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Bahnam, et al. v. Farm Bureau General Insurance Company of Michigan (COA – UNP 10/15/2020; RB #4158)


Michigan Court of Appeals; Docket # 347638; Unpublished
Judges Swartzle, Jansen, and Borrello; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion 

Not Applicable

Actual Fraud
Cancellation and Rescission of Insurance Policies

In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing the plaintiff’s first-party action for no-fault PIP benefits.  After the trial court issued its order, the Court of Appeals decided Haydaw v Farm Bureau Ins Co, ___ Mich App ___ (2020), and thus in light of Haydaw, the Court of Appeals held that the trial court erred in this case by dismissing the plaintiff’s action based on false statements the plaintiff made during the course of litigation.

Samer Bahnam was severely injured in a motor vehicle collision in October 2016, and sought no-fault PIP benefits from Farm Bureau General Insurance Company of Michigan (Farm Bureau).  After Farm Bureau withheld payment of Bahnam’s benefits, including replacement services benefits allegedly performed by Bahnam’s sister, Dina, Bahnam filed the underlying first-party action against Farm Bureau. Farm Bureau hired an investigator to surveil plaintiff on numerous occasions over the following year, and the surveillance revealed plaintiff performing a myriad of activities that he claimed in a subsequent deposition that he could not and had not performed.  Ultimately, the trial court determined that Bahnam’s misstatements in his deposition constituted fraud, and granted summary disposition in favor of Farm Brueau.

After the trial court granted summary disposition in favor of Farm Bureau, the Court of Appeals issued its decision in Haydaw, holding that false statements made during the course of first-party litigation do not provide grounds for rescission of automobile insurance policies based on fraud provisions therein.  Since the trial court based its summary disposition order entirely on misstatements Bahnam made during his 2018 deposition, the Court of Appeals vacated the trial court’s order in accordance with Haydaw.

In this case, the trial court granted summary disposition in favor of Farm Bureau based upon the fraud-exclusion clause in the no-fault policy at issue. In doing so, the trial court relied solely upon plaintiff’s deposition testimony, which the trial court found to be false because the testimony contradicted the contents of surveillance videos showing plaintiff’s post-accident conduct. The facts of this case fit squarely within Haydaw, and that decision requires a conclusion that the trial court erroneously granted summary disposition in favor of Farm Bureau.

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