Thomas v. State Farm Mutual Automobile Insurance Company
Filing
51
OPINION & ORDER Denying Defendant State Farm's Motion for Summary Judgment (Dkt. 35 ). Signed by District Judge Mark A. Goldsmith. (Sandusky, K)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
YOLANDA THOMAS,
Plaintiff,
Case No. 17-cv-10558
HON. MARK A. GOLDSMITH
vs.
STATE FARM MUTUAL AUTOMOBILE
INSURANCE CO.,
Defendant.
____________________________/
OPINION & ORDER
DENYING DEFENDANT STATE FARM’S MOTION FOR SUMMARY JUDGMENT
(Dkt. 35)
This matter is before the Court on Defendant State Farm Mutual Automobile Insurance
Co.’s (“State Farm”) motion for summary judgment (Dkt. 35). The issues have been fully briefed.
Because oral argument will not aid the decisional process, the motion will be decided based on the
parties’ briefing. See E.D. Mich. LR 7.1(f)(2); Fed. R. Civ. P. 78(b). For the reasons that follow,
the Court denies State Farm’s motion.
I. BACKGROUND
Plaintiff Yolanda Thomas was involved in two distinct motor vehicle accidents in 2014:
one in January and one in November. Statement of Mat. Facts ¶ 2 (Dkt. 35). Thomas now seeks
payment of no-fault benefits from Defendant State Farm. Id. ¶ 3. According to Thomas’s doctor,
she sustained a traumatic brain injury and suffers from memory loss. See Bleiberg Dep., Ex. 3 to
Pl. Resp, at 18, 104 (Dkt. 45-6). Due to her injuries, Thomas received in-home attendant care
through One Life Care Services. Statement of Mat. Facts ¶ 5. Plaintiff’s counsel submitted
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attendant care calendars, signed by Plaintiff, as part of her claim for PIP (personal injury
protection) benefits. Counter-Statement of Mat. Facts ¶ 10 (Dkt. 45). These calendars noted that
Thomas was receiving in-home care every day between September 2015 and November 2017,
though it does not appear calendars for June 2016, June 2017, or July 2017 were submitted.1 See
Attendant Care Calendars, Ex. C to Def. Mot (Dkt. 35). However, Thomas was attending an inpatient physical therapy program from November 2016 through January 11, 2017, Statement of
Mat. Facts ¶ 5, and was in a coma in the hospital between May 21, 2017 and June 3, 2017, id. ¶ 8.
State Farm – whose policy provides that “[t]here is no coverage under this policy if you or any
other person insured under this policy has made false statements with the intent to conceal or
misrepresent any material fact or circumstance in connection with any claim under this policy” –
cut off payment of PIP benefits due to this allegedly fraudulent behavior. Insurance Policy, Ex. D
to Def. Mot., § 11 (Dkt. 35). Thomas brought this suit seeking payment of benefits.
II. STANDARD OF REVIEW
A motion for summary judgment under Federal Rule of Civil Procedure 56 shall be granted
“if the movant shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute of material fact
exists when there are “disputes over facts that might affect the outcome of the suit under the
governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). “[F]acts must be
viewed in the light most favorable to the nonmoving party only if there is a ‘genuine’ dispute as
to those facts.” Scott v. Harris, 550 U.S. 372, 380 (2007). “Where the record taken as a whole
1
The email cover letter accompanying the calendars also claims to be submitting the August 2016
calendar, but no such calendar was filed with the summary judgment motion.
2
could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for
trial.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
III. ANALYSIS
Under Michigan law, fraudulent misrepresentations made in the course of an insurance
claim may void the policy. An insurance company seeking to void a policy must establish four
elements:
(1) the misrepresentation was material, (2) that it was false, (3) that the insured
knew that it was false at the time it was made or that it was made recklessly,
without any knowledge of its truth, and (4) that the insured made the material
misrepresentation with the intention that the insurer would act upon it. A statement
is material if it is reasonably relevant to the insurer’s investigation of a claim.
Bahri v. IDS Prop. Cas. Ins. Co., 864 N.W.2d 609, 612 (Mich. Ct. App. 2014) (internal quotation
marks omitted).
There is no dispute regarding the first two elements. A misrepresentation was made, as
Thomas could not possibly have used the attendant care services while she was hospitalized or in
an in-patient facility. See Diallo v. Nationwide Mut. Fire Ins. Co., No. 328639, 2016 WL
6780735, at *4 (Mich. Ct. App. Nov. 15, 2016) (“[I]t was physically impossible for the household
replacement services to be performed in the manner outlined in the submitted claims.”). It is also
clear that the misrepresentation was material, as she requested reimbursement for days when she
was not using the services. See Meemic Ins. Co. v. Fortson, No. 337728, ___ N.W.2d ___, 2018
WL 2424356 at *2 (Mich. Ct. App. May 29, 2018) (“Despite the fact that he was not being cared
for by Louise and Richard at those times, Louise submitted payment requests to Meemic, stating
that they had provided constant attendant care to Justin. That constituted a material
misrepresentation.”).
This is true regardless of the value represented by the material
misrepresentation. See Tipou v. Marsh, No. 334588, 2018 WL 1072941, at *2 (Mich. Ct. App.
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Feb. 27, 2018), appeal denied, 917 N.W.2d 62 (Mich. Sept. 12, 2018) (finding that a
misrepresentation of $400 was sufficient to trigger exclusion).
State Farm is unable to show as a matter of law, however, that Thomas knew that the
misrepresentation was false at the time it was made or that it was made recklessly, without any
knowledge of its truth. Nor can State Farm show that she made the material misrepresentation
with the intention that the insurer would act upon it. State Farm argues that there “can be no other
intent in providing false attendant care services records than an attempt to obtain benefits to which
she is not entitled.” Def. Mot. at 8 (Dkt. 35). Therefore, State Farm contends, the timesheets
submitted by Thomas, which contain false statements, void the policy. Thomas counters that “a
reasonable juror could easily conclude that Plaintiff, who could not pay her own bills or remember
to take her medication, lacked the intent for fraud by clear and convincing evidence.” Pl. Resp.
at 18-19 (Dkt. 45-2).
State Farm replies that Thomas is arguing “that she is mentally
incapacitated, and; [sic] therefore, she was unable to commit fraud,” claiming that this is a
“seemingly novel argument.” Def. Reply. at 2 (Dkt. 48). State Farm does not otherwise rebut
the argument that Thomas lacked the intent to defraud.
Contrary to State Farm’s contention that Thomas’s argument is “seemingly novel,” there
is ample Michigan precedent supporting the view that evidence of the plaintiff’s impaired mental
state defeats summary disposition in favor of the insurer. See, e.g., Pitts v. Doe, Nos. 338371,
338475, 2018 WL 4002049, at *4 (Mich. Ct. App. Aug. 21, 2018) (“Intent to defraud is not shown
where false statements are made as a result of inadequate memory, unintentional error, confusion,
or the like.”); see also Hatcher v. Liberty Mut. Ins. Co., No. 330062, 2017 WL 1367119, at *4
(Mich. Ct. App. Apr. 13, 2017) (summary disposition in no-fault benefits case not appropriate
where, among other reasons, there was question of fact whether failure to recall earlier episode
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of neck pain was fraudulent or “failure of memory”). While Michigan courts recognize that
summary disposition may be appropriate where the evidence incontrovertibly establishes
fraudulent intent, see, e.g., Bahri, 864 N.W.2d at 612-613, that outcome is not appropriate where
a genuine issue of fact remains. See Hatcher at *2, n.4 (distinguishing Bahri as involving
“uncontested evidence” of fraud).
Here, there is evidence that Thomas had significant trouble with her memory. Her doctor
testified that she has “memory issues,” which prevented her from giving details of the timing of
prior accidents and the care she received. See Bleiberg Dep. at 18. He also described that Thomas
has “confusion.” Id. at 84. The doctor further testified that she had suffered a traumatic brain
injury following the November 2014 accident. See id. at 70. Thomas’ deposition revealed that
she remembered few details about her accident, as she was unable to recall when it occurred, see
Thomas Dep., Ex. 1 to Pl. Resp. at 11 (Dkt. 45-4), how it occurred, see id. at 13, or at which
hospital she was treated, see id. at 18. She testified that her memory loss started after the accident.
Id. at 23. Thomas also could not remember the name of One Life Care Services or how long they
had been assisting her. Id. at 27.
As is clear from her doctor’s diagnosis and her deposition testimony, Thomas has
significant memory issues. Given these memory issues, State Farm has pointed to no evidence in
the record that Thomas knew she was providing false statements when submitting the attendant
care calendars. Therefore, State Form has not shown that Thomas knew any statements were
made were false at the time they were made. Nor has State Farm shown that Thomas made any
statements recklessly. Because State Farm is unable to adduce evidence on either point to
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neutralize Thomas’ memory issues, a reasonable jury could conclude that Thomas did not intend
to defraud State Farm. Accordingly, summary judgment is inappropriate.2
IV. CONCLUSION
For these reasons, Defendant’s motion for summary judgment (Dkt. 35) is denied.
SO ORDERED.
Dated: November 1, 2018
Detroit, Michigan
s/Mark A. Goldsmith
MARK A. GOLDSMITH
United States District Judge
CERTIFICATE OF SERVICE
The undersigned certifies that the foregoing document was served upon counsel of record and any
unrepresented parties via the Court's ECF System to their respective email or First Class U.S. mail
addresses disclosed on the Notice of Electronic Filing on November 1, 2018.
s/Karri Sandusky
Case Manager
2
State Farm’s argument in its reply brief that Thomas’s counsel was involved in the process of
transmitting timesheets to it, see Def. Reply at 2, is a fact with no legal significance. The issue is
whether Thomas acted with fraudulent intent; State Farm fails to explain how the involvement of
counsel in the process has any bearing on that issue.
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