AMANDA A KITTERMAN V MICHIGAN EDUC EMPLOYEES MUTUAL INSUR
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STATE OF MICHIGAN
COURT OF APPEALS
AMANDA A. KITTERMAN,
UNPUBLISHED
June 29, 2004
Plaintiff-Appellant,
and
GREGG MILLER
Plaintiff
v
No. 247428
Saginaw Circuit Court
LC No. 01-040630-CK
MICHIGAN EDUCATIONAL EMPLOYEES
MUTUAL INSURANCE COMPANY,
Defendant-Appellee,
Before: Jansen, P.J., and Markey and Gage, JJ.
PER CURIAM.
Plaintiff Kitterman appeals by right the trial court’s order granting summary disposition
in favor of defendant Michigan Educational Employees Mutual Insurance Companies
(MEEMIC) on her claims for breach of contract and violation of Michigan’s Consumer
Protection Act (MCPA), MCL 445.901, et seq. Because the trial court failed to view the
evidence before it in the light most favorable to plaintiff, made factual findings, and misapplied
the law, we reverse.
I. Summary of Facts and Proceedings
This case arises out of an automobile accident which occurred February 21, 2001, when
defendant Foster Boshans ran a stop sign striking a 2000 Chevrolet Malibu driven by plaintiff
Gregg Miller, the “significant other” of the Malibu’s owner, plaintiff Kitterman. MEEMIC
rescinded insurance coverage for the Malibu contending Kitterman made material
misrepresentations regarding who would drive the vehicle. Accordingly, MEEMIC refused to
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pay for collision damage and personal injury protection (PIP) benefits for Miller. Kitterman
sued MEEMIC alleging breach of contract and violation of the MCPA. Miller also sued for PIP
benefits, which was settled after case evaluation. Plaintiffs’ negligence claim against defendant
Boshans was dismissed after he was granted a discharge in bankruptcy proceedings.1 Defendant
contended it properly rescinded the contract based on plaintiff’s misrepresentation and failure to
disclose that Miller drove the Malibu. After discovery, the trial court granted defendant’s
motion for summary disposition pursuant to MCR 2.116(C)(10).
Plaintiff was a single school teacher who had insured motor vehicles with defendant for
many years through the VanRoeyen insurance agency. At some point plaintiff began a
relationship with Miller. On October 22, 1999, Miller transferred title to a 1978 or 1979 Dodge
pickup to plaintiff. On or about October 11, 1999, plaintiff added the pickup to her MEEMIC
automobile insurance policy. Plaintiff transferred the pickup title back to Miller on March 28,
2001. No claims were ever submitted to MEEMIC concerning the pickup.
On January 31, 2000, plaintiff spoke by telephone to Mary Ann George of the
VanRoeyen agency to request that the insurance on the pickup be cancelled and the Malibu be
added. George filled out a “Policy Change Endorsement” form and mailed it to plaintiff for her
review, signature and return. The form, under the heading “description and use of the vehicle to
be insured” indicated that plaintiff was the owner (lessee) and the “principal driver of [the]
vehicle.” Plaintiff signed and returned the form on or about February 15, 2000. Plaintiff has
always been the titled owner of the Malibu and made all the payments for it and the insurance.
George testified by deposition that she had no independent recollection of the January 31,
2000 telephone conversation with plaintiff. But George identified a printout of email
correspondence between herself and Leann Aberlich, an underwriter for defendant, concerning
the change endorsement plaintiff requested. The printout showed Aberlich sent an email
message to the VanRoeyen agency on February 3, 2000, at 1:11 p.m., which reads, “Noticed insd
has 2 very new vehicles on policy, Please find out if any other household members and if she is
only driver. Why 2 cars?” George responded at 1:58 p.m. as follows:
Actually, I asked her about this when car was added because I thought the same
thing. She indicated she was only driver and both cars were in her name. We are
waiting for signed end to come back. In the event of a loss, it would probably be
a situation like the one we had for Walworth pap0620250. Just wanted you to
know that I did inquire. Thanks, Maryanne.
Miller testified by deposition that he did not begin living with plaintiff until the “middle
of June 2000.” Miller admitted that he transferred the title to his pickup to plaintiff for a few
months for “insurance purposes” because plaintiff did not want him to drive without insurance
and it was cheaper for plaintiff to insure. According to Miller, plaintiff leased the Malibu
1
Hereafter, “plaintiff” refers only to Kitterman.
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because she was generating too many miles on her leased Mercury Mountaineer and needed a
car that obtained better gas mileage.
Plaintiff testified in a statement under oath that Miller was her “significant other” who
began living with her in May or June 2000. In January 2000 she added the Malibu to her
insurance policy by calling and speaking to someone who she believed was a secretary at the
VanRoeyen agency. Plaintiff answered “myself” when asked who would be driving the Malibu.
Miller was not living with her at the time. Plaintiff never spoke to anyone from the VanRoeyen
agency about the insurance coverage after that first telephone conversation. Plaintiff explained
she never informed defendant or the VanRoeyen agency about Miller moving in with her
because “I did not know that I needed to let them know that someone was living with me.”
Plaintiff claimed that Miller’s pickup was placed in her name because she could better afford
necessary repairs before it was sold. She denied the Malibu was Miller’s car and denied Miller
was the primary driver. But plaintiff admitted that because she and Miller were together most of
the time, Miller drove the Malibu “maybe 50% of the time.”
The trial court, in granting defendant’s motion for summary disposition, concluded:
Each action taken by the Plaintiffs in and by themselves may not show an
intentional misrepresentation, but taken together as a whole, they show there is no
genuine issue of material fact that a misrepresentation had occurred. For the
above reasons, MEEMIC has the right to rescind the insurance policy and declare
it void ab initio. Therefore, because no contract exists, Plaintiffs’ Count II Violation of the Michigan Consumers Protection Act no longer has merit.
[Opinion and Order of the trial court, p 5.]
The trial court subsequently denied reconsideration and plaintiff appeals by right.
II. Standard of Review
This Court reviews de novo a trial court’s grant or denial of summary disposition under
MCR 2.116(C)(10), which tests the factual sufficiency of plaintiff’s claim. Lash v Allstate Ins
Co, 210 Mich App 98, 101; 532 NW2d 869 (1995). The moving party must specifically identify
the undisputed factual issues, MCR 2.116(G)(4), Maiden v Rozwood, 461 Mich 109, 120; 597
NW2d 817 (1999), and support its position with affidavits, depositions, admissions, or
documentary evidence, MCR 2.116(G)(3)(b); Smith v Globe Life Ins Co, 460 Mich 446, 455;
597 NW2d 28 (1999). The trial court must consider the submitted documentary evidence in the
light most favorable to the nonmoving party. MCR 2.116(G)(5); Maiden, supra at 120. If the
moving party carries its initial burden, the party opposing the motion must then demonstrate with
admissible evidence that a genuine and material issue of disputed fact exists, MCR 2.116(G)(4).
If the non-moving party fails to do so, summary disposition is properly granted, Smith, supra at
455. But a trial court may not make findings of fact or weigh credibility in deciding a motion for
summary disposition. Skinner v Square D Co, 445 Mich 153, 161; 516 NW2d 475 (1994). This
Court will liberally find the existence of a genuine issue of material fact. Lash, supra.
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III. Analysis
A. The Remedy of Rescission
To establish intentional misrepresentation or common-law fraud requires proof that (1)
there was a material representation; (2) it was false; (3) it was made with knowledge that it was
false, or made recklessly, without knowledge of its truth and as a positive assertion; (4) the party
who made it intended that it should be acted upon; (5) the party to whom the misrepresentation
was directed acted in reliance upon it and (6) thereby suffered injury. Hord v Environmental
Research Inst (After Remand), 463 Mich 399, 404; 617 NW2d 543 (2000); M & D, Inc v
McConkey, 231 Mich App 22, 27; 585 NW2d 33 (1998). “Innocent misrepresentation” in the
making of a contract is established when a false statement of fact, made without knowledge of its
falsity or intent to deceive, is relied upon by the other party to the contract to their detriment
resulting in the unjust enrichment of the party that made the false statement. United States
Fidelity & Guaranty Co v Black, 412 Mich 99, 115-118; 313 NW2d 77 (1981); McConkey,
supra at 27-28.
In the context of an automobile insurance policy, the general rule is that if an insured
intentionally or innocently misrepresents a material fact in the application for the policy,
rescission that voids the policy ab initio is an appropriate remedy. Lake States Ins Co v Wilson,
231 Mich App 327, 331; 586 NW2d 113 (1998); Lash, supra at 102-103. An insurer may
establish materiality and reliance if the misrepresentation affects the insurer’s risk or relates to
the insurer’s underwriting guidelines. Katinsky v Auto Club Ins Ass’n, 201 Mich App 167, 170;
505 NW2d 895 (1993); Lake States, supra. See also Lash, supra at 103 (absent the
misrepresentation the insured would not have been eligible under the insurer’s underwriting
guidelines). But an insured’s misrepresentation does not limit the insurer’s liability to an
innocent third party with respect to coverage mandated by statute. MCL 257.520(f)(1); Lake
States, supra at 331-332; Auto-Owners Ins Co v Johnson, 209 Mich App 61, 64; 530 NW2d 485
(1995). And, rescission may not be appropriate where the insurer has continued to accept
premiums but the alleged fraud could easily have been detected. Farmers Ins Exchange v
Anderson, 206 Mich App 214, 219; 520 NW2d 686 (1994).
Finally, some basic principles of fraud and misrepresentation apply to the case at bar.
First, to establish either an intentional or innocent misrepresentation, there must be a material
false statement. Hord, supra at 410; McConkey, supra at 28. Second, the misrepresentation
must relate to an existing or past fact rather than being a promise of future performance. Forge v
Smith, 458 Mich 198, 212; 580 NW2d 876 (1998); Hi-Way Motor Co v International Harvester
Co, 398 Mich 330, 336; 247 NW2d 813 (1976).
B. Intentional or Innocent Misrepresentation
In the case at bar, the evidence, when viewed in a light most favorable to plaintiff, does
not establish she made a false statement of an existing or past fact in her application for
insurance coverage for the Malibu. Plaintiff’s telephone conversation with George, an employee
of the VanRoeyen agency, occurred on January 31, 2000. Plaintiff signed the change
endorsement form on February 15, 2000. These events occurred months before Miller moved in
with plaintiff according to the uncontradicted testimony of both plaintiff and Miller. Further,
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plaintiff’s admission that Miller may have driven the Malibu 50% of the time viewed in context
and in the light most favorable to her, related only to the time-frame when Miller was living with
her after May or June 2000 and the two were “together most of the time.” Again, this timeframe was months after the Malibu was added to the insurance policy. Moreover, plaintiff
denied that Miller was ever the primary or main driver of the Malibu.
Evidence that plaintiff told George she was the “only” driver of the Malibu is extremely
weak. George testified she had no independent recollection of her telephone conversation with
plaintiff. Assuming without deciding that the email correspondences between George and
defendant’s underwriter are admissible as exceptions to the rule against hearsay either as
recorded recollection, MRE 803(5), or regularly recorded activity, MRE 803(6), they do not
establish that plaintiff made a false written or oral statement. Viewed in the context of George’s
testimony and in a light favorable to plaintiff the email correspondence shows only that George
asked plaintiff “if she were [sic] the only driver of the household” or if “there was [sic] any other
drivers in the household.” Based on the undisputed testimony of plaintiff and Miller, plaintiff’s
responses to George were truthful.
Thus, viewing the evidence in a light most favorable to plaintiff, there is little or no
evidence that she made a material false statement in her dealings with defendant’s agent to add
the Malibu to her insurance policy. Plaintiff and Miller’s actions with respect to Miller’s pickup
do not change this view of the evidence. Moreover, the trial court’s reliance on Hammoud v
Metropolitan Prop & Cas Ins Co, 222 Mich App 485, 489; 563 NW2d 716 (1997) (“an insurer
does not owe a duty to the insured to investigate or verify that individual's representations or to
discover intentional material misrepresentations”), is misplaced because there is no evidence
whatsoever that plaintiff made an intentional material misrepresentation of an existing or past
fact in respect to the Malibu. The trial court’s contrary conclusion based on plaintiff’s and
Miller’s actions “taken together as a whole” is impermissible fact finding at a motion for
summary disposition.
In sum, the only possible relevant misrepresentation that plaintiff could have made of an
existing or past fact was that she was the “principal” driver of the Malibu between the time she
acquired it and when she signed the change endorsement form on February 15, 2000. The trial
court must be reversed because it did not view the evidence in a light most favorable to
Kitterman and impermissibly resolved this disputed issue of material fact on a motion for
summary disposition. Skinner, supra at 161.
C. Intentional Concealment
Despite the fact that the trial court accepted its argument, defendant apparently
recognizes the weakness of its position regarding misrepresentation and also argues that the trial
court reached the correct result based on the insurance contract’s “concealment or fraud” clause.
This Court will not reverse the trial court where it reaches the right result for the wrong reason.
Lakeside Oakland Development, LC v H & J Beef Co, 249 Mich App 517, 531 n 6; 644 NW2d
765 (2002); Hall v McRea Corp, 238 Mich App 361, 369, 366; 605 NW2d 354 (1999), remanded
465 Mich 919 (2001).
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The insurance contract at issue contains the following clause:
This entire Policy is void if an insured person has intentionally concealed or
misrepresented any material fact or circumstance relating to:
a) this insurance;
b) the Application for it;
c) or any claim made under it.
On appeal, defendant does not clearly argue how this clause applies to the case at hand.
On brief, defendant vaguely argues that “there was misrepresentation with regard to the claim.”
An appellant may not merely announce its position and leave it to this Court to discover and
rationalize the basis for its claims, Ambs v Kalamazoo County Road Comm, 255 Mich App 637,
650; 662 NW2d 424 (2003), nor leave it to this Court to search for the factual basis to sustain or
reject its position, People v Traylor, 245 Mich App 460, 464; 628 NW2d 120 (2001).
Nevertheless, this argument must fail as a basis for summary disposition for the same
reason that defendant’s claim regarding intentional or innocent misrepresentation fails: disputed
issues of material fact exist for trial. Moreover, looking at the evidence in a light most favorable
to plaintiff, we find little or no evidence of intentional concealment. It is undisputed that
defendant’s policy change form did not request information regarding others who might be living
in plaintiff’s household or who might be driving the Malibu. Further, neither MEEMIC nor the
VanRoeyen Agency ever requested this information from plaintiff after the Malibu was added to
the insurance policy. Thus, plaintiff’s contention that she did not know she was required to
inform her insurer when her boyfriend moved into her home is reasonable. Accordingly, the trial
court’s grant of summary disposition in favor of defendant on plaintiff’s breach of contract claim
must be reversed.
D. The MCPA Claim
The trial court based its dismissal of plaintiff’s MCPA claim on its ruling that because
defendant had properly rescinded its contract so that it was void ab initio, there could be no
violation of the MCPA. Because the trial court erred in granting summary disposition on
plaintiff’s contract claim, the underpinning of the trial court’s reasoning evaporates. Further, the
trial court’s reasoning is flawed because plaintiff’s claims do not flow from the insurance
contract but from defendant’s alleged violations of the MCPA.
The MCPA prohibits “unfair, unconscionable, or deceptive methods, acts, or practices in
the conduct of trade or commerce.” MCL 445.903(1). The act defines “trade or commerce” as
“the conduct of a business providing goods, property, or service primarily for personal, family,
or household purposes and includes the advertising, solicitation, offering for sale or rent, sale,
lease, or distribution of a service or property, tangible or intangible, real, personal, or mixed, or
any other article, or a business opportunity.” MCL 445.902(d). Thus, the MCPA is intended to
protect consumers in their purchase of goods and services. Forton v Laszar, 239 Mich App 711,
715; 609 NW2d 850 (2000). But the MCPA exempts from its purview a “transaction or conduct
specifically authorized under laws administered by a regulatory board or officer acting under
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statutory authority of this state or the United States.” MCL 445.904(1)(a). This exemption
focuses on “whether the transaction at issue, not the alleged misconduct, is ‘specifically
authorized.’” Smith, supra at 464; see also Attorney General v Diamond Mortgage Co, 414
Mich 603, 617; 327 NW2d 805 (1982).
In Smith, supra, our Supreme Court considered whether an action alleging violation of
the MCPA could be brought against an insurance company. The Smith Court interpreted MCL
455.904 before it was amended effective March 28, 2001 by 2000 PA 432. At issue in Smith
was the manner in which the defendant represented the benefits and conditions of its credit life
and disability policy. The Court first concluded that Ҥ 4(1)(a) generally exempts the sale of
credit life insurance from the provisions of the MCPA . . . .” Smith, supra at 465. The Court
also concluded that Ҥ 4(2)(a) specifically exempts from the MCPA unfair, unconscionable, or
deceptive methods, acts, or practices made unlawful by chapter 20 of the Insurance Code.” Id. at
466. But then the Court held that the first clause of § 4(2)(a) provided an exception to the first
two exemptions, thus permitting private causes of action under the MCPA against insurance
companies. The Court explained:
Giving effect to both § 4(1) and § 4(2), we conclude that private actions
are permitted against an insurer pursuant to § 11 of the MCPA regardless of
whether the insurer's activities are "specifically authorized." Although § 4(1)(a)
generally provides that transactions or conduct “specifically authorized” are
exempt from the provisions of the MCPA, § 4(2) provides an exception to that
exemption by permitting private actions pursuant to § 11 arising out of
misconduct made unlawful by chapter 20 of the Insurance Code. Therefore, the
exemptions provided by §§ 4(1)(a) and 4(2)(a) are inapplicable to plaintiff's
MCPA claims to the extent that they involve allegations of misconduct made
unlawful under chapter 20 of the Insurance Code. [Smith, supra at 467.]
The enactment of 2000 PA 432 amended MCL 445.904 to move the former subsection
2(a) to its own subsection (3), thus removing actions rendered unlawful by chapter 20 of the
Insurance Code from the purview of the of a private cause of action under section 11 of the
MCPA. Defendant argues that because it did not rescind the policy at issue until after the
effective date of the amendment, plaintiff’s MCPA claim is barred because it alleges acts made
unlawful by the Insurance Code. Plaintiff contends that her action alleges violations of the
MCPA occurring from the date she added the Malibu to her insurance policy, January 31, 2000,
to the date of the accident, February 21, 2001. Thus, plaintiff argues her MCPA is viable under
Smith, supra.
The essence of plaintiff’s MCPA claim is that defendant engaged in “unfair,
unconscionable, or deceptive methods, acts, or practices,” MCL 445.903(1), which led her to
believe she had insurance coverage for the Malibu when in fact defendant later denied she
ever had coverage. Thus, although the alleged deception did not become apparent until
defendant rescinded the policy after March 28, 2001, the deceptive acts and practices alleged
all occurred before the effective date of the amendment to MCL 445.904. Because defendant
voided the policy ab initio, we conclude plaintiff’s MCPA cause of action arose before March
28, 2001. In other words the alleged deceptive acts and practices occurred before that date
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and before the statute was amended. So, the question next presented is whether the
amendment of MCL 445.904 applies retrospectively or only prospectively.
This Court recently addressed this question in Kubiak v Heritage Ins Co, unpublished
opinion per curiam of the Court of Appeals (No. 240936, dec’d January 27, 2004). The panel
wrote:
Defendant argues that because the amendment was effective “prior to
trial” it precludes plaintiffs’ claim based on unlawful insurance practices.
“Amendments of statues are generally presumed to operate prospectively unless
the Legislature clearly manifests a contrary intent.” Tobin v Providence Hosp,
244 Mich App 626, 661-662; 624 NW2d 548 (2001). Generally, when a statute is
amended, the pertinent date for determining whether to apply the amended statute
is the date the cause of action arose. Hill v General Motors Acceptance Corp,
207 Mich App 504, 513-514; 525 NW2d 905 (1994). Unless the Legislature
clearly indicates otherwise, a statute is not given retroactive effect if it impairs
vested rights. On the other hand, a statute may be given retroactive effect if the
statute is remedial or procedural in nature. Tobin, supra at 661-663. The
amendment at issue here is not remedial or procedural in nature. But it does
abolish a cause of action under the MCPA for actions that are unlawful under
chapter 20 of the Insurance Code. Accordingly, because the Legislature has not
otherwise stated, the amendment should not be applied retroactively. Because the
amendment was effective after plaintiffs’ claim arose and after their complaint
was filed, it does not apply to plaintiffs’ claim. [Kubiak, supra, slip op at pp 3-4;
footnote omitted.]
We conclude the facts of this case should yield the same result for the reasons set forth in
Kubiak. Although we may not rely on an unpublished case, we may find it persuasive. We find
persuasive the reasoning set forth in Kubiak to resolve this issue. Accordingly, the trial court’s
order granting summary disposition on plaintiff’s MCPA claim must be reversed.
We reverse and remand to the trial court for further proceedings. We do not retain
jurisdiction.
/s/ Kathleen Jansen
/s/ Jane E. Markey
/s/ Hilda R. Gage
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