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Cox v Farm Bureau Mut Ins Co (COA – UNP 6/14/2018; RB #3761)


Michigan Court of Appeals; Docket #336326; Unpublished
Judges Sawyer, Cavanagh, and Fort Hood per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 


Intervention by Service Providers and Third Party Payors in PIP Claims
Actual Fraud

In this unpublished per curiam opinion, the Court of Appeals affirmed the grant of summary disposition for Defendant Farm Bureau Mutual Insurance Company (“Farm Bureau”) denying the intervening Plaintiff Michigan Institute of Pain and Headache, PC, (“MIPH”) an independent cause of action. The Court affirmed the trial court because it found that Covenant Med Ctr, Inc v State Farm Mut Auto Ins Co, 500 Mich 191; 895 NW2d 490 (2017), barred independent statutory causes of actions for medical providers. The Court reversed the trial court’s grant of summary disposition for Farm Bureau regarding the issue of fraud. The Court reversed because it found that there were reasonable alternative explanations other than fraud to the evidence that Farm Bureau supplied to demonstrate fraud.

This case arose out of a motor vehicle accident where Plaintiff William Cox (“Cox”) was injured. Cox filed this action against Farm Bureau seeking first party PIP benefits. The medical providers intervened seeking to recover amounts owed to them from Cox. Farm Bureau motioned for summary disposition on the ground that Cox had committed fraud. Farm Bureau pointed to Cox’s rental and use of a car, despite his doctor’s indication that he was disabled from driving. Farm Bureau also pointed to Cox’s purchase of a 2014 Denali as evidence of fraud.

The Court first held that the intervening medical providers lacked standing to bring a cause of action. While the case was pending on appeal, the Michigan Supreme Court decided Covenant, and held that medical providers lacked an independent statutory cause of action in no-fault cases. The Court had previously determined that Covenant applied retroactively to cases on appeal in Bronson Healthcare Group, Inc v Mich Assigned Claims Plan, ___ Mich App ___, ___; ___ NW2d ___ (2018). Because this case was pending on appeal when Covenant was decided, the decision applied to this case and barred the intervening medical providers from bringing an independent cause of action. The Court explained that the medical providers should be allowed to amend their complaints under the assignment-of-benefits theory, if such an assignment had occurred.

The Court next reversed the trial court’s grant of summary disposition regarding fraud because it found reasonable alternative explanations for the evidence relied upon to prove Cox’s fraud. The Court first explained that there are four elements to determine fraud: (1) the misrepresentation was material, (2) that it was false, (3) that the insured knew that it was false at the time it was made or that it was made recklessly, without any knowledge of its truth, and (4) that the insured made the material misrepresentation with the intention that the insurer would act upon it. First, Farm Bureau pointed to Cox’s rental and use of a car as demonstrating fraud. However, the Court explained that violating a doctor’s order and driving a rental car does not demonstrate fraud, it demonstrates that a person has violated a medical order. Also, Cox did not drive the entire day, so his request for reimbursement for replacement services for having someone drive him did not show fraud per se. Cox may have driven and then needed someone else to drive as well. Second, Farm Bureau pointed to Cox’s purchase of a 2014 Denali as demonstrating his fraud. However, Cox had explained that his mother drove the vehicle and he did not. There was no evidence showing that Cox had driven the vehicle and so his request for replacement services was not fraud per se. Finally, Farm Bureau pointed to Cox’s reimbursement for being driven to his doctor’s appointment on July 23, 2014 as evidence of fraud. However, there was no evidence that Cox did not have a doctor’s appointment that day and so it was not fraud per se.

“The fact that plaintiff drove during a period in which his doctor instructed him not to drive could mean that plaintiff was not disabled or as injured as he claimed to be, or it could mean that plaintiff simply disobeyed his doctor’s instruction not to drive because he wanted to sign the apartment lease in Baldwin and had no one else to drive him there. . . . Plaintiff testified that he has not yet driven the Denali; rather, his mother and Ridgell used the vehicle to take plaintiff to his appointments. Defendant fails to address the possibility that plaintiff sometimes used medical transportation companies such as City Xpress to attend his medical appointments and at other times was driven to appointments by his mother or Ridgell. . . Defendant apparently infers that plaintiff’s first appointment with Dr. Iskander was on July 24, 2014, because that was the date on which Dr. Iskander signed the first disability certificate. Even assuming that plaintiff did not see Dr. Iskander until July 24, 2014, defendant has not demonstrated as a matter of law that City Xpress committed fraud”

Thus, the Court upheld the trial court in part and reversed the trial court regarding fraud.

Lansing car accident lawyer Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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