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Proof of a Guaranteed Job Is Necessary for Insured to Recover No-Fault Wage Loss Benefits

Gregory D. White

An insured who makes a claim for no-fault personal injury protection benefits under an automobile insurance policy must prove he had actual guaranteed work to survive an insurer’s motion for summary disposition, the Michigan Court of Appeals recently held in an unpublished opinion.

In Hatfield v Progressive Michigan Ins Co, the plaintiff filed suit after Progressive, his insurer, refused to pay wage loss PIP benefits following a February 2014 motor vehicle accident. During his deposition, the plaintiff testified that although he had been unemployed, he was offered a new job as a painter that was to start the day after the accident occurred, and that he would make $15 an hour for 40 hours or more a week. To substantiate his claim, the plaintiff provided a “Request for Employment Verification” that contained the details of the alleged offer. The form was allegedly signed by a co-owner of the painting company.

Progressive moved for summary disposition, arguing that the plaintiff had not been offered a job, and the submission of a false employment verification form violated the fraud provision in the policy. The company cited the following policy language in support of its motion to dismiss:

“We may deny coverage for an accident or loss if you or a person seeking coverage has knowingly concealed or misrepresented any material fact or circumstance, or engaged in fraudulent conduct, in connection with the presentation of settlement of a claim.”

Additionally, Progressive offered testimony of the painting company’s bona fide owner, who testified that the person that signed the employment verification form was not a co-owner of the company and had no authority to offer a job to the plaintiff, and that the plaintiff was never offered employment.

After the trial court granted Progressive’s motion for summary disposition, the Michigan Court of Appeals upheld the ruling, holding that the unsworn Request for Employment Verification form was not sufficient to create a genuine issue of material fact.

While weighing unsworn statements against sworn testimony is not novel under the Michigan Court Rules, the lower court went further by stating that, even if the plaintiff was misled by purported “co-owner” of the painting company, it was “not the insurance company’s fault.” This sentiment was repeated in the Court of Appeals’ decision and lends credence to the argument that Progressive would have been entitled to summary disposition even if sworn testimony had been offered to prove any misrepresentation by the “co-owner” to the plaintiff. Instead, the Court of Appeals focused on whether or not the plaintiff had “guaranteed work.”

Insurance carriers will certainly be watching and hoping for more rulings suggesting that plaintiffs must prove the existence of guaranteed work available to establish a viable PIP wage-loss claim. We will continue to monitor any developments in this area of the law.

Author: Gregory Davis White

Gregory Davis White

Gregory “Davis” White, an associate in the firm’s Insurance Defense group, solves clients’ problems by figuring out the best way to assemble the elements of each case. He is admitted to practice in Michigan and Wisconsin.

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