Recent Article: Steven M. Couch, Farmington Hills

Court of Appeals Imposes Strict Penalty for Misrepresentations Made in Support of Assigned No-Fault Claim

By: Steven M. Couch

On October 24, 2017, the Michigan Court of Appeals issued its published opinion in Candler v. Farm Bureau General Insurance Company of Michigan (No. 332998), holding that the plaintiff’s submission of three fraudulent documents in support of a no-fault claim administered on behalf of the Michigan automobile insurance placement facility (“MAIPF”) was a sufficient basis to order summary disposition of the plaintiff’s claims. This resolved a question about the proper interpretation of MCL 500.3173a, the statute that sets forth the penalty for submitting false statements or documents in support of an assigned no-fault claim. The Court’s decision now provides insurers handling these matters on behalf of the MAIPF with an effective tool to defend against abusive claims.

Since 2014, no-fault insurers have invoked the rule set forth in Bahri v. IDS Property Casualty Ins. Co., 308 Mich. App. 420 (2014), in defense against fraudulent claims. The Bahri court held that a carrier could bar coverage if the insurance policy at issue contained language that rendered a claim ineligible for payment in the event of fraud or misrepresentation in support of the claim. However, Bahri has no direct applicability to assigned claims because such claims are solely governed by statute, not by any policy of insurance. Within this framework, counsel defending suits arising out of assigned claims had at least one fewer tool to defend against fraudulent claims. READ FULL ARTICLE HERE