No-fault action; Mutual rescission of a policy; Tuomista v Moilanen; Young v Rice; Wall v Zynda; Distinguishing Green v Meemic Ins Co (Unpub)

Given that there was no evidence that plaintiff-insured (Smith) “used or ‘cashed’ the money refunded to her,” the court concluded that reasonable minds could differ as to whether she consented to the rescission of her no-fault policy with defendant-Auto Club Group. Thus, the trial court did not err in denying Auto Club’s summary disposition motion. Smith was involved in an auto accident and had a policy with Auto Club at the time. Sometime before this action was filed, Auto Club “discovered what it claimed constituted a discrepancy between addresses listed in Smith’s application for the insurance policy and the address listed as Smith’s on the police report of the accident. Defendant considered this a material misrepresentation or false information and sent Smith a letter of rescission.” In addition, it refunded her premium via “an electronic funds transfer (EFT), which automatically refunded the premium to Smith’s credit card.” Auto Club argued on appeal it was entitled to summary disposition because there was no material question of fact that a “mutual rescission occurred because Smith admitted to receiving the letter of rescission, acknowledged receiving the premium refund, and did not return the refund to defendant. However, defendant’s characterization of the ‘facts’ is not an accurate representation of the testimony. While Smith admitted to receiving the letter of rescission, acknowledged receiving the premium refund, and did not return the refund to defendant, Smith testified that she set the refunded money aside and did not use it.” While Auto Club cited unpublished cases in which mutual rescission was found, in each of them, the insurer “refunded the premium in the form of a check and the insured endorsed and cashed the check.” For example, unlike in Green, Auto Club here “sent the funds back to Smith via an EFT.” In light of Smith’s testimony that she did not use the funds but instead set them aside, her “conduct did not clearly indicate a ‘mutual understanding that the contract [was] abrogated or terminated’ or acquiescence to” Auto Club’s rescission of the policy. Affirmed.