Michigan Court of Appeals; Docket # 339777, 341409, 341565; Unpublished
Judges Riordan, Kelly, and Cameron; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Actual Fraud
Fraud/Misrepresentation
Cancellation and Rescission of Insurance Policies
SUMMARY:
In this unanimous unpublished per curiam decision arising out of a first-party claim for no-fault PIP benefits, the Court of Appeals reversed the trial court’s denial of defendant Auto-Owners Insurance Company’s motion for summary disposition, vacated the trial court’s subsequent judgment and orders awarding no-fault and case evaluation sanctions plaintiff, Rayshawn Price, and remanded for entry of an order granting Auto-Owners summary disposition. The Court of Appeals determined that Auto-Owners was entitled to judgement as a matter of law because the plaintiff committed fraud in his application for benefits, thereby voiding his coverage under his policy with Auto-Owners entirely.
Rayshawn Krause was injured in a motor vehicle collision and later sued his automobile insurer, Auto-Owners, for no-fault PIP benefits related to his injuries. Auto-Owners moved for summary disposition, asserting that Price had committed fraud and that his policy was therefore void pursuant to the policy’s fraud exclusion provision. Auto-Owners cited numerous examples of alleged fraud in support of its motion, including claims for replacement services such as snow shoveling on dates when it did not actually snow. Similarly, Auto-Owners presented Price’s deposition testimony and that of Price’s replacement services provider to show that the provider did not, in fact, perform any replacement services on several of the dates claimed. Many of the examples of alleged fraud used by Auto-Owners in support of its motion, such as a replacement services diary which included the dates and services in question, were produced by Price in response to Auto-Owners’ interrogatories, and included Price’s signature under the attestation, “I AFFIRM THAT THE STATEMENTS ABOVE ARE TRUE TO THE BEST OF MY INFORMATION, KNOWLEDGE AND BELIEF.” The trial court ultimately denied Auto-Owners’ motion for summary disposition, and the case proceeded to trial, where a jury returned a verdict in favor of Price.
Auto-Owners appealed the trial court’s denial of its motion for summary disposition, which the Court of Appeals determined should have been granted. The Court concluded that all four elements of the fraud analysis laid out in Bahri v IDS Prop Cas Ins Co, 308 Mich App 420 (2014) were satisfied. At issue, principally, was the third element—that Price made the false statements knowingly or that the false statements were made recklessly without any knowledge of whether they were true. The Court of Appeals determined that it was, in light of the fact that Price, himself, submitted the replacement services diary with the fraudulent dates and services, and signed an attestation that everything in them was true.
Considering the evidence submitted on summary disposition, reasonable minds could not differ that plaintiff presented the RS diary to Auto-Owners either knowing that at least some of the entries in the diary were false or with reckless disregard as to falsity. As the parties acknowledged below, a cursory review of the RS diary reveals the entry indicating that Carter performed snow-shoveling services for plaintiff at his Detroit home on August 2, 2014. Indeed, in his response to Auto-Owners’ motion for summary disposition, plaintiff admitted that the snow-shoveling entry was just as false as it was obviously false, arguing:
Can anyone believe that someone attempting to defraud an insurance company would indicate she shoveled snow in August? . . . . Only an idiot would suggest that. When is the last time it snowed in Michigan in August? GIVE ME A BREAK! NOT ONLY IS THE SERVICE PROVIDER [i.e., Carter] ALLEGEDLY A FRAUD; SHE IS A STUPID FRAUD.
Plaintiff failed to recognize that by that same logic, he must have either submitted the RS diary to Auto-Owners recklessly—without reviewing the entries to determine whether they were accurate—or knowing that at least one of them was patently unbelievable.
