Michigan Court of Appeals; Docket #281624; Published
Judges Saad, Bandstra, and Hoekstra; unanimous; per curiam
Official Michigan Reporter Citation: 283 Mich. App. 636, Link to Opinion 
STATUTORY INDEXING:
One-Year Back Rule Limitation [3145(1)]
TOPICAL INDEXING:
Not applicable
CASE SUMMARY:
In this unanimous published per curiam opinion, the Court of Appeals held that even though defendant Wausau Insurance Company’s adjuster may have made a fraudulent misrepresentation regarding the availability of additional PIP benefits for plaintiff’s care, plaintiff cannot establish a claim for fraudulent misrepresentation in order to circumvent the one-year-back rule under MCL 500.3145(1) because the adjuster’s misrepresentation did not involve information or facts exclusively within the adjuster’s control, and plaintiff could have consulted with an attorney at any time to determine the truth of the adjuster’s claim.
In 1983, plaintiff’s legally incapacitated person, Nancy Eastman, who was then 10 months old, sustained severe brain injuries in a motor vehicle accident. Defendant Wausau began paying the incapacitated person’s guardian $20 per day for her care. The guardian claimed she repeatedly called defendant regarding whether she was entitled to additional benefits for the incapacitated person’s care. The adjuster told the guardian that defendant had paid everything it was going to pay.
In 1990, plaintiff took over Eastman’s care for which she also received $20 per day. Subsequently, the payment was increased to $21 per day. Plaintiff asked about the increase and defendant’s adjuster stated it was a cost-of-living adjustment. There was no evidence that plaintiff ever asked if she was entitled to receive additional benefits for Eastman’s care. The adjuster stated that he never advised either caregiver regarding their entitlement to attendant care benefits because he believed those benefits made the care of a disabled person a job.
In 2006, plaintiff sued defendant for breach of contract and later amended the complaint to include a claim for fraud or fraudulent misrepresentation. The trial court granted defendant’s motion for partial summary disposition, finding that plaintiff failed to support a claim for fraudulent misrepresentation and, therefore, it refused to exercise its equitable power to void application of the one-year-back rule.
On appeal, the Court of Appeals noted that in Cooper v Auto Club Insurance Association, 481 Mich 399; 751 NW2d 443 (2008), the Michigan Supreme Court held that because the one-year-back rule of §3145(1) only applies to actions brought under the No-Fault Act, and because a fraud action is not a no-fault action, but instead is an independent and distinct action for recovery of damages payable under the common law for losses incurred as a result of the insurer’s fraudulent conduct, a common law cause of action for fraud is not subject to the one-year-back rule. However, the Supreme Court also cautioned that because some insureds may try to circumvent the one-year-back rule by claiming fraudulent misrepresentation, trial courts should use caution when evaluating these claims. Moreover, the Supreme Court instructed that insureds must show that their reliance on the insurance company’s representation was reasonable. Based on the holding in Cooper, the Court of Appeals determined that if the adjuster was not truthful about the benefits owed to the caregivers, plaintiff did not establish that either she or the first caregiver relied upon the fraudulent misrepresentation. According to the court, the representation did not involve information that was exclusively in defendant’s control. The caregivers had other means of ascertaining the benefits available, such as contacting an attorney, which plaintiff eventually did. Furthermore, the court pointed out that defendant did not prevent the caregivers from contacting an attorney. Because the plaintiff could have determined what rights were available, plaintiff failed to assert a claim for fraudulent misrepresentation and, therefore, the one-year-back rule barred the claim for benefits accrued before July 20, 2005. In this regard, the court stated:
“[T]he Supreme Court, in Cooper v Auto Club Ins Ass’n, 481 Mich 399; 751 NW2d 443 (2008), specifically addressed whether an action for fraud is subject to the one-year-back rule of MCL 500.3145(1). . . .
The Court clarified that, because a fraud claim is separate from a no-fault claim, a court does not need to invoke its equitable power in the fraud action to avoid application of the one-year-back rule. . . . ‘[T]he no-fault rules simply do not apply’ to the fraud claim. . . .
However, the Supreme Court cautioned that, because some insureds may attempt to circumvent the one-year-back rule by asserting a common-law fraud claim against an insurer, ‘trial courts should exercise special care in assessing these types of fraud claims.’ . . . Regarding the reliance element of fraud, the Court stated:
‘In particular, courts should carefully consider in this context whether insureds can satisfy the reliance factor. Insureds must “show that any reliance on [the insurer’s] representations was reasonable.”’. . .
Even assuming that Abdey made a fraudulent misrepresentation when he, in response to Bencheck’s inquiries about additional benefits, told her that additional benefits were not available to her or when, in the absence of such an inquiry, he failed to inform Bencheck and plaintiff that additional benefits were available to them, plaintiff cannot establish that either she or Bencheck relied upon the fraudulent misrepresentation. Abdey’s representation did not involve information or facts that were exclusively or primarily in the control of defendant. Rather, Abdey’s misrepresentation concerned what benefits were available to plaintiff and Bencheck for their care of Eastman under the no-fault act. Plaintiff and Bencheck had means, i.e., consultation with a lawyer, to determine whether Abdey’s representation was true. Indeed, soon after plaintiff learned that additional benefits might be available for her care of Eastman, she consulted a lawyer and the present case was initiated soon thereafter. Plaintiff does not claim, nor is there even the slightest hint of evidence, that defendant in any way prevented her or Bencheck from determining the truthfulness of Abdey’s representation. Because plaintiff and Bencheck had the means to determine the accuracy of Abdey’s representation, plaintiff is not able to establish that either she or Bencheck relied on Abdey’s representation. Accordingly, plaintiff’s claim for fraud fails.
Because plaintiff cannot establish a claim for fraud and because the one-year-back rule bars plaintiff’s no-fault claim for benefits that accrued before July 20, 2005, the trial court did not err in granting defendant’s motion for partial summary disposition. We therefore affirm the trial court’s order granting the motion.”
