Michigan Court of Appeals; Docket #301431; Unpublished
Judges Stephens, Cavanagh, and Saad; Unanimous; Per Curiam
Official Michigan Reporter Citation: Not applicable; Link to Opinion
STATUTORY INDEXING:
Not applicable
TOPICAL INDEXING:
Reformation of Insurance Contracts Reformation for Misrepresentation
In this unanimous unpublished per curiam Opinion, the Michigan Court of Appeals affirmed the trial court order granting summary disposition in favor of defendant Farmers Insurance Exchange and holding that the provisions of MCL 500.3012 required that a Geico issued Mississippi auto policy be treated as a Michigan policy for purposes of payment of PIP benefits to Tamika Gordon.
Tamika Gordon sustained injuries in an automobile accident on May 19, 2009 while a passenger in an uninsured auto. At that time, she lived with her mother in Michigan, but previously from September 2007 to spring 2008, she lived with her father in Mississippi. She purchased an auto policy from Geico in May 2008 and stated at that time her primary residential address was in Mississippi. However, she gave Geico copies of her Michigan driver’s license and a vehicle registration that listed her mother’s address in Michigan. Ms. Gordon informed Geico that she would be traveling back and forth to Michigan, although she intended to transfer registration of her vehicle to Mississippi and her car would be garaged in Mississippi. Geico then issued a Mississippi auto policy, which was in effect until May 15, 2009. In 2008, Ms. Gordon returned to Michigan, but did not inform Geico of her move. In April 2009, she renewed her policy with Geico for the period beginning May 16, 2009. At that time, she did not specifically request Michigan no-fault coverage when she applied for coverage with Geico or when she renewed her policy. During the initial policy term, Ms. Gordon reported two losses to Geico under the policy, both of which occurred in Michigan.
After her accident on May 19, 2009, Geico paid the policy limit under the Mississippi issued policy in the amount of $1,000 for her medical expenses. The remainder of the claim was assigned to Farmers Insurance through the Assigned Claims Facility.
In the trial court, Geico disputed its obligation to pay PIP benefits. However, the trial court determined that Geico “knew or should have known” that Ms. Geico resided in Michigan, and therefore, Geico was a higher priority insurer under the Michigan no-fault statute. On appeal, Geico argued that it was not aware of Ms. Gordon’s move back to Michigan and, therefore, was not obligated to provide Michigan coverage under the Mississippi policy. Geico also claimed that Gordon “misrepresented” her residency to Geico.
In affirming the ruling against Geico, the Court of Appeals held that there was no proof on the record that Ms. Gordon knew at the time that she was applying for insurance that she would be moving back to Michigan. Therefore, Geico failed to establish any misrepresentation.
The Court of Appeals also ruled that pursuant to MCL 500.3012, the Mississippi policy must be treated as an insurance policy that complies with Michigan law. MCL 500.3012 states:
“Such a liability insurance policy issued in violation of sections 3004 through 3012 shall, nevertheless, be held valid but be deemed to include the provisions required by such sections, and when any provision in such policy or rider is in conflict with the provisions required to be contained by such sections, the rights, duties and obligations of the insured, the policyholder and the injured person shall be governed by the provisions of such sections.”
The court held that this statute, as interpreted in Farm Bureau v Allstate, 233 Mich App 38 (1998), required the policy be treated as a Michigan policy:
“It is evident that the basic purpose of § 3012 is to treat an insurance policy that an insurer issues purporting to be a Michigan policy that complies with Michigan law as such even if the written terms of the policy are inconsistent with Michigan Law. Farm Bureau, 233 Mich App at 41.”
The Court of Appeals held that the trial court found that because Geico knew or should have known that it was dealing with a Michigan resident, Geico must have issued a policy purporting to comply with the Michigan No-Fault Act, and therefore, that MCL 500.3012 applies and Geico is responsible to pay PIP benefits regardless of what the contract purported to provide.
In affirming the trial court, the court stated that the record is clear that Geico did know, or clearly should have known, it was dealing with a Michigan resident. Therefore, Geico would have issued an insurance policy to comply with her needs. Accordingly, the trial court’s determination in favor of Farmers was affirmed.
