Policy rescission; Mutual rescission; Young v. Rice; Wall v. Zynda

The court held that material fact questions precluded summary disposition for defendant-insurer (Meemic) on material misrepresentation grounds. But the trial court “incorrectly rejected Meemic’s rescission defense by reasoning that Meemic failed to present ‘sufficient evidence that’” plaintiff-Green had actually received the rescission letter when she deposited the refund check. Almost one year after Green and plaintiff-Collins filed this first-party no-fault action, Meemic sought to rescind the policy. “Meemic sent a letter to Green’s mother, the named insured, declaring the policy rescinded and enclosing a refund check for the full amount of the premiums paid. Green endorsed the check and deposited the proceeds on her mother’s behalf. By doing so, Green and her mother consented to the rescission, thereby releasing Meemic from its contractual obligations. This meant that no insurance coverage existed at the time of plaintiffs’ accident.” The court noted that Meemic presented the trial “court a copy of the letter it sent to Green’s mother.” Once it produced “evidence of having mailed the letter and the check, Green bore the burden of coming forward with evidence refuting Meemic’s claim.” Green did not present “evidence that the letter and enclosed check went undelivered to their intended recipient: her mother. Her affidavit does not include a denial that the letter arrived.” She admitted to depositing the check. “Meemic’s letter explained in detail the reasons it sought to rescind the no-fault policy, and Meemic tendered a check for the premiums Green had paid. By signing the premium refund check, Green signaled her acquiescence to the policy’s rescission.” This evidence compelled “the determination that Green and Meemic mutually agreed to rescind the no-fault policy under which plaintiffs sought benefits, extinguishing their claims.” The court held that by “refunding the premiums Green or her mother had paid, Meemic restored the status quo. As the contract was legally and mutually rescinded, plaintiffs no longer had any ground to pursue their lawsuit against Meemic.” Reversed.