The Michigan Court of Appeals issued a ruling on a case involving alleged insurance fraud earlier this month. In Sampson v. Home-Owners Insurance Co., the defendant alleged that the plaintiff committed fraud while bringing a claim for Michigan no-fault benefits.
In the case, the plaintiff was injured in a car accident on I-96. He sustained neck injuries from the car accident. As part of his claim for Michigan no-fault benefits, he claimed household replacement services that were provided by a Ciara Beard. The services claimed included driving and running errands.
The defendant insurance company in the case presented surveillance video showing the plaintiff driving, lifting objects and running errands in March 2013, the same period of time he claimed replacement services. The defendant contended this was fraud and a violation of the insurance policy. Relying upon a recent Court of Appeals decision, Bahri v. IDS Prop Casualty Insurance, the defendant filed a motion to dismiss the Michigan no-fault case. The trial denied the dismissal and the insurance company defendant appealed.
In affirming the trial court’s ruling, the Michigan Court of Appeals held there was a question of fact as to whether fraud was committed by the plaintiff, and as such, a jury should decide the case.
The reasoning was simple. The surveillance tapes did not establish that the household service statements turned into the insurance company by Ciara Beard were false. Although the surveillance did show the plaintiff driving at various times, they were consistent with the plaintiff’s deposition testimony and the limitations he claimed. The plaintiff did admit he could not drive at times, but never testified he could never drive. He supported this by testifying to the fact pain medication helped him get through the day and driving was an activity that his doctors wanted him to try to do more often.
This case was not a situation where, like the plaintiff in Bahri, the plaintiff sought compensation for replacement services that never occurred. As a result, the Appeals Court denied the insurance company’s motion to dismiss the case.
Although this case was unpublished, and therefore has limited precedential value, it is important ruling. For the past year, insurance companies have been using the Bahri case in aggressive attempts to dismiss entire Michigan no-fault PIP cases. Many trial court judges have used the Bahri ruling to dismiss cases at even the slightest hint of fraud.
The Sampson decision provides an avenue for plaintiffs and their lawyers to demonstrate to trial judges throughout Michigan that not all no-fault cases are fraudulent.