No-fault insurance; PIP benefits; Rescission; Material misrepresentation; Household member; Occasional driver; Howard v LM Gen Ins Co; Bradley v Westfield Ins Co; Oade v Jackson Nat’l Life Ins Co of MI; Webb v Progressive Marathon Ins Co; Equity; Sherman v Progressive Marathon Ins Co

The court held that the trial court erred by denying plaintiff-insurer summary disposition as to whether defendant-insured made a material misrepresentation in her no-fault application, but remand was required for an equitable rescission analysis. Defendant sought PIP benefits after an accident involving her Ford Fusion. Plaintiff sought rescission based on alleged misrepresentations about a Nissan Altima and defendant’s daughter. The court first held that plaintiff failed to establish injury from the misrepresentation about ownership of the Altima because, under Howard, the allegedly misrepresented coverage was not the coverage at issue, and plaintiff did not show that “absent coverage on the Altima, it would not have covered the Fusion.” But the court held that defendant’s failure to list her daughter as a household member or occasional driver was a material misrepresentation. The court reasoned that the application required disclosure of “[a]ll household members” and occasional drivers, and the testimony showed the daughter returned home in the summers, including during the policy period, making defendant’s claim that she was away at school “indefinitely” belied by the record. The court further held that plaintiff showed injury because its underwriter attested that, had the daughter been disclosed, premiums “would have increased by $263.75” due to the increased risk of another household member or driver. Because the trial court did not reach the next step under Sherman, the court remanded for the trial court to balance the equities and determine whether rescission was proper. Reversed and remanded.