Circuit Court LC No. 13-010612-NF
Before: K. F. Kelly, P.J., and Gleicher and Shapiro, JJ.
No-Fault personal injury protection (PIP) case, defendant
sought summary disposition based upon a fraud exclusion
clause in its policy. Defendant asserted that plaintiff made
fraudulent statements concerning her need for replacement
services and so was excluded by the policy from all PIP
benefits. The trial court granted summary disposition as to
replacement services, a ruling from which plaintiff has not
appealed. The trial court denied the motion as to
payment for medical services and from that ruling, defendant
appeals by leave granted. We affirm.
alleges she was injured in a single-car collision on January
22, 2013. The vehicle was owned and operated by Timothy
Williams; Shelton was a passenger. She sought PIP benefits
from defendant because she did not own a vehicle nor reside
with a relative who did. Thus, defendant, as Williams's
insurer, was to provide her with those PIP benefits to which
she was entitled under the No-Fault Act. MCL 500.3114(4)(a).
Plaintiff claimed PIP benefits that included medical expenses
and replacement services for household chores, beginning in
January 2013. Defendant denied the claim and plaintiff
moved for summary disposition asserting that plaintiff was
not entitled to PIP benefits under an exclusionary clause in
the policy reading:
We will not cover any person seeking coverage under this
policy who has made fraudulent statements or engaged in
fraudulent conduct with respect to procurement of this policy
or to any OCCURRENCE for which coverage is sought.
argues that this policy exclusion applies to plaintiff
despite the fact that she is not a policyholder, and that the
evidence demonstrates beyond a question of fact that
plaintiff engaged in fraud as defined in the policy.
Defendant relies largely on Bahri v IDS Prop Cas Ins
Co, 308 Mich.App. 420, 423-426; 864 N.W.2d 609 (2014),
in which we held that a fraud provision in an insurance
contract could bar a claim for PIP benefits when the
policyholder filed a claim for replacement services for a
date prior to the subject accident. However, both the law and
the facts of this case differ substantially from those that
existed in Bahri.
governing application of the policy exclusion in
Bahri is not applicable in this case. In
Bahri, the provision applied to the plaintiff in
that case because "defendant issued [the subject]
no-fault automobile policy to [the] plaintiff."
Bahri, 308 Mich.App. at 421. In this case, however,
plaintiff was not a party to, nor an insured under, the
policy; she was injured while a passenger and because neither
she nor her spouse or resident relative had a no-fault
policy, defendant was required to pay her benefits pursuant
to statute, not pursuant to a contractual agreement.
Michigan Supreme Court stated in Rohlmanv Hawkeye
Security, 442 Mich. 520, 524-525; 502 N.W.2d 310 (1993),
"PIP benefits are mandated by statute under the no-fault
act, MCL 500.3105; MSA 24.13105, and, therefore, the statute
is the 'rule book' for deciding the issues involved
in questions regarding awarding those benefits. On the other
hand, the insurance policy itself . . . is the contract
between the insurer and the insured . . . ."
Supreme Court adhered to this principle in Harris v Auto
Club Ins Ass'n, 494 Mich. 462, 471-472; 835 N.W.2d
356 (2013), a case involving a motorcycle-automobile
collision. MCL 500.3114(5)(a), using language paralleling the
language used in MCL 500.3114(4)(a), provided that if the
injured motorcyclist, his spouse or a resident relative did
not have a no-fault policy then his no-fault benefits would
be paid by the insurer of the owner or registrant of the
automobile. In Harris, the Court stated that
plaintiff could not take advantage of the uncoordinated
medical benefit provision in the policy because his claim did
not flow from the subject policy, but "solely by
statute." Harris, 494 Mich. at 472 The Court
[The plaintiff] is not claiming benefits under a no-fault
insurance policy that he or anyone else procured. [He] is
neither a third-party beneficiary nor a subrogee of the
no-fault policy issued to the person that struck him and thus
he [was] not eligible to receive benefits under that policy.
Rather, [the plaintiff's] right to PIP benefits arises
solely by statute. [Id.]
argument is directly contrary to the grounds for the holdings
in both Rohlman and Harris. Here, as in
those cases, plaintiff's no-fault benefits are governed
"solely by statute." Thus, the exclusionary
provision in defendant's no-fault policy does ...