United States District Court, E.D. Michigan, Southern Division
ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY
JUDGMENT
TERRENCE G. BERG UNITED STATES DISTRICT JUDGE
Plaintiff
Kathleen Gemmell seeks recovery from her insurance company,
Defendant Encompass Indemnity Company, for injuries she says
she sustained when the suspension fell out of her car while
she was driving in Madison Heights, Michigan. She is suing,
under Michigan's No-Fault Act, Mich. Comp. Laws §
500.3101 et seq., for personal protection insurance
(“PIP”) benefits to pay medical bills, lost
wages, attendant care benefits, and other expenses she and
her husband incurred because of the accident. Encompass in
turn contends that in order to obtain no-fault benefits
Plaintiff made material misrepresentations regarding the
nature and cause of her injuries, as well as attendant care
and replacement services purportedly performed by her
husband, Gary Gemmell. According to Encompass, these alleged
misrepresentations trigger a fraud exclusion in the insurance
policy, releasing Encompass from any obligation to pay
Plaintiff's claims. The parties are now before the Court
on Encompass's motion for summary judgment. Based on
evidence presented in the parties' briefs and during the
parties' June 17, 2019 oral arguments in this matter, the
Court has determined that genuine disputes of material fact
remain, making summary judgment inappropriate at this time.
BACKGROUND
Encompass
issued policy number 281976536 to Gary Gemmell and Kathleen
Gemmell. That policy, which was in effect from June 22, 2017
through June 22, 2018, provided home insurance, car
insurance, and personal umbrella coverage to Plaintiff and
her husband. It also contained several coverage exclusions
including one titled “Concealment or Fraud, ”
which placed the following limitation on coverage:
“[t]his insurance is based on your honest cooperation
with us, so the information you gave to us must be correct to
the best of your knowledge. Therefore:
(a) . . . we do not provide coverage to one or more covered
persons, who whether before or after a loss, has:
(1) Concealed or misrepresented any material fact or
circumstance; or
(2) Engaged in fraudulent conduct; or
(3) Made false statements relating to his insurance; whether
as to eligibility or claim entitlement.
ECF No. 19-10 PageID.315.
Plaintiff
is a 63-year-old home-healthcare attendant. She claims that
the single-car accident caused “[a]ggravation of
existing pelvis fracture, addition of new pelvis fractures,
back pain, head injury, anxiety, neck pain, ” and a
“new fracture in [her] low back, ” rendering her
unable to work from September 22, 2017 through February 27,
2018. ECF No. 19-11 PageID.400-01; ECF No. 21-1 PageID.501.
At the time of the accident Plaintiff had, for several years,
worked as a caregiver to her mother's elderly friend, who
Plaintiff calls her “aunt.” ECF No. 19-1
PageID.104 (Plaintiff's Dep.). She was paid for these
services through her aunt's trust, the Sylvia Higison
Trust, at a rate of $17 per hour. ECF No. 19-1 PageID.105;
ECF No. 19-11 PageID.397. Plaintiff's husband happens to
be the trustee of the Sylvia Higison Trust. ECF No. 19-11
PageID.397.
In
addition to the physical injuries she claims to have
sustained in the car accident, Plaintiff avers that the
debilitating nature of her injuries necessitated that her
husband provide attendant care and replacement services for
her each day from September 22, 2017, the day after the
accident, through December 31, 2017. ECF No. 19-11
PageID.390-92; ECF No. 21-1 PageID.552-55. The claimed
attendant care services included “bathing, lifting,
fetching, carrying, cooking, and performance of activities
for patient that avoid any prolonged standing or use of
staircase.” ECF No. 19-11 PageID.379-390.
Plaintiff's husband signed a sworn statement attesting
that he performed these services for at least four hours each
day. ECF No. 19-11 PageID.391; ECF No. 21-1 PageID.555. He
also stated that he spent at least 2.5 hours each day during
this same September 22, 2017 through December 31, 2017 period
performing replacement services. ECF No. 19-11 PageID.411;
ECF No. 21-1 PageID.531-34. These replacement services, which
were compensable at a rate of $20 per day under the policy,
included washing dishes, cleaning, preparing meals, taking
out the garbage, gardening, and picking fruits and
vegetables. ECF No. 19-11 PageID.402.
Encompass
contends Plaintiff's claimed injuries in fact predate the
car accident and that she fraudulently attributed them to the
accident to obtain no-fault benefits. Encompass further
questions Plaintiff's assertion that her husband
performed extensive attendant and replacement services in the
wake of the accident. To cast doubt on the veracity of her
claims for these services, Encompass highlights
Plaintiff's statements to medical providers suggesting
that she and her husband were not living together, or at
least were not on amicable terms, during the months he
supposedly provided these services.
The
central question before the Court at this juncture is whether
the undisputed material facts show that Plaintiff's
actions implicate the fraud exclusion in her insurance policy
and, if so, whether violation of that exclusion ...