When a policyholder misrepresents where an insured vehicle is garaged, the insurance carrier is entitled to void the policy ab initio and properly deny coverage for any first-party no-fault benefits.
The plaintiff applied for a no-fault automobile insurance policy with Everest in May 2014. On the application, he listed an address in Charlotte, Michigan, as his residence and the location at which the automobile was garaged, and stated that he was the only member of his household over the age of 14. In August 2014, the plaintiff was involved in a motor vehicle accident in Warren, Michigan, and later applied to Everest for benefits in October 2014, listing a Detroit residence as the garaging address.
At his deposition, the plaintiff testified that at the time he applied for the insurance policy, he was planning to move to Charlotte to live with his girlfriend, her mother, and her minor son, but in fact, never permanently relocated from the Detroit address, which was his grandmother’s home. Had the plaintiff listed the Detroit address and named his grandmother as a member of his household as opposed to the address in Charlotte, Everest would have charged a substantially increased premium.
Based on the discrepancies between the two addresses and the misrepresentations in the plaintiff’s insurance application, Everest rescinded his policy and refunded his premium.
In response to a first-party complaint filed in Wayne County Circuit Court seeking no-fault benefits, Adam Post filed a motion for summary disposition on behalf of Everest to dismiss the lawsuit, arguing that no genuine issue of material fact existed as to the plaintiff’s misrepresentation of his garaging address and household members.
The lower court denied the motion in November 2016, after which Amy Applin prepared an application for leave to appeal requesting that the Michigan Court of Appeals either peremptorily reverse the trial court or grant the application and proceed to a full interlocutory appeal ahead of the trial scheduled for March 2017.
In an extremely rare move, the appellate court chose to peremptorily reverse the lower court, agreeing with Everest’s position that there was no factual issue for trial regarding the misrepresentation. The ruling not only dismissed the plaintiff’s first-party action but also dismissed multiple derivative claims filed by health care providers who had either treated or extended medical services to the plaintiff.
The defense victory was substantial. Initial demands by the plaintiff and providers exceeded $1.25 million (the plaintiff himself sought nearly $935,000), and the combined case evaluation awards were more than $310,000 – all of which were reduced to zero in light of the Court of Appeals’ decision.