Harris Cheema v. Progressive Marathon Insurance Company

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
HARRIS CHEEMA and OVERLAND UNPUBLISHED
TRANSPORTATION, LLC, June 2, 2022
Plaintiffs-Appellants,
v No. 355910
Wayne Circuit Court
PROGRESSIVE MARATHON INSURANCE LC Nos. 18-014071-NF; 19-
COMPANY and STATE FARM MUTUAL 003321-NF
AUTOMOBILE INSURANCE COMPANY,
Defendants-Appellees,
and
GOLDEN INSURANCE AGENCY, LLC, and SAM
SAEIDI,
Defendants.
Before: JANSEN, P.J., and CAMERON and RICK, JJ.
PER CURIAM.
In this dispute over no-fault insurance benefits, plaintiffs, Harris Cheema and Overland
Transportation, LLC (Overland), appeal by right the trial court’s order dismissing their claims
against Progressive Marathon Insurance Company (Progressive) and State Farm Mutual
Automobile Insurance Company (State Farm). Because we conclude that there were questions of
fact that had to be resolved before the trial court could determine whether Progressive could
properly rescind the policy at issue, and a question of fact as to whether Cheema was an owner of
the motor vehicle involved in the accident, the trial court erred when it dismissed Cheema’s claims
against Progressive and State Farm under MCR 2.116(C)(10). Accordingly, we dismiss in part,
affirm in part, reverse and vacate in part, and remand for further proceedings consistent with this
opinion.
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I. BASIC FACTS
Cheema is the sole owner of Overland. Overland is a medical transportation company that
transports patients to and from medical appointments. For the most part, insurance companies
paid fees to Overland for the services that it provided. Cheema managed Overland and also worked
as one of its drivers. Overland provided its drivers with its vehicles to transport passengers, and
Cheema would sometimes run personal errands while on the way to or from a transport.
Cheema first went to Golden Insurance Agency, LLC, to purchase a commercial insurance
policy for Overland’s vehicles in 2017. When purchasing the policy, Cheema stated that he
explained “in detail” to the agent what his business did. Cheema claimed that he had the same
discussion when he purchased the new policy with Progressive in 2018. After describing his
business, the agent suggested a particular policy, and Cheema accepted that policy.
Sam Saeidi testified that he was the writing agent who handled Cheema’s purchase of the
Progressive policy. Saeidi stated that Cheema told him that his business offered a courtesy shuttle
and did not collect any fees for its service.1 Saeidi stated that he explained to Cheema what the
phrase “transportation for hire” meant. Saeidi denied that Cheema ever told him that Overland
billed insurance companies or workers’ compensation for its transportation services. Saeidi was
under the impression that Overland was a “not-for-profit” business and that Overland did not
collect money for its services.
Cheema signed an application for insurance on behalf of Overland. The policy application
represented that Overland did not transport passengers for hire. Specifically, the insurance
application included the following question: “Does the insured ever transport passengers for hire?”
Cheema answered: “No.” The insurance quote also noted that Overland’s business type was
“Passenger Transportation (Not For Hire).” Cheema did not recall having a discussion with the
agent about whether his business was a transportation-for-hire business. Cheema denied
misrepresenting the nature of his business to the agent or telling the agent that Overland provided
passengers with a courtesy shuttle only. Cheema stated that he thought that Overland was not a
business that engaged in transportation for hire because Overland did not receive payment from
people it transported. Rather, Overland was paid by third parties. Cheema thought that the agent
correctly completed the application on the basis of the information that he provided, and he signed
the application.
1
Although we are not taking it into consideration when deciding the instant appeal, we note that
Saeidi has made similar assertions in another case that is before this Court in Docket No. 359291.
In that case, Golden Insurance and Saeidi assisted a company that provided transportation services
to medical patients with obtaining an insurance policy. However, according to Saeidi, the business
owner in that case failed to inform Saeidi that his business transported medical patients in exchange
for compensation. Saeidi indicated that he understood that the company offered a courtesy shuttle.
In contrast, the business owner testified that he informed Saeidi that his business transported
medical patients. This information was obtained after the insurance company refused to pay PIP
benefits following a motor vehicle accident.
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On April 24, 2018, Cheema was operating one of Overland’s vehicles for personal reasons
and was involved in an accident. He injured his left knee, left elbow, and neck and possibly
aggravated a prior injury.
Progressive sent Cheema a notice of cancellation of its policy that was effective July 14,
2018. Progressive stated that it was canceling the policy because it did not “have a program for
passenger transportation for a fee in [Michigan].” In October 2018, Cheema sued Progressive for
unpaid personal injury protection insurance (PIP) benefits.
In a letter dated November 29, 2018, Progressive rescinded the policy that had been issued
to Overland and declared it void as of April 4, 2018. Progressive took this action claiming
misrepresentation or fraud. In its cancellation letter, Progressive indicated that the rescission
superseded “any notice of cancellation, notice of nonrenewal, notice of reinstatement or renewal.”
In March 2019, Overland sued Golden Insurance and its principal, Saeidi. Overland
alleged, in part, that Saeidi, who acted on behalf of Golden Insurance, had negligently completed
the application and misadvised Cheema.
In April 2019, Cheema amended his complaint against Progressive to include State Farm
as a defendant that provided coverage under a State Farm policy of a resident relative. Progressive,
State Farm, and Golden Insurance moved to consolidate Cheema’s case against the insurers with
Overland’s case against the agency because the cases all involved the same set of facts. The trial
court granted the motion, consolidated the cases, and ordered that all the proceedings from the
2018 case be transferred into the 2019 case and closed the 2018 case.
State Farm and Progressive later moved for summary disposition of the claims against
them. The trial court granted defendants’ motions for summary disposition. The trial court
acknowledged that there was a factual dispute as to whether Cheema caused the misrepresentation
in the application, but determined that there was no factual dispute that Cheema agreed to the
rescission. Therefore, it concluded that Progressive could not be held liable under the policy. The
trial court also agreed that the undisputed evidence showed that Cheema was an owner of the
Odyssey and that he had not maintained the required insurance. For that reason, the trial court
ruled that Cheema was barred from obtaining PIP benefits. Accordingly, the trial court dismissed
all the claims against Progressive and State Farm in Cheema’s case.
In December 2020, Overland stipulated to the dismissal of its claims against Golden
Insurance and Saeidi. This appeal followed.
II. JURISDICTION
We first consider our jurisdiction, which is always within the scope of our review. Chen v
Wayne State Univ, 284 Mich App 172, 191; 771 NW2d 820 (2009).
Although the trial court ordered the merger of the two lower court cases and closed the first
case, the two cases involved distinct claims and different parties. Overland’s claims operated
under the theory that the breaches of duty by Golden Insurance and Saeidi caused Progressive to
void the insurance policy issued by Progressive to Overland. By contrast, Cheema’s claims
involved, in part, the assertion that Golden Insurance properly selected and sold the Progressive
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policy to Overland and correctly identified the nature of Cheema’s business. Moreover, the trial
court did not recaption the cases to reflect the parties’ changed statuses—instead, the parties
continued to caption the cases separately and refer to them as consolidated even though they were
ostensibly one case. It further appears that the cases were consolidated under MCR 2.505(A)
rather than joined under MCR 2.205. If the cases were consolidated and not joined, the two cases
would have retained their separate character, and each would have been subject to separate final
orders. See Chen, 284 Mich App at 196-199.
To the extent that the two cases were consolidated, the trial court’s order granting the
motions for summary disposition by Progressive and State Farm would have been the final order
for Cheema’s case because it adjudicated all the disputes between Cheema and the insurers. See
MCR 7.202(6)(a)(i). Accordingly, the relevant date for purposes of calculating the deadline for
an appeal of right would be the date the trial court entered its order denying reconsideration.
Because Cheema did not file his claim of appeal within 21 days of that order, this Court would not
have jurisdiction to hear his appeal as an appeal of right if the two cases were merely consolidated.
See MCR 7.204(A)(1)(d). Nevertheless, even if Cheema’s appeal is untimely as an appeal of right,
we choose to exercise our discretion and treat his appeal as an application for leave to appeal and
grant the application. Waatti & Sons Electric Co v Dehko, 230 Mich App 582, 585; 584 NW2d
372 (1998).
We do not agree, however, that Overland is a proper party to this appeal. This Court has
jurisdiction to hear appeals by parties who were aggrieved by the lower court’s decision. See
MCR 7.203(A). Overland did not assert any claims against the insurers and stipulated to the
dismissal with prejudice of all its claims against Golden Insurance and Saeidi. The trial court also
did not recaption the case to include Overland in Cheema’s claims. As such, Overland is not an
aggrieved party. See Federated Ins Co v Oakland Co Rd Comm, 475 Mich 286, 290-292; 715
NW2d 846 (2006). Consequently, we conclude that Overland lacks standing to appeal, and we
dismiss it from the appeal. See id. at 297.
III. RESCISSION
A. STANDARDS OF REVIEW
We first address Cheema’s arguments that the trial court erred when it determined that
Progressive was entitled to rescind its insurance policy and granted Progressive’s motion for
summary disposition on that basis.
A trial court’s decision regarding a motion for summary disposition is reviewed de novo.
Glasker-Davis v Auvenshine, 333 Mich App 222, 229; 964 NW2d 809 (2020).
A motion under MCR 2.116(C)(10) . . . tests the factual sufficiency of a
claim. When considering such a motion, a trial court must consider all evidence
submitted by the parties in the light most favorable to the party opposing the
motion. A motion under MCR 2.116(C)(10) may only be granted when there is no
genuine issue of material fact. A genuine issue of material fact exists when the
record leaves open an issue upon which reasonable minds might differ. [El-Khalil
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v Oakwood Healthcare, Inc, 504 Mich 152, 160; 934 NW2d 665 (2019) (quotation
marks, citations, and emphasis omitted).]
“Summary disposition is suspect where motive and intent are at issue or where the
credibility of a witness is crucial. Furthermore, where the truth of a material factual assertion of a
moving party is contingent upon credibility, summary disposition should not be granted.”
Foreman v Foreman, 266 Mich App 132, 135-136; 701 NW2d 167 (2005) (citation omitted).
Summary disposition is improper if evidence is in conflict. Lysogorski v Bridgeport Charter Twp,
256 Mich App 297, 299; 662 NW2d 108 (2003).
B. THE REMEDY OF RESCISSION
In Michigan, every “owner or registrant of a motor vehicle required to be registered in this
state” must “maintain security for payment” of PIP benefits and property protection insurance.
MCL 500.3101(1). Although the Legislature required owners and registrants to purchase
insurance policies and enacted a comprehensive scheme regulating such polices, the policies
themselves remain contracts subject to the common law of contracts as modified by the no-fault
act. Bazzi v Sentinel Ins Co, 502 Mich 390, 399-400; 919 NW2d 20 (2018). The Legislature did
not limit the common-law remedies available to an insurer for misrepresentation or fraud. Id.
at 400-401. As such, the remedies for misrepresentation and fraud remain, which includes the
remedy of rescission. Id. at 401. Rescission is an equitable remedy that allows a party who was
fraudulently induced to enter into a contract to void the contract. Id. at 408-409. “Rescission
abrogates a contract and restores the parties to the relative positions that they would have occupied
if the contract had never been made.” Id. at 409. Rescission does not amount to a simple refusal
to be bound by the contract, which would constitute a breach of contract if done improperly.
Rather, an insurance policy that is properly rescinded is “considered never to have existed” as a
result of the rescission. Id. at 408.
On appeal, Progressive maintains that it had the right to rescind the contract without any
need for a court’s approval. Progressive relies on foreign authorities for that proposition, but those
authorities are merely persuasive, see Franks v Franks, 330 Mich App 69, 97 n 4; 944 NW2d 388
(2019), and inapplicable because our Supreme Court has already clarified the proper approach to
handling claims of rescission.
Our Supreme Court has recognized that there traditionally was a distinction between
equitable rescission and the right to rescind at law through mutual rescission. MEEMIC Ins Co v
Fortson, 506 Mich 287, 310 n 19; 954 NW2d 115 (2020). Our Supreme Court has held that a
party to an insurance policy contract does not have an absolute right to the equitable remedy of
rescission on the ground of fraud in the inducement. See Bazzi, 502 Mich at 411. Moreover,
although a party has the right to attempt to rescind a contract at law on the ground that he or she
was induced to enter into the agreement by fraud, the rescinding party must adhere to strict
requirements. See Don McCullagh, Inc v Dimitroff, 327 Mich 656, 658-659; 42 NW2d 775 (1950)
(reciting the conditions that apply when a party wishes to assert the right of rescission). The party
asserting the right to rescind the contract must promptly give notice of the decision to the other
party after learning about the misstatements, and the rescinding party must adhere to the rescission.
Id. at 659. The failure to adhere to the rescission may constitute a waiver of the right to rescind.
Id. If the parties agree to the rescission, the contract is void as a matter of law. However, if the
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other party opposes the attempted rescission, the matter becomes one for the courts. If there is a
question of fact as to the validity of the rescission, it is normally for the finder of fact to resolve
unless the undisputed facts show that a verdict should be directed in a party’s favor. Id.(concluding that, because the undisputed evidence showed that the plaintiff continued to use the
car and waived his right to rescind as a matter of law, the trial court should have directed a verdict
in the defendant’s favor on the issue of rescission).
In this case, Progressive asserted the right to rescind the insurance contract as a remedy for
being fraudulently induced to enter into the contract. If the rescission was not mutual, then
Progressive would have the burden to prove that it was entitled to the equitable remedy of
rescission by establishing the elements of its affirmative defense of fraud. Shelton v Auto-Owners
Ins Co, 318 Mich App 648, 657; 899 NW2d 744 (2017). Accordingly, in order to establish its
right to summary disposition on the basis of fraud in the inducement, Progressive had to show that
there was no material factual dispute that (1) Overland made a material misrepresentation, (2) the
representation was false, (3) Overland knew it was false or made the representation with reckless
disregard for the truth, and (4) it made the representation with the intention that Progressive would
act on it. Id.Progressive clearly established that Overland made a misrepresentation. The undisputed
evidence shows that Overland was in the business of transporting passengers to and from
appointments for a fee, which amounted to the transportation of passengers for hire. Moreover,
Cheema admitted that he signed the application for insurance on behalf of Overland and that the
application represented that Overland was not in the business of transporting passengers for hire.
The fact that Overland—through Cheema—relied on Saeidi to fill out the application for insurance
does not alter the fact that Overland was responsible for the misrepresentation. See Mate v
Wolverine Mut Ins Co, 233 Mich App 14, 20-21; 592 NW2d 379 (1998) (noting that an
independent insurance agent is the agent of the insured and not the insurer).
The undisputed evidence also shows that the representation was material because
Progressive demonstrated that it would not have issued the policy had Overland accurately
represented that it was in the business of transporting passengers for hire. See Keys v Pace, 358
Mich 74, 82; 99 NW2d 547, 551 (1959); Auto-Owners Ins Co v Comm’r of Ins, 141 Mich App
776, 781; 369 NW2d 896 (1985) (defining a material misrepresentation as one that would affect
the decision to accept the risk or would have increased the premium). It was also beyond
reasonable dispute that Overland intended that Progressive rely on the representations in
determining whether to issue the policy. As such, Progressive established that there was no
material factual dispute as to three of the four elements of fraud. However, as the trial court
correctly noted below, there was a factual dispute over whether Overland knew that the
representation was false.
Cheema testified that he explained “in detail what [Overland] is” to Saeidi before the
insurance policy was issued. Cheema agreed that this included “how [Overland] got money,”
which is mostly through insurance companies. When confronted with the fact that the policy
application indicated that Overland was “not for hire,” Cheema indicated that he did not recall
having a discussion with anyone at Golden Insurance about what it meant to be “for hire.” Cheema
presented evidence that it was his understanding that a business that transports people “for hire”
was a business that directly charged its passengers a fee—as opposed to charging a third party,
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such as an insurer. He further presented evidence that—contrary to Saeidi’s deposition
testimony—Saeidi understood that to be the case as well. Specifically, Cheema presented a written
summary of a contact that Progressive’s investigator had with Saeidi. The investigator wrote that
Saeidi told him that he wrote the policy for Overland and that Saeidi acknowledged that Cheema
told him that his business did not transport passengers for hire. Nevertheless, Saeidi also told the
investigator that Cheema told him that Overland billed Medicaid and Medicare. When the
investigator asked Saeidi about his understanding of the phrase “for hire,” Saeidi told him that that
meant that the business charged people for their services, not Medicare or Medicaid.
The evidence permitted an inference that Saeidi may have led Cheema to believe that that
was an accurate understanding of the phrase when completing the application. Although a finder
of fact could disbelieve Cheema’s evidence, this Court cannot make credibility determinations,
Foreman, 266 Mich App at 136, and is required to view the evidence in a light most favorable to
the nonmoving party when reviewing a motion for summary disposition, El-Khalil, 504 Mich at
160. Furthermore, “whether an insured has committed fraud is [generally] a question of fact for a
jury to determine.” See Meemic Ins Co v Fortson, 324 Mich App 467, 473; 922 NW2d 154 (2018).
See also Shelton, 318 Mich App at 657 (stating that it is an element of fraud that the person making
the misrepresentation knew that his or her representation was false). Thus, because there was a
question of fact as to whether Cheema believed that the representation that he made on Overland’s
behalf was true, a question of fact existed as to whether Cheema committed fraud.
The trial court concluded that summary disposition was nevertheless proper because, in its
view, the undisputed evidence showed that Cheema—acting on Overland’s behalf—had accepted
Progressive’s decision to rescind the policy by using the refunded premiums to pay Overland’s
business expenses. That is, the trial court determined that there was no question of fact that
Progressive established a mutual rescission at law.
The parties to a contract may explicitly agree to rescind the contract, but they may also do
so impliedly through their actions. See Young v Rice, 234 Mich 697, 700-701; 209 NW 43 (1926).
A mutual rescission occurs by implication when the parties by their actions mutually abandon all
further performance and treat the contract as at an end, or when one of the parties distinctly
abandons all rights and obligations under the contract and the other accepts the situation so created.
Id. Progressive relies on the latter situation. As such, Progressive had to show that there was no
reasonable factual dispute that Overland took actions that demonstrated that it accepted
Progressive’s decision to rescind and treated the policy as rescinded.
Progressive relies on Puffer v State Mut Rodded Fire Ins Co, 259 Mich 698; 244 NW 206(1932), for the proposition that Overland’s use of the refunded premiums established a mutual
rescission as a matter of law. In Puffer, the insurer reduced the coverage applicable to a fire loss
after the loss and before giving notice of the change to the insured, which arguably rendered the
change improper. Id. at 699-700. The insurer then sent the insured a check for the reduced amount
and wrote on the check that the amount covered the loss “in full” and further wrote that the insured
“jointly and severally” released the insurer. Id. at 700. The insured cashed the check. Id. at 700-
701. Our Supreme Court determined that, by cashing the check and retaining the funds, the insured
effected an accord and satisfaction that ended any dispute over the amount of the loss. Id. at 702.
The Court reasoned that the insured could not accept the check under protest because receipt of
the funds was contingent on the acceptance of the conditions stated on the check. Id.
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The facts of the instant case are distinguishable from the facts in Puffer. In this case,
Progressive sent a letter to Overland stating that it was exercising the right of rescission.
Progressive separately refunded the premiums by electronic transfer. Progressive did not send
Overland a check with unambiguous conditions on the acceptance of the funds. Indeed, it did not
even refer to the refunded premiums in its letter asserting the right to rescind. Accordingly,
Progressive did not put Cheema on notice that, by accepting and retaining the refunded premiums,
Cheema would be agreeing to the rescission of the policy on behalf of Overland. Consequently,
the evidence did not show that Cheema necessarily agreed to particular terms and conditions by
the use of the refunded premiums, as occurred in Puffer. Instead, the trial court had to examine
the evidence and determine whether there was a factual dispute about whether Overland accepted
the rescission though its actions.
We find there is a factual dispute that exists here. A reasonable finder of fact could
conclude that when Cheema spent the refunded premiums, he impliedly accepted Progressive’s
decision to rescind on behalf of Overland. But there was also evidence that Cheema did not accept
the rescission. Cheema testified that he did not agree with Progressive’s decision to rescind and
presented evidence that he contacted his lawyer about it. He also called Golden Insurance to
express his disagreement under the assumption that Golden Insurance was the proper party to
correct the dispute. It was also noteworthy that Cheema had already sued Progressive for unpaid
benefits under the policy before Progressive rescinded the policy. The evidence that Cheema took
steps to dispute the rescission and had already sued Progressive to collect benefits under the policy
is evidence from which a reasonable jury could find that Cheema did not accept the notion that the
policy was fraudulently procured. Under these circumstances, a reasonable finder of fact could
conclude that Cheema’s decision to spend the refunded premiums did not imply that he accepted
Progressive’s attempted rescission on behalf of Overland. See Young, 234 Mich at 700-701.
Additionally, as our Supreme Court has explained, rescission is an equitable remedy that a
trial court has the discretion to grant. Bazzi, 502 Mich at 409. When determining whether to apply
the remedy, a trial court must balance all the equities, which includes the rights of third parties.
Id. at 410-412. The trial court must consider a variety of factors when determining whether to
apply the equitable remedy of rescission:
(1) the extent to which the insurer could have uncovered the subject matter
of the fraud before the innocent third party was injured; (2) the relationship
between the fraudulent insured and the innocent third party to determine if
the third party had some knowledge of the fraud; (3) the nature of the
innocent third party’s conduct, whether reckless or negligent, in the injury-
causing event; (4) the availability of an alternate avenue for recovery if the
insurance policy is not enforced; and (5) a determination of whether policy
enforcement only serves to relieve the fraudulent insured of what would
otherwise be the fraudulent insured’s personal liability to the innocent third
party. [Pioneer State Mut Ins Co v Wright, 331 Mich App 396, 411; 952
NW2d 586 (2020).]
This Court has also held that trial courts must balance the equities when determining
whether to allow a mutual rescission at law in the same way that courts must do for equitable
rescission, at least when the rights of an innocent third party are implicated in the rescission. Univ
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of Mich Regents v Mich Auto Ins Placement Facility, ___ Mich App ___, ___; ___ NW2d ___
(2022) (Docket No. 354808); slip op at 4-6. Consequently, to the extent that Cheema might be
deemed an innocent third party, the trial court would have to balance his rights when determining
whether to enforce a mutual rescission.
In this case, the trial court effectively treated Cheema and Overland as the same entity
because Cheema was the owner of Overland and acted on Overland’s behalf in procuring the
insurance policy. However, in the absence of evidence that would warrant disregarding the entity’s
separate existence, courts must respect the separate existence of the entity. Green v Ziegelman,
310 Mich App 436, 450-451; 873 NW2d 794 (2015). Because the trial court did not determine
that Overland’s separate existence should be disregarded, it should have treated Cheema as a third
party to the insurance agreement. The trial court could properly consider the fact that Cheema was
Overland’s principal when balancing the equities, but it also had to consider his status as an
employee at the time of the accident and had to consider his culpability for the misrepresentation
and whether it was innocent. See Pioneer State, 331 Mich App at 411. As already discussed,
whether Cheema acted innocently was a question of fact that implicated the equities, so it could
not be resolved on a motion for summary disposition. See Franks, 330 Mich App at 91-92 (stating
that summary disposition may be appropriate when applying equity if there are no material factual
disputes, but noting that a court sitting in equity may nevertheless need to take evidence when
determining how to fashion its decree).
Cheema demonstrated that there were questions of fact as to whether Overland committed
fraud in the inducement, whether Overland impliedly accepted the rescission, and questions of fact
concerning whether rescission was an appropriate remedy should Progressive establish fraud in
the inducement. Consequently, the trial court erred when it determined that Progressive was
entitled to rescind the contract as a matter of law and erred when it dismissed Cheema’s claims for
PIP benefits on that basis.
C. ELECTION OF REMEDIES DOCTRINE
Cheema also argues on appeal that Progressive was barred from rescinding the contract as
a matter of law because it elected its remedy when it chose to cancel the policy and could not later
change its mind and choose to rescind the policy. We disagree that the common-law doctrine of
election of remedies bars Progressive from asserting rescission.
The election of remedies doctrine is “merely a procedural rule. . . .” Riverview Co-Op, Inc
v First Nat’l Bank & Trust Co of Mich, 417 Mich 307, 311; 337 NW2d 225 (1983). We review
questions of law de novo. Hamed v Wayne Co, 490 Mich 1, 8; 803 NW2d 237 (2011).
The common-law doctrine of election of remedies is a procedural rule that precludes a
party from pursuing two inconsistent remedies. Riverview Coop, Inc v The First Nat’l Bank &
Trust Co of Mich, 417 Mich 307, 311; 337 NW2d 225 (1983). “Its purpose is not to prevent
recourse to alternate remedies, but to prevent double redress for a single injury.” Id. at 312. The
elements of election of remedies are (1) the party against whom the doctrine is to be enforced knew
that he or she had two or more remedies available at the time of election; (2) the remedies were
inconsistent; and (3) the party chose one of the remedies to the exclusion of the other. Id. at 312-
313; see also In re Mahon’s Estate, 290 Mich 193, 197; 287 NW 430 (1939) (stating that the
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doctrine of election of remedies only applies when, with full knowledge of the facts, a party makes
a deliberate choice between two inconsistent remedies). “If any one of these elements is absent,
the result of preclusion does not follow.” Riverview Coop, Inc, 417 Mich at 313 (quotation marks
and citation omitted).
In this case, the election of remedies doctrine is inapplicable. The accident occurred in
April 2018. In May 2018, Progressive learned that Cheema had used the vehicle that was involved
in the accident for patient transportation. A Progressive representative contacted Saeidi, who
indicated that Overland transported patients to physical therapy but that Overland did not get paid
for its services. In June 2018, Cheema was informed that his insurance policy would be cancelled
on July 14, 2018, but Progressive continued its investigation into whether Cheema was entitled to
benefits under the policy. On July 20, 2018, Cheema submitted to an examination under oath and
testified that Overland had consistently received payments for transporting patients. In August
2018, Progressive contacted Saeidi again. Saeidi indicated that Cheema had reported that he billed
Medicare and Medicaid for Overland’s services. In November 2018, Progressive rescinded the
insurance policy. Thus, the record reflects that Progressive did not know that it had two remedies
when it issued the cancellation. Indeed, there is no evidence that Progressive was aware that
Overland had consistently billed for its services until Cheema submitted to an examination under
oath in July 2018. The election of remedies doctrine is inapplicable.
Moreover, we question whether the election of remedies doctrine would apply under the
circumstances of this case. The purpose of the election of remedies doctrine is to “prevent double
redress for a single injury.” Riverview Coop, Inc, 417 Mich at 312. In this case, there is no danger
of Progressive obtaining double recovery because Progressive returned Overland’s premium.
Additionally, contrary to Cheema’s arguments on appeal, the facts in this case are distinguishable
from the facts in Burton v Wolverine Mut Ins Co, 213 Mich App 514; 540 NW2d 480 (1995).
Indeed, unlike the insurer in Burton, Progressive did not cancel the policy before the motor vehicle
accident in this case occurred. Id. at 517.
IV. STATE FARM’S MOTION
A. STANDARD OF REVIEW
Cheema also argues that the trial court erred when it granted State Farm’s motion for
summary disposition on the ground that Cheema was barred from obtaining PIP benefits because
he was an owner of the Odyssey and he failed to maintain the required insurance. This Court
reviews de novo a trial court’s decision on a motion for summary disposition. Glasker-Davis, 333
Mich App at 229. This Court also reviews de novo whether the trial court properly interpreted and
applied the relevant statutes. See In re Carroll, 300 Mich App at 159.
B. ANALYSIS
The Legislature provided that every “owner or registrant of a motor vehicle required to be
registered in this state” must “maintain security for payment” of PIP benefits and property
protection insurance. MCL 500.3101(1). An owner or registrant who does not maintain the
required coverage is not entitled to be paid PIP benefits. MCL 500.3113(b). An owner or
registrant can “maintain” the required insurance coverage without purchasing such coverage in his
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or her own name. Dye v Esurance Prop & Cas Ins Co, 504 Mich 167, 186-192; 934 NW2d 674
(2019). An owner is defined to be, in relevant part, a person “renting a motor vehicle or having
the use of a motor vehicle, under a lease or otherwise, for a period that is greater than 30 days,”
MCL 500.3101(3)(l)(i), or a person that holds legal title to the motor vehicle,
MCL 500.3101(3)(l)(iii).
In this case, if Progressive properly rescinded the insurance policy, then the Odyssey was
uninsured under the No-Fault Act. MCL 500.3101(1). See Bazzi, 502 Mich at 408-409
(recognizing that a rescinded contract is treated as having never existed). And if Cheema was also
deemed to be an owner of the minivan titled in the name of his business, then he is not eligible for
PIP benefits from State Farm because he failed to maintain the required insurance. See
MCL 500.3113(b).
It is undisputed that the Odyssey was registered and titled in Overland’s name. As such,
Overland was both the actual owner and the registrant. See Titan Ins Co v State Farm Mut Auto
Ins Co, 296 Mich App 75, 86-92; 817 NW2d 621 (2012) (discussing the distinction between an
owner and a registrant and concluding that a person can remain a registrant even after transferring
title to a vehicle). State Farm nevertheless argues that Cheema was a co-owner because he
admitted that had absolute control over the Odyssey, so in State Farm’s view of the evidence,
Cheema had the “use” of the Odyssey for a period “greater than 30 days” within the meaning of
MCL 500.3101(3)(l)(i). The trial court agreed and concluded on that basis that, as a co-owner
with Overland, Cheema had to maintain the coverage required by MCL 500.3101(1). Because the
Odyssey did not have the required insurance as a result of the rescinded policy, the trial court held
that Cheema was barred from obtaining PIP benefits under MCL 500.3113(b).
More than one person can be the owner of a vehicle under the No-Fault Act, and whether
a particular person was an owner is normally a question of fact. Botsford Gen Hosp v Citizens Ins
Co, 195 Mich App 127, 133; 489 NW2d 137 (1992). When the Legislature defined owner to
include people who had the “use” of a motor vehicle, the Legislature intended to prevent users of
motor vehicles from obtaining the benefits of PIP coverage without purchasing insurance through
the expedient of titling the vehicle in the names of family members. Ardt v Titan Ins Co, 233 Mich
App 685, 690; 593 NW2d 215 (1999). Nevertheless, this Court has noted that the Legislature
associated the phrase “having the use” of the motor vehicle with renting or leasing the vehicle and
concluded that that language showed that the Legislature did not intend that all use of a vehicle for
30 days amounted to having the use of the motor vehicle. Id. at 690-691. Instead, the language
showed that “having the use” refers to proprietary or possessory usage, “as opposed to merely
incidental usage under the direction or with the permission of another.” Id. at 691.
In this case, State Farm presented evidence that Cheema controlled access to the Odyssey
and could, in theory, make use of the Odyssey at any time and for any purpose. That evidence,
however, did not by itself establish that Cheema was an owner. Cheema owned and managed
Overland and acted as its agent when determining whether and to whom the Odyssey should be
assigned, but Overland was—in the absence of evidence to disregard its form—a separate entity.
See Green, 310 Mich App at 451. Therefore, Cheema’s acts as Overland’s agent must be
distinguished from the acts that Cheema took in his individual capacity. Stated another way, the
trial court needed to consider whether Cheema managed his own use of the Odyssey consistent
with his status as an employee of Overland.
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Cheema testified that he had control over the Odyssey, but he also testified that Overland’s
three vans were used exclusively for Overland’s business. He stated that he routinely directed his
drivers to the locations where they had to transport patients. He further testified that there were
other vehicles for his personal transportation needs, which included a Toyota titled in his name.
Cheema admitted that he sometimes used Overland’s vehicles to run errands before or after
transporting a passenger, but he also stated that he paid himself whenever he acted as a driver for
Overland.
Cheema’s testimony permitted an inference that, Cheema did not have unfettered use of
the Odyssey for purposes outside of Overland’s business and that he respected the limitations on
that use. In the absence of evidence that Cheema routinely misused his status as the owner of
Overland to treat Overland’s vehicles as personal vehicles, a reasonable finder of fact could
conclude from Cheema’s testimony that he did not have more than incidental use of the Odyssey
with the permission of his employer, Overland. See Ardt, 233 Mich App at 690-691. Stated
another way, a reasonable finder of fact could conclude that Cheema respected the limitations on
his use of the Odyssey imposed by Overland’s policies and, therefore, was not an owner within
the meaning of MCL 500.3101(3)(l)(i).
Because there was a question of fact as to whether Cheema was an owner required to
maintain no-fault coverage under MCL 500.3101(3)(l), the trial court erred when it determined
that, as a matter of law, Cheema was an owner who would be barred from seeking PIP benefits
under MCL 500.3113(b), if Progressive properly rescinded the policy at issue. For that reason,
even if Progressive properly rescinded the policy, a reasonable finder of fact could find that
Cheema was not an owner required to maintain insurance on the Odyssey under
MCL 500.3101(3)(l). If a reasonable finder of fact made that finding, State Farm would be next
in priority for the payment of PIP benefits as the insurer of a member of Cheema’s household. See
MCL 500.3114. Consequently, the trial court erred when it determined that there were no
circumstances under which State Farm could be liable for payment of PIP benefits.
The trial court should have denied State Farm’s motion for summary disposition.
V. CONCLUSION
Because Overland was not aggrieved by the trial court’s decision to grant the motions for
summary disposition by Progressive and State Farm, we dismiss Overland’s appeal.
We conclude that the trial court erred when it granted the motion for summary disposition
in favor of Progressive. There were questions of fact that had to be resolved before the trial court
could determine whether Progressive was entitled to the equitable remedy of rescission or
determine whether Progressive established a mutual rescission at law. Additionally, even if
Progressive established its right to rescind in equity or at law, there were questions of fact
implicating whether the trial court should enforce the remedy. The trial court did not err when it
determined that Progressive was not barred as a matter of law from asserting rescission under the
doctrine of election of remedies.
The trial court also erred when it granted State Farm’s motion for summary disposition.
Whether Cheema was an owner of the Odyssey under the No-Fault Act was a question of fact. As
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such, even if Progressive establishes its right to rescind, Cheema might not be precluded from
obtaining PIP benefits from State Farm under MCL 500.3113(b).
For these reasons, we reverse the trial court’s opinion and order granting the motions for
summary disposition by Progressive and State Farm, vacate that opinion and order, and remand
for further proceedings.
Dismissed in part, affirmed in part, reversed and vacated in part, and remanded for further
proceedings consistent with this opinion. We do not retain jurisdiction. Plaintiff as the prevailing
party may tax costs. MCR 7.219(A).
/s/ Kathleen Jansen
/s/ Michelle M. Rick
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