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Kodra v American Select Ins Co (COA – UNP 6/23/2022; RB #44341)   


Michigan Court of Appeals; Docket #356166; Unpublished 
Judges Boonstra, Gadola, and Hood; Per Curiam 
Official Michigan Reporter Citation: Not Applicable; Link to Opinion

Not Applicable

Actual Fraud
Cancellation and Rescission of Insurance Policy

In this unanimous, unpublished, per curiam decision, the Court of Appeals reversed the trial court’s denial of Defendant American Select Insurance Company’s (“American Select”) motion for summary disposition, in which it sought dismissal of Plaintiff Dirina Kodra’s first-party action.  The Court of Appeals held that Kodra made a material misrepresentation in her original application for no-fault insurance with American Select, and that American Select was entitled to rescind her policy and deny the claim she made thereunder as a result.

Dirina Kodra was injured in a motor vehicle accident while driving a 2015 Chrysler 200C she co-leased with her then-fiance, Dannelly Smith, whose driver’s license had been suspended indefinitely for repeated traffic violations.  Kodra had initially obtained no-fault insurance from American Select to cover a different vehicle, a 2004 Ford Escape, which she co-owned with Smith, but on her original application for coverage, she indicated that the Ford Escape was titled only in her name.  At some point after American Select issued the policy, Kodra removed the Ford Escape and added the Chrysler 200C, but she failed to disclose that the vehicle was co-leased with Smith.  Kodra filed a claim for no-fault PIP benefits with American Select after the subject accident, but American Select denied her claim and notified her that it was rescinding the policy after discovering that Kodra had failed to disclose that Smith was a co-owner of the Ford Escape and a co-lessee of the Chrysler 200C, that Smith was a resident of Kodra’s household, and that Smith’s license had been indefinitely suspended.  In Kodra’s resultant first-party action against American Select, American Select moved for summary disposition, arguing that Kodra committed a material misrepresentation that induced American Select to issue a policy it otherwise would not have issued.  The trial court denied American Select’s motion, finding that Kodra’s misrepresentation was not material because there was no evidence that Smith ever drove the vehicle or would ever drive the vehicle.

The Court of Appeals reversed the trial court’s summary disposition order, holding that Kodra’s misrepresentation was material because American Select relied upon it in insuring a risk it otherwise would not have insured.  “Generally,” the Court wrote, “an insurer’s assertion that it wold not have issued the policy under its guidelines if it had known of the previously undisclosed information is sufficient to establish materiality.”  In this case, American Select presented sufficient evidence to establish that it would not have issued the policy had it known about Smith’s status as a co-owner of the Ford Escape and a co-lessee of the Chrysler 200C, in the form of a letter, authored by its Master Underwriter, stating as much.  The Court also found that the other elements of fraudulent misrepresentation were satisfied in this case, including that which requires knowledge of falsity by the misrepresentor, given Kodra’s deposition, during which she apparently acknowledged that she knew her indication to American Select—that she was the sole owner of the Ford Escape and sole lessee of the Chrysler 200C—was false when she made it.

“The record thus establishes that (1) plaintiff made material representations, (2) that were false, (3) according to her deposition testimony, plaintiff knew the representations were false when she made them, (4) she intended that defendant act upon her representations by issuing the policy, (5) defendant acted in reliance upon plaintiff’s representations by issuing the policy, and (6) defendant suffered damage as a result. Defendant thus established the elements of fraudulent misrepresentation, including the element of materiality. We observe that ‘it is impossible to hold an insurance company liable for a risk it did not assume.’ Hunt v Drielick, 496 Mich 366, 373; 852 NW2d 562 (2014) (quotation marks, citation, and brackets omitted). The trial court therefore erred by denying defendant’s motion for summary disposition.” 

Michigan auto accident attorney Stephen Sinas is the lead editor of the appellate case summaries published on this site regarding the Michigan auto insurance law. To learn more about how Stephen Sinas and how the Sinas Dramis Law Firm can help you if you have been injured in a Michigan auto accident, visit

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