Michigan Court of Appeals; Docket # 350181; Unpublished
Judges Redford, Meter, and O’Brien; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Not Applicable
TOPICAL INDEXING:
Release and Settlements
SUMMARY:
In this unanimous unpublished per curiam decision, the Court of Appeals affirmed the trial court’s dismissal of the plaintiff’s fraud claim against defendant, State Farm Mutual Automobile Insurance Company. The plaintiff, Judy Clauss, filed two first-party actions, one in 2016 and the other in 2017, against State Farm after she was injured in a pedestrian versus motor vehicle collision, and both cases were closed after the parties negotiated a settlement and submitted stipulated orders for dismissal. Clauss executed a release following the settlement, releasing and discharging State Farm “from any and all actions, causes of action, claims, demands, and damages that arose from the [subject collision],” but filed another lawsuit in 2018 against State Farm for fraud. The Court of Appeals held that, although Clauss’s fraud claim was not a no-fault action, the release still precluded her from bringing “‘any and all’ claims against State Farm regardless of the legal theories on which they based their claims.”
Judy Clauss was severely injured in a pedestrian versus motor vehicle collision that occurred on May 9, 1990, and received over $2,000,000 in no-fault PIP benefits from State Farm over the ensuing decades. In 2016, Clauss filed a breach of contract claim to recover “duplicate benefits equal to payments the medical insurer paid under [Clauss’s] medical insurance policy because [Clauss’s] policies were not coordinated.” Clauss then filed a second lawsuit in 2017, asserting both a no-fault claim and a fraud claim. Both the 2016 and 2017 cases were closed after the parties negotiated a settlement and submitted stipulated orders for dismissal, and shortly after the cases’ dismissal, Clauss executed a “RELEASE OF PIP CLAIMS” in which she “released and discharged State Farm from any and all actions, causes of action, claims, demands, and damages that arose from the [subject collision].” A few months after executing the release, however, Clauss filed the underlying lawsuit against State Farm, alleging both a breach of contract claim and the same fraud claim it alleged in the 2016 and 2017 lawsuits. State Farm moved for summary disposition, which the trial court granted, ruling that the release precluded Clauss from asserting any claims against State Farm.
The Court of Appeals affirmed the trial court’s summary disposition order in favor of State Farm, holding that, pursuant to the release, Clauss unambiguously relinquished “‘any and all’ claims against State Farm regardless of the legal theories on which they based their claims.” Thus, even though Clauss’s 2018 fraud claim was not a no-fault action, Clauss was still barred from filing such a claim against State Farm.
In Cooper, 481 Mich at 401, our Supreme Court addressed the issue whether the no-fault one-year-back rule of MCL 500.3145(1) barred the plaintiff’s common law fraud claim. It held that a fraud claim is not a no-fault action for the recovery of PIP benefits but an “independent and distinct action for recovery of damages payable under the common law for losses incurred as a result of the insurer’s fraudulent conduct” and, therefore, a fraud claim is not subject to the one-year-back rule. Id. Our Supreme Court, however, did not address the issue presented in this case which is whether a release of all claims barred the plaintiffs’ fraud claim. Because this case presents a distinctly different issue, Cooper is inapposite. Cooper never discussed or decided the issue presented in this case and plainly does not stand for the proposition that a claim released under the broad terms of a release may be raised despite having been waived and released by contract.
The record reflects that the trial court in this case closely examined the Release and correctly determined that it plainly and unambiguously provided that plaintiffs relinquished “any and all” claims against State Farm regardless of the legal theories on which they based their claims. The trial court properly ruled that the Release provided that plaintiffs “gave up every possible cause of action against State Farm up to the date of the release.” The trial court properly concluded that the terms of the Release barred plaintiffs’ claims made in their 2018 case.
