Fraudulent Insurance Acts [§3173a(2)]
In this unanimous unpublished per curiam decision (Swartzle, concurring), the Court of Appeals affirmed the trial court’s summary disposition order dismissing Plaintiff Tamika Wilson’s first-party action against Defendant Titan Insurance Company (“Titan”). The Court of Appeals held that Wilson was barred from seeking no-fault PIP benefits through the Michigan Assigned Claims Plan (“MACP”) for injuries she sustained in the subject motor vehicle collision because she committed a fraudulent insurance act for purposes of MCL 500.3173a(2).
Wilson injured her back, neck, and shoulder in a motor vehicle collision, and thereafter applied for PIP benefits through the MACP. The MACP assigned Wilson’s claim to Titan, but Titan denied her claim, arguing that she was barred from receiving benefits through the MACP pursuant to MCL 500.3173a(2) because she committed fraud in her original application for benefits. Specifically, Titan highlighted a prompt in Wilson’s application in which she was asked to disclose all pre-existing injuries. She listed only hypertension, but not the fact that she had been receiving treatment for a slipped disc and a pinched nerve in her back for five months immediately prior to the subject collision. This back injury was allegedly the result of either an earlier motor vehicle collision or a gunshot wound—perhaps both—neither of which were disclosed on her application either. In Wilson’s subsequent first-party action against Titan, the trial court granted summary disposition in Titan’s favor, ruling that Wilson’s claim was barred by MCL 500.3173a(2).
The Court of Appeals affirmed the trial court’s summary disposition order, relying on the test set forth in Candler v Farm Bureau Mut Ins Co of Mich, 321 Mich App 772 (2017) for determining whether a claimant has committed a fraudulent insurance act for purposes of MCL 500.3173a(2). That test provides:
"[A] person commits a fraudulent insurance act under this statute when (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."
On appeal, Wilson argued that her claim was not barred by MCL 500.3173a(2) because her omission was not false, that even if it was false, she did not know it was false, and that it was not material.
The Court of Appeals held that Wilson’s omission did constitute a falsehood and that “reasonable minds would not disagree that [Wilson] should have disclosed at least something related to her long-standing body pain in response to the preexisting-conditions question,” considering the fact that she had been treated for back pain on multiple occasions in the five months immediately prior to the subject collision.
"The alleged false information in this case came in the form of an omission—plaintiff’s failure to report her back and body pain or any associated diagnoses or accident history on her application for no-fault coverage. The application question at issue stated: ‘Please list any pre- existing conditions that you had before this accident and how long you have been treating for those conditions.’ Plaintiff solely listed hypertension. Given the evidence that plaintiff was taking a prescription painkiller for her body pain, that she discussed her body pain and its connection to her previous accidents and injuries with her doctor multiple times in the five months preceding this accident and was referred to a pain specialist, and that plaintiff associated a slipped disc, pinched nerve, and buckshot left in her body with the pain, reasonable minds would not disagree that plaintiff should have disclosed at least something related to her long-standing body pain in response to the preexisting-conditions question. By only listing hypertension in answering the question, plaintiff effectively made a statement containing false information, as hypertension was plainly not her only preexisting condition. And when plaintiff answered the next question identifying a healthcare provider, it leaves the reader with the impression that she saw the provider for hypertension."
The Court of Appeals next held that her omission was “certainly material” because her pre-existing injuries were relevant to whether there was a causal connection between her back injury and the subject collision, and therefore whether she was entitled to PIP benefits at all for those injuries.
"Moreover, plaintiff’s omission was certainly material for purposes of MCL 500.3173a(2). ‘Statutory provisions must be read in the context of the entire act, giving every word its plain and ordinary meaning. When the language is clear and unambiguous, we will apply the statute as written and judicial construction is not permitted.’ Driver v Naini, 490 Mich 239, 247; 802 NW2d 311 (2011). Plaintiff argues that her omission was not material because defendant never relied upon it. Plaintiff confuses reliance with materiality. Reading MCL 500.3173a(2) as a whole, the word ‘material’ clearly refers to the relevance of the information rather than to whether anyone relied upon it. MCL 500.3172(1) provides coverage for certain individuals under the MACP based on ‘accidental bodily injury arising out of the ownership, operation, maintenance, or use of a motor vehicle[.]’ Accordingly, there must be a causal connection between an accident and an injury for which no-fault coverage is sought. In determining whether there is a causal relationship, the issue of whether a claimant has preexisting conditions unrelated to the accident is certainly relevant and material to assist in distinguishing between treatment for covered injuries and treatment for which coverage is unavailable. Plaintiff’s omission of information about her preexisting back and arm pain and associated health issues was clearly material given that she was seeking coverage for injuries to her back, neck, and shoulder allegedly arising out of the motor vehicle accident at issue. The plain meaning of the word ‘material’ in the context of the entire antifraud provision does not require detrimental reliance to satisfy the materiality requirement."
Lastly, the Court held that there was no question that Wilson knew that she was committing a falsity by omitting information pertaining to her pre-existing back injury. Specifically, the Court noted that in Wilson’s deposition, she defined a pre-existing condition as any injury “relat[ing] to ‘ongoing treatment that I go to the doctor for on a daily, monthly basis.’ ” Therefore, based on her own definition of the term, she did have a pre-existing condition, as she was receiving treatment on a regular basis for back pain at the time of the subject collision.
"The medical records described above, which plaintiff does not contest, established that for approximately five months preceding the motor vehicle accident plaintiff had a condition—various body pain—for which she was receiving ongoing treatment by a doctor on a regular basis. This is exactly how plaintiff herself described a preexisting condition. Accordingly, we conclude as a matter of law that plaintiff knew that she falsely answered the preexisting-conditions question in the application."
Justice Swartzle concurred in full with the majority’s opinion but wrote separately merely to note that Wilson’s application to the MACP lacked so much necessary information that it should never have been accepted in the first place and returned to Wilson for re-completion.
"I concur in full with the majority’s opinion affirming summary disposition in favor of defendant Titan Insurance Company. I write separately to point out that this application, in its current form, should have never been accepted in the first place. Plaintiff Wilson failed to answer whether she had sought treatment for any prior condition, but then she inexplicably listed the address of a healthcare provider in answer to the same question. She then stated that she did not take any medications prior to the accident, but then inexplicably listed ‘Xanax, Norco,’ again in answer to the same question. Even more concerning, Wilson failed to indicate that she had read the ‘Fraud Warning’ or that she had reviewed the application and attested to its truth and accuracy. A minor misstatement here or there on an application is one thing; the wholesale failure to provide information critical to a claim is another."