Fraud in procurement; Titan Ins Co v Hyten; Material misrepresentation; Oade v Jackson Nat’l Life Ins Co of MI; Rescission; Equity balancing; Webb v Progressive Marathon Ins Co

The court held that defendant-insurer established common-law fraud in the procurement and was entitled to rescind plaintiff’s policy without any equity balancing, so summary disposition was proper. Plaintiff applied for a policy on 1/9/24 and represented that she was the only household member age 14 or older and that neither she nor any rated household member had a license suspension within the past three years. She then sought first-party no-fault benefits after a 1/18/24 crash. Defendant later discovered plaintiff had a suspension from 3/27/19 to 6/3/21, and plaintiff testified she lived with her fiancé, whose driving record also reflected a suspension within three years. On appeal, the court held that the misrepresentations were material. A misrepresentation is material if the insurer would not have issued the policy or would have charged a higher premium, and defendant’s underwriter averred it would not have issued the policy had plaintiff answered accurately. The court next held that the knowledge element was satisfied because procurement fraud is proven if the insured either knew the statement was false or made it “recklessly, without any knowledge of its truth,” and the record supported recklessness where plaintiff signed the declarations page requesting issuance “in reliance on these statements” despite later admitting a household member existed and despite the suspension history. The court noted that “the law requires [a driver] to know [their] driving status[.]” The court also found no genuine issue that plaintiff intended reliance and that defendant relied. The application itself stated plaintiff sought issuance “in reliance on these statements,” and the underwriter affidavit established reliance in issuing coverage. Finally, the court held the trial court was not required to balance equities because plaintiff was not an innocent third party and, once fraud in procurement was established, the insurer is “‘entitled to rescind coverage’” and “’the trial court need not engage in any balancing of the equities[.]’” Affirmed.