Michigan Court of Appeals; Docket # 350052; Unpublished
Judges Redford, Riordan, and Tukel; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Misrepresentation / Fraud as a Basis to Rescind Coverage [§500.3113]
TOPICAL INDEXING:
Cancellation and Rescission of Insurance Policies
SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the trial court’s grant of summary disposition to defendants Akins and Everest National Insurance Company on the issue of the validity of plaintiff’s insurance contract with defendant Everest and plaintiff’s ability to bring a tort claim against defendant Akins. In its holding, the Michigan Court of Appeals found that plaintiff’s material representations permitted Everest to rescind the insurance policy and that the recission barred plaintiff from tort recovery against either defendants.
This case arose from a motor vehicle accident in which plaintiff claimed PIP benefits from defendant Everest, which refused to make payment. Consequently, plaintiff filed a complaint alleging that she was entitled to PIP benefits from defendant Everest and tort damages from defendant Akins. Defendant Everest moved for summary disposition, contending that plaintiff’s insurance policy had been rescinded because she misrepresented material facts when she failed to disclose that she lived with her father on her insurance application. The trial court granted defendant Everest’s motion, and defendant Akins subsequently moved for summary disposition on plaintiff’s liability claim, arguing that “on the basis of plaintiff’s insurance policy having been rescinded, plaintiff’s vehicle was not insured at the time of the accident and, therefore, plaintiff was statutorily barred from bringing a third-party claim against Akins.” The trial court granted this motion as well.
On appeal, plaintiff argued that the trial court erred by granting defendant Everest’s motion because “any misrepresentations in her insurance application were caused by the insurance agent who helped plaintiff fill the form out” and that the misrepresentation were “not material.” The Court disagreed with this argument, finding that “[w]hen an insurance policy ‘is facilitated by an independent insurance agent or broker, the independent insurance agent or broker is considered an agent of the insured rather than an agent of the insurer . . . [t]hus, the insurance agent was an independent agent acting as a representative of plaintiff, not Everest, and any fault of the insurance agent this is attributable to plaintiff.” The Court further found that “[i]n light of the definition of materiality, it is clear that the misrepresentations at issue here were material,” as the vice president of underwriting for the third-party underwriter of Everest asserted that “if Everest had known that plaintiff’s father lived with her, it would have charged an additional $432 in premium.” Thus, the Court found that this was “not a situation with two innocent parties; plaintiff knowingly made repeated false statements in her insurance application, but Everest did not make any false statements or representations when entering into the insurance contract with plaintiff. Further, turning to plaintiff’s argument that the disqualification of uninsured drivers is not applicable, the court held “[i]t is undisputed that plaintiff was the owner of the vehicle at the time of the accident. Additionally . . . plaintiff did not have insurance on her vehicle at the time of the accident, due to the effect of the recission. Consequently, plaintiff did not fulfill the requirements of MCL 500.3101 . . . and, by extension, could not make a PIP claim under . . . MCL 500.3113 or a claim for tort liability under the then-applicable version of MCL 500.3135.” Thus, the holding of the trial court was affirmed.