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Volume XXVI, No. 23, October 22, 2014      

From the Law Offices of Garan Lucow Miller, P.C.

From the Editor: Sarah Nadeau 

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Fraud Exclusion In A No-Fault Automobile Policy Bars A Plaintiff’s

Entire PIP Claim At The Summary Disposition Stage Where The Plaintiff Engaged In Fraudulent Conduct In Connection With Her PIP Claim

By

CARYN FORD

In Bahri v IDS Prop Cas Ins Co, No 316869 (Mich App 2014), the Michigan Court of Appeals recently issued an opinion affirming the trial court’s order granting summary disposition in favor of Defendant IDS Property Casualty Insurance Company on the basis that the Plaintiff’s claim, as well as the Intervening medical provider’s claims, were barred due to fraudulent conduct engaged in by Plaintiff regarding her claim for PIP benefits.

Plaintiff maintained a policy of Michigan No-Fault automobile insurance with IDS.  The no-fault policy contained a general fraud exclusion, which provided:

We do not provide coverage for any insured who has made fraudulent statements or engaged in fraudulent conduct in connection with any accident or loss for which coverage is sought under this policy.

Plaintiff was involved in two car accidents, one on March 4, 2011, and the second on October 20, 2011.  IDS insured Plaintiff for the second accident; another insurer had paid PIP benefits to Plaintiff for the first accident.  With respect to the second accident, Plaintiff claimed there was a phantom vehicle coming towards her vehicle which caused Plaintiff to hit another car.  Following the October 20, 2011 accident, Plaintiff sought PIP and uninsured motorist benefits from Defendant.

Plaintiff’s PIP claim included a claim for replacement services allegedly provided daily to Plaintiff from October 2011 to February 29, 2012.  Surveillance video, however, captured Plaintiff bending, lifting, driving, and running errands the same days she claimed she needed assistance with those types of activities.  Moreover, Plaintiff submitted claims for replacement services for the entire month of October even though the accident did not occur until October 20, 2011.

The trial court granted defendant’s motion for summary disposition on the basis that Plaintiff’s PIP claim was barred because of her fraudulent representations and that under the plain terms of the policy no uninsured motor vehicle was involved because the phantom vehicle did not strike Plaintiff’s vehicle.  Since the intervening medical providers stood in the shoes of Plaintiff, the trial court held that they were not entitled to receive PIP benefits as well.

Plaintiff’s PIP claim included a claim for replacement services allegedly provided daily to Plaintiff from October 2011 to February 29, 2012.  Surveillance video, however, captured Plaintiff bending, lifting, driving, and running errands the same days she claimed she needed assistance with those types of activities.  Moreover, Plaintiff submitted claims for replacement services for the entire month of October even though the accident did not occur until October 20, 2011.

The trial court granted defendant’s motion for summary disposition on the basis that Plaintiff’s PIP claim was barred because of her fraudulent representations and that under the plain terms of the policy no uninsured motor vehicle was involved because the phantom vehicle did not strike Plaintiff’s vehicle.  Since the intervening medical providers stood in the shoes of Plaintiff, the trial court held that they were not entitled to receive PIP benefits as well.

Intervening Plaintiffs timely filed a claim of appeal.  No appeal was filed on behalf of the actual Plaintiff.  The Court of Appeals agreed that the fraud exclusion applied in this case.  The Court concluded that Plaintiff’s document for replacement services from October 1, 2011 to February 29, 2012 was false on its face since the accident did not occur until October 20, 2011.  The Court reasoned that Plaintiff was seeking recoupment for services that were performed before the accident.

The Court of Appeals further determined that the surveillance evidence depicted Plaintiff performing activities inconsistent with her claimed limitations.  For instance, surveillance captured Plaintiff performing various activities such as lifting, carrying, and dumping a large bucket of liquid in her yard, as well as running several errands over an eight hour period.  The same day the surveillance was taken Plaintiff claimed she needed help with tasks involving bending, lifting, carrying objects, running errands, and driving.

Ultimately, the Court of Appeals determined that the “evidence belies plaintiff’s assertion that she required replacement services, and it directly and specifically contradicts representations made in the replacement services statements.”  As such, the Court of Appeals held that reasonable minds could not differ that Plaintiff made fraudulent representations for purposes of recovering PIP benefits.  Since the Plaintiff’s claim for PIP benefits was barred, the intervening medical providers’ claim for PIP benefits was also barred.

The Court of Appeals further addressed the merits of Plaintiff’s claim for uninsured motorist benefits, even though she was not a party to the action and the Intervening Plaintiffs had no UM claim.  The Court of Appeals held that the plain language required some sort of physical contact with the phantom vehicle in order for UM coverage to be triggered.  Since the Plaintiff made no direct or indirect physical contact with the phantom vehicle, no UM coverage was owed.

This decision provides authority to support an argument that an entire claim for PIP benefits can be barred at the summary disposition stage if the insurer engaged in fraudulent conduct in connection with her claim and the policy contains a similar fraud exclusion.

 

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Evidence Of An Insurance Policy’s Uninsured Motorist Bodily Injury Policy Limit Was Not Relevant At Trial, And Was Prejudicial

By

GREG BOKOTA

In a case of first impression in Indiana, the Indiana Court of Appeals held that evidence of an insurance policy’s uninsured motorist (UM) bodily injury policy limit was not relevant at trial, and in fact was prejudicial.  In State Farm Mutual Automobile Insurance Company v. Earl, 3 N.E.3d 1009 (Ind.Ct.App. 2014) an insured and the estate of the deceased insured brought an action against State Farm seeking to recover UM benefits. The Circuit Court, Jackson County, entered judgment on a jury verdict in favor of the insureds.  The judgment was for $250,000, the exact amount of UM coverage provided by the State Farm policy.

Before the trial began, State Farm filed a motion in limine, asking the trial court to exclude any evidence about the amount of UM coverage available to the insureds, arguing that the limit was irrelevant and prejudicial. The trial court denied the motion.  On appeal, the Court of Appeals acknowledged that in some circumstances, evidence of UM insurance limits is clearly relevant, but in this case, the sole issue for the jury was the amount of damages caused to the insured by the uninsured motorist.  When the only issue to be determined was damages, the Court found that evidence of the bodily injury limit in the insureds’ policy was irrelevant to the issue being decided.

State Farm also argued that it was prejudiced by the introduction of the bodily injury limit in the insureds’ policy.  The jury was presented with evidence that the coverage limit for bodily injury was $250,000.  The jury awarded exactly $250,000 in damages.  The Court of Appeals found that the trial court erred when it allowed the introduction of evidence concerning the bodily injury limit.

It should be noted that this was a 2-1 decision with a vigorous dissenting opinion based on two older cases which had addressed the question as a collateral issue –  Malott v. State Farm Mutual Automobile Insurance Company, 798 N.E.2d 924 (Ind.Ct.App. 2003) and Allstate Insurance Company v. Hammond, 759 N.E.2d 1162, (Ind.Ct.App. 2001).  The Indiana Supreme Court has accepted transfer of this matter and is now considering whether to affirm the Court of Appeals’ decision in Earl.  Until the Supreme Court reaches its decision, the Earl case is not binding precedent.

 

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REGISTER NOW!

BUCKEYE SEMINAR

October 23, 2014

GREATER COLUMBUS CONVENTION CENTER

8:30 – 9:00 a.m.      CONTINENTAL BREAKFAST / REGISTRATION

9:00 – 9:05 a.m.      WELCOME AND INTRODUCTION

Speaker: SUSAN M. WILLIAMS, ESQ.

 

9:05 – 9:50 a.m.      2014 NO-FAULT LAW UPDATES

Speaker: SAMANTHA E. DRAUGELIS, ESQ.

 

9:50 – 10:35 a.m.    TIPS & STRATEGIES IN DEFENDING PROVIDER SUITS:

                             CLAIMS THROUGH TRIAL

Speaker: MARK L. NAWROCKI, ESQ.

 

10:35 – 11:05 a.m.  HOME MODIFICATION & TRANSPORTATION AGREEMENTS:

                             MCCA REQUIREMENTS POST ADMIRE

Speaker: SUSAN M. WILLIAMS, ESQ.

Speaker: TARA L. VELTING, ESQ.

 

11:05 – 12:00 p.m.  DEPOSITIONS OF CLAIM STAFF:

                             WHY WOULD YOU? HOW COULD YOU?

                             Speaker: JOHN W. WHITMAN, ESQ.

 

12:00 – 12:30 p.m.  QUESTION & ANSWER SESSION

                             RETURN EVALUATION FORMS

 

Comprehensive written materials will be distributed to all program attendees.

To register: contact Eileen Carty: ecarty@garanlucow.com

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Garan Lucow Miller

is hosting a U of M Tailgate

U of M v Indiana

When:       Saturday, November 1, 2014
Game Time: 3:30 pm
Tailgate starts: 12:00 pm (Noon)

 

Where:      Michigan Stadium
1201 South Main Street
Ann Arbor, MI 48104

 

Tailgate Location:      Hospitality Area C
Enter off of West Stadium Blvd -     Gate 1

 

Tailgate does NOT include tickets to the game

AT THE TAILGATE THERE WILL BE A RAFFLE FOR 2 SETS (2 TICKETS EACH) FOR THE UPCOMING

U OF M v MARYLAND GAME ON SATURDAY, NOVEMBER 22, 2014

Please RSVP to Eileen Carty at ecarty@garanlucow.com

 Hope you can join us!

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