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Sabados v State Farm Mut Auto Ins Co (COA – UNP 2/12/2019; RB #3844) 


Michigan Court of Appeals; Docket # 342088; Unpublished
Judges Jansen, Beckering, and O’Brien; per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion


Actual Fraud


In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the grant of summary disposition regarding Plaintiff Marija Sabados’ (“Sabados”) fraud in the application of benefits from Defendant State Farm Mutual Automobile Insurance Company (“State Farm”). The Court explained that Sabados committed fraud by testifying in a deposition that she was unable to drive, even though there was evidence that she had driven herself to the deposition.

Sabados was involved in an accident while driving her son’s car. Sabados was a named insured under the vehicle’s no-fault policy provided by State Farm. Sabados alleged that she was injured and filed a claim for first-party PIP benefits. Sabados claimed that she was unable to drive and requested replacement services for driving. Sabados testified in a deposition hearing that she was unable to drive; however, when she was confronted with evidence that she had driven, Sabados admitted to being untruthful. There was evidence presented that Sabados had in fact driven herself to the deposition hearing. The trial court granted summary disposition for State Farm finding that Sabados had committed fraud in violation of an anti-fraud provision in the no-fault contract.

The Court of Appeals affirmed the trial court’s grant of summary disposition because it found the misrepresentations were material, false, made knowingly false by Sabados, and made anticipating that State Farm would act upon it. The Court first explained that Sabados admitted to being untruthful when she claimed that she was unable to drive and so the statements were false. The false statements were material because Sabados used her inability to drive as part of her evidence to demonstrate her injury. The statements were knowingly falsely made by Sabados because Sabados drove herself to the deposition hearing where she made the initial false statements. Finally, Sabados anticipated State Farm would act upon these false statements because she made a claim for replacement services based on her inability to drive. Thus, the Court affirmed the trial court.

This misrepresentation was material because it was evidence of the severity of her injuries, which is reasonably relevant to defendant’s investigation of the claim. See id. at 425. The misrepresentation was also material because plaintiff claimed “driving” as one of the replacement services to which she was entitled. Next, plaintiff’s misrepresentation that she could not drive was clearly false, as she admitted at her deposition and continues to admit in her brief on appeal. See id. at 424. And plaintiff clearly knew that the representation was false because, if nothing else, she drove herself to the deposition before she gave the testimony that she could not drive. See id. Lastly, reasonable minds could not disagree that plaintiff intended for defendant to rely upon the misrepresentation. See id. at 425. Plaintiff listed the inability to drive on her replacement-services form, and then testified at her deposition that she still could not drive as a result of the accident.

The Court thus upheld summary disposition for State Farm.


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