Whether defendant-Progressive Michigan Insurance Company could rescind the policy ab initio as to the plaintiff-insured’s minor child; Titan Ins. Co. v. Hyten; Bazzi v. Sentinel Ins. Co.; Assigned Claims Facility (ACF)

On remand from the Michigan Supreme Court for reconsideration in light of Bazzi, the court held that the claim by the plaintiff-insured’s (Frost) minor child did not bar defendant-Progressive Michigan Insurance Company from rescinding the policy. It remanded for further proceedings because the trial court did not expressly rule on the grounds for rescission, which Progressive had to establish to prevail. Frost obtained a liability insurance policy from Progressive to cover her car in 4/10. The car was destroyed the next month. The following month after that, her child was injured in an accident while an occupant in an uninsured vehicle. The ACF assigned the child’s claim to intervening plaintiff-Citizens Insurance Company. Progressive informed Frost in 9/10 that her policy was rescinded ab initio, alleging that she procured it through fraud. Frost sued Progressive for reimbursement for losses incurred when her car was destroyed. Citizens intervened seeking reimbursement from Progressive for benefits Citizens had paid on behalf of Frost’s child. Citizens and Progressive filed cross-motions for summary disposition. The trial court granted Citizens’ motion and denied Progressive’s, finding that the accident occurred before Progressive tried to rescind the policy, “and that once the accident occurred, Progressive lost its ability to rescind as to” Frost’s child. The court previously vacated and remanded. The Michigan Supreme Court vacated that opinion and remanded for reconsideration in light of Bazzi. After reviewing Bazzi, the court noted it previously determined that the trial court’s ruling was inconsistent with the Supreme Court’s holding in Hyten. The Supreme Court there concluded that “absent statutory provisions to the contrary, ‘an insurer is not precluded from availing itself of traditional legal and equitable remedies to avoid liability under an insurance policy on the ground of fraud in the application for insurance, even when the fraud was easily ascertainable and the claimant is a third party.’” The court now found that its prior decision was consistent with and adhered to the majority decision in Bazzi. Vacated and remanded.