Action seeking PIP benefits; Contract interpretation; Rory v. Continental Ins. Co.; Whether the insurance policy included a fraud provision; Whittlesey v. Herbrand Co.; Forge v. Smith; Fraud; Bahri v. IDS Prop. Cas. Ins. Co.; Distinguishing Haydaw v. Farm Bureau Ins. Co.

The court held that the trial court properly granted defendant-insurer summary disposition of plaintiff’s claim for PIP benefits. Plaintiff sued defendant seeking to recover payment of PIP benefits for injuries he sustained in an auto accident. The trial court granted defendant’s motion for summary disposition, finding plaintiff’s statements to defendant were material and false as demonstrated by surveillance evidence that contradicted his testimony, that he knew his statements were false, and that they were made intending for defendant to rely on them. On appeal, the court found the evidence showed that “plaintiff’s representation about his need for wage-loss benefits because he could not perform all of his job functions after the accident was untrue.” Plaintiff claimed he “could not pay himself the $800 per week after the accident like he had before the accident—and therefore required wage-loss benefits—because he could perform only the managerial aspects of his job and not the heavy-lifting aspects.” But defendant’s surveillance showed plaintiff “could, and in fact did, perform the heavy-lifting aspects of his job.” In addition, “Haydaw does not control this case, and the trial court correctly determined that reasonable minds could not differ with regard to the fact that plaintiff had made misrepresentations about his need for wage-loss benefits.” The misrepresentation was “material because it was reasonably relevant to defendant’s investigation of plaintiff’s claim for benefits. Reasonable minds could not differ with regard to the fact that plaintiff knew that his representation was false, or made it without knowledge of its truth, because he was the one performing the same functions of his job that he did before the accident while claiming a need for wage-loss benefits.” Further, “reasonable minds could only conclude that plaintiff made the misrepresentation with the intent that defendant pay him wage-loss benefits.” In sum, because reasonable minds could not disagree that defendant “established all of the elements in Bahri, defendant had the contractual right to deny coverage on plaintiff’s claim based on plaintiff’s misrepresentations pursuant to the fraud exclusion in plaintiff’s policy.” Affirmed.