Soyed Ahmed v. Farm Bureau General Insurance Company of Michigan

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
SOYED AHMED, UNPUBLISHED
August 27, 2019
Plaintiff-Appellee/Cross-Appellant,
v No. 342188
Wayne Circuit Court
FARM BUREAU GENERAL INSURANCE LC No. 16-015810-NI
COMPANY OF MICHIGAN,
Defendant-Appellant/Cross-
Appellee.
Before: GADOLA, P.J., and SERVITTO and REDFORD, JJ.
PER CURIAM.
Defendant appeals, by leave granted1 the trial court order denying its motion for summary
disposition in this first-party insurance matter, and plaintiff cross-appeals the trial court’s order
denying summary disposition in his favor. Because there were no material questions of fact that
plaintiff made false statements with respect to his insurance claim, we reverse the trial court’s
decision on defendant’s motion for summary disposition and direct the trial court to enter
summary disposition in defendant’s favor.
On or about June 9, 2016, plaintiff was driving a vehicle owned by his wife’s uncle when
he was involved in an automobile accident. Plaintiff asserts he incurred injuries in the accident
to his head, shoulder, wrist, hip, neck, and back. At the time of the accident, plaintiff held an
automobile insurance policy issued by defendant. According to plaintiff, defendant refused to
pay all PIP benefits owed to plaintiff under the policy. Plaintiff thus initiated an action against
defendant on December 5, 2016, seeking relief for defendant’s alleged breach of contract and
seeking a declaration concerning the applicability of the no-fault act to plaintiff’s claims and the
amount of benefits plaintiff is entitled to receive from defendant as a result of the automobile
accident.
1
Unpublished order of the Court of Appeals, issued June 21, 2018 (Docket No. 342188).
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Defendant moved for summary disposition pursuant to MCR 2.116(C)(10), asserting that
plaintiff misrepresented a pre-existing condition and submitted false information concerning his
claim for replacement and attendant care services. Defendant thus asserted that under the fraud
and concealment clause in the insurance policy, the policy is void and plaintiff cannot receive
any benefits. Plaintiff responded that he, not defendant, was entitled to summary disposition
pursuant to MCR 2.116(I)(2). Plaintiff asserted that defendant did not deny paying him benefits
for any reasons it now claims, but instead denied benefits for its false assumption that plaintiff
was driving for Uber at the time of the accident and that it was thus not the responsible insurer.
According to plaintiff, defendant unreasonably refused to pay him the benefits he was owed and
had no justification for denying plaintiff benefits. The trial denied both motions for summary
disposition, finding that there was a question of fact concerning whether plaintiff was driving for
Uber at the time of the accident and questions of fact regarding whether plaintiff made material
misrepresentations warranting a voiding of the policy.
We review de novo a trial court’s decision regarding a motion for summary disposition to
determine if the moving party is entitled to judgment as a matter of law. Maiden v Rozwood, 461
Mich. 109, 118; 597 NW2d 817 (1999). A motion for summary disposition made under MCR
2.116(C)(10) tests the factual sufficiency of the complaint and the court considers all affidavits,
pleadings, depositions, admissions, and other evidence submitted by the parties in the light most
favorable to the party opposing the motion to determine whether there is any question of material
fact. Bernardoni v City of Saginaw, 499 Mich. 470, 472–473; 886 NW2d 109 (2016). When the
submitted evidence fails to establish a genuine issue regarding any material fact, the moving
party is entitled to judgment as a matter of law. Id. at 473. In addition, when a motion is made
and supported under subrule (C)(10), an adverse party must, “by affidavits or as otherwise
provided in this rule, set forth specific facts showing that there is a genuine issue for trial.” Id.,
quoting MCR 2.116(G)(4). If the adverse party fails to do so, then judgment, if appropriate,
shall be entered against him or her. Id. “If it appears to the court that the opposing party, rather
than the moving party, is entitled to judgment, the court may render judgment in favor of the
opposing party.” MCR 2.116(I)(2).
Questions involving the proper interpretation and application of a contract or the legal
effect of a contractual clause are reviewed de novo. Rory v Contl Ins Co, 473 Mich. 457, 464;
703 NW2d 23 (2005). The ordinary rules of contract interpretation apply to the interpretation of
insurance contracts. McGrath v Allstate Ins Co, 290 Mich. App. 434, 439; 802 NW2d 619 (2010).
The language of insurance contracts should be read as a whole and must be
construed to give effect to every word, clause, and phrase. When the policy
language is clear, a court must enforce the specific language of the contract.
However, if an ambiguity exists, it should be construed against the insurer. An
insurance contract is ambiguous if its provisions are subject to more than one
meaning. An insurance contract is not ambiguous merely because a term is not
defined in the contract. Any terms not defined in the contract should be given
their plain and ordinary meaning, which may be determined by consulting
dictionaries. [Id. (internal citations omitted)]
Before delving into defendant’s claim on appeal, we address plaintiff’s assertion that
defendant has waived its fraud and breach of insurance contract affirmative defenses because it
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failed to plead these defenses with specificity as required by MCR 2.112(D)(2). “[T]he primary
function of a pleading in Michigan is to give notice of the nature of the claim or defense
sufficient to permit the opposite party to take a responsive position. Baker v Marshall, 323 Mich
App 590, 595; 919 NW2d 407 (2018), quoting Stanke v State Farm Mut Auto Ins Co, 200 Mich
App 307, 317; 503 NW2d 758 (1993). Plaintiff was put on sufficient notice of the challenged
affirmative defenses.
Defendant’s affirmative defenses included the following: “Plaintiff’s claim is, in whole
or in part, fraudulent or so excessive that it has no reasonable foundation . . .”; “Plaintiff’s
benefits are not past-due, nor did Defendant unreasonably delay or refuse to pay benefits,
because a reasonable question of entitlement and/or a reasonable question of law existed . . .”;
and “Plaintiff, or those acting in concert with Plaintiff, have misrepresented material facts in
connection with the procurement of the policy or Plaintiffs claim under the policy, thereby
voiding the policy ab initio and any applicable coverage under it.” Defendant stated additional
affirmative defenses relating to the possibility that plaintiff was driving for Uber at the time of
the accident. These defenses were sufficiently pleaded with specificity such that plaintiff was
put on notice that defendant was asserting defenses of fraud and breach of contract.
On appeal, defendant contends that the trial court erred in denying its motion or summary
disposition because there was no question that plaintiff made material misrepresentations and
false statements in his claim for benefits which, according to the plain language of the insurance
policy, voids the policy. We agree.
In Mina v Gen Star Indemnity Co, 218 Mich. App. 678; 555 NW2d 1 (1996), rev’d in part
on other grounds, 455 Mich. 866 (1997), this Court stated:
To void a policy because the insured has willfully misrepresented a material fact,
an insurer must 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. [Id. at 686–687 (internal citations omitted).]
In Bahri v IDS Prop Cas Ins Co, 308 Mich. App. 420, 423-424; 864 NW2d 609 (2014) this Court
was called upon to interpret an insurance policy general fraud exclusion “which provided: ‘We
do not provide coverage for any insured who has made fraudulent statements or engaged in
fraudulent conduct in connection with any accident or loss for which coverage is sought under
this policy.’ ” The Bahri Court reiterated that it “has explained the requirements for establishing
fraud or false swearing as follows” then quoted the four elements set forth in Mina, supra. Bahri,
308 Mich. App. at 424-425. In an insured’s breach-of-contract action, the insurer’s burden of
proof with respect to its affirmative defenses is the preponderance-of-the-evidence standard.
See, Stein v Home-Owners Ins Co, 303 Mich. App. 382; 843 NW2d 780 (2013).
The insurance contract defendant issued to plaintiff and effective on the June 9, 2016
accident date provides, in relevant part:
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PART V-GENERAL PROVISIONS
***
C. Fraud or Concealment
The entire policy will be void if, whether before or after a loss, you, any
family member, or any insured under this policy has:
1. Intentionally concealed or misrepresented any material fact or
circumstance;
2. engaged in fraudulent conduct; or
3. made false statements
relating to this insurance or to a loss to which this insurance applies.
The insurance policy at issue clearly and unambiguously states that the entire policy will
be void if the insured intentionally concealed or misrepresented any material fact or
circumstance, which is established if the four factors in Mina, supra, have been met. The
insurance policy also, however, clearly and unambiguously states that the entire policy will be
void if the insured simply “made false statements” relating to the insurance or a loss to which the
insurance applies. This basis for voiding the policy does not require that any false statement be
made intentionally. Here, viewing the evidence in a light most favorable to plaintiff, defendant
has established that plaintiff made false statements relating to the insurance or a loss to which the
insurance applies.
Plaintiff testified at deposition, through an interpreter, that he went to his regular doctor,
Dr. Redwan Uddin, four or five days after the accident. Defense counsel asked plaintiff, “Prior
to the accident, the June 9th accident, had you made any complaints to Dr. Redwan [Uddin] of
back pain?” Plaintiff responded “No.” Defense counsel then asked, “Prior to the accident, had
you had any back pain?” Plaintiff again responded, “No.” At the end of plaintiff’s deposition
defense counsel again asked, “Again, just so I’m clear, prior to the June 9th, 2016 accident, had
you ever had neck pain?” and, “Prior to the June 9th [2016] accident, had you ever had any back
pain?” and, “Prior to the June 9, 2016 accident, had you had any shoulder pain on either side?”
Plaintiff responded “No” to each question.
However, plaintiff’s medical records detail a history of back pain and treatment for the
same. A March 19, 2012 record from Adult and Pediatric Medicine and signed by Dr. Meraj
Yunus indicates that plaintiff was being seen for “chronic ongoing lower back pain.” The exam
indicates that plaintiff’s back was tender to touch in the lumbar area and that some spasms were
noted. The assessment included “chronic back pain” and the note under “Plan” was for plaintiff
to “continue pain meds, muscle relaxants, and back exercises.” An April 7, 2012 record from the
same facility and signed by the same doctor indicates that plaintiff was seen for “chronic
ongoing lumbar area back pain.” The “Assessment” stated “acute lumbar strain” with the same
treatment. An April 20, 2015 report signed by Dr. Uddin indicates that plaintiff was there due to
“back pain for 3 days.” Plaintiff presented “with c/o Back pain. The pain began 2-3 days ago.
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The pain is located in the lower back. The severity of the pain is moderate. The nature of the
pain is intermittent. Aggravating factors include physical activities, sneezing, twisting.” He was
prescribed 600 MG of Ibuprofen 3 times per day for 2 weeks. A June 4, 2015 report indicates
that plaintiff was seen for a chief complaint of “back pain since morning.” Plaintiff was
prescribed Norco and scheduled for a follow up in a month. A September 23, 2015 report
indicates that plaintiff was being seen for lower back pain which started “3-4 weeks ago” and
that aggravating factors include driving, lifting, physical activities, sitting, sneezing, and
twisting. He was again prescribed 600 MG of Ibuprofen 3 times per day for 30 days.
Plaintiff attempts to explain the inaccuracies in plaintiff’s deposition testimony as being
due to his limited knowledge of the English language and faulty translations by plaintiff’s
translator at deposition. However, plaintiff stated at the beginning of his deposition that he could
read English and could speak some English. When asked by defense counsel at the conclusion
of the deposition whether he understood all of the questions he had been asked, plaintiff
responded that he did. Additionally, plaintiff’s counsel stated that he also spoke plaintiff’s
primary language, Bengali. Plaintiff’s counsel corrected the translator twice during plaintiff’s
deposition but did not do so during the sequence of questions concerning plaintiff’s prior back
and neck pain. Had there been any misinterpretation of plaintiff’s answers, counsel could readily
have corrected them either by requesting that the translator properly interpret or by questioning
plaintiff himself during the deposition. There is simply no indication that plaintiff did not
understand what he was being asked or that the interpreter incorrectly stated plaintiff’s answers
to the posed questions. Plaintiff specifically stated, more than once, that he had not had back
pain prior to the accident. His medical records clearly contradict those statements. Because
defendant claims that his back was injured in the accident, any prior back problems are material
and relevant to his claim. In denying prior back pain, plaintiff thus made intentional material
misrepresentations and/or false statements relative to his back.
Plaintiff also made intentional material misrepresentations and/or false statements with
respect to replacement service and attendant care benefits. Plaintiff testified at deposition that
his wife was the only one who provided any assistance to him. He also testified that on
September 1, 2016, he, along with his uncle and a friend, went to Saudi Arabia and stayed there
for 3-4 weeks.
Plaintiff submitted an attendant care form covering the month of September 2016, signed
by plaintiff’s wife and dated October 8, 2016, indicating that his wife performed the following
attendant care services for defendant every day in September 2016: medication management,
preparing meals and cooking, was on call, and assisted with all activities of daily living. The
form further states that she changed linens and bedding 3 times per week, assisted with home
physical therapy and massage 3 times per week, assisted with bathing and grooming 3 times per
week, assisted with daily appointments/agenda planning 3 times per week, and provided
transportation/ attended appointments 3 times per week for the entire month of September.
Plaintiff also submitted a replacement services form for the month of September 2016, signed on
October 8, 2016, by his wife, stating that his wife provided replacement services for plaintiff
every day during the month of September (including cooking, dishwashing, dusting, vacuuming,
taking out the trash and interior maintenance). At deposition, plaintiff’s wife testified that she
filled out the attendant care and replacement services forms herself and signed each one. She
further testified that the forms accurately stated the services she provided to plaintiff.
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Clearly, because plaintiff was not even in the country from September 1, 2016, to at least
September 22, 2016, plaintiff’s wife could not have provided the stated attendant care and
replacement services for plaintiff that she claimed she provided on those dates. As a result,
plaintiff made false statements relative to the attendant care and replacement services provided
for him during the month of September 2016. These representations, along with those
concerning plaintiff’s lack of prior back pain, were material, as they were “reasonably relevant to
the insurer’s investigation of a claim.” Mina, 218 Mich App at. 687.
The above being true, the unambiguous, clear language of Part V, subsection C. in the
insurance policy allows defendant to void the entire policy. Summary disposition should
therefore have been entered in defendant’s favor. We therefore need not address plaintiff’s
cross-appeal, claiming that he, rather than defendant, was entitled to summary disposition.2
We reverse the trial court’s decision on defendant’s motion for summary disposition and
remand to the trial court to enter summary disposition in defendant’s favor. We do not retain
jurisdiction.
/s/ Michael F. Gadola
/s/ Deborah A. Servitto
/s/ James Robert Redford
2
We briefly note plaintiff’s suggestion that because defendant did not pay his benefits based on a
“false assumption” that he was driving for Uber at the time of the accident, he is entitled to
summary disposition. However, summary disposition is not the remedy if an insurer is found to
have unreasonably refused or failed to pay owing benefits:
An insurer still runs the risk of sanctions under [MCL 500.3142] of the act if its
liability ultimately is established and payments are found to be overdue, a risk
which subjects it to an even greater rate of interest on overdue payments if both §
3142 interest and postcomplaint interest under MCL § 600.6013; MSA §
27A.6013 are awarded. [Nasser v Auto Club Ins Ass’n, 435 Mich. 33, 56–57; 457
NW2d 637 (1990)]
In addition, an insurer may be liable for an insured’s attorney fees if insurance benefits are
determined to be overdue. See, MCL 500.3148.
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