Security for Payment of Benefits: Definitions [§3101]
Replacement Service Expense Benefits: Nature of the Benefit [§3107(1)(c)]
Replacement Service Expense Benefits: The Incurred Requirement [§3107(1)(c)]
Uninsured Motorist Benefits
In this unanimous published per curiam Opinion, the Court of Appeals held that summary disposition for defendant insurer was properly granted on plaintiff’s claims for uninsured motorist benefits because the entitlement to uninsured benefits under the terms of the policy required “some sort of physical contact with the insured” and plaintiff “admitted that she made no direct director or indirect contact.”
The Court of Appeals further ruled that summary disposition was properly granted on plaintiffs’ first-party no-fault claim because she had made fraudulent misrepresentations that precluded her recovery under the policy pursuant to MCL 500.3107(1)(c). Consequently, the court held that the intervening plaintiffs (treatment providers) could not recover their medical expenses because they were deemed to have been “standing in the shoes” of plaintiff.
A vehicle driven by plaintiff, Nazhat Bahri, struck another vehicle. The police report indicated it was a two-vehicle accident, but plaintiff claimed a third vehicle was involved. Plaintiff sought PIP and uninsured motorist (UIM) benefits from defendant, IDS Property Casualty, her no-fault carrier, claiming various types of replacement services. During this same time, plaintiff was caught on surveillance video bending, lifting, driving, and running errands. When IDS denied benefits, plaintiff brought this action. The intervening plaintiffs in the case were the doctors who treated plaintiff for her injuries and who sought to recover payment for their services. IDS moved for summary disposition, arguing that benefits were unavailable because plaintiff had made fraudulent representations when she filed her claim for replacement services. IDS asserted that, because intervening plaintiffs stood in the shoes of plaintiff, they also were not entitled to recover benefits. Regarding the UIM claim, IDS maintained that because the “phantom” third vehicle did not strike plaintiff’s vehicle, the policy precluded benefits. The trial court granted IDS’s motion for summary disposition.
The Court of Appeals affirmed the trial court’s decision, finding the evidence “belie[d]” plaintiff’s claim that she required replacement services, and “directly and specifically” contradicted representations she made in her claim for benefits. The court said:
“Reasonable minds could not differ in light of this clear evidence that plaintiff made fraudulent representations for purposes of recovering PIP benefits. … Because plaintiff’s claim for PIP benefits is precluded, intervening plaintiffs’ claim for PIP benefits is similarly barred, as they stand in the shoes of plaintiff.”
Regarding the UIM claim, the Court of Appeals said that, pursuant to the no-fault policy, there had to be “some sort of physical contact” with plaintiff. The court stated:
“[F]or the third vehicle to be an uninsured motor vehicle under the policy, it had to hit plaintiff or cause another object to hit plaintiff. Plaintiff, however, admitted that she made no direct or indirect contact with the third vehicle during her second accident. Thus, this section would not apply. Furthermore, based on plaintiff’s fraudulent representations … coverage would not be applicable under the policy.”
The Court of Appeals further said the policy’s fraud exclusion applied and the intervening plaintiffs (treatment providers) stood in plaintiff’s shoes and could not recover. The court said:
“In order to substantiate her claim for replacement services, plaintiff presented a statement indicating that services were provided by ‘Rita Radwan’ from October 1, 2011 to February 29, 2012. Because the accident occurred on October 20, 2011, on its face, the document plaintiff presented to defendant in support of her PIP claim is false, as it sought recoupment for services that were performed over the 19 days preceding the accident. Moreover, defendant produced surveillance evidence depicting plaintiff performing activities inconsistent with her claimed limitations. Plaintiff was observed bending, lifting, carrying objects, running errands, and driving — on the dates when she specifically claimed she needed help with such tasks. Of particular note, on November 11, 2011, plaintiff represented that she required assistance vacuuming, cooking, dishwashing, making beds, grocery shopping, taking out the garbage, driving, and running errands. Yet, surveillance videos captured her performing various activities, such as lifting, carrying, and dumping a large bucket of liquid in her yard. On December 19, 2011, plaintiff sought replacement services for various household activities, including grocery shopping. But, on that day, she was observed running several errands from 11:05 a.m. until 7:00 p.m. Plaintiff indicated that on December 29, 2011, she required the assistance of Rita to drive her and perform multiple household activities. However, surveillance video on that day captured plaintiff driving her own vehicle on errands. Similar discrepancies were noted for December 30, 2011.”
Regarding the intervening plaintiffs’ claim for UIM benefits, the Court of Appeals said it was “meritless” because: 1) they only sought PIP benefits in their complaint; 2) under the policy language, plaintiff was not entitled to UIM benefits; and 3) UIM coverage was precluded in light of plaintiff’s fraudulent representations.
Accordingly, the Court of Appeals held:
“Because there is no genuine issue of material fact regarding plaintiff’s fraud, and therefore her inability to recover benefits under the policy, we affirm the trial court’s grant of summary disposition.”