_______________________________ 

Michigan Supreme Court 

Lansing, Michigan 

Chief Justice: Justices: 

Clifford W. Taylor Michael F. Cavanagh 

Elizabeth A. Weaver Opinion Marilyn Kelly 

Maura D. Corrigan 

Robert P. Young, Jr. 

Stephen J. Markman 

FILED JUNE 25, 2008 

AMYRUTH L. COOPER, by her Next Friend, 

SHARON L. STROZEWSKI, AND LORALEE 

A. COOPER, by her Next Friend, SHARON L. 

STROZEWSKI, 

Plaintiffs-Appellants, 

v No. 132792 

AUTO CLUB INSURANCE ASSOCIATION, 

Defendant-Appellee. 

BEFORE THE ENTIRE BENCH 

MARKMAN, J. 

At issue is whether plaintiffs’ common-law cause of action for fraud is 

subject to the one-year-back rule of MCL 500.3145(1). Because the one-yearback rule only applies to actions brought under the no-fault act, and because a 

fraud action is not a no-fault action, i.e., an “action for recovery of personal 

protection insurance benefits payable under [the no-fault act] for accidental bodily 

injury,” MCL 500.3145(1), but instead is an independent and distinct action for 

recovery of damages payable under the common law for losses incurred as a result 
 

of the insurer’s fraudulent conduct, we hold that a common-law cause of action for 

fraud is not subject to the one-year-back rule. Therefore, we reverse in part the 

judgment of the Court of Appeals and remand the case to the trial court for further 

proceedings consistent with this decision. 

I. FACTS AND PROCEDURAL HISTORY 

In January 1987, plaintiffs Amyruth and Loralee Cooper sustained severe 

brain injuries in an automobile accident that occurred while they were passengers 

in a car driven by their mother, Sharon Strozewski. From the time they were 

discharged from the hospital in October 1987, both sisters have required 24-hour 

attendant care. By the fall of 1989, Loralee did not need as much nursing care, but 

still needed attention beyond what a babysitter could provide. Amyruth has 

required continuous skilled nursing care, which has been provided through an 

agency paid by defendant, plaintiffs’ automobile insurer. 

At the time of the accident, Strozewski was working at GTE, earning 

approximately $50 a day. In the fall of 1989, defendant’s claims representative, 

Jim Hankamp, suggested to Strozewski that she quit her job and stay at home to 

care for Loralee full-time. Defendant offered to pay Strozewski $50 a day, and 

she accepted by signing an agreement. In September 1991, the parties agreed to 

increase the payments to Strozewski to $75 a day. In October 1998, the rate was 

effectively increased to $6.50 an hour and, after that, it progressively increased up 

to $10 an hour by October 2000. According to defendant, as of December 26, 

2
 
 

2003, defendant had paid more than $5.6 million in personal protection insurance 

(PIP) benefits under the no-fault act for the girls’ care. 

Plaintiffs filed this lawsuit in 2003, alleging that defendant had failed to 

pay all the PIP benefits that were due under the no-fault act because it underpaid 

Strozewski for the attendant care she had provided to her daughters at home over 

the years. Defendant filed a motion for partial summary disposition arguing, 

among other things, that because the amended Revised Judicature Act (RJA), 

MCL 600.5851(1),1

 states that the minority/insanity tolling provision applies only 

to actions brought under this act, the saving provision does not apply to no-fault 

actions to toll the one-year-back rule of MCL 500.3145(1). The trial court denied 

the motion, and the Court of Appeals denied defendant’s application for leave to 

file an interlocutory appeal. Unpublished order of the Court of Appeals, entered 

July 1, 2004 (Docket No. 254659). Two weeks later, the Court of Appeals issued 

its opinion in Cameron v Auto Club Ins Ass’n, 263 Mich App 95; 687 NW2d 354 

(2004), which held that the minority/insanity provision of MCL 600.5851(1) 

applies only to actions filed under the RJA and, therefore, it does not toll an action 

1

 MCL 600.5851(1) provides: 

Except as otherwise provided in subsections (7) and (8), if the 

person first entitled to make an entry or bring an action under this act 

is under 18 years of age or insane at the time the claim accrues, the 

person or those claiming under the person shall have 1 year after the 

disability is removed through death or otherwise, to make the entry 

or bring the action although the period of limitations has run. This 

section does not lessen the time provided for in section 5852. 

3
 
brought under the no-fault act. Defendant filed an application for leave to appeal 

in this Court, which was denied, 471 Mich 915 (2004), as was defendant’s motion 

for reconsideration. 471 Mich 956 (2004). 

In August 2004, following the Court of Appeals decision in Cameron, 

plaintiffs amended their complaint to assert a new cause of action for fraud. 

Plaintiffs alleged that defendant had fraudulently induced Strozewski to accept an 

unreasonably low compensation rate for her in-home attendant care services. 

Specifically, plaintiffs alleged that defendant had committed fraud by telling 

Strozewski: (1) that if she did not quit her job and accept $50 a day for providing 

24-hour attendant care for Loralee, she would be personally responsible for paying 

for Loralee’s nursing care; (2) that she had a parental obligation to provide 

attendant care for her children, which reduced defendant’s legal obligation to pay 

attendant care benefits, and that if she did not agree to take care of Loralee for $50 

a day, Loralee would have to be institutionalized; (3) that the attendant-care rate 

was not negotiable and that a higher rate was not available even though, in reality, 

defendant was paying other insureds as much as $7 an hour for providing similar 

attendant care; (4) that she was required to sign a contract before she could recover 

continuing no-fault benefits; (5) that case-management expenses were paid at the 

same rate as attendant-care benefits; and (6) that attendant care could not be paid 

to family members at the market rate or agency rate, i.e., the rate normally paid by 

the insurance agency to other caregivers. Plaintiffs allege that, as a result of 

defendant’s fraud, they sustained the following damages: (1) inadequate payments 

4
 
for attendant-care services; (2) loss of payments for case-management expenses, 

i.e., expenses incurred for the services rendered by a case manager; (3) loss of 

payments for room and board expenses; and (4) inadequate payments of no-fault 

benefits. 

While the denial of defendant’s first motion for partial summary disposition 

was still on appeal, defendant filed a second motion for partial summary 

disposition, arguing that Strozewski could not recover in-home attendant-care 

benefits for services rendered before the filing of the complaint. The trial court 

denied the motion, and defendant did not file an interlocutory appeal. 

Several months later, defendant filed a third motion for partial summary 

disposition, arguing that, under MCL 500.3145(1), plaintiffs could not recover 

benefits for any services that were rendered more than one year before the filing of 

the original complaint. The trial court denied the motion. Defendant filed an 

interlocutory application for leave to appeal, which was denied by the Court of 

Appeals. Unpublished order of the Court of Appeals, entered January 12, 2005 

(Docket No. 259729). Defendant then filed a second application for leave to 

appeal in this Court, which was denied. 472 Mich 858 (2005). 

After this Court denied leave to appeal, the parties stipulated the entry of a 

judgment that resolved their differences over the amounts of damages that 

plaintiffs would be able to recover over the various periods at issue. This 

judgment preserved defendant’s right to appeal the trial court’s adverse decisions 

5
 
 

 

with regard to issues that were raised by either party in defendant’s three motions 

for partial summary disposition. 

Defendant then filed a claim of appeal. The Court of Appeals affirmed in 

part, reversed in part, and remanded for entry of an order of partial summary 

disposition in favor of defendant. Unpublished opinion per curiam of the Court of 

Appeals, issued November 21, 2006 (Docket No. 261736). The Court of Appeals 

held that this Court’s decision in Cameron v Auto Club Ins Ass’n, 476 Mich 55; 

718 NW2d 784 (2006), which affirmed the Court of Appeals decision in that case, 

was dispositive of defendant’s claim that plaintiffs may not recover PIP benefits 

relating to any losses incurred more than one year before plaintiffs filed their 

original complaint. Moreover, it held that plaintiffs’ fraud claim was subject to 

the one-year-back rule of MCL 500.3145(1) because the claim was nothing more 

than a no-fault claim couched in fraud terms. We granted plaintiffs’ application 

for leave to appeal. 478 Mich 861 (2007). 

II. STANDARD OF REVIEW 

Issues of statutory interpretation and other questions of law are reviewed de 

novo. Devillers v Auto Club Ins Ass’n, 473 Mich 562, 566-567; 702 NW2d 539 

(2005). The grant or denial of a motion for summary disposition is also reviewed 

de novo. McClements v Ford Motor Co, 473 Mich 373, 380; 702 NW2d 166 

(2005). 

6
 
III. ANALYSIS 

A. FRAUD ACTIONS AND ONE-YEAR-BACK RULE 

The Michigan no-fault act, MCL 500.3145(1), provides, in relevant part: 

An action for recovery of personal protection insurance 

benefits payable under this chapter for accidental bodily injury may 

not be commenced later than 1 year after the date of the accident 

causing the injury unless written notice of injury as provided herein 

has been given to the insurer within 1 year after the accident or 

unless the insurer has previously made a payment of personal 

protection insurance benefits for the injury. If the notice has been 

given or a payment has been made, the action may be commenced at 

any time within 1 year after the most recent allowable expense, work 

loss or survivor’s loss has been incurred. However, the claimant 

may not recover benefits for any portion of the loss incurred more 

than 1 year before the date on which the action was commenced. 

[Emphasis added.] 

The one-year-back rule of this provision limits recovery of PIP benefits to those 

incurred within one year before the date on which the no-fault action was 

commenced. PIP benefits include “all reasonable charges incurred for reasonably 

necessary products, services and accommodations for an injured person’s care, 

recovery, or rehabilitation.” MCL 500.3107(1)(a). 

Plaintiffs argue that by alleging in their amended complaint that defendant 

fraudulently induced Strozewski to accept an unreasonably low compensation rate 

for her in-home attendant-care services, plaintiffs brought a common-law fraud 

claim that is distinct from a no-fault claim for benefits, and that such claim 

therefore is not subject to the one-year-back rule of MCL 500.3145(1). A fraud 

action is not subject to the one-year-back rule of MCL 500.3145(1) because the 

one-year-back rule applies only to actions brought under the no-fault act, and a 

7
 
 

fraud action is a distinct and independent action brought under the common law. 

A fraud action is not an “action for recovery of [PIP] benefits payable under [the 

no-fault act] for accidental bodily injury.” Rather, in the context of an insurance 

contract, a fraud action is an action for recovery of damages payable under the 

common law for losses incurred as a result of the insurer’s fraudulent conduct. 

There is a distinction between claiming that an insurer has refused to pay no-fault 

benefits to its insureds and claiming that the insurer has defrauded its insureds. A 

fraud action is conceptually distinct from a no-fault action because: (1) a fraud 

action requires an insured to prove several elements that are different from those 

required in a no-fault action; (2) a fraud action accrues at a different time than a 

no-fault action; and (3) a fraud action permits an insured to recover a wide range 

of damages that are not available in a no-fault action. 

To assert a no-fault claim, an insured must demonstrate that the insured is 

entitled to benefits “for accidental bodily injury arising out of the ownership, 

operation, maintenance or use of a motor vehicle as a motor vehicle” without 

regard to fault, and that the insurer is obligated under an insurance contract to pay 

those benefits, but failed to do so timely. MCL 500.3105.2 To assert an 

actionable fraud claim, on the other hand, an insured must demonstrate: 

2

 MCL 500.3105 provides: 

(1) Under personal protection insurance an insurer is liable to 

pay benefits for accidental bodily injury arising out of the 

(continued . . .) 

8
 
 

“(1) That [the insurer] made a material representation; (2) that 

it was false; (3) that when [the insurer] made it [the insurer] knew 

that it was false, or made it recklessly, without any knowledge of its 

truth and as a positive assertion; (4) that [the insurer] made it with 

the intention that it should be acted upon by [the] plaintiff; (5) that 

[the] plaintiff acted in reliance upon it; and (6) that [the plaintiff] 

thereby suffered injury. Each of these facts must be proved with a 

reasonable degree of certainty, and all of them must be found to 

exist; the absence of any one of them is fatal to a recovery.” [HiWay Motor Co v Int’l Harvester Co, 398 Mich 330, 336; 247 NW2d 

813 (1976), quoting Candler v Heigho, 208 Mich 115, 121; 175 NW 

141 (1919).] 

A fraud claim is clearly distinct from a no-fault claim. First, a fraud claim 

requires proof of additional elements, such as deceit, misrepresentation, or 

concealment of material facts, and the substance of such claim is the insurer’s 

wrongful conduct. Unlike a no-fault claim, a fraud claim does not arise from an 

insurer’s mere omission to perform a contractual or statutory obligation, such as 

(continued . . .) 

ownership, operation, maintenance or use of a motor vehicle as a 

motor vehicle, subject to the provisions of this chapter. 

(2) Personal protection insurance benefits are due under this 

chapter without regard to fault. 

(3) Bodily injury includes death resulting therefrom and 

damage to or loss of a person’s prosthetic devices in connection with 

the injury. 

(4) Bodily injury is accidental as to a person claiming 

personal protection insurance benefits unless suffered intentionally 

by the injured person or caused intentionally by the claimant. Even 

though a person knows that bodily injury is substantially certain to 

be caused by his act or omission, he does not cause or suffer injury 

intentionally if he acts or refrains from acting for the purpose of 

averting injury to property or to any person including himself. 

9
 
 

its failure to pay all the PIP benefits to which its insureds are entitled. Rather, it 

arises from the insurer’s breach of its separate and independent duty not to deceive 

the insureds, which duty is imposed by law as a function of the relationship of the 

parties.3

 Second, unlike an action for no-fault benefits, which arises when the 

insurer fails to pay benefits, an action for fraud arises when the fraud is 

perpetrated. Hearn v Rickenbacker, 428 Mich 32, 39; 400 NW2d 90 (1987). 

Finally, under a no-fault cause of action, the insureds can only recover no-fault 

benefits, whereas under a fraud cause of action, the insureds may recover damages 

for any loss sustained as a result of the fraudulent conduct,4

 which may include the 

equivalent of no-fault benefits, reasonable attorney fees, damages for emotional 

distress, and even exemplary damages. See Phillips v Butterball Farms Co, Inc 

(After Second Remand), 448 Mich 239, 250-251; 531 NW2d 144 (1995); 

Veselenak v Smith, 414 Mich 567, 574; 327 NW2d 261 (1982); Phinney v 

Perlmutter, 222 Mich App 513, 527; 564 NW2d 532 (1997); Clemens v Lesnek, 

200 Mich App 456, 463-464; 505 NW2d 283 (1993). 

3

 “[T]he relationship between insurers and their insureds is ‘sufficient to 

permit fraud to be predicated upon a misrepresentation.’” Hearn v Rickenbacker, 

428 Mich 32, 39; 400 NW2d 90 (1987), quoting Drouillard v Metropolitan Life 

Ins Co, 107 Mich App 608, 621; 310 NW2d 15 (1981). 

4

 “In a fraud and misrepresentation action, the tortfeasor is liable for 

injuries resulting from his wrongful act, whether foreseeable or not, provided that 

the damages are the legal and natural consequences of the wrongful act and might 

reasonably have been anticipated.” Phinney v Perlmutter, 222 Mich App 513, 

532; 564 NW2d 532 (1997). 

10
 
Therefore, “[a]lthough mere allegations of failure to discharge obligations 

under [an] insurance contract would not be actionable in tort, where, as here, the 

breach of separate and independent duties are alleged, [the insureds] should be 

allowed an opportunity to prove [their] causes of action.” Hearn, 428 Mich at 40 

(citation omitted); see also Roberts v Auto-Owners Ins Co, 422 Mich 594, 603-

604; 374 NW2d 905 (1985) (tort actions survive in a contractual setting as long as 

the tort action is based on a breach of duty that is distinct from the contract); 

Kewin v Massachusetts Mut Life Ins Co, 409 Mich 401, 422; 295 NW2d 50 (1980) 

(tort actions may survive when an insurer breaches a duty that existed 

“independent of and apart from the contractual undertaking”). “[T]ort liability 

abolished by the no-fault act is only such liability as arises out of the defendant’s 

ownership, maintenance or use of a motor vehicle, not liability which arises out of 

other conduct . . . .” Citizens Ins Co of America v Tuttle, 411 Mich 536, 542; 309 

NW2d 174 (1981); see also Shavers v Attorney General, 402 Mich 554, 623; 267 

NW2d 72 (1978) (the no-fault act only “partially abolish[ed] the common-law 

remedy in tort for persons injured by negligent motor vehicle tortfeasors . . . .” 

[emphasis added]); Bak v Citizens Ins Co of America, 199 Mich App 730, 737-

738; 503 NW2d 94 (1993) (“The enactment of the no-fault act did not extinguish 

common-law doctrines predating that legislation.”). 

That common-law fraud claims survive even where a self-contained 

system, such as the no-fault system, exists is further suggested by this Court’s 

decisions in the context of the dramshop act. The dramshop act, MCL 436.1801 et 

11
 
 

 

seq., states that it provides “the exclusive remedy for money damages against a 

licensee arising out of the selling, giving, or furnishing of alcoholic liquor.” MCL 

436.1801(10). In Manuel v Weitzman, 386 Mich 157, 164-165; 191 NW2d 474 

(1971), overruled in part on other grounds by Brewer v Payless Stations, Inc, 412 

Mich 673 (1982), this Court held that the dramshop act does not abrogate actions 

arising out of other unlawful conduct, and that tavern owners remain liable for 

injuries arising out of breach of other common-law duties.5 Similarly, the no-fault 

act, which provides the remedy for injuries arising out of “the ownership, 

maintenance or use of a motor vehicle,”6

 MCL 500.3105(1), does not abrogate 

actions arising out of the breach of other common-law duties. Nothing in the nofault act or other relevant law suggests that insurers are exempt from liability for 

5

 This Court stated: 

We specifically approve the following statement in [De Villez 

v Schifano, 23 Mich App 72, 77; 178 NW2d 147 (1970)]: 

“We hold that the dramshop act affords the exclusive remedy 

for injuries arising out of an unlawful sale, giving away, or 

furnishing of intoxicants. King v. Partridge, 9 Mich App 540, 543 

(1968). However, the act does not control and it does not abrogate 

actions arising out of unlawful or negligent conduct of a tavern 

owner other than selling, giving away, or furnishing of intoxicants, 

provided the unlawful or negligent conduct is recognized as a lawful 

basis for a cause of action in the common law.” [Manuel, 386 Mich 

at 164-165.] 

6

 We note that the question whether the no-fault act provides the exclusive 

remedy for injuries arising out of “the ownership, maintenance or use of a motor 

vehicle” is not relevant here because the insureds argue that their injuries arose out 

of the insurer’s fraudulent conduct, not out of “the ownership, maintenance or use 

of a motor vehicle.” 

12
 
breaching other common-law duties by, for example, misrepresenting material 

facts and deceiving their insureds. The fact that the dispute would not have arisen 

in the absence of the no-fault insurance contract does not mean that the action 

brought by the insureds is a no-fault action. 

Defendant argues, and the Court of Appeals appears to assert, that where 

the damages sought by the insureds are defined in terms of additional PIP benefits, 

the insureds’ cause of action must necessarily be considered a “no-fault action 

couched in fraud terms.” Cooper v Auto Club Ins Ass’n, unpublished opinion per 

curiam of the Court of Appeals, issued November 21, 2006 (Docket No. 261736), 

at 2. We respectfully disagree. Although the nature of the damages sought may 

constitute a useful indicator of the precise nature of the claim, this factor alone 

cannot be viewed as dispositive. 

The fact that a lawsuit seeks to recover a loss that was 

covered by an insurance policy, alone, should not dictate the nature 

of a plaintiff’s claims . . . Although the contract of insurance may be 

one source of the insurer’s obligation to pay the loss, the insurer may 

also be held liable for tortious conduct that is wholly separable from 

its purely contractual duties. [Hearn, 428 Mich at 40-41.] 

Where fraudulent conduct results in the loss, or reduced payment, of PIP benefits, 

plaintiffs are entitled to seek damages for their entire loss, including the equivalent 

of the no-fault benefits. See Phinney, 222 Mich App at 532. It should not be seen 

as unusual that damages for fraud in a statutory context would be more than 

randomly related to lost statutory benefits. Simply because the insureds choose to 

13
 
 

measure their loss from the fraudulent conduct, in whole or in part, on the basis of 

lost PIP benefits does not transform their claim into a no-fault claim. 

Therefore, where an insured’s claim arises not out of the insurer’s mere 

failure to pay no-fault benefits, but out of the insurer’s fraudulent 

misrepresentations, which might have ultimately led to payment of reduced nofault benefits to the insureds, the courts are faced with a fraud claim, as opposed to 

a no-fault claim. Because fraud claims are independent of and distinct from nofault claims, the one-year-back rule of the no-fault act simply does not apply. 

Consequently, where the insureds state a fraud cause of action, this Court 

need not resort to its equitable power to prevent the one-year-back rule’s 

application. In Devillers, 473 Mich at 590-591, this Court stated that, in the 

context of a no-fault claim, this Court may exercise its equitable power to avoid 

the application of the one-year-back rule if there are allegations of fraud, mutual 

mistake, or other unusual circumstances.7 Because Devillers “concerns those 

statutory claims brought pursuant to the no-fault act,” i.e., no-fault actions, 

Devillers is not pertinent in cases involving independent fraud actions. West v 

Farm Bureau Gen Ins Co of Michigan (On Remand), 272 Mich App 58, 65; 723 

NW2d 589 (2006). Thus, where the insureds state a common-law fraud claim, 

wholly separate from a no-fault claim, this Court need not consider an equitable 

7

 In Devillers, however, this Court concluded that because there was “no 

allegation of fraud, mutual mistake, or any other ‘unusual circumstance’ . . . there 

[was] no basis to invoke the Court’s equitable power.” Devillers, 473 Mich at 

591. 

14
 
 

exception to the application of the one-year-back rule because the no-fault rules 

simply do not apply.8 

B. CAUTIONARY NOTES 

While insureds are entitled to pursue common-law fraud claims against 

insurers and their remedies are not limited by the one-year-back rule of the nofault act, we are not oblivious to the fact that, in the initial stages of litigation, 

some insureds may attempt to circumvent the application of the one-year-back rule 

to defeat insurers’ motions for summary disposition. In order to limit such 

practices, to prevent wasteful or frivolous litigation, and to maintain the integrity 

of both the no-fault law and the common-law fraud cause of action, trial courts 

should exercise special care in assessing these types of fraud claims, and we offer 

the following guidance. 

Because fraud must be pleaded with particularity, MCR 2.112(B)(1), and 

“is not to be lightly presumed, but must be clearly proved,” Palmer v Palmer, 194 

Mich 79, 81; 160 NW 404 (1916), “by clear, satisfactory and convincing” 

evidence, Youngs v Tuttle Hill Corp, 373 Mich 145, 147; 128 NW2d 472 (1964), 

trial courts should ensure that these standards are clearly satisfied with regard to 

all of the elements of a fraud claim. As stated above, the elements of fraud in the 

8

 We note that, where a case involves a no-fault claim, this Court may still 

exercise its equitable power if there has been a determination that genuinely 

“unusual circumstances” such as fraud or mutual mistake were present. Devillers, 

supra at 590-591. 

15
 
insurance context are: (1) that the insurer made a material representation; (2) that 

it was false; (3) that when the statement was made, the insurer knew that it was 

false, or the insurer made it recklessly without any knowledge of its truth and as a 

positive assertion; (4) that the insurer made the statement with the intention that it 

would be acted upon by the insureds; (5) that the insureds acted in reliance upon 

the statement; and (6) that the insureds consequently suffered injury. See Hi-Way 

Motor Co, 398 Mich at 336. 

In particular, courts should carefully consider in this context whether 

insureds can satisfy the reliance factor. Insureds must “show that any reliance on 

[the insurer’s] representations was reasonable.” Foreman v Foreman, 266 Mich 

App 132, 141-142; 701 NW2d 167 (2005). Because fraud cannot be “perpetrated 

upon one who has full knowledge to the contrary of a representation,” 

Montgomery Ward & Co v Williams, 330 Mich 275, 284; 47 NW2d 607 (1951), 

insureds’ claims that they have reasonably relied on misrepresentations that clearly 

contradict the terms of their insurance policies must fail. One is presumed to have 

read the terms of his or her insurance policy, see Van Buren v St Joseph Co 

Village Fire Ins Co, 28 Mich 398, 408 (1874); therefore, when the insurer has 

made a statement that clearly conflicts with the terms of the insurance policy, an 

insured cannot argue that he or she reasonably relied on that statement without 

questioning it in light of the provisions of the policy. See also McIntyre v Lyon, 

325 Mich 167, 174, 37 NW2d 903 (1949); Phillips v Smeekens, 50 Mich App 693, 

697; 213 NW2d 862 (1973). In addition, insureds will ordinarily be unable to 

16
 
 

establish the reliance element with regard to misrepresentations made during the 

claims handling and negotiation process, because during these processes the 

parties are in an obvious adversarial position and generally deal with each other at 

arm’s length. See Mayhew v Phoenix Ins Co, 23 Mich 105 (1871) (Where the 

insured has the same knowledge or means of knowledge as the insurer, the insurer 

cannot be regarded as occupying any fiduciary relationship that would entitle the 

insured to rely on the insurer’s representations, and a settlement hastily made with 

the insurer under such circumstances will not be set aside for fraud. Insureds are 

bound to inform themselves of their rights before acting, and, if they fail to do so, 

they themselves are responsible for the loss.); Nieves v Bell Industries, Inc, 204 

Mich App 459, 464; 517 NW2d 235 (1994) (“There can be no fraud when a 

person has the means to determine that a representation is not true.”). However, 

when the process involves information and facts that are exclusively or primarily 

within the insurers’ “perceived ‘expertise’ in insurance matters, or facts obtained 

by the insurer[s] in the course of [their] investigation, and unknown” to the 

insureds, the insureds can more reasonably argue that they relied on the insurers’ 

misrepresentations. 14 Couch on Insurance 3d § 208:19, p 208-26; see also Crook 

v Ford, 249 Mich 500, 504-505; 229 NW 587 (1930); French v Ryan, 104 Mich 

625, 630; 62 NW 1016 (1895); Tabor v Michigan Mut Life Ins Co, 44 Mich 324, 

331; 6 NW 830 (1880).9 

9

 In Tabor, the Court held that “[w]hile. . . a person cannot generally be 

(continued . . .) 

17
 
 

The courts should also carefully examine whether the insureds have 

established both that the statements are statements of past or existing fact, rather 

than future promises or good-faith opinions, Hi-Way Motor Co, 398 Mich at 337; 

Danto v Charles C Robbins, Inc, 250 Mich 419, 425; 230 NW 188 (1930); 

Foreman, 266 Mich App at 143, and that they are objectively false or misleading, 

Hord v Environmental Research Institute of Michigan, 463 Mich 399, 411; 617 

NW2d 543 (2000). Further, the insureds must demonstrate that the 

misrepresentations were made with the intent to defraud, Foreman, 266 Mich App 

at 143, and that the insureds were injured as a consequence. Hi-Way Motor Co, 

398 Mich at 336. The courts must distinguish between misrepresentations of fact, 

i.e., false statements of past or existing facts, and mere negotiation of benefits, i.e., 

the mutual discussion and bargaining preceding an agreement to pay PIP benefits. 

Finally, as with any other action, if the courts conclude that the fraud 

claims were frivolous or interposed without an adequate basis or for improper 

purposes, appropriate sanctions should be considered. See MCR 2.114. 

(continued . . .) 

justified in acting solely on the statement of his legal rights by an adverse agent in 

insurance controversies,” relief is warranted if the statements are “so mixed with 

unconscionable conduct as to stand differently.” Id. at 331. Not only did the 

insurer misrepresent the applicable law regarding forfeiture of policies and 

pressure the ill insured to immediately comply with the insurer’s demands without 

allowing him to obtain independent advice, but, critically, the insurer also 

misrepresented facts that were within the exclusive knowledge of the insurer, such 

as the actions taken by the insurance commissioner and by some of the insured’s 

neighbors, which directly affected the surrender of the insured’s policy. Thus, the 

plaintiff could recover under her fraud claim. 

18
 
III. CONCLUSION 

Because under MCL 500.3145(1) the one-year-back rule applies solely to 

no-fault actions, and because a fraud action is not a no-fault action, but, rather, 

constitutes an independent and distinct action for recovery of damages under the 

common law for losses incurred as a result of the insurer’s fraudulent conduct, we 

hold that a common-law action for fraud is not subject to the one-year-back rule. 

Therefore, we reverse in part the judgment of the Court of Appeals and remand 

this case to the trial court for further proceedings consistent with this opinion. 

Stephen J. Markman 

Clifford W. Taylor 

 Maura D. Corrigan 

Robert P. Young, Jr. 

CAVANAGH, J. I concur in the result only. 

Michael F. Cavanagh 

19
 
_______________________________ 

v 

S T A T E O F M I C H I G A N 

SUPREME COURT 

AMYRUTH L. COOPER, by her Next Friend, 

SHARON L. STROZEWSKI, AND LORALEE 

A. COOPER, by her Next Friend, SHARON L. 

STROZEWSKI, 

Plaintiffs-Appellants, 

No. 132792 

AUTO CLUB INSURANCE ASSOCIATION, 

Defendant-Appellee. 

BEFORE THE ENTIRE BENCH 

WEAVER, J. (concurring). 

I concur only in the result reached by the majority opinion. Specifically, 

because the one-year-back rule applies only to actions brought under the no-fault 

act, and because a fraud action is not a no-fault action—“action for recovery of 

personal protection insurance benefits payable under [the no-fault act] for 

accidental bodily injury,” MCL 500.3145(1)—but, instead, is an independent 

action for recovery of damages payable under the common law for losses incurred 

as a result of the insurer’s fraudulent conduct, I agree that the common-law cause 

of action for fraud is not subject to the one-year-back rule. 
Therefore, I concur in the majority’s decision to reverse in part the 

judgment of the Court of Appeals and to remand this matter to the trial court for 

further proceedings consistent with that decision. 

Elizabeth A. Weaver 

Marilyn Kelly 

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