Michigan Court of Appeals; Docket # 331460; Unpublished
Judges Fort Hood, Cavanagh and Ronayne Krause; Unanimous, Per Curiam (with Judge Ronayne Krause concurring)
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Link to Concurrence
STATUTORY INDEXING:
Assigned Claims Facility Determination of Eligibility [§3173a]
TOPICAL INDEXING:
CASE SUMMARY:
In this unanimous unpublished per curiam Opinion, the Court of Appeals held the trial court properly denied defendant-insurer’s motion to dismiss plaintiff’s entire claim based on alleged fraud because the record did not clearly establish that plaintiff acted with an intent to defraud or that he was “aware of, and participating and engaging in” fraudulent conduct under MCL 500.3173a(2).
Plaintiff was injured when he was struck by a vehicle while walking. Plaintiff did not have no-fault insurance and the driver of the vehicle could not be identified. Plaintiff filed a claim for no-fault benefits with the Michigan Assigned Claims Plan (MACP) and defendant-Titan Insurance was assigned the claim. Plaintiff brought this action, asserting that Titan failed to pay benefits. Plaintiff alleged that he “sustained injuries which required medical treatment, rehabilitation treatment, household replacement services, attendant care services, prescription items and medical appliances, wage loss benefits, and other [unspecified] benefits. …” Titan moved for summary disposition, arguing that all of plaintiff’s claims were barred because he had submitted fraudulent documentation to support a claim for attendant-care services. The trial court granted Titan’s summary disposition motion in part, and dismissed plaintiff’s attendant-care claims.
The Court of Appeals affirmed, finding the trial court correctly dismissed only plaintiff’s attendant-care claims, rather than the entire action. In so ruling, the Court distinguished this case from Bahri v IDS Property Casualty Ins Co, 308 Mich App 420 (2014), which Titan argued supported dismissal of plaintiff’s entire complaint.
According to the Court of Appeals, plaintiff’s alleged fraudulent conduct with respect to the attendant-care claim should not bar the remainder of his claims because, unlike Bahri, which involved the application of a fraud exclusion in a no-fault insurance policy, the issue in this case was plaintiff’s right to receive benefits through MACP, and his recovery was governed by the language of the No-Fault Act. This conclusion, the Court said, was consistent with the decision in Shelton v Auto-Owners Ins Co, 318 Mich App 648 (2017), where the appellate panel wrote:
“The law governing application of the policy exclusion in Bahri is not applicable in this case. In Bahri, the provision applied to the plaintiff in that case because ‘[the] defendant issued [the subject] no-fault automobile policy to [the] plaintiff.’ … In this case, however, [the] plaintiff was not a party to, nor an insured under, the policy; she was injured while a passenger and because neither she nor her spouse or resident relative had a no-fault policy, defendant was required to pay her benefits pursuant to statute, not pursuant to a contractual agreement.”
The Court of Appeals explained that §3173a(2) defines a “fraudulent insurance act” as occurring when a person “presents or causes to be presented an oral or written statement, including computer-generated information, as part of or in support of a claim to the Michigan automobile insurance placement facility for payment or another benefit knowing that the statement contains false information concerning a fact or thing material to the claim.” This definition, the Court said, is consistent with the language of MCL 500.4503(c) and (d), noting that §4503 refers to “acts … committed by any person … knowingly” and requires “an intent to … defraud[ ] or deceive.”
With these statutory provisions in mind, the Court of Appeals pointed out the record evidence included the deposition testimony, the attendant-care forms and the household replacement services forms of Angela Bakeley and Jean Mitchell, two women who assisted plaintiff after the accident and with whom he had personal relationships. The deposition testimony of plaintiff was also part of the underlying record, the Court said, although it noted it was “unclear, confusing and disjointed.”
The Court of Appeals further noted the trial court struck the attendant-care portion of plaintiff’s claims and, in so doing, had said: “There’s no question there’s fraud here” and “I know you [defendant] want the whole claim to be dismissed. But the Court can’t determine whether or not the plaintiff himself orchestrated this, or we have a competing interest with these two ladies, and I’m just going to leave it at that; okay? You don’t know.” According to the Court of Appeals, the trial court said it was hesitant to impose the extreme penalty of dismissing all of plaintiff’s claims without a showing that plaintiff was aware of, and participating and engaging in, any fraudulent conduct. “Put another way,” the Court of Appeal said, “it is clear from the record that the trial court was unable to determine whether plaintiff had an intent to defraud or deceive defendant.”
Next, the Court of Appeals found the trial court’s ruling conformed to the plain language of §3173a(2), which states that a fraudulent insurance act requires a showing that the person acted with knowledge that the statement contained false information. The Court stated:
“While the record evidence is no doubt contradictory, conflicting and often times confusing with regard to when Bakeley and Mitchell provided attendant care and household replacement services for plaintiff following his motor vehicle accident, it is also devoid of any indication of plaintiff’s involvement in, or understanding or awareness of, the submission of the claim forms by Bakeley and Mitchell with regard to attendant care and household replacement services.”
Therefore, the Court of Appeals said the trial court properly granted summary disposition on plaintiff’s attendant-care claims, and correctly denied summary disposition on the remainder of the claims.
In a concurring opinion, Judge Ronayne Kraus said that “whether plaintiff was aware of the false information is irrelevant for purposes of MCL 500.3171a(2).” She concurred in the outcome by focusing on the word “claim” in the statute, noting the fraudulent statements were made only in connection with the claim for attendant care. However, she explained:
“Exclusion of plaintiff’s claims for attendant care benefits does not necessarily exclude any other claims he might have, if those other claims are not supported by or do not contain a fraudulent insurance act.”
