First-party action under the No-Fault Act; Rescission of an insurance policy contract based on fraud in the procurement; Titan Ins Co v Hyten; Bazzi v Sentinel Ins Co; Oade v Jackson Nat’l Life Ins Co of MI; Reimbursement of the PIP benefits paid to plaintiff; Whether there was “unnecessary delay” on defendant-insurer’s part; Award of attorney fees & costs; MCL 500.3148(2)

The court held that the trial court properly rescinded the insurance policy contract for fraud in the procurement based on plaintiff-insured’s explicit denial that “he used his vehicle to carry passengers for a fee.” In light of the rescission, it was appropriate to grant defendant-insurer summary disposition of plaintiff’s claims, without regard to whether he “was driving for Uber at the time of the accident.” The court also held that reimbursement of the PIP benefits paid to him “was an appropriate remedy following rescission.” Finally, given that “the claim was fraudulent and defendant was the prevailing party,” it was properly awarded attorney fees and costs. Plaintiff unequivocally stated in his insurance application that “he was not using his vehicle to carry persons for a fee. This statement was not made by representations provided in bulk by defendant for plaintiff’s signature, but rather as a negative answer to one of 15 binary questions in the five-page application[.]” The court noted only the first element of common-law fraud, materiality, was disputed here. A litigation representative for defendant “stated in an affidavit that the ‘specific purpose’ of the application question was to allow defendant ‘to determine insurance eligibility… so that it can fully assess risk.’ She also stated, ‘Had [plaintiff] informed [defendant] in his Application that he was using his [vehicle] to carry persons for a fee . . . , [defendant] would have refused [his] request for insurance coverage because it creates a significantly higher risk to [it] as an insurer.’” While plaintiff characterized that “testimony as self-serving, he provides no evidence to refute it, only speculation on the interaction between the application question and the policy coverage exclusion.” The court concluded that because “defendant successfully established fraud in the procurement, and requested rescission, . . . [it] was ‘entitled to rescind the policy and declare it void ab initio[.]’” As to the reimbursement of PIP benefits paid, a review of the “time line discredits plaintiff’s contention defendant waited ‘years’ to seek rescission, and does not show ‘unnecessary delay’ on defendant’s part.” Lastly, the court held that the trial court properly awarded it attorney fees under MCL 500.3148(2). “Defendant was forced to defend against a claim pursued under a policy that was procured by fraud. Therefore, the award is within the range of reasonable and principled outcomes and was not an abuse of discretion.” Affirmed.