The No-Fault Act; Survivor’s benefits; Policy rescission based on a material misrepresentation in an insurance application; Fraud; Innocent misrepresentation; Whether the equities had to be balanced; Pioneer State Mut Ins Co v Wright; Whether plaintiff-personal representative (PR) qualified as an innocent third party; Van Dyke Spinal Rehab Ctr, PLLC v USA Underwriters; Return of premiums paid; Attempt to distinguish between mutual & equitable rescission; Application signature

While the court agreed with plaintiff-PR that the trial court had to determine whether defendant-insurer “returned the premiums paid before ratifying defendant’s rescission of the” no-fault policy at issue, it found no error as to her other arguments challenging summary disposition for defendant. Plaintiff sought to recover survivor’s benefits from defendant after the decedent-insured’s (Ericka) death. Ericka was struck by vehicles while a pedestrian. Defendant argued “it was entitled to equitably rescind the policy because Ericka materially misrepresented that she was the only household member at the address indicated on the” insurance application. The court concluded there was “no genuine issue of material fact that Ericka at least committed innocent misrepresentation. Ericka represented on her application that she was the sole resident at the Farmington Road address, which was false, because she lived with her children and grandchild at the time. Further, defendant submitted an affidavit by” its manager of underwriting investigations (S) stating “that defendant relied upon Ericka’s representation and extended insurance coverage based upon her ‘representation that she was the only person living at the Policy Address.’ [S] also provided that the insurance premium would have increased by $227.50 had defendant known about the additional household members, making the representation a material one. Under these circumstances, it was permissible for defendant to declare the policy void ab initio based on the fraudulent manner that it was acquired.” Among other things, the court also determined that plaintiff did “not qualify as an innocent third party because she did not suffer a physical or financial injury. Because [her] claims are derivative of Ericka’s, she is not entitled to no-fault benefits, and the trial court was not required to conduct the balancing test . . . .” But the court was “unconvinced by defendant’s attempt to distinguish between mutual and equitable rescission in” regard to the return of premiums. It “remanded for the trial court to determine whether a refund check was returned, received, and negotiated by the parties.” Affirmed in part, reversed in part, and remanded.