The Michigan Court of Appeals this week issued another decision pertaining to the Michigan no-fault law and the ability to obtain benefits following a Detroit car accident. The issue in this case involved yet another insurance carrier attempting to deny the payment of no-fault PIP benefits due to alleged fraud on the part of a plaintiff.
In Spencer v. State Farm, docket no. 332111 (unpublished, 9/14/17), the plaintiff was injured in a car accident in Wayne County on October 17, 2013. He turned to his auto no-fault carrier, State Farm Insurance, for the payment of certain benefits, including replacement services. State Farm alleged the plaintiff lied about receiving replacement services from his sister following the accident. According to State Farm, the plaintiff’s allegedly fraudulent misrepresentations prevented the recovery of all no-fault benefits available to the plaintiff from his insurance policy. So according to State Farm, not only was the plaintiff not able to recover replacement services, his entire lawsuit should be dismissed.
The alleged fraud by the plaintiff is a little confusing, but it appears there was some confusion as to whether or not he was actually receiving replacement services from his sister during a certain portion of his claim.
The Wayne County trial judge agreed with State Farm, finding there was fraud on the part of the plaintiff and dismissed his case. The plaintiff appealed and the Court of Appeals reversed the dismissal, finding there was a question as to whether what the plaintiff said in his deposition was actually fraudulent. As a result, the plaintiff is able to go forward with his Michigan no-fault case.
This case is important because insurance carriers – like State Farm Insurance – have been filing motions throughout Michigan alleging fraud on the part of plaintiffs in the hopes of getting cases dismissed. In 2014, the Court of Appeals issued Bahri v. IDS Property Casualty Ins. Co., 308 Mich App 420. This case allows an insurance company to void an entire insurance policy if the plaintiff willfully misrepresents a material fact about his or her claim.
In Bahri, the plaintiff had a no-fault insurance policy that included a provision withholding coverage from an insured who makes fraudulent statements or engaged in fraudulent conduct followed a car accident. In that case, the plaintiff sought compensation for replacement services provided before the car accident. In addition, the plaintiff was videotaped performing activities he said he could not do. As a result, the court of Appeals dismissed the case.
The Court of Appeals in this case distinguished Bahri, stating there is was no evidence the plaintiff was performing activities he testified he could not do. In addition, there was confusion as to whether the services provided to the plaintiff weren’t in fact done for the time frame he claimed replacement services. As a result, the case should not been dismissed based on Bahri and fraud.