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Ferndale Rehabilitation Center v Allstate Ins Co (COA - UNP 3/18/2021; RB #4237)



Michigan Court of Appeals; Docket # 351746; Unpublished
Judges Tukel, Jansen and Cameron; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion

§500.3173a: ASSIGNED CLAIMS FACILITY – Fraudulent Insurance Act as the Basis of Disqualification


In this unanimous unpublished per curiam opinion, the Court of Appeals affirmed the holding of the trial court granting summary disposition to defendant on the issue of whether Richard Thirkill, assignor to plaintiff, had committed a fraudulent insurance act such that he was ineligible for payment of PIP benefits under the MACP. In doing so, the Court found that Thirlkill knew that his statements that he had no pre-existing medical conditions and his omission that he was already receiving replacement services was a fraudulent insurance act, and that the fraudulent act was material to his no-fault PIP claims he was pursuing from the MACP

This case arose from a motor vehicle accident in which Richard Thirlkill was injured. Following the accident, Thirlkill filed an application with the Michigan Automobile Insurance Placement Facility (MAIPF), which provides PIP benefits under the Michigan Assigned Claims Plan (MACP). In his application, Thirlkill stated that he did not have any pre-existing medical conditions and sought a claim of replacement services. The MACP assigned Thirlkill’s claim for benefits to defendant Allstate Insurance Company. In the meantime, Thirlkill was receiving medical treatment at plaintiff’s clinic, Ferndale Rehabilitation Center, and assigned his rights to coverage to plaintiff. Plaintiff Ferndale Rehabilitation Center then filed a claim for benefits against Defendant Allstate Insurance Company, which Allstate denied.

During discovery, defendant Allstate conducted a deposition of Thirlkill that revealed his numerous medical conditions, including an addition to painkillers, vein insufficiency, diabetes, and a gunshot wound. Thirlkill further testified that, as a result of these conditions, a family friend had provided him with replacement services. Thirlkill further divulged that he received social security disability payment, took a number of prescription medications, and used heroin “on and off.” Accordingly, defendant Allstate moved for summary disposition, alleging that Thirlkill had provided false information as part of his PIP claim for replacement services, and that plaintiff Ferndale Rehabilitation Center’s entire claim for PIP benefits must be denied as a result. The trial court granted defendant’s motion, stating that there was “no question that Thirlkill committed a fraudulent insurance act in his application to the [MACP].”

On appeal, plaintiff Ferndale Rehabilitation Center argued that the trial court erred by granting summary disposition in favor of defendant Allstate because the statements at issue made by Thirlkill in the application for PIP benefits did not amount to a fraudulent insurance act because he did not knowingly assert false information and because the medical information provided in the application was not material.  In analyzing this claim, the Court of Appeals noted that the Court had already articulated, in Candler v Farm Bureau Mut Ins Co of Mich, 321 Mich App 772; 910 NW2d 666 (2017), that “in order to qualify as part of a fraudulent insurance act under [MCL 500.3173(a)(2), the false statement merely must have been presented ‘as [art of or in support of a claim to the [MAIPF] for payment or another benefit.’” The Court further noted that the elements of proving a fraudulent insurance act included:

"(1) the person presents or causes to be presented an oral or written statement, (2) the statement is part of or in support of a claim for no-fault benefits, and (3) the claim for benefits was submitted to the MAIPF. Further, (4) the person must have known that the statement contained false information, and (5) the statement concerned a fact or thing material to the claim."

In this case, the Court noted that plaintiff’s arguments rested on the last two Candler prongs, i.e., that Thirlkill did not know his statements contained false information and that his statements were not material to the claim. In addressing the first argument, the court noted that “Michigan law presumed that one who signs a written agreement knows the nature of the instrument so executed and understands its contents.” Thus, the Court found that Thirlkill’s misunderstanding of the questions was not an excuse for fraud.

The Court then turned to plaintiff’s second argument that defendant was not prejudiced by Thirlkill’s failure to give his medical history in his application for PIP benefits because defendant “clearly had the means to determine the truth” by accessing Thirlkill’s medical records. In analyzing this argument, the Court noted that MCL 500.3173a(4) provides that “a fraudulent insurance act occurs if ‘a person who presents or causes to be presented an oral or written statement . . . knowing that the statements contains false information concerning a fact or thing material to the claim’ does not exclude situations in which the insurer is able to discover for itself the truth of the statements.”

The Court next turned to plaintiff’s argument that Thirlkill’s omission regarding the pre-performance of replacement services did not amount to a false insurance act. In analyzing this claim, the Court noted that “under MCL 500.4503, a ‘fraudulent insurance act’ is defined as ‘acts or omissions committed by any person who knowingly, and with an intent to injure, defraud, or deceive.’  Thus, the Court found that plaintiff’s argument that “there is no deception inherent in not revealing that [replacement] services were already being provided at state expense, is of no consequence because MCL 500.4503 specifically considers omissions of facts in its definition of ‘fraudulent insurance acts.’”

Finally, the Court turned to plaintiff’s argument that Thirlkill’s answers on his application for PIP benefits were not material to plaintiff’s claims for benefits against defendant Allstate. Specifically, plaintiff argued that the false statements in the application for PIP benefits were directed at MAIPF, not defendant. In analyzing this claim, the Court noted that this argument was the same as that made by the plaintiff in Candler, and that this Court had expressly rejected this argument, stating that the statute “does not require that any particular recipient have received the false statement in order for the act to qualify as a fraudulent insurance act, as long as the statements was used ‘as part of a or in support of a claim to the [MAIPF].’” While plaintiff argued that the medical history not disclosed by Thirlkill had no bearing on his eligibility for no-fault benefits, the Court disagreed, stating that “in providing PIP benefits related to the automobile accident, defendant had to ensure it was not also covering for medical expenses related to Thirlkill’s other medical conditions. Therefore, information about Thirlkill’s preexisting conditions is material to his claim for PIP benefits.”

Thus, the Court concluded that the trial court had not erred by finding that no genuine issue of material fact remained as to whether Thirkill knew statements regarding his medical history and replacement services on his application for PIP benefits contained false information and that those statements were material to the claim. Therefore, plaintiff, as Thirlkill’s assignee, was “equally subject to the consequences of Thirlkill’s actions.”

Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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