Michigan Court of Appeals; Docket # 341177; Unpublished
Judges Hoekstra, Murphy, and Markey per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
TOPICAL INDEXING:
Fraud/Misrepresentation
Silent Fraud
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals upheld the trial court’s grant of summary disposition allowing Defendant Progressive Michigan Insurance (“Progressive”) to deny the no-fault benefits based on fraud. The Court also upheld the lower court’s refusal to hear new evidence and to hear a new legal argument. The Court of Appeals upheld the trial court’s grant of summary disposition based on fraud because Plaintiff misrepresented his employment prospects to Progressive. The Court of Appeals upheld the trial court’s refusal to hear new evidence because it found that the introduction of the evidence was untimely submitted. The Court refused to hear Plaintiff’s new legal argument because it found that the evidence it relied upon was untimely submitted.
Plaintiff was injured in an automobile accident on February 9, 2014 and made a claim for first party no-fault benefits from his no-fault provider Progressive. Progressive refused to pay the benefits based on the policy’s anti-fraud provision. Plaintiff was unemployed at the time of the accident, but claimed he was going to begin working on February 10, 2014. The trial court in an earlier lawsuit found that there was insufficient evidence to demonstrate that Plaintiff had a genuine offer of employment or could reasonably believe he had such an offer. Plaintiff had claimed that Randall Miller (“Miller”) had offered him a job with Hometown Painting to begin on February 10, 2014. However, Plaintiff provided no evidence to support this claim and the owner of Hometown Painting Mike Androsky (“Androsky”) claimed that Miller was not an owner of Hometown Painting and had no authority to offer any employment. The trial court subsequently granted summary disposition.
After the grant of summary disposition, Plaintiff moved for reconsideration raising a new legal argument and attaching an affidavit of Kenneth Walker (“Walker”) supporting his claims. During the pendency of the first appeal, Plaintiff motioned the Court of Appeals for relief from judgment based on two affidavits Plaintiff obtained after the trial court’s issue of summary disposition. The first affidavit was that of Walker supporting Plaintiff’s claims. The second affidavit was that of Miller confirming the truth of his statements to Plaintiff. The Court of Appeals denied this motion and then later issued its opinion upholding the trial court’s grant of summary disposition. However, the Court of Appeals remanded the case for the trial court to clarify if summary disposition was being granted regarding Plaintiff’s wage-loss action or Plaintiff’s entire action. The trial court clarified that it was dismissing the entire action. Plaintiff again appealed the trial court’s order.
The Court of Appeals first noted that the new legal arguments Plaintiff was making relied upon the new evidence that Plaintiff tried to introduce with the trial court and the new evidence was properly rejected by the trial court. The Court found that when new evidence is presented in a motion for re-consideration, that evidence is not properly submitted and should not be considered. The Court also reasoned that MCR 2.116 requires a party opposing a motion for summary disposition to present its proof to the trial court before the court decides the motion. Finding that both case law and the court rules required a party opposing a motion for summary disposition to present its proof before the decision for summary disposition, the Court of Appeals found the evidence to be improperly submitted and thus it would not consider the new evidence on appeal. Therefore, the Court rejected the new legal argument and would only consider the evidence that was presented to the trial court on review.
“Clearly, this Court determined that plaintiff did not use due diligence in presenting the two affidavits to the trial court before its decision regarding summary disposition. As such, plaintiff’s arguments based on the two affidavits that he continues to present are not preserved.”
Plaintiff then argued that the trial court erred by making credibility determination when rendering its decision for summary disposition. However, the Court of Appeals explained that the lower court properly rendered its verdict on the evidence before it. First, the Court explained that the evidence that was before the trial court was speculative, and a legal claim cannot be based on speculation. Second, the Court reasoned that the evidence would have been hearsay if offered to prove the matter asserted. Third, the Court argued that if the evidence was used to support Plaintiff’s mental state (in which case the evidence would potentially be admissible evidence) it would in fact demonstrate “recklessness.” Since fraud can be based on an individual having a reckless mental state, this would provide Plaintiff no relief.
“A reasonable trier of fact could infer from this evidence that plaintiff knowingly and intentionally submitted the material misrepresentations to defendant. At a minimum, the evidence showed that plaintiff acted recklessly. So, the admissible evidence presented to the court showed “actionable fraud,” and the trial court properly granted defendant summary disposition of plaintiff’s entire claim on the basis of fraud.”
The Court further explained that the Michigan Supreme Court recognized “innocent fraud” in Titan Ins. Co. v. Hyten, 491 Mich. 547, 555 (2012), for no-fault benefit cases. The Court explained that with innocent fraud or misrepresentation, “it is unnecessary to show that the innocent misrepresenter knew his representation was false.” Therefore, even if Plaintiff was misled by Miller, the effect of Plaintiff’s fraudulent conduct would be the same.
Finally, the Court rejected Plaintiff’s assertion that the Court’s order for remand entitled Plaintiff to another hearing regarding a motion for summary disposition. The Court found its prior instructions to be clear: the lower court was to clarify whether it intended to issue summary disposition for wage loss or summary disposition for the entire case. The Court’s order for “further proceedings” was only in reference to the trial court’s remand order. Plaintiff was not entitled to a full re-hearing of its case because the lower court was only to hold a remand hearing clarifying its order of summary disposition.
“In this case, this Court’s remand instructions to the trial court were clear: clarify whether the trial court in its ruling on defendant’s motion for summary disposition ‘intended to dismiss plaintiff entire claim based on fraud or whether it intended merely to dismiss the claim for wage loss benefits.’”
Thus, the Court of Appeals upheld the lower court’s grant of summary disposition and rejected Plaintiff’s attempt to bring in two new pieces of evidence after the lower court’s order for summary disposition.