Michigan Court of Appeals; Docket #308762; Unpublished
Judges Cavanagh, Saad, and Riordan; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not applicable; Link to Opinion 
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Cancellation and Rescission of Insurance Policies
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Michigan Court of Appeals affirmed the trial court’s Order granting Liberty Mutual summary disposition on the issue of whether, based on the injured person’s alleged fraud, Liberty Mutual was entitled to rescind the subject insurance policy and deny the injured person no-fault benefits pursuant to that policy.
The injured person in this case, Gail Silvernail, was injured in a motor vehicle accident that occurred on March 1, 2010. At the time, Ms. Silvernail was driving a 2003 Pontiac Aztek that was insured under a policy of insurance issued by Liberty Mutual Insurance Company. The policy was issued to Ms. Silvernail’s friend, Shellie Andrews. However, Ms. Andrews did not own the Aztek. Moreover, Ms. Silvernail was not named as an insured on the policy, nor was she listed as a driver. Because Ms. Silvernail did not have any other no-fault insurance coverage, she sought no-fault insurance coverage for her injuries from Liberty Mutual under the policy issued to Ms. Andrews. Liberty Mutual conducted an investigation and determined that the policy should be rescinded and Ms. Silvernail’s claims for benefits should be denied, because Ms. Andrews made material misrepresentations regarding the owner and operator of the Aztek when she insured the vehicle. In response, Ms. Silvernail filed a lawsuit against Liberty Mutual on the grounds that she should not be denied no-fault benefits, because there was no evidence of the purported material misrepresentations and, even if there was such evidence, there was no further evidence proving that Ms. Silvernail was involved in making those misrepresentations to Liberty Mutual.
The trial court granted Liberty Mutual’s motion for summary disposition on the grounds that by failing to inform Liberty Mutual that she did not own the Aztek and that Ms. Silvernail would be driving the Aztek, Ms. Andrews made material misrepresentations that were sufficient to permit Liberty Mutual to rescind the policy. The trial court further determined that Ms. Silvernail was not an innocent third-party, because she knew Andrews was not the titled owner of the Aztek, but was present and permitted Andrews to procure insurance coverage by misrepresenting the owner and operator status of the Aztek to Liberty Mutual so she could save money.
In upholding the trial court’s Order granting summary disposition to Liberty Mutual, the Court of Appeals found that there was evidence that Ms. Andrews advised defendant’s agent that plaintiff misrepresented the fact that she owned the Aztek. The court further noted there was evidence, such as contemporaneous notes Liberty Mutual’s agent took during the phone call, which showed that Ms. Andrews specifically indicated that she would be the principal driver of the Aztek and that she was advised that Liberty Mutual would not insure the vehicle, if she did not own it. Moreover, the court noted the case of Casey v Auto-Owners Ins Co, 273 Mich App 388 (2006), for the proposition that an insured is obligated to read her insurance policy and raise any questions about coverage to the insurance company. The court also noted that the plaintiff’s mere denial of the substance of evidence indicating fraud is insufficient to demonstrate that there is a genuine issue of material fact regarding whether the fraud occurred. In this regard, the Court of Appeals stated in pertinent part:
“. . . Andrews testified that she did not disclose that plaintiff would be the Aztek’s principal driver because “they didn’t ask.” However, according to the contemporaneous notes of defendant’s agent taken during the telephone call in which Andrews added the Aztek to her existing policy, Andrews specifically indicated that the principal driver of the Aztek would be herself. And the declaration page of the policy, dated shortly after the addition of the Aztek to the policy, is consistent with the agent’s note. Plaintiff was not a named insured on the policy and was not listed as a driver of any vehicle covered by the policy. An insured is obligated to read her insurance policy and raise any questions about coverage; thus, even if the insured does not read the policy, she is charged with knowledge of its contents. Casey v Auto Owners Ins Co, 273 Mich App 388, 394-395; 729 NW2d 277 (2006); see also Dancey, 288 Mich App at 8. Plaintiff’s mere denial of the substance of this documentary evidence is insufficient to demonstrate that a genuine issue of material fact exists. See Quinto v Cross & Peters Co, 451 Mich 358, 362; 547 NW2d 314 (1996). And plaintiff’s claim that Andrews had an insurable interest in the Aztek which required her to maintain insurance on it even if true would not prohibit defendant from rescinding the policy on the ground that it was procured by fraud.”