PIP benefits; Rescission; Bazzi v Sentinel Ins Co; Pioneer State Mut Ins Co v Wright balancing test; Real party in interest; MCR 2.201(B)(1); Applicability of res judicata; C-Spine Orthopedics, PLLC v Progressive MI Ins Co; Survivor’s benefits; MCL 500.3108; Jurisdiction & mootness

The court concluded “that the trial court committed no reversible error” and affirmed the (1) 11/4/21 order granting summary disposition to defendant-USA Underwriters, (2) 5/31/23 order granting defendant-Farmers partial summary disposition, (3) 8/22/23 order denying plaintiffs-children’s motion to reinstate the USA policy, and (4) 1/12/24 order granting Farmers summary disposition. The case arose “from the death of the decedent, Brianna C. Hendrix, and the subsequent attempt to recover no-fault benefits by plaintiff estate and the decedent’s surviving minor children, AMC, AMH, and ADH (collectively, ‘surviving children’ or ‘plaintiff children’).” The estate and the children challenged the trial court’s 11/4/21 order and the 8/22/23 order, “arguing that the trial court was required to apply the Pioneer balancing test before deciding whether to rescind the decedent’s auto-insurance policy.” The court held that under the “circumstances, it was permissible for USA to void the policy ab initio based on the fraudulent manner in which it was acquired.” The court held that because “the decedent would not be entitled to benefits from USA had she survived, plaintiff children are not eligible for survivor’s benefits under the USA policy. [They] are not an innocent third party under Bazzi and Pioneer, and the trial court did not err by granting USA’s motion for summary disposition and denying plaintiff children’s motion to reinstate the USA policy.” It next found that “the trial court did not err when it determined that plaintiff children—and not plaintiff estate—were the proper party to pursue survivor’s benefits under MCL 500.3108.” The court noted that res judicata clearly did not apply here. Thus, the “estate’s contention that the trial court was bound by its prior decision” was meritless. The court concluded that given “plaintiff children acknowledged their receipt of social security benefits, which are required to be set off from payable survivor’s benefits under the no-fault act, the trial court did not err in determining that Farmers was entitled to a setoff in the amount of $32,024.” It also found that “Farmers’ good-faith payment of survivor’s benefits to plaintiff estate for the benefit of plaintiff children discharged its liability to pay survivor’s benefits.” Finally, the court held that ultimately, “plaintiff children failed to support their claims for additional survivor’s loss benefits with documentary evidence to create a genuine issue of material fact. The trial court did not err by granting” Farmers summary disposition.