Mark Smith v. Michigan Automobile Insurance Placement Facility ( 2019 )

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
revision until final publication in the Michigan Appeals Reports.
STATE OF MICHIGAN
COURT OF APPEALS
MARK SMITH, UNPUBLISHED
December 26, 2019
Plaintiff-Appellant,
v No. 344023
Wayne Circuit Court
MICHIGAN AUTOMOBILE INSURANCE LC No. 17-010415-NF
PLACEMENT FACILITY,
Defendant-Appellee.
Before: FORT HOOD, P.J., and SERVITTO and BOONSTRA, JJ.
PER CURIAM.
In this first-party no-fault action, plaintiff appeals as of right the trial court’s order
granting summary disposition in favor of defendant. We affirm.
I. FACTUAL BACKGROUND
In October 2016, plaintiff visited his doctor, Dr. Mohamed Ayad, twice complaining of
“chronic” and “acute” back and neck pain. Then, on November 5, 2016, plaintiff was involved
in an automobile accident that, plaintiff alleges, injured plaintiff’s back, neck, and shoulder. On
April 7, 2017, plaintiff filed an application with defendant, the Michigan Automobile Insurance
Placement Facility, for personal protection insurance (PIP) benefits. In this application, plaintiff
indicated that he did not have any preexisting conditions and did not seek treatment for such
conditions before the November 5, 2016 accident. In a deposition taken on December 6, 2016,
when asked if he experienced any problems with his back, shoulder, or neck before the
November 5, 2016 accident, plaintiff responded “no,” and stated only that he experienced some
soreness in his neck before the accident that the doctor indicated was from sleeping on it wrong.
When defense counsel was confirming during the deposition that plaintiff had never received
treatment on his back, shoulder, or neck before the accident, plaintiff responded, “correct.”
Plaintiff then explained that he did see Dr. Ayad before the accident, but only for general health
checkups. Plaintiff’s medical records from Dr. Ayad, however, show that plaintiff visited Dr.
Ayad for “chronic” and “acute” back and neck pain, that he had been diagnosed with cervicalgia,
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and had received a Toradol injection and had x-rays done of his cervical, lumbar, and sacral
spine.
Defendant did not assign plaintiff’s claim to an insurer for PIP benefits after reviewing
plaintiff’s medical records, claiming that he committed fraud when he indicated on his
application that he did not have neck and back issues before the accident. Plaintiff then filed a
complaint in Wayne Circuit Court, contending that defendant unreasonably and unlawfully
neglected to assign an insurer to pay plaintiff his requested PIP benefits. Defendant filed a
motion for summary disposition under MCR 2.116(C)(10), arguing that, by denying
experiencing or receiving treatment for back pain before the accident, plaintiff submitted false
statements in support of his application for benefits and was therefore not eligible to receive
benefits. Plaintiff filed a response arguing that arguing that he did not knowingly or intentionally
misrepresent information in his benefits application, and instead, had simply forgotten to
mention his prior injuries. At the hearing on defendant’s motion, the trial court stated, “[i]t
appears to the court that it’s outside the realm of credibility that a person would be unable to
recall being treated for back pain a mere month before the accident which resulted in claims of
back pain.” The trial court subsequently granted defendant’s motion for summary disposition.
On appeal, plaintiff again contends that defendant did not establish that he knowingly
made misrepresentations on his application for PIP benefits because he did not do so
intentionally, but rather, forgot about his prior injuries. Plaintiff contends in the alternative that
whether he knowingly provided false information is immaterial to his claim for PIP benefits
because an accident that aggravates a preexisting condition is still compensable. Plaintiff lastly
argues that the trial court erred in making a credibility determination at the summary disposition
stage. We disagree.
II. STANDARD OF REVIEW
“This Court reviews a trial court’s ruling on a motion for summary disposition de novo.”
Pugno v Blue Harvest Farms LLC, 326 Mich App 1, 11; 930 NW2d 393 (2018). This Court
must review the evidence and all reasonable inferences drawn from it to decide whether a
genuine issue of material fact exists. Id. at 11-12. “A motion under MCR 2.116(C)(10) . . . tests
the factual sufficiency of a claim.” El-Khalil v Oakwood Healthcare, Inc, ___ Mich ___, ___;
___ NW2d ___ (2019) (Docket No. 157846); slip op at 7. “A motion brought under MCR
2.116(C)(10) may only be granted when there is no genuine issue of material fact.” Id. “A
genuine issue of material fact exists when the record leaves open an issue upon which reasonable
minds might differ.” Id. (citation and quotation marks omitted). “In reviewing a motion for
summary disposition brought under MCR 2.116(C)(10), a trial court considers affidavits,
pleadings, depositions, admissions, and documentary evidence filed in the action or submitted by
the parties . . . in the light most favorable to the party opposing the motion.” Sprague v Farmers
Ins Exchange, 251 Mich App 260, 264; 650 NW2d 374 (2002) (citation and quotation marks
omitted). This Court, reviewing a motion under MCR 2.116(C)(10), considers “[t]he relative
strength of the evidence offered by plaintiff and defendant[] . . . .” El-Khalil, ___ Mich at ___;
slip op at 9.
The party bringing the motion for summary disposition has the initial burden of
supporting its argument by affidavits, depositions, admissions or other documentary evidence.
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Sprague, 251 Mich at 264. The burden then shifts to the party opposing the motion, who must
then establish that a genuine issue of material fact exists, and the opposing party must go beyond
mere allegations or denials, and establish specific facts demonstrating a triable issue of fact. Id.
“If the opposing party fails to present documentary evidence establishing the existence of a
material factual dispute, the motion is properly granted.” Id.
In the trial court, plaintiff did not raise one of the arguments that he now maintains on
appeal: that his current injuries are aggravations of preexisting injuries due to the accident. That
argument is not preserved on appeal because it was not “raised in and decided by the trial court.”
Pugno, 326 Mich App at 10. Unpreserved issues are reviewed on appeal for plain error. Bennett
v Russell, 322 Mich App 638, 642; 913 NW2d 364 (2018) (footnote omitted). “To avoid
forfeiture under the plain error rule, three requirements must be met: 1) the error must have
occurred, 2) the error was plain, i.e., clear or obvious, 3) and the plain error affected substantial
rights.” In re Smith Trust, 274 Mich App 283, 285-286; 731 NW2d 810 (2007) (citation and
quotation marks omitted). “ ‘[A]n error affects substantial rights if it caused prejudice, i.e., it
affected the outcome of the proceedings.’ ” Lawrence v Mich Unemployment Ins Agency, 320
Mich App 422, 443; 906 NW2d 482 (2017) (citation omitted). Finally, issues of statutory
interpretation are also reviewed de novo. Szpak v Inyang, 290 Mich App 711, 713; 803 NW2d
904 (2010).
III. ANALYSIS
There was no evidence presented that created a genuine issue of material fact regarding
whether plaintiff simply forgot about his previous injuries. It is not enough to merely assert
allegations in a brief to successfully establish a genuine issue of fact. Sprague, 251 Mich at 264.
Further, whether plaintiff’s injuries are the result of the accident or were preexisting and
aggravated thereafter was material to defendant’s determination of whether to award plaintiff
benefits, since its award of benefits would depend principally on when and to what extent
plaintiff began suffering from his injuries. MCL 500.3105; MCL 500.3107. Finally, the trial
court did not err in stating that plaintiff’s claim was “outside the realm of credibility” because
there was nothing to suggest a genuine issue of material fact.
Because plaintiff was not insured at the time of the accident, he sought benefits through
the Michigan Assigned Claims Plan, which is facilitated by defendant. Candler v Farm Bureau
Mutual Insurance Company of Michigan, 321 Mich App 772, 775; 910 NW2d 666 (2017), citing
MCL 500.3171(2). When defendant refused to assign plaintiff’s claim to an insurer, it did so
based on the language in MCL 500.3173a(4),1 which provides:
A person who presents or causes to be presented an oral or written statement,
including computer-generated information, as part of or in support of a claim to
the Michigan automobile insurance placement facility, or to an insurer to which
the claim is assigned under the assigned claims plan, for payment or another
1
Prior to the June 11, 2019 amendment to this statute, this subsection was codified as MCL
500.3173a(2). MCL 500.3173a as amended by 2019 PA 21.
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benefit knowing that the statement contains false information concerning a fact or
thing material to the claim commits a fraudulent insurance act under section 4503
that is subject to the penalties imposed under section 4511. A claim that contains
or is supported by a fraudulent insurance act as described in this subsection is
ineligible for payment of personal protection insurance benefits under the
assigned claims plan.
In Candler, we explained that a “fraudulent insurance act” under MCL 500.3173a occurs when:
(1) the person presents or causes to be presented an oral or written statement, (2)
the statement is part of or in support of a claim for no-fault benefits, and (3) the
claim for benefits was submitted to the MAIPF. Further, (4) the person must have
known that the statement contained false information, and (5) the statement
concerned a fact or thing material to the claim. [Candler, 321 Mich App at 779-
780 (footnote omitted).]
It is undisputed that plaintiff presented to defendant oral and written statements in
support of his no-fault claim that indicated that plaintiff did not have pain prior to the accident.
It also undisputed that those statements were not accurate. Plaintiff’s argument on appeal
specifically hinges, however, on elements (4) and (5) of the above test for a fraudulent insurance
act—plaintiff argues that his misstatements were not done knowingly and were not material to
his claim. Regarding the knowing element, plaintiff argues that, while he did make
misstatements concerning his prior medical history, they were not done knowingly because of
the form of questions he was asked and because approximately six months had passed between
his prior medical visits and his application for benefits. Regarding the materiality argument,
plaintiff asserts that whether he misspoke regarding his previous medical history does not matter
because the accident aggravated any prior injuries he suffered. We conclude that both arguments
are without merit.
As both parties indicate in their briefs, there are few published cases interpreting the
relevant statute, MCL 500.3173a. However, the requirements for a fraudulent insurance act in
no-fault cases not implicating MCL 500.3173a are of guidance, the only difference being that, in
those cases, defendant had already referred the insurance claim to an insurance provider where
here, defendant did not. In cases not implicating MCL 500.3173a, we have held that, to establish
fraud, an insurer is required to show that:
(1) the misrepresentation was material, (2) that it was false, (3) that the insured
knew that it was false at the time it was made or that it was made recklessly,
without any knowledge of its truth, and (4) that the insured made the material
misrepresentation with the intention that the insurer would act upon it. A
statement is material if it is reasonably relevant to the insurer’s investigation of a
claim. [Bahri v IDS Prop Cas Ins Co, 308 Mich App 420, 424-425; 864 NW2d
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609 (2014),[2] citing Mina v Gen Star Indemnity Co, 218 Mich App 678, 686; 555
NW2d 1 (1996), rev’d in part on other grounds 455 Mich 866 (1997) (quotation
marks omitted)].
One makes a knowing false statement when they have knowledge that the statement is false, or
when the statement is made recklessly even without knowledge of the truth. Bahri, 308 Mich
App at 425.
Plaintiff complained of back and neck pain, which was characterized as “chronic” and
“acute,” six months before he filed the application seeking benefits. He was prescribed
medications for this pain and did not indicate that he had stopped taking the medication before
his application for benefits was submitted. Plaintiff did not state in his deposition that he went to
the doctor before the accident for neck and back pain, but merely forgot by the time he applied
for benefits—rather, he stated only that he visited the doctor for regular checkups and mild neck
pain from sleeping wrong. There is no evidence in the record that plaintiff merely forgot to
mention his prior injuries and doctor visits—such is only stated in his brief on appeal. In his
deposition, plaintiff denies having had the previous pain altogether. While plaintiff asserts that
he did not know he was misstating information on the application, the trial court determined
there was no genuine issue of material fact regarding whether plaintiff knowingly—meaning
with knowledge the information was false or with reckless disregard for the truth—provided
false information on his application.
After having determined on the basis of the facts in evidence that defendant had satisfied
its burden by showing that there were no issues of material fact as to whether plaintiff committed
a fraudulent act, the court correctly noted that the burden shifted to plaintiff to establish with
evidence that an issue of fact existed. Plaintiff did not submit an affidavit or other evidence in
response to defendant’s allegation in its motion for summary disposition that plaintiff knowingly
misrepresented information in his application. “If the opposing party fails to present
documentary evidence establishing the existence of a material factual dispute, the motion is
properly granted.” Sprague, 251 Mich at 264. With all of that in mind, given the evidence
submitted, including medical records and deposition testimony from plaintiff, we conclude that
the trial court correctly determined that reasonable minds could not differ regarding whether
plaintiff knowingly provided false information on his application.
Plaintiff also argues, however, that the alleged false information he provided was not
material to his claim. “A statement is material if it is reasonably relevant to the . . . investigation
of a claim.” Mina, 218 Mich App at 686-687. Plaintiff argues, without supporting evidence, that
his injuries aggravated his preexisting condition. Ordinarily, a claimant may recover no-fault
2
In Candler, this Court stated in a footnote that Bahri did not apply because the ruling in Bahri,
stating that “fraudulent acts can bar the recovery of all PIP benefits,” was “predicated on the
interpretation and application of an insurance policy contract that contained a fraud exclusion . . .
,” and in Candler, there was no insurance policy contract to begin with. Candler, 321 Mich App
at 780 n 6. However, the definition of fraud articulated in Bahri is of guidance, even though the
alleged fraud here does not implicate an insurance policy contract.
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benefits if he can prove that the relevant accident aggravated a preexisting condition. Mollitor v
Associated Truck Lines, 140 Mich App 431, 438; 364 NW2d 344 (1985). However, again,
plaintiff did not provide evidence of a preexisting condition, let alone an aggravation of that
condition. In fact, he initially denied having any significant pain in his back or neck prior to the
accident. Even if plaintiff did provide evidence of a preexisting condition, however, the
condition or injuries would still be material to his claim as that information would determine
when his injury started, the level of injury he suffered before the accident, to what extent it was
aggravated, and whether his claim through defendant could be accepted or denied. His alleged
fraud was material because it was pivotal to whether his claim could be accepted, with or without
a preexisting condition. Accordingly, although plaintiff failed to raise this argument below and
thus, the trial court made no explicit conclusions concerning materiality, we cannot see any error
in the court’s implicit conclusion that the alleged fraud was material to plaintiff’s claim.
Finally, plaintiff argues that the trial court erred in making a determination as to his
credibility at the motion hearing. “The trial court is not permitted to assess credibility, weigh the
evidence, or resolve factual disputes . . . .” Hastings Mutual Ins Co v Grange Ins Co of Mich,
319 Mich App 579, 583-584; 903 NW2d 400 (2017) (citation and quotation marks omitted).
Still, the trial court considers the pleadings, depositions, and affidavits to make a determination
regarding whether there is an issue upon which reasonable minds might differ. Bahri, 308 Mich
App at 423. Here, the trial court made a determination as to whether reasonable minds could
differ based on the facts presented. As noted above, there was no evidence in the record that
plaintiff merely forgot to mention his previous injuries after being asked about them multiple
times, but rather, plaintiff denied them altogether. When the trial court stated, “[i]t appears to the
court that it’s outside the realm of credibility that a person would be unable to recall being
treated for back pain a mere month before the accident which resulted in claims of back pain[,]”
it was not weighing plaintiff’s credibility, as plaintiff argues—rather, it was making a
determination regarding whether reasonable minds might differ in light of the record evidence.
Thus, we discern no error with respect to credibility in the trial court’s determination.
IV. CONCLUSION
The trial court did not err in granting summary disposition to defendant because there
were no genuine issues of fact regarding whether plaintiff made a material misrepresentation on
his application for PIP benefits, which constituted a fraudulent insurance act and rendered
plaintiff ineligible for benefits.
Affirmed.
/s/ Karen M. Fort Hood
/s/ Deborah A. Servitto
/s/ Mark T. Boonstra
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