of defendant. And, although the trial court granted summary disposition in favor of defendant on the basis of plaintiff’s fraudulent replacement services, summary disposition was also appropriate on the basis of plaintiff’s fraudulent application for benefits.
