Michigan Court of Appeals; Docket #349049; Unpublished
Judges Kelly, Borrello, and Boonstra; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Actual Fraud
Fraud/Misrepresentation
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing his first-party action for no-fault PIP benefits. In his application for PIP benefits, the plaintiff, Mamadou Alpha Diallo, approximated his “average weekly wage/salary” based on his “gross receipts,” as opposed to his much lower adjusted gross income. Defendant American Country Insurance Company argued that Diallo’s calculation constituted fraud, and that it was entitled to void his policy as a result. The Court of Appeals disagreed, noting that Diallo’s application for benefits did not define the terms “wage” or “salary,” and that a reasonable juror could conclude that Diallo believed he was being truthful when he computed his weekly wage loss the way he did.
Diallo was injured in a motor vehicle collision and subsequently filed an application for PIP benefits, including reimbursement for lost wages as an Uber driver. Under a section in the application titled “Avg. Weekly Wage/Salary,” Diallo entered $1,465—an accurate approximation of his “gross receipts” as reported on his federal income tax returns. Because Diallo claimed substantial business expenses, however, those same tax returns reflected a much lower adjusted gross income. Eventually, American Country Insurance Company stopped paying Diallo PIP benefits, and successfully moved for summary disposition in his subsequent first-party action, arguing that Diallo fraudulently misrepresented his wage loss, voiding his policy as a result.
The Court of Appeals reversed the trial court’s summary disposition order in favor of American Country—holding that the trial court erred in concluding, as a matter of law, that Diallo engaged in fraud when he based his wage loss on his gross receipts as opposed to his adjusted gross income. More specifically, the Court held that the trial court erred when it determined, as a matter of law, that Diallo intended to commit fraud with respect to his wage loss claims. In that regard, the Court provided:
Simply put, defendant asked plaintiff to disclose the amount of his weekly wages, and he did so. Whether this amount should have been reduced by plaintiff’s claimed business expenses is a question that is wholly distinct from whether plaintiff made a fraudulent misrepresentation when submitting the application. A jury could find that plaintiff believed, in completing the application, that he was being truthful (or, for that matter, that he was correct) when he based his weekly wage loss on his gross income, regardless of whether it ultimately would be the proper basis for computing the amount of benefits to which he was entitled. See Mina, 218 Mich App at 686. Moreover, to the extent there is ambiguity in the terms of the application, any such ambiguity should be construed against defendant. Wilkie v Auto-Owners Ins Co, 469 Mich 41, 62; 664 NW2d 776 (2003) (“[I]t is . . . well established that ambiguous language should be construed against the drafter, i.e., the insurer.”).
