Michigan Court of Appeals; Docket #361722; Unpublished
Judges Markey, Jansen, and Kelly; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
In this unanimous, unpublished, per curiam decision, the Court of Appeals affirmed the trial court’s summary disposition order dismissing Plaintiff Therese Root’s action for no-fault PIP benefits against Defendant Falls Lake National Insurance Company (“Falls Lake”). The Court of Appeals held that Root committed a material misrepresentation on her original application for coverage, entitling Falls Lake to rescind the policy it issued to her.
Therese Root was involved in a motor vehicle accident while operating her Ford Escort. She sought PIP benefits following the accident from Falls Lake, her no-fault insurer, but Falls Lake denied Root’s claim, asserting that the policy void ab initio because Root made a material misrepresentation on her original application for coverage. Specifically, Falls Lake asserted that Root failed to identify a Chevy van owned by her husband when asked to identify all vehicles owned or registered in her name (the evidence tended to show that the van was actually owned and registered in Root’s husband’s name, but Root never challenged Falls Lake’s claim that she owned the van). In Root’s resultant lawsuit against Falls Lake, Falls Lake moved for summary disposition, arguing that it was entitled to rescission because Root’s failure to identify the Chevy van constituted a material misrepresentation. To establish materiality, Falls Lake presented testimony from its adjuster, Michael Keough, who testified that he would not have written the policy had he known that Root owned an undisclosed Chevy van, and that if the Chevy van had been added to the policy the premium would have increased by $845. In response to Falls Lake’s motion, Root argued that her omission of the van was not material because Falls Lake presented no evidence that her premium would have increased if she had merely listed the van on the application—which is all she was required to do—but not actually added it to the policy. The trial court ultimately agreed with Falls Lake and granted summary disposition in its favor.
The Court of Appeals affirmed the trial court’s summary disposition order, holding that Root’s failure to list the van on the application constituted a material misrepresentation. With respect to Root’s argument that there was no evidence her premium would have increased merely by disclosing the Chevy van but not adding it to the policy, the Court noted that Keough’s statement was actually two-fold: he testified that if he had known Root owned a Chevy van that was not listed on the application, he would not have written the policy, and he separately testified that if the Chevy van had been added to the policy, the premium would have increased by $845. Under Michigan caselaw—e.g., Montgomery v Fidelity & Guaranty Life Ins Co, 269 Mich App 126 (2005)—a misrepresentation is material if it causes a policy to be issued that would not otherwise be issued.