Michigan Court of Appeals; Docket #353845; Unpublished
Judges Ronayne Krause, Beckering, and Boonstra; Per Curiam
Official Michigan Reporter Citation: Not Applicable; Link to Opinion
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In this unanimous unpublished per curiam decision, the Court of Appeals reversed the trial court’s summary disposition order dismissing Plaintiff Bronson Health Care Group, Inc.’s (“Bronson”) first-party action against Defendant State Farm Fire and Casualty Company (“State Farm”). The Court of Appeals held that a question of fact existed as to whether State Farm complied with MCL 500.3020(1)(b) in cancelling its insured’s/Bronson’s patient’s automobile insurance policy, under which Bronson sought no-fault PIP benefits on the basis of an assignment. Specifically, the Court of Appeals held that a question of fact existed as to whether State Farm mailed written notice of cancellation to the insured’s last known address.
Eric Boodt procured an automobile insurance policy from State Farm on February 19, 2018 via the agency of Sabrina Pritchett-Evans. At the time of procurement, Boodt lived at an address on Lake Street; however, the unsigned, computer-generated application for coverage showed a mailing address on Clinton Avenue, where Boodt lived prior to moving to his Lake Street residence. There was no direct evidence to explain the discrepancy on the application, as “the office representative at the agency with whom Boodt interacted had left the office on bad terms and [could not be contacted].” After Boodt failed to make his first month’s premium payment on time, State Farm sent a cancellation notice to the Clinton Avenue address. After Boodt failed to make the premium payment, State Farm did, in fact, cancel the policy, effective 12:01 a.m. on April 5, 2018. At approximately 2 p.m. on April 5, 2018, Boodt was involved in a serious motor vehicle collision, after which he received treatment from Bronson and assigned his rights to no-fault PIP benefits for his treatment to Bronson. Bronson thereafter filed the underlying first-party action against State Farm, which moved for summary disposition, arguing that it had properly mailed a notice of cancellation to Boodt, and that, after Boodt failed to pay upon receipt of the notice, the policy was cancelled—all prior to the subject collision. The trial court granted summary disposition in State Farm’s favor.
The Court of Appeals reversed the trial court’s summary disposition order, holding that a question of fact existed as to whether State Farm did “strictly and affirmatively comply” with the requirements of MCL 500.3020(1)(b)—specifically, that it mail a notice of cancellation to “its insured at the insured’s address last known to the insurer.” There was evidence that State Farm did know that Boodt lived on Lake Street at the time it mailed the notice of cancellation to the Clinton Avenue address—e.g., a letter produced by Boodt’s mother, sent to Boodt from State Farm, addressed to the Lake Street address; the fact that the Lake Street address showed up in an “ECS Report” in State Farm’s file; the fact that the traffic crash report listed Boodt’s Lake Street address; and the fact “that Boodt gave out his Lake street address for all other purposes, which gives rise to an inference that he would have told the employee at Pritchett-Evans’s agency his correct address.” Based on the possibility that the agent who facilitated Boodt’s purchase of the subject policy knew Boodt’s proper address—which knowledge, therefore, would be imputed to State Farm—summary disposition was not proper.
"We find the evidence insufficiently conclusive to permit summary disposition. In no particular order, Boodt’s driver’s license had been issued while he still lived on Clinton Avenue, and although there was a sticker on the back where a change-of-address would be found, the sticker was illegible. The Secretary of State confirmed that Boodt had changed his driver’s license address almost three years before he purchased the policy from State Farm. The electronic system used by Pritchett-Evans’s agency staff to generate policy applications could automatically fill in an applicant’s address if the applicant previously had a policy with State Farm. Employees were supposed to confirm the address with the applicant, but it was possible the employee did not do so in this matter. According to his girlfriend, Boodt did have a motorcycle policy with State Farm at one point. There appears to be no dispute that Boodt consistently provided his Lake Street address for all other purposes, from utility bills to child custody matters. Pritchett-Evans did not have access to information showing how Boodt’s insurance certificate was delivered to him, but it was presumed that the dealership from which Boodt purchased the Isuzu would have received a binder showing Boodt’s address as it had been taken down by the unidentified office representative. Nevertheless, the traffic accident report showed Boodt as living on Lake Street. Boodt’s mother found a letter from State Farm to Boodt in his items, addressed to him at the Lake Street address. According to State Farm’s file, an adjuster noted the discrepancy between the address on Boodt’s application and the address in an ‘ECS report.’
Clearly, it is possible to infer that State Farm was not aware of Boodt’s address on Lake Street. Equally clearly, it is possible to infer that State Farm, or its agent, was aware of the address on Lake Street. As noted, all reasonable inferences must be construed in favor of plaintiffs at this stage. We find persuasive that Boodt gave out his Lake Street address for all other purposes, which gives rise to an inference that he would have told the employee at Pritchett-Evans’s agency his correct address. That knowledge would be imputed to the agent, and then to State Farm, irrespective of whether State Farm had actual knowledge. There is a plausible explanation for why the wrong address was nevertheless entered into the policy application. State Farm’s file indicates that the Lake Street address was found in its ‘ECS Report.’ We have found nothing in the record explaining what an ‘ECS Report’ is, and at oral argument, State’s Farm attorney also did not know what an ‘ECS Report is.’ As a consequence, we must construe the record as showing that State Farm did, in fact, have some knowledge of Boodt’s address on Lake Street. The letter to Boodt from State Farm may have been mere junk mail, and it may have been mailed after the accident. However, in the absence of any evidence explaining how communication from State Farm could otherwise have been addressed to Boodt at Lake Street, the letter nevertheless also implies that State Farm did know about the Lake Street address."