Michigan Court of Appeals; Docket # 338306; Unpublished
Judges Kelly, Tukel, and Redford; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Exception for Occupants [§3114(4)]
TOPICAL INDEXING:
Actual Fraud
Fraud/Misrepresentation
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order as to plaintiff Dwayne Parler’s claims for wage-loss benefits and replacement services and affirmed the trial court’s summary disposition order dismissing all of plaintiff Jami Lessard’s claims for no-fault PIP benefits. Both Parler and Lessard sought no-fault PIP benefits under Lessard’s automobile insurance policy with defendant Home-Owners Insurance Company. Home-Owners denied payment as to Parler and Lessard, arguing that both had engaged in fraud. The Court of Appeals determined, however, that Parler’s entitlement to no-fault PIP benefits was purely statutory, and that the fraud exclusion provision in Lessard’s policy could not, therefore, be invoked to bar his claims. Moreover, even if the fraud exclusion provision could be invoked to bar his claims, a question of fact existed as to whether Parler committed fraud with respect to his claims for wage-loss and replacement services. As for Lessard, the Court determined that he had made numerous fraudulent statements and that the fraud exclusion provision in her policy could be invoked to bar her claims for benefits.
Lessard and Parler were both traveling in Lessard’s vehicle when they were struck by another vehicle and injured. Both filed claims for no-fault PIP benefits with Lessard’s insurer, Home-Owners Insurance Company, but Home-Owners refused to pay benefits to either and moved for summary disposition in each of their subsequent lawsuits. Home-Owners argued that both Lessard and Parler had engaged in fraud, thus triggering the fraud exclusion provision in Lessard’s policy and voiding her policy altogether, as well as precluding any further coverage under it. The trial court granted both of Home-Owners’ motions, prompting Parler to file a motion for reconsideration, arguing that his entitlement to no-fault PIP benefits was purely statutory and therefore not subject to the policy’s fraud exclusion provision. The trial court still held that Home-Owners could rely on fraud as an affirmative defense to Parler’s statutory claim for benefits, however, but because Home-Owners was only able to prove that Parler had made fraudulent statements with respect to his claims for replacement services and lost wages, the court only granted his motion for reconsideration with respect to his claims for medical benefits. Both plaintiffs appealed.
The Court of Appeals first determined that the trial court erred in granting Home-Owners motion for summary disposition as to Parler’s claims for replacement services and wage-loss benefits. At the time of the collision, Parler did not have his own home but was instead living with various friends and family members. He testified that he owned a lawn care and snow removal business, but never filed any paperwork for the business nor filed any tax returns. Parler asserted that his injuries caused him to lose wages and necessitated replacement services. Specifically, he argued that someone would come over to whichever house he was residing at and perform household services for him.
As to Parler’s claims for replacement services, the trial court ruled that “‘Parlers inability to establish his residence demonstrates fraud as to his claim for replacement services.’” The Court of Appeals disagreed, finding that nothing in Parler’s testimony suggested that he knowingly made false statements, and refusing to apply such a black-letter rule that replacement services must be provided at a traditional residence.
The trial court presumably also relied on this testimony and ruled that “Parler’s inability to establish his residence demonstrates fraud as to his claim for replacement services.” Apparently, the court was reasoning that because Parler did not identify any particular residence at which he stayed after moving out of Lessard’s home sometime after the accident, it was proof-positive that his testimony was false or fraudulent. But whether Parler identified which dates he spent at certain places after moving out of Lessard’s place does not necessarily show that his testimony was knowingly false. While a jury ultimately may find Parler’s testimony not credible, there is nothing in the record to show that his testimony necessarily was knowingly untrue.
. . .
Therefore, all that is required to be a valid, recoverable replacement expense is that the expense be reasonably incurred in obtaining ordinary and necessary services which, if Parler had not been injured, he would have performed himself. Neither the trial court nor Home-Owners has identified any authority that requires the services to have been supplied at the same “residence” the claimant had before the accident. Indeed, the statute does not require these services to have been rendered at any particular location; instead, the replacement-services benefit simply applies “to all manner of ordinary or mundane household services that the injured person might have performed.” In re Carroll, 300 Mich App at 161. Thus, if a plaintiff incurred expenses for “ordinary and mundane” services that he would have performed, even while temporarily staying at someone else’s home, then those expenses would be compensable. Accordingly, the trial court erred when it determined that Parler’s testimony necessarily constituted fraud which precluded his claims for replacement services.
As to Parler’s claims for lost wages, the trial court held that Parler committed fraud because he “‘failed to provide any supporting evidence of his claim for lost wages.’” Parler claimed that his primary source of income was from the aforementioned business, but also testified that he earned some money from “hustling.” The trial court determined that his statement regarding “hustling” contradicted his wage-loss claims and therefore constituted fraud. The Court of Appeals disagreed, reasoning that “reasonable minds could differ on the scope of this statement because ‘hustling’ can mean a ‘side’ income, in addition to any primary source.” Moreover, the Court determined that Parler did not need documentary evidence above and beyond his proffered testimony in order to create a question of fact as to whether he did, in fact, operate the aforementioned business, and to whether he did, in fact, lose wages as a result of his injuries.
As for Lessard, however, the Court of Appeals affirmed the trial court’s motion for summary disposition with regard to her claims because she was a party to the insurance contract with Home-Owners, and because she did make “many” fraudulent statements, “including statements related to other names she has gone by, Parler’s address, Lessard’s pre-existing conditions, and the identity of medications she was taking at the time of the accident.”
