Michigan Court of Appeals; Docket #250735; Unpublished
Judges Talbot, Whitbeck and Jansen; 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
CASE SUMMARY:
In this unanimous unpublished per curiam opinion, the Court of Appeals reversed judgment for defendants and entered an order reforming the no-fault insurance policy so that it would provide liability coverage for the statutory minimum of $20,000 per person/$40,000 per occurrence. This appeal was decided without oral argument. In this case, plaintiff insurance company sought to reduce defendant Wilson’s residual tort liability coverage from a $100,000 per person /$300,000 per occurrence policy to the statutory minimum policy providing $20,000 per person/$40,000 per occurrence, claiming Wilson failed to state on her application for insurance that an uninsurable driver, Drinkwine, lived in her household. Drinkwine was subsequently involved in an automobile accident while driving Wilson’s vehicle. A passenger was injured in the accident. In finding that plaintiff was entitled to reform the policy, the Court of Appeals recognized that although MCL 257.520(1) provides that a policy cannot be reformed or annulled after an accident even if there was fraud, MCL 257.520(1)(g) provides that excess or additional coverage is exempt from the protection afforded under paragraph (1). It then noted that in Lake States Ins Co v Wilson [RB #2018] another Court of Appeals panel ruled that a no-fault insurer is only entitled to reform a policy to revoke non-mandatory insurance if the fraud could not be easily ascertained. The Court of Appeals disagreed with the trial court’s conclusion that the fraud could have been easily ascertained. In this regard, the court said:
“There is no indication in the record that the two persons identified in the AUI search . . . actually lived with Wilson, so there is no basis to conclude that the discovery of these two names, or further investigation of their names, would have revealed that Wilson gave false information. Nor is there any indication that either of these two other persons were not insurable, such that their presence in Wilson’s household would have caused plaintiff not to issue a policy. More significantly, there is no reason to believe that further investigation of these other names would have led to information about Drinkwine. Thus, there is no basis for inferring a causal connection between plaintiff’s failure to further investigate the other two names revealed in the AUI search and its failure to discover that Drinkwine was a member of Wilson’s household. Therefore, the trial court erred in determining that Wilson’s misrepresentation was easily ascertainable. . . . Reversed and remanded.”
