Michigan Court of Appeals; Docket # 344950; Unpublished
Judges FortHood, Sawyer and Shapiro; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
Misrepresentation/Fraud as a Basis to Rescind Coverage
In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the holding of the trial court’s denial of Defendant Farm Bureau’s Insurance Company of Michigan’s motion for summary disposition on the issue of whether Farm Bureau could deny plaintiff’s claims and rescind his father’s insurance policy on the basis of post procurement fraud by plaintiff. In so holding, the Court reasoned that based upon the Michigan Supreme Court’s holding in Meemic Ins Co v Fortson, 506 Mich 287; __ NW2d __ (2020), Farm Bureau could not enforce its anti-fraud provision to deny no-fault PIP benefits to the injured person because of acts of post-procurement fraud.
This case arose from an accident in which plaintiff Lacascio was severely injured when he was struck by a car as a pedestrian. Following the accident, plaintiff suffered multiple injuries which required lengthy hospitalization, surgery, and rehabilitative care. Defendant Farm Bureau Insurance Company was the no-fault insurer designated to provide plaintiff with PIP benefits because defendant insured a vehicle owned by plaintiff’s father. Defendant denied plaintiff’s claim and cancelled his father’s insurance policy, contending that plaintiff had made false statements regarding his attendant care that were “intended to materially defraud defendant.” Specifically, defendant alleged that plaintiff drove himself on days that his girlfriend claimed attendant care payments, despite plaintiff denying the ability to drive in his examination under oath (EUO), did not always use his cane as stated in the EUO, carried a heavy object once on his uninjured shoulder, and was paid to pull weeds for a neighbor despite claiming being unable to work.
On appeal, the Court noted that Meemic Ins Co v. Fortson, 506 Mich 287; __ NW2d __ (2020) was controlling. In Meemic, the Michigan Supreme Court held that “a policy provision providing for recission on the basis of a claimant’s post procurement misrepresentations is inconsistent with the no-fault act . . . .” Further, the Court clarified in Williams v. Farm Bureau Mut Ins Co, __ Mich App __; __ NW2d __ (2021) (Docket No. 349903), that Meemic abrogated the holding of Bahri v IDS Prop Cas Ins Co, 308 Mich App 420; 864 NW2d 609 (2014) which defendant relied on for the proposition that anti-fraud provisions in no-fault insurance policies applied to both pre and post procurement fraud. Thus, the Court found that defendant’s claimed defense was grounded “on neither the no-fault act not the common law” and that it was therefore “invalid and unenforceable,” per Meemic.