Michigan Court of Appeals; Docket # 348054; Unpublished
Judges Boonstra, Gadola, and Tukel; Per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEXING:
Wage Loss for Temporarily Unemployed Persons / Qualifications [§3107a]
TOPICAL INDEXING:
Cancellation and Rescission of Insurance Policies
SUMMARY:
In this unanimous unpublished per curiam decision , the Court of Appeals reversed the trial court’s summary disposition ruling that, as a matter of law, Defendant Fremont Insurance Company was responsible for injured plainitff Roskamp’s no-fault PIP benefits as a matter of law a, and the Defendant Allstate Insurance Company, which was assigned through the Assigned Claims Plan to handle Roskamp’s claims, was not. The Court of Appeals explained that the trial court erred in reaching its holding because the trial court determined that Fremont waived its right to rescind its no-fault insurance policy on the basis of fraud because Fremont issued a notice of nonrenewal on the policy. The Court of Appeals reasoned that with its notice of nonrenewal, Fremont did not induce belief that the policy was in effect through the date of the crash. Rather, Fremont sent its notice of nonrewal after Roskamp was injured, so the trial court erred in ruling that Fremont’s renewal waived its right to rescind the policy. As a separate issue, the Court of Appeals held that t Roskamp presented sufficient evidence to create a question of fact about whether he was temporarily unemployed at the time of the subject car crash for purposes of MCL 500.3107a.
Plaintiff Andrew Roskamp was injured in a car crash while driving a 2016 Ford F-150 pick-up truck leased by his then-girlfriend, Shannon Dexter. Dexter obtained no-fault insurance through Fremont in 2015—approximately one year before the subject crash—and after her daughter was injured in a separate crash in April of 2016, Fremont informed Dexter that all drivers in her household must be listed on the policy. Around in April of 2016, Roskamp moved in with Dexter, and Dexter added both the 2016 Ford-150 pick-up truck and Roskamp’s own 2002 Ford F-150 pick-up truck to the policy. She did not list Roskamp as a driver in her household, however, nor disclosed that the 2002 truck was owned by Roskamp. Roskamp testified that she neglected to do so because his driving record would have made “the cost of insurance prohibitive if he were revealed to be the owner and driver of the vehicle.”
Roskamp was driving the aforementioned 2016 Ford F-150 pick in November of 2016 when he was involved in the subject crash. After conducting an investigation of the crash, Fremont discovered that Dexter had failed to disclose Roskamp as a driver living in her household, and sent Dexter a notice shortly thereafter informing her that it would not be renewing her no-fault policy after the policy term ended in December of 2016. Then, after further investigation, Fremont sought to rescind her policy altogether. Roskamp’s claim for benefits was then assigned to Allstate, and in his ensuing first-party action against both Fremont and Allstate, a priority dispute arose between the two insurers. Ultimately, the trial court ruled that Fremont had waived its right to seek rescission by first issuing Dexter a notice of nonrenewal, and granted summary disposition in Allstate’s favor.
The Court of Appeals reversed the trial court’s summary disposition order, noting, first, that the trial court misapplied the Court of Appeals’ previous decision in Burton v Wolverine Mut Ins Co, 213 Mich App 514 (1995) to the facts of this case. In Burton, the Court of Appeals held that an insurer could not seek to rescind a policy after having sent a notice to its insured—on October 27, 1986—that his policy would be cancelled, effective November 17, 1986. On November 8, 1986, the insured was injured in a car crash, and after learning of its insured’s claim for benefits, the insurer then claimed that it was entitled to rescind the policy, effective October 14, 1986. The Court of Appeals held that the insurer had waived its right to seek rescission by sending the October 27th notice because, in doing so, the insured was led to believe that he would not need to procure other insurance until the cancellation date specified in the notice.
The Court of Appeals distinguished this case from Burton, noting that, in Burton, the insurer sent the cancellation notice to its insured after learning of his misrepresentation. The Court’s concern in Burton was “that the no-fault insurer had discovered a material misrepresentation in the procurement of the policy, informed the policy holder that it would bear the risk until a certain date, but then rescinded the policy following a high-exposure accident.” Such a concern did not exist in this case, however, because Fremont did not discover Dexter’s misrepresentation until after the accident, at which point it “advised her that they would not renew her policy, and upon further investigation determined to seek rescission.” Therefore, unlike the insured in Burton, “Dexter was not induced to rely on the coverage of Fremont’s policy by the notice of nonrenewal at the time of the accident; rather, the accident had already occurred at the time Fremont decided not to renew her policy.”
"In addition, we disagree that public policy necessarily dictates against rescission in this case. The trial court accurately observed that it is important to have appropriate no-fault insurance coverage and important for the insured to have certainty about the dates of that coverage. In this case, Fremont’s actions did not create uncertainty for the policyholder regarding coverage. In Burton, at the time of the accident, the insurer’s action of cancelling the policy may have caused the policyholders to believe they had coverage because the cancellation date had not yet occurred. Thus, the policyholder in Burton may have chosen not to obtain other insurance at the time of the accident, believing that coverage existed under the policy until the cancellation date. Here, Fremont’s decision not to renew Dexter’s policy occurred after Roskamp’s accident. It is not the case that Fremont’s decision to not renew the policy created reliance by Dexter or Roskamp on that policy at the time of the accident."
The Court thus remanded the case back to the trial court for a determination of whether “Fremont in this case otherwise should be permitted . . . to rescind the policy.”
The Court also addressed whether Roskamp was temporarily unemployed for purposes of MCL 500.3107a. The trial court held that he was, and the Court of Appeals agreed, noting that “the record suggests that Roskamp was employed in the month preceding the accident, and he presented evidence that he was actively seeking employment at the time of the accident.” Specifically, “Roskamp testified at his EUO that he and Dexter’s father had discussed him working for the father’s company, and Dexter testified that Roskamp had participated in job interviews after he left his previous employment.”
