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Volume XXVIII, No. 26, September 23, 2016 

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

From the Editor: Sarah Nadeau

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CONTINUED, AND EXPANDED,
APPLICATION OF THE BAHRI DECISION

By Paul Gipson

It has been almost two (2) years since Bahri v IDS Prop Cas Ins Co, 308 Mich App 420; 864 NW2d 609 (2014) app den 498 Mich 879; 868 NW2d 910 (2015).  Since that time, a handful of decisions have come out of the Court of Appeals that interpret Bahri.  The most recent case is the unpublished decision of Ward v State Farm Mut Auto Ins Co, ___NW2d___; 2016 Mich. App. LEXIS 1719 (Ct App, Sep. 15, 2016).

In Ward, defendant filed four (4) motions for summary disposition.  The first motion related to wage loss.  Plaintiff testified that she had to quit her job as a result of a September 29, 2013 motor vehicle accident.  Plaintiff’s work records showed that she was fired due to non-compliance with regulations and attendance issues.  This motion was granted.

The second motion related to plaintiff’s claims for daily attendant care and replacement services, including house cleaning.  Plaintiff admitted that she did not need attendant care.  Plaintiff’s service provider testified that she never cleaned plaintiff’s house.  This motion was granted.

The third motion related to plaintiff’s last remaining no-fault benefit – medical expenses.  Defendant argued that it was secondary to plaintiff’s BlueCross BlueShield health insurance and that plaintiff failed to show there were any medical expenses not already paid by BCBS.  Plaintiff proffered evidence of copayments not covered by BCBS.  This motion was not granted.

The fourth motion for summary disposition was based on Bahri.  Defendant asserted that plaintiff made false representations about replacement services and wage loss.  As stated, above, plaintiff’s replacement service claim was dismissed based on the service provider’s testimony that she did not clean plaintiff’s house as plaintiff had claimed.  Defendant further argued that plaintiff’s entire claim, including medical, should be dismissed based on plaintiff’s false representations that voided the policy ab initio. This motion was granted and plaintiff’s case was dismissed.  Plaintiff appealed.

The Court of Appeals decided this case based on the enforcement of the applicable policy of insurance as a contract, only.  The policy read as follows:

“There is no coverage under this policy if you or any other person insured under this policy has made false statements with the intent to conceal or misrepresent any material fact or circumstance in connection with any claim under the policy.”

Plaintiff argued that the rescission of the policy was an equitable remedy and that common law fraud was the standard that should have been applied by the trial court.  Plaintiff further argued that defendant never proved the common law requirement of reliance.  The Court found that there was no need to evaluate the common law requirement of reliance as the applicable policy of insurance did not require a “fraudulent” statement, but merely a “false statement with the intent to conceal or misrepresent any material fact…”  Furthermore, the policy did not require reliance by defendant.

The Court of Appeals distinguished this case from Bahri based upon the differing language in the insurance policies.  In Bahri, the policy used “fraudulent statements or fraudulent conduct” language.  In Ward, the policy did not include the term “fraudulent.”  The Ward Court concluded: “[r]egardless, the bottom line is that even when a policy requires a showing of fraud to bar coverage under the contract, no reliance is required.”

Plaintiff next argued that the trial court improperly made a credibility determination when it credited the service provider’s testimony over that of the plaintiff when determining whether plaintiff had the necessary “intent.” The Court of Appeals agreed that the trial court was not permitted to assess credibility or determine facts on a motion for summary disposition.  The Court stated, however, that “it is clear that reasonable minds would find this blatant inconsistency fatal to plaintiff’s claim.”  This was sufficient to support the motion for summary.

The Court of Appeals then discussed plaintiff’s false wage loss representations.  The Court noted that plaintiff’s testimony regarding the accident forcing her to quit her job was directly refuted by “clear documentary evidence” that she was fired due to performance.  Again, the Court found that no reasonable minds could differ on the conclusion that plaintiff made a false statement with the intent to conceal a material fact from defendant in relation to her wage-loss claim.  In other words, the service provider testimony related to replacement services and the documentary evidence related to wage loss both independently warranted dismissal.

Many plaintiffs argue that the misrepresentations made were “innocent” and that a trial court does not have the ability to make the factual determination of “intent.”  As stated in Bahri and affirmed in Ward, it would appear the trial court can make this determination of intent if reasonable minds cannot differ in light of evidence that clearly contradicts a plaintiff’s assertion related to a no-fault benefit.

Finally, the Court of Appeals determined that when a false representation was made in connection with any claim under the policy, all coverage was forfeited, including medical.  In summary, Ward supports the proposition that a policy of insurance is enforceable as written without direct consideration of the elements of common law fraud.  Ward also provided further guidance on the type of evidence that can be used when evaluating whether there is the requisite intent.

 

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REGISTER NOW

BUCKEYE SEMINAR

The Buckeye Seminar will take place on
Thursday, October 13, 2016,
at  the Greater Columbus Convention Center.

This is a complimentary seminar for our clients.

Click HERE  for a seminar agenda.

 

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BASICS OF MICHIGAN AUTOMOBILE
NO-FAULT INSURANCE LAW COURSE

 Garan Lucow Miller, P.C. is pleased again to offer this in-depth,
educational course to our clients.  It will be taught each Tuesday evening,
from September 27, 2016 through November 22, 2016, from 6:00 p.m. to 8:00 p.m.

In an effort to facilitate our clients in the Detroit metro area,
the course will be held at the DoubleTree by Hilton,
located at 42100 Crescent Blvd. Novi, MI 48375.

The cost of the 9 week course is $350.00 per person,
with a discount of $50.00 per person
for more than 2 registrants from the same company.

Click HERE  for an agenda.

 

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RIVALRY SEMINAR

The Rivalry Seminar will take place on
Friday, October 28th,
at the Kellogg Hotel & Conference Center in East Lansing, Michigan.

This is a complimentary seminar for our clients.

Click HERE  for a seminar agenda.

 

Please contact Eileen Carty to register at ecarty@garanlucow.com or 248-641-7600.