August 17, 2021
In a recent, unpublished, decision, Losinski v Progressive Marathon Insurance Company, (Unpub, COA No. 355047, 7/29/21), the Court addressed a fraud provision in Progressive’s policy. The PIP action rose from a car accident that occurred in December of 2018. Plaintiff, Amy Losinski obtained her original policy of insurance from Progressive in 2011, and automatically renewed it every six (6) months.
Plaintiff testified that she obtained the insurance policy in 2011 when she lived in Grosse Pointe Woods. Around 2013 she moved from Grosse Pointe Woods to Macomb Township and, she updated her address with Progressive in May 2013. Plaintiff then moved from Macomb Township to St. Clair Shores in 2015 or 2016, and moved again from St. Clair Shores to Harper Woods in 2017. She lived in Harper Woods at the time of the accident. However, while Plaintiff added a vehicle to the insurance policy in May 2018 prior to the accident, she failed to update her address with Progressive: her policy at the time of the accident reflected her old address in Macomb Township.
Plaintiff’s policy with Progressive contained language outlining the insured’s duty to report changes, penalties for fraud or misrepresentation, and denial of the insured’s ability to sue the insurer if all provisions of the policy of insurance were not met. The insured’s duties to inform Progressive included changes to mailing, residential, and garaging address of the vehicle covered by the policy. Progressive filed a Motion for Summary Disposition pursuant to MCR 2.116(C)(10) on the grounds that Plaintiff had made a material misrepresentation. The Motion was granted, and this appeal by Plaintiff followed.
The Court found there was a genuine issue of material fact as to whether Plaintiff committed pre-procurement fraudulent misrepresentation or silent fraud. Ultimately, however, the Court of Appeals affirmed the dismissal of Plaintiff’s claims, relying on Plaintiff’s pre-procurement innocent misrepresentation and Plaintiff’s failure to comply with all the terms of the insurance policy. Specifically, the Court noted that each renewal of a contract is a separate and distinct contract, and Plaintiff failed to inform Progressive of her change of address from Macomb at the time of her renewals, and failed to inform Progressive of the proper address for garaging her added vehicle.
In Roberts v Saffell, 280 Mich App 397;760 NW2d 715 (2008), aff’d 483 Mich 1089 (2009), the Court established that innocent misrepresentation can be shown when the insurer relies on the false representation in such a way that the party making the misrepresentation benefits from it, so long as a contract of insurance exists between the two. Here, Plaintiff added a vehicle to her policy with Progressive, knowing that her reported residential and garaging address was false. The Court found Progressive detrimentally relied on that representation because it continued covering Plaintiff at a lower premium than it otherwise would have. Privity of contract existed between the two by virtue of the insurance policy in which Plaintiff was the named insured. Thus, Plaintiff committed innocent misrepresentation in the procurement of her contract renewals in violation of the terms of the insurance policy.
The Court further found Plaintiff failed to comply with the contractual terms of the policy which imposed a duty on the insured to notify the insurer of changes to her addresses and stated that she could not sue her insurer without fully complying “with all the terms of [the] policy”.
Judge Gleicher issued a dissent, in which she disagreed with the majority’s interpretation of the Michigan Supreme Court’s ruling in Meemic v Forston, 506 Mich 287; 954 NW2d 115 (2020). Judge Gleicher stated that Meemic stands for the proposition that anti-fraud provisions in contracts for no-fault insurance are only valid regarding fraudulent statements made at the inception of the policy of insurance. She opined that renewals are not new contracts of insurance and thus any misrepresentations made after the original procurement of the policy are “post-procurement” misrepresentations. Under the dissent’s analysis, only statements made by the insured at the time of the inception of the original contract for insurance could be used to enforce rescission based on the anti-fraud provisions of an insured’s contract for insurance.