McCauley, et al v Progressive Marathon Ins Co (COA – UNP 7/20/2023; RB #4611)
Michigan Court of Appeals; Docket #361847; Unpublished
Judges Patel, Boonstra, and Rick; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
STATUTORY INDEX:
Not Applicable
TOPICAL INDEX:
Cancellation and Rescission of Insurance Policies
Fraud/Misrepresentation
Innocent Third Party Doctrine
SUMMARY:
In this unanimous, unpublished, per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing Plaintiff Angela McCauley’s action for unpaid no-fault PIP benefits against Defendant Progressive Marathon Insurance Company (“Progressive”). The Court of Appeals found a question of fact as to whether McCauley’s brother committed fraud when he procured an insurance policy on which McCauley was listed as a named insured, and also as to whether McCauley was an innocent third party with respect to her brother’s alleged fraud.
Angela McCauley was injured in a motor vehicle accident in January 2021. At the time of the accident, she was a named insured on a no-fault policy that her brother—referred to only as “Willis” in the Court of Appeals’ opinion—procured from Progressive approximately ten months prior. On the application, Willis identified three vehicles—one of which was owned by McCauley and the vehicle involved in the January 2021 accident—and affirmed that all three vehicles were garaged at his home in Redford. McCauley did not take any part in filling out the application.
After the accident, McCauley claimed PIP benefits under her policy, but Progressive denied the claim and notified McCauley and Willis that their policy was being voided ab initio based on misrepresentations about where McCauley’s vehicle was principally garaged. In McCauley’s resultant lawsuit, Progressive argued that McCauley lived not at the Redford address but at her boyfriend’s house in Detroit; the evidence, meanwhile—including the deposition testimony of both McCauley and Willis—suggested that McCauley had lived at the Redford address for over six years; that McCauley had her mail delivered to the Redford address; that McCauley’s driver’s license listed the Redford address; that McCauley paid Willis money for utilities and other household bills; and that, while McCauley had been spending the night “[m]aybe three to four times a week” at her boyfriend’s house in Detroit for approximately two years, she did not have her own bedroom or closet at her boyfriend’s house, did not pay her boyfriend any rent or utilities, and did not keep any clothes or personal necessities at her boyfriend’s house. Despite this evidence, Progressive moved for summary disposition, arguing that there was no question of fact that McCauley committed fraud in the procurement of the policy, and that, but for said fraud, Progressive would not have issued the policy. Progressive also argued that its policy specifically prohibited garaging vehicles at multiple addresses, and that McCauley could not be considered an innocent third party because she was a named insured on the policy. Ultimately, the trial court agreed with Progressive and granted its motion.
The Court of Appeals reversed the trial court’s summary disposition order, holding, first, that a question of fact existed as to whether Willis committed fraud when he listed his Redford address as the garaging address for McCauley’s vehicle. Given McCauley’s complicated living situation, a reasonable trier of fact could conclude that there was no fraud at all.
“We find that there is a genuine issue of material fact whether there was fraud in the inducement. Progressive’s motion for summary disposition was premised on its argument that Willis misrepresented where the vehicle was garaged when he completed the application for insurance. But Progressive did not provide a copy of the insurance application to the trial court. Without the application, there is no evidence of Willis’s alleged ‘misrepresentations’ or how ‘garaged’ is explained on the application. Further, the evidence and testimony reflect that McCauley lived at the Redford address for over six years, all her mail was delivered to the Redford address, her driver’s license listed the Redford address, and her wage and financial documents listed the Redford address. McCauley admitted that she periodically spent the night at her boyfriend’s Detroit home since 2020, but all her personal belongings remained at the Redford address in her bedroom. While she admitted that she spent the night at her boyfriend’s Detroit home as often as three or four times in a week, she testified that she could not put a firm number on how often she stayed overnight at his home because it varied. And Willis confirmed that it varied. Indeed, McCauley’s testimony is somewhat inconsistent. But sorting out the truth is a jury function. A trial court may not assess the truth or weigh the evidence in reviewing a motion under MCR 2.116(C)(10). Skinner v Square D Co, 445 Mich 153, 161; 516 NW2d 475 (1994). Moreover, Willis’s testimony demonstrates his confusion on the garaging issue: ‘Well, considering like I said, the person and the vehicle can move about as they please, what’s the time limit on where the vehicle is garaged[?]’ Willis explained that he included McCauley’s vehicle on the policy and used the Redford address because ‘she was staying here at the time and . . . is still staying here.’ Viewing the evidence and testimony in the light most favorable to McCauley as the nonmoving party, a reasonable trier of fact could conclude that Willis did not commit actionable fraud when he completed the application for insurance.”
The Court of Appeals held, second, that at the very least, a question of fact existed as to whether McCauley was an innocent third party. Progressive argued that McCauley could not be considered such because she was a named insured on the policy, “[b]ut did not support its statement with any case law or legal analysis.” Moreover, there was no evidence to suggest McCauley participated in any way in filling out the application or was aware of the information provided on it.
“Regardless of the information that Willis provided on the insurance application, there is no evidence that McCauley made any false representations to Progressive during the application process. Willis testified that he completed the application on his phone and that McCauley was not part of the application process. McCauley also testified that she was not part of the application process. Progressive did not present any evidence that McCauley participated in the application process. Progressive simply asserted in its motion for summary disposition that McCauley was not an innocent third party in the preprocurement fraud because she is a named insured on the subject policy. But Progressive did not support its statement with any case law or legal analysis. And Progressive has not provided any authority or elaborated its argument on appeal. . . .
Absent evidence that McCauley participated in the application process or knew that her brother made intentional misrepresentations in answering the questions on the application, a reasonable trier of fact could determine that she is an innocent third party. We find that there is a question of fact whether McCauley participated in the alleged preprocurement fraud or whether she is an innocent third party to Willis’s alleged misrepresentations.”
