An appellate court in Michigan has affirmed a trial court's decision dismissing an insured's complaint for benefits against his no-fault insurer after finding that the insured – in an effort to support his no-fault wage loss claim – had misrepresented to his insurer that he was about to start working at a job.
The Case
Randy Hatfield, who had been unemployed for quite some time, was in an automobile accident on February 9, 2014. He submitted a claim to Progressive Michigan Insurance Company that asserted that he was to start full-time employment on February 10, 2014 with Hometown Painting at a wage of $15 an hour for 40 hours or more a week. He supported this contention by submitting to Progressive an unsworn, handwritten document labeled “Attestation” that was signed by a purported co-owner of Hometown Painting, Randall Miller.
After Progressive refused to pay no-fault benefits to Mr. Hatfield on the basis of the insurance policy's fraud provision, Mr. Hatfield sued.
During discovery, Mr. Hatfield was deposed and testified “that he was supposed to start work as a painter for Hometown Painting on February 10; that he spoke to both Miller and Androsky regarding the job in December 2013; that the job was for 40 hours a week with a pay rate of $15 an hour[.]”
Progressive deposed Mike Androsky, who testified that:
- He was the sole owner of Hometown Painting;
- He had never offered Mr. Hatfield a painting job;
- Mr. Miller was a subcontractor and did not have the authority to offer Mr. Miller a job with Hometown Painting; and
- Neither he nor Mr. Miller worked 40 hours a week.
The trial court granted summary disposition in favor of Progressive, and Mr. Hatfield appealed.
The Appellate Court's Decision
The appellate court affirmed.
In its decision, the appellate court found that Progressive had presented evidence that Mr. Hatfield had submitted “materially false statements” to Progressive as part of his application for no-fault benefits.
Specifically, the appellate court said, Progressive's evidence indicated that Mr. Hatfield had misrepresented both that Mr. Miller was a co-owner of Home Town Painting and that Mr. Hatfield had a full-time job for 40-hours a week paying $15 an hour at Home Town Painting starting on February 10, 2014. In the appellate court's view, a reasonable trier of fact could infer from this evidence that Mr. Hatfield had “knowingly and intentionally submitted the material misrepresentations to [Progressive].”
The appellate court added that, even accepting Mr. Hatfield's testimony as truthful and inferring that he had been misled by Mr. Miller into believing that he had a full-time job waiting for him at Home Town Painting to start in February 2014, Mr. Hatfield's testimony showed “that his belief, at a minimum, was reckless.” The admissible evidence – the submitted deposition testimony of Mr. Hatfield and Mr. Androsky – showed that the attestation that Mr. Hatfield had prepared and submitted to Progressive to support his no-fault claim “contained several material misrepresentations.”
Because Mr. Hatfield had at least acted recklessly, the appellate court found, the admissible evidence presented to the trial court showed “actionable fraud,” and the trial court had properly granted Progressive summary disposition of Mr. Hatfield's entire claim on the basis of fraud. Even if Mr. Hatfield had been misled by Mr. Miller, the effect of the “fraudulent conduct” on Progressive would be the same, the appellate court concluded.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].