Gable v. Citizens Ins. Co. of the Midwest (COA – UNP 4/2/2019; RB #3878)


Michigan Court of Appeals; Docket # 341757; Unpublished
Judges Shapiro, Beckering, and M.J. Kelly; per curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion

Misrepresentation/Fraud as a Basis to Rescind Coverage

Actual Fraud

In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s grant of summary disposition for defendant Citizens Insurance Company of the Midwest (“Citizens”), because Citizens did not provide “clear, satisfactory, and convincing evidence” that plaintiff Denise Gable (“Gable”) committed fraud, in violation of her no-fault insurance policy.

Plaintiff Gable suffered numerous injuries as a result of a motor vehicle collision—a shoulder strain most notably. She was ordered to undergo physical therapy, and during her course of treatment, she began experiencing headaches, vision loss, and light sensitivity. Multiple treating physicians diagnosed Gable with probable ischemic optic neuropathy (“ION”), but perhaps traumatic optic neuropathy (“TON”) as a result of the motor vehicle collision. After receiving treatment from several providers, Gable filed a complaint against Citizens to recover no-fault PIP benefits. Citizens asserted that PIP benefits were not owed because Gable’s condition “did not arise out of the ownership, maintenance, or use of a motor vehicle as a motor vehicle and that her actions during the pendency of her claims breached her obligations under the policy.”

Citizens moved for summary disposition, arguing that Gable misrepresented her condition to her doctors and at her deposition—at which she testified that she was diagnosed with either ION or TON—and that she actually suffered from a wholly unrelated ailment that she failed to reveal to her doctors. Additionally, Citizens adduced surveillance video showing plaintiff waxing her car in the sunlight, which, it argued, “belied plaintiff’s claims of ‘extreme sensitivity to light and significant right arm/shoulder pain,’ and further illustrated her material misrepresentations to defendant.” The trial court granted Citizens motion.

The Court of Appeals disagreed with the trial court, noting that, although various doctors surmised that Gable’s vision problems resulted from ischemic optic neuropathy, “the record also contains potential diagnoses of traumatic optic neuropathy.” Her representations, therefore, could not be said to have been made “knowingly or recklessly with the intent that defendant rely on them.” The Court of Appeals reasoned as follows:

. . . to conclude that plaintiff made material representations knowingly or recklessly with the intent that defendant rely on them requires either ignoring some of the record evidence, finding some evidence more credible than other evidence, or viewing the evidence in the light most favorable to the movant, rather than the nonmovant. All of which is prohibited when deciding a motion for summary disposition. See Shelton, 318 Mich App at 657; Amerisure Ins Co, 282 Mich App at 431. In addition, to the extent that the trial court impliedly determined that plaintiff could not believe in good faith that she was entitled to PIP benefits, given the opinions of various doctors that her condition was attributable to ION rather than TON, this was a determination inappropriate for summary disposition.

Defendant points to several specific examples of alleged misrepresentation from plaintiff’s deposition. Defendant contends that plaintiff misrepresented her condition when, at her second deposition, she “testified that she was diagnosed with “TON – traumatic optic neuropathy.” Upon review of the deposition transcript, we note that plaintiff does testify that her doctors diagnosed her with TON, but she also said that doctors provided an alternative diagnosis, and agreed that it could be ION. Asked whether “any doctor [told her] that it wasn’t due to trauma or that it was not likely that it was due to trauma[,]” plaintiff replied, “No, both of them [referring to Drs. Franchi and Lin] said it was from the car accident.” As indicated above, there is record evidence to support plaintiff’s testimony, specifically with regard to Dr. Lin.

As to the surveillance footage that showed Gable waxing her vehicle in the sunlight, the Court determined that Gable had not actually said that she could not work in the sunlight at all. Rather, Gable stated that she was “looking for a job ‘that doesn’t have light’ or that did not ‘involve computers of bright lights.’” The video, therefore, was not necessarily inconsistent with her prior representations re light sensitivity, nor did it “provide ‘clear, satisfactory, and convincing evidence’ of fraud.” Moreover, the video did not depict the plaintiff performing tasks so strenuous on her shoulder as to constitute proof positive that she was not, in fact, suffering from a shoulder injury. In regards to the surveillance footage, the Court reasoned:

Defendant also contends that the video surveillance of plaintiff establishes that she misrepresented her condition to defendant with claims of “extreme sensitivity to light and significant right arm/shoulder pain.” The premise of defendant’s assertion is that plaintiff has said that she is, in the words of defendant, “unable to work in sunlight.” Plaintiff denies making this statement, and at her 2017 deposition, she provided testimony regarding her sensitivity to light that was more nuanced than defendant’s premise would suggest. Plaintiff said that she was looking for a job “that doesn’t have light” or that did not “involve computers of bright lights.” However, she also indicated that some types of computer screens emit a light that is more bothersome to her eye than do others, and her testimony suggested that she could tolerate direct sunlight without pain for short periods. Moreover, nothing in the record indicates that she is under doctor’s orders to always wear sunglasses when outside. Five minutes of video surveillance showing plaintiff in the sunlight with her sunglasses on top of her head, at hand should she need them, is not necessarily inconsistent with her deposition testimony, nor does it provide “clear, satisfactory, and convincing evidence” of fraud. Cooper, 481 Mich at 414. Similarly, we do not believe that the five-minute clip from the surveillance video presents “clear, satisfactory, and convincing evidence” of fraud with regard to plaintiff’s claims of shoulder and arm pain resulting from the car accident. Just because plaintiff could wax a single spot on the door of her vehicle for five-minutes, alternating hands every few seconds, does not show that she could perform tasks requiring her to lift and carry, nor does it conclusively prove intent to defraud. See Shelton, 318 Mich App at 660 (indicating that a plaintiff’s modest engagement in activities that the plaintiff asserts is painful is not “sufficient to establish any of the elements of fraud beyond a question of fact”).

The Court of Appeals thus reversed and remanded for further proceedings.