Michigan Supreme Court Decision: No-Fault Benefits
By: Kopka Pinkus Dolin
Does MCL 500.3173a(4) apply to misrepresentations made during discovery in the courses of litigation?
On June 11, 2024, the Michigan Supreme Court unanimously reversed the Michigan Court of Appeals decision in Williamson v AAA (Docket No. 165131. Decided June 11, 2024), and held misrepresentations made during discovery could prevent an insured from recovering personal injury protection benefits in assigned claims plan cases.
In Williamson, the insurance carrier, AAA, sent discovery requests to the Estate of the deceased injured claimant seeking evidence supporting household and attendant care services. In its response to AAA’s interrogatories, the Estate claimed benefits for attendant care purported to have been provided after claimant’s death. In response, AAA moved for summary disposition claiming the Estate knowingly presented material misrepresentations in support of its claim for no-fault benefits. AAA’s motion relied on the anti-fraud provision in MCL 500.3173a(4), which reads:
A person who presents or causes to be presented an oral or written statement, including computer-generated information, as part of or in support of a claim to the Michigan automobile insurance placement facility, or to an insurer to which the claim is assigned under the assigned claims plan, for payment or another benefit knowing that the statement contains false information concerning a fact or thing material to the claim commits a fraudulent insurance act under section 4503 that is subject to the penalties imposed under section 4511. A claim that contains or is supported by a fraudulent insurance act as described in this subsection is ineligible for payment of personal protection insurance benefits under the assigned claims plan.
The Estate responded arguing its discovery responses were not submitted in support of the “claim,” and therefore, MCL 500.3173a(4) was inapplicable. The trial court granted AAA’s motion.
The Michigan Court of Appeals reversed holding only prelitigation statements can constitute statements in support of a claim under MCL 500.3173a(4). Because the Estate provided the disputed statements during discovery during litigation, it determined MCL 500.3173a(4) did not apply.
The Michigan Supreme Court reversed the Michigan Court of Appeals decision defined “claim” in MCL 500.3173a as generally a claimant’s demand for coverage under the MACP motor vehicle accident injuries. Applying the definition to the Williamson case, the Michigan Supreme Court found the Estate’s interrogatory answer supported of a demand for coverage to MACP motor vehicle accident injuries. The matter has been remanded the case to the Court of Appeals to address the unresolved issues, mainly whether AAA failed to satisfy the intent and materiality prong for a fraudulent insurance act under MCL 500.3173a(4).
What does Williamson v AAA mean for cases in the future?
Moving forward, we can expect to see an increase in insurers relying upon fraud as a basis for dismissal under MCL 500.3173a(4). It is not uncommon for Plaintiffs to make misrepresentations in discovery to support their claims. Recently, those misrepresentations could only be used to target Plaintiff’s credibility because they occurred after the policy had been procured. The Michigan Supreme Court’s opinion opens the door to insurance carriers to seek dismissal of first-party claims for any representation considered to be a fraudulent insurance act under . The elements for proving a fraudulent insurance act include: (1) the person presents or causes to be presented an oral or written statement, (2) the statement is part of or in support of a claim for no-fault benefits, and (3) the claim for benefits was submitted to the MAIPF, (4) the person must have known that the statement contained false information, and (5) the statement concerned a fact or thing material to the claim.
Authored by: Rayan H. Harajli, Associate
