As a result of the team’s efforts throughout this prolonged and hotly contested litigation, the client avoided more than $7.2 million in potential exposure.
According to the complaint, the plaintiff sustained severe brain damage and physical injuries in an October 2016 motor vehicle accident. Though he was a healthy 18-year-old male at the time of the incident, he is now wheelchair bound and will require round-the-clock nursing care for the rest of his life.
Just three weeks before the accident, the plaintiff’s mother applied for automobile insurance, indicating that she owned a 2000 Ford Excursion Limited but no other vehicles when, in fact, she also owned and registered a 2003 Ford Taurus and a 2007 Ford Expedition. The client’s position was that the mother’s failure to disclose that information constituted a material misrepresentation in the application, which rendered the insurance policy null and void.
After the mother submitted a claim for no-fault benefits, the client discovered the misrepresentation and rescinded the policy and issued a premium refund check in accordance with the applicable law. The mother later brought suit, prompting Jim to file an initial motion for summary disposition on the grounds that there was no genuine issue of material fact regarding the misrepresentation and that the policy was properly voided ab initio. The presiding Wayne County Circuit Court judge denied the motion, finding that a question of fact remained as to whether the misrepresentations were “material.”
Subsequent deposition testimony from the underwriting manager and the insurance agency owner confirmed that the policy would not have been issued due to the carrier’s potential risk if one of the two unlisted vehicles were to be involved in an accident. Additionally, screenshots of the online application process clearly showed that had the mother stated that not all vehicles registered to her were listed on the application, coverage would have been refused.
Jim filed a second motion for summary disposition on January 8, 2018, reasserting that no genuine issue of fact existed as to the mother’s material misrepresentation and that the misrepresentation need not be intentional for the carrier to rescind the policy and deny coverage. This time, after an oral argument on April 5th, the court fully agreed with the carrier’s position and granted the motion.
Although the carrier was found to have rightly rescinded the policy, that doesn’t mean the plaintiff won’t receive benefits. A co-defendant insurance company will continue to reimburse costs for his medical treatment and ongoing care.