In this matter, a woman applied for an automobile insurance policy from Everest on November 1, 2015 – the same day she was involved in a motor vehicle accident. On her application, she indicated she was the only person above the age of 14 residing at her address. During Everest’s processing of her claim, however, the woman admitted in a recorded statement that her 21-year-old daughter lived with her on that date.
Had the woman listed her daughter as a member of the household on the application, the total premium on the policy would have increased considerably. Discovering the misrepresentation, and in accordance with a fraud provision in the insurance contract, Everest rescinded the policy and issued a premium refund check that the woman then cashed.
A physical therapy provider that treated the woman for her alleged injuries submitted a claim for reimbursement. When Everest denied the claim, the provider filed suit. Jim brought a motion for summary disposition, arguing that because the insurance policy was properly rescinded for fraudulent misrepresentation under both Michigan law and the express language of the policy, and because the insured effectively ratified the rescission by endorsing the premium refund check, the provider was not entitled to reimbursement.
Rather than responding to the motion and arguing its position before the court, the plaintiff voluntarily dismissed the lawsuit, abandoning a total claim of more than $25,000.