Patterson v. Progressive Marathon Insurance Company
Filing
22
OPINION and ORDER Denying 12 MOTION for Summary Judgment - Signed by District Judge Nancy G. Edmunds. (LBar)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
AMEN PATTERSON
Case No. 18-10415
Plaintiff,
v.
Honorable Nancy G. Edmunds
PROGRESSIVE MARATHON INSURANCE
COMPANY
Defendant.
/
ORDER AND OPINION DENYING DEFENDANT’S MOTION
FOR SUMMARY JUDGMENT [13]
Pending before the Court is Defendant Progressive Marathon Insurance
Company’s motion for summary judgment. (ECF No. 13.) Progressive contends that
Plaintiff’s claim for first-party no-fault insurance benefits in connection with an auto
accident should be dismissed because the insured allegedly misrepresented her
residential address in her application for the policy. Progressive argues that as a result
of this misrepresentation, it is entitled to rescind the policy and deny coverage to Plaintiff
as a matter of law. Plaintiff opposes the motion. On December 19, 2018, the Court held
a hearing in connection with Progressive’s motion. For the reasons set forth below, the
Court DENIES the Motion.
I.
Background
On January 31, 2017, Plaintiff Amen Patterson sustained injuries in a motor vehicle
accident. Plaintiff was driving his 2016 Ford F-150 pickup truck at the time of the accident.
The truck was insured by Progressive.
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Plaintiff is not the named insured on the Progressive insurance policy, however.
On January 30, 2015, a women named Angela Hudson, Plaintiff’s former girlfriend,
obtained an auto insurance policy from Progressive for her 2009 Buick Enclave. On
September 28, 2015, Ms. Hudson added Plaintiff and his 2005 Ford F-150 pickup truck
to her Progressive policy. In December 2016, Plaintiff’s 2005 Ford F-150 was replaced
on the policy by his newly acquired 2016 Ford F-150.
After his accident, Plaintiff made a claim on the Progressive policy for first-party
no-fault insurance benefits. On May 30, 2017, Progressive denied Plaintiff’s claim. In its
denial letter, Progressive explains that it was denying Plaintiff’s claim because it
discovered that the vehicles listed on the policy were garaged at multiple locations and
not at the address identified in the insurance application. According to Progressive, this
constituted a misrepresentation or concealment of a material fact at the inception of the
policy that warranted denial of Plaintiff’s claim. Although Progressive denied coverage
for Plaintiff’s claim, it did not actually rescind or void the insurance policy.1
On January 3, 2018, Plaintiff initiated this action in Wayne County Circuit Court
asserting claims for breach of the policy and seeking to recover first-party no-fault
insurance benefits. On February 5, 2018, Progressive removed the case to this Court
and subsequently filed its answer and affirmative defenses. (ECF No. 1.) On September
21, 2018, Progressive moved for summary judgment on Plaintiff’s claims.
In its motion, Progressive argues that it is entitled to summary judgment because
Plaintiff and Ms. Hudson misrepresented, in her initial insurance application and
subsequently upon the renewal of the policy, the location where the vehicles would be
1
Counsel for Progressive indicated at the hearing that policy has not actually been rescinded at this time.
2
garaged. Specifically, Progressive contends that Ms. Hudson falsely listed her former
address of 20855 Lahser Road, #815, Southfield, Michigan 48033 on her insurance
application as the address where her vehicle would be garaged when she actually resided
with Plaintiff at two other addresses throughout the duration of the policy: 19931 Marlowe
Street, Detroit, Michigan 48235 and 16159 Gilchrest Street, Detroit, Michigan 38235.
Progressive contends the summary judgment evidence establishes that neither Plaintiff,
nor Ms. Hudson, actually resided at the Southfield address at the inception of the policy
and that none of their vehicles were actually ever garaged at the Southfield address as
allegedly represented in the insurance application. Progressive further argues that Ms.
Hudson and Plaintiff intentionally misrepresented their addresses and the locations at
which their vehicles would be garaged in order to obtain insurance coverage and lower
insurance premiums. And Progressive maintains that it would not have issued the policy
to Ms. Hudson or agreed to provide coverage for Plaintiff’s vehicle had either of the other
two addresses been identified as the location where the vehicles would be garaged.
Progressive asserts that these facts entitle it to rescind the policy and deny coverage for
Plaintiff’s claims as a matter of law.
In support of its motion, Progressive submits the following as summary judgment
evidence: (Exhibit A) the police report from Plaintiff’s accident; (Exhibit B) Plaintiff’s
complaint in this lawsuit; (Exhibit C) Ms. Hudson’s insurance application; (Exhibit D) an
insurance declaration page dated January 30, 2015; (Exhibit E) an insurance declaration
page dated September 28, 2015; (Exhibit F) Bureau of Driver and Vehicle Records
Report; (Exhibit G) Plaintiff’s Deposition Transcript; (Exhibit H) Progressive’s denial letter
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to Plaintiff; and (Exhibit I) the insurance policy.2 Progressive does not, however, submit
any testimony from its own employees or representatives. Progressive also does not
present any testimony from Ms. Hudson.
Plaintiff raises four arguments in response to Progressive’s motion. First, Plaintiff
argues Progressive cannot deny coverage on the basis of a material misrepresentation
when it has not actually rescinded the policy and continues to collect premiums. Second,
Plaintiff argues Progressive does not have an absolute right to rescind the policy because
Plaintiff is not the insured on the policy. Third, Plaintiff argues he is not bound by the
contractual provision Progressive relies on in denying his claim because he is not actually
a party to the insurance policy. Finally, Plaintiff argues Progressive fails to establish as
a matter of law the existence of fraud or a misrepresentation of material fact in connection
with Ms. Hudson’s application for the insurance policy. Plaintiff contends there are
genuine issues of material fact as to whether Plaintiff or Ms. Hudson actually made a
misrepresentation of a material fact that was relied upon by Progressive and therefore
summary judgment is not proper.
II.
Summary Judgment Standard
“Summary judgment is proper only if the moving party shows that the record does
not reveal a ‘genuine dispute as to any material fact and the movant is entitled to judgment
as a matter of law.’” Benison v. Ross, 765 F.3d 649, 658 (6th Cir.2014) (quoting FED. R.
CIV. P. 56(a)). A genuine issue 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, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). But “[w]here the
2
In addition, Progressive attaches as Exhibit A to its reply brief copies of Ms. Hudson’s auto-financing
invoices from Capital-One.
4
record taken as a whole could not lead a rational trier of fact to find for the non-moving
party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (internal quotation
marks omitted) (citing First Nat. Bank of Ariz. v. Cities Servs. Co., 391 U.S. 253, 289, 88
S.Ct. 1575, 20 L.Ed.2d 569 (1968)).
This case was filed in state court and removed here on diversity grounds. (See
ECF No. 1.) “[F]ederal courts sitting in diversity ‘apply state substantive law and federal
procedural law.’” Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S.
393, 417, 130 S.Ct. 1431, 176 L.Ed.2d 311 (2010) (quoting Hanna v. Plumer, 380 U.S.
460, 465, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965)). When deciding issues of substantive law,
this Court must apply the law of the state's highest court. Saab Auto. AB v. Gen. Motors
Co., 770 F.3d 436, 440 (6th Cir.2014). If the state's highest court has not decided the
applicable law, the state law must be ascertained “‘from all relevant data,’ which includes
the state's appellate court decisions.” Id. (quoting Garden City Osteopathic Hosp. v. HBE
Corp., 55 F.3d 1126, 1130 (6th Cir.1995)).
III.
Analysis
Michigan law is well-settled that a material misrepresentation made in an
application for no-fault insurance entitles the insurer to rescind the policy ab initio. 21st
Century Premier Ins. Co. v. Zufelt, 315 Mich. App. 437, 445, 889 N.W.2d 759, 764 (2016);
Lash v. Allstate Ins. Co., 210 Mich. App. 98, 103–04, 532 N.W.2d 869, 872 (1995).
Rescission may be justified without regard to the intentional nature of the material
misrepresentation as long as the representation is relied upon by the insurer. Lake States
Ins. Co. v. Wilson, 231 Mich. App. 327, 331, 586 N.W.2d 113, 115 (1998). Reliance may
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exist when the misrepresentation relates to the insurer's guidelines for determining
eligibility for coverage. Id.
Here, Progressive fails to establish it is entitled to rescind the policy and deny
coverage for Plaintiff’s claims as a matter of law.3 Setting aside the issues of whether or
not Ms. Hudson actually made a false representation in her insurance application or
whether such representation is attributable to Plaintiff, Progressive fails to establish that
any alleged misrepresentation of the garaging address was material. Under Michigan
law, a fact or representation in an application for insurance is “material where
communication of it would have had the effect of substantially increasing the chances of
loss insured against so as to bring about a rejection of the risk or the charging of an
increased premium.” Oade v. Jackson Nat'l Life Ins Co of Mich, 465 Mich. 244, 253–254;
632 NW2d 126 (2001). Progressive contends in its briefing that it would not have issued
and renewed the policy but for Ms. Hudson’s representation that she resided at the
Southfield address and that the vehicles covered by the policy would be garaged at that
location. But Progressive presents no evidence to support this contention and fails to
establish that such a representation was material to its decision to issue and renew the
policy.4 Compare Auto-Owners Ins. Co. v. Motan, No. 321059, 2015 WL 5247261, at *3
(Mich. Ct. App. Sept. 8, 2015) (finding that affidavit of insurance underwriter confirming
that it would not have issued the policy had it been aware of the misrepresentations was
sufficient to establish materiality). In other words, Progressive presents no evidence that
3
The Court will assume for the purpose of its analysis that rescission is available to Progressive under the
facts and circumstances of this case.
4
Progressive indicates in its reply brief that it intends to submit an affidavit to support its contention that a
misrepresentation concerning the garaging of a vehicle is a material misrepresentation and an uninsurable
risk that it had not contemplated at the time of the policy’s inception. However, no such affidavit has been
submitted to the Court.
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it would not have issued the policy had Ms. Hudson used a different address in her
application, or that it would have rescinded coverage had she updated her address to a
different location.
Moreover, although Progressive claims in its briefing that Plaintiff failed to disclose
his vehicle would not be garaged at the Southfield address, Progressive’s own summary
judgment evidence suggests otherwise.
Progressive’s Exhibit E—the insurance
declaration page adding Plaintiff and his vehicle to the policy—states that the garaging
zip code for Plaintiff’s vehicle is 48235 (i.e., Detroit), not 48033 (i.e., Southfield). This
evidence suggests that Progressive knew Plaintiff’s vehicle would be garaged at the
Detroit address, not the Southfield address, at the time it was added to the policy, and
nevertheless knowingly chose to extend coverage for the vehicle.
Similarly, Progressive contends in its briefing without any evidentiary support that
Plaintiff and Ms. Hudson represented they resided at the Southfield address in order to
obtain lower insurance premium rates. Progressive also fails to present any evidence
that it actually relied on Plaintiff’s or Ms. Hudson’s representations concerning the
garaging address in determining the premium amounts to be paid by Ms. Hudson, or that
the premium amounts would in fact have been higher had Ms. Hudson used a different
address in her application. Based on the record before the Court, Progressive fails to
establish that there are no genuine issues of material fact with respect to its rescission
defense. Therefore it is not entitled to summary judgment on Plaintiff’s claim.5
5
Because Progressive fails to establish its entitlement to rescission as a matter of law, the Court will not
address Plaintiff’s arguments that: (1) rescission is not available under the facts and circumstances of this
case; and (2) Plaintiff is not bound by the terms of the insurance policy.
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IV.
Conclusion
For the above-stated reasons, Progressive’s motion for summary judgment is
DENIED.
SO ORDERED.
s/Nancy G. Edmunds
Nancy G. Edmunds
United States District Judge
Dated: January 8, 2019
I hereby certify that a copy of the foregoing document was served upon counsel of record
on January 8, 2019, by electronic and/or ordinary mail.
s/Lisa Bartlett
Case Manager
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