Michigan Court of Appeals; Docket # 339784; Unpublished
Judges Shapiro, Beckering, and Kelly; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion; Link to Dissent
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Actual Fraud
Cancellation and Rescission of Insurance Policies
Fraud/Misrepresentation
SUMMARY:
In this 2-1 unpublished per curiam decision (with Shapiro, dissenting), the Court of Appeals REVERSED the trial court’s determination that a question of fact existed as to whether Plaintiff possessed the requisite intent to defraud Defendant and REMANDED for entry of summary disposition in favor of defendant, because Plaintiff’s evidence that she sustained a traumatic brain injury did not prove that she could not form an intent to commit fraud.
Plaintiff sustained a traumatic brain injury in a motor vehicle accident and was prescribed 24-hour per day attendant care and daily replacement services. According to her claims for benefits, the attendant care was provided by her son and her son’s fiancée. In Plaintiff’s deposition, as well as that of her son and her son’s fiancée, Defendant discovered that the attendant-care forms contained material false statements. For instance, her son’s fiancée “admitted in her deposition that she had claimed to have provided 12-hours of services to [Plaintiff], even on days when she was in a different city or a different state.” As a result, Defendant sought to void the policy because of a rescission clause within it, which stated:
The entire policy will be void if, in obtaining or maintaining this policy, or whether before or after a loss, you, an “insured”, a “family member” or any other person seeking coverage has:
1. Intentionally concealed or misrepresented any material fact or circumstance;
2. Engaged in fraudulent conduct; or
3. Made false statements;
relating to this insurance.
Plaintiff contended that her daughter in law was not a “family member,” as would be required to activate the above rescission clause, because she was not related to Plaintiff by blood, marriage, or adoption when she signed the forms. Plaintiff also contended that her son was not a family member because he did not reside with Plaintiff at the time he signed the forms. And thirdly, Plaintiff contended that she suffered from a traumatic brain injury and could not make competent statements as to whether she had ever reviewed the claim submissions, a contention she supported with medical records “indicating that since the accident she had memory problems and had, in fact, been diagnosed with a traumatic brain injury.”
The trial court determined that a question of fact existed as to whether Plaintiff possessed the requisite intent to commit fraud, which the Court of Appeals reversed. As to Plaintiff’s son and son’s fiancée, the Court of Appeals determined that they, themselves, were not seeking to make a claim under the policy, their fraud did not trigger the rescission clause.
. . . a person “seeking coverage” is a person seeking to make a claim under the policy. In doing so, the person seeking coverage must fulfill enumerated duties that would not be expected or required from a person providing services to an insured person and then seeking payment for the services rendered. Consequently, based on the policy language, [Plaintiff’s son] and [fiancée]—individuals seeking payment for benefits provided to [Plaintiff]—cannot trigger the rescission clause. Accordingly, to the extent that they made false or misleading statements in connection with the attendant-care forms, their fraud is not a basis for voiding the contract under the rescission clause. See Fortson, 324 Mich App at 484 (stating that fraud committed by an individual not listed in a rescission clause is insufficient to trigger the fr [sic] rescission clause).
Plaintiff’s fraud, however, was sufficient to trigger the rescission clause. The Court determined that although Urech presented evidence to verify her traumatic brain injury and its associated symptoms, that evidence did not prove that she could not possess an intent to commit fraud.
Yet, there is no evidence that the traumatic brain injury and its associated memory problems affected [Plaintiff’s] ability to understand that the attendant-care forms were inaccurate when she signed them. If there were some evidence suggesting that because of her memory problems she could not form the intent necessary to commit fraud, then there would certainly be a fact question. If there were evidence that when she signed the forms she believed that they were accurate based on her memory of the services provided, then there would be a fact question. However, simply providing evidence that she was sometimes forgetful because of a brain injury is insufficient to create a genuine issue of material fact. Stated differently, [Plaintiff] has not presented any evidence showing that her memory loss affected her ability to understand the forms that she signed contained false statements. In the absence of such evidence, we can only speculate that because she had memory issues and a brain injury she may not have appreciated or realized that the forms she was signing contained materially false statements.
Judge Shapiro, dissenting, argued that Plaintiff’s cognitive impairments were sufficient to create a genuine issue of material fact as to whether she could possess an intent to defraud.
Viewed in a light most favorable to the nonmovant, the results of the neuropsychological testing, the probate court’s determination that Urech is legally incapacitated and the deposition testimony create a material question of fact as to Urech’s cognitive status. That is, reasonable minds could differ on whether Urech understood the nature of the documents her son had her sign and whether at the end of the month she could have recalled who her assisted her when. Accordingly, Pioneer has not established as a matter of law that Urech acted with fraudulent intent.
