Appellate review; Standard of review for equitable rescission; Abuse of discretion; Wilmore-Moody v Zakir; Summary disposition; Material misrepresentation under MCR 2.116(C)(10); Insurance rescission; Equitable balancing & reformation v rescission; Bazzi v Sentinel Ins Co; Titan Ins Co v Hyten

The court held that defendant-Progressive was entitled to rescind plaintiff-Sherman’s no-fault policy because there was no genuine issue of material fact that she made material misrepresentations in her insurance application, and the trial court abused its discretion by ordering reformation rather than rescission. Sherman was injured as a passenger in one of her insured vehicles and sought PIP benefits. But Progressive discovered that she misrepresented where her vehicles were garaged and failed to disclose resident-relatives, facts that would have raised her premium by 83.2%. Progressive denied coverage, rescinded the policy, and refunded the premiums. The trial court denied summary disposition and instead reformed the policy to reflect a Detroit garaging address and a higher premium, but the Court of Appeals reversed. On appeal, the court first clarified that, when rescission is sought through a motion under MCR 2.116(C)(10), an appellate court must determine de novo whether “there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Then it must review the “trial court’s decision to grant or deny the equitable doctrine of rescission for an abuse of discretion.” The court held that Sherman’s false statements about the garaging location and household residents were material because Progressive showed it “would have issued Sherman a different contract had it known the accurate information,” and there was “no genuine issue of material fact that Sherman made misrepresentations[.]” Finally, the court held that the equities were entirely one-sided because “the record contains no allegation of wrongdoing or inequitable conduct on Progressive’s part,” Sherman was “the party who committed material misrepresentations,” and there were “no third-party interests at stake,” so “there was no plausible basis for the trial court to find that a result favoring Sherman and disfavoring Progressive was warranted as a matter of equity.” The court also held that no remand to rebalance the equities was necessary because “the record is complete and the equities overwhelmingly favor rescission[.]”