Michigan Court of Appeals; Docket # 339637; Unpublished
Judges Markey, Fort Hood, and Gadola; 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In this unanimous unpublished per curiam decision regarding a no-fault insurance case in which Defendant Auto-Owners Insurance Company argued that the plaintiff, Christian Scavuzzo, committed fraud in claiming his insurance benefits, the Court of Appeals rejected the plaintiff’s argument that the special jury instruction regarding fraud was unfairly prejudicial and that the verdict should be overturned. In so holding, the Court of Appeals reasoned that, to the extent that the insurance policy provision at issue required that the plaintiff show that the alleged fraudulent statements were made directly to Auto-Owners, the special jury instruction sufficiently implied this requirement, even though it was not expressly stated.
Plaintiff Christian Scavuzzo appealed a jury’s finding that he had committed fraud, arguing that the special verdict form used by the jury was unfairly prejudicial. Specifically, he argued:
The trial court’s use of the non-standard jury verdict form . . . resulted in substantial injustice to [plaintiff]. The verdict form and the jury instructions did not provide that alleged misrepresentations or fraudulent statements must be made to [AOIC] in order to find that [plaintiff’s] claims would be excluded by [AOIC’s] policy exclusion. Due to this omission, [plaintiff] was substantially and unfairly prejudiced by the admission of evidence regarding his alleged failures to inform the federal government about his earned income.
Scavuzzo submitted a request for wage-loss benefits from Auto-Owners, asserting lost wages of between $52,000 and $60,000 per year. However, Auto-Owners presented evidence that Scavuzzo was receiving disability benefits from the Social Security Administration, and that he had not reported any income to the IRS or the SSA. The specific question on the special verdict form which Scavuzzo took exception to read as follows: “Did the Plaintiff make a fraudulent statement or engage in fraudulent conduct with respect to procurement of the insurance policy or to an occurrence for which coverage is sought?”
The Court determined that plaintiff’s argument, that the special verdict form “failed to inform the jury that plaintiff’s alleged fraudulent statements had to be made directly to [Auto-Owners] . . . was wholly lacking in merit.” The Court reasoned:
In regard to the special verdict form, the jury was asked whether plaintiff made a fraudulent statement or engaged in fraudulent conduct “with respect to procurement of the insurance policy or to an occurrence for which coverage [was] sought[.]” The nature of the question was such that it clearly called for examination of whether plaintiff made misrepresentations to AOIC, considering that in procuring a policy or filing a claim for an occurrence an insured would necessarily be engaged in making representations to AOIC. Moreover, with respect to the instruction on the elements of fraud recited in the preceding paragraph, we conclude it is implicit that AOIC had to be the target or recipient of any fraudulent statements because misrepresentations had to be made with the intention that AOIC act upon them.
Plaintiff’s insurance claim submitted to AOIC included a request for wage loss, with plaintiff asserting lost wages of between $52,000 and $60,000 per year. AOIC presented evidence that plaintiff received disability benefits from the Social Security Administration (SSA) and that these benefits would be discontinued should he earn more than $1,170 per month. In conjunction with this evidence, AOIC produced evidence that plaintiff failed to report any income to the IRS or the SSA. Contrary to plaintiff’s faulty reasoning, evidence of plaintiff’s failures to disclose income to the IRS and the SSA supported AOIC’s position that plaintiff made fraudulent statements to AOIC, where he directly claimed to AOIC that he had income ranging from $52,000 to $60,000.4 The jury was not instructed in a manner that suggested that defrauding the federal government could serve as the basis for finding in favor of AOIC. In sum, there was no instructional error, no error with respect to the special verdict form, and no error as to the jury’s verdict.
The Court thus affirmed the dismissal.
