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STATE OF MICHIGAN 

COURT OF APPEALS 

PANSY REID, 

 Plaintiff-Appellee, 

UNPUBLISHED 

January 21, 2016 

v No. 323673 

Wayne Circuit Court 

MICHIGAN PROPERTY & CASUALTY 

GUARANTY ASSOCIATION, 

LC No. 13-014662-NI 

 Defendant-Appellant. 

Before: STEPHENS, P.J., and HOEKSTRA and SERVITTO, JJ. 

PER CURIAM. 

 Defendant appeals by leave granted1 an order denying its motion for summary disposition 

in this no-fault action. Because a material question of fact remains, the trial court properly 

denied defendant’s motion for summary disposition and we affirm. 

 Plaintiff brought the present lawsuit, seeking benefits under a no-fault policy for injuries 

she sustained in an automobile accident on November 14, 2012. At the time of the accident 

plaintiff lived with her daughter and son-in-law, Melissa and Philip Parham, and she had been 

living with them for several years. Further, when the accident occurred, she was driving a 

vehicle owned and registered by Philip. The Parhams obtained no-fault insurance through 

American Fellowship Mutual Insurance Company (AFMIC), which dissolved in 2013 at which 

time defendant assumed AFMIC’s underwriting files. When completing applications for 

insurance in 2008 and 2009, Philip answered “no” when asked if there were “additional licensed 

residents” in the household or “additional drivers” of the vehicles. It is undisputed that plaintiff 

lived with the Parhams when Philip completed these forms and that she was a licensed driver. 

 Based on Philip’s failure to report plaintiff’s presence in the home, defendant moved for 

summary disposition in this case, arguing that the insurance applications completed by Philip 

contained material misrepresentations or fraudulent statements that rendered the policy void ab 

 

1 Reid v Mich Prop & Cas Guaranty Ass’n, unpublished order of the Court of Appeals, entered 

March 16, 2015 (Docket No. 323673). 
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initio. Following a hearing, the trial court denied defendant’s motion finding “that maybe there 

is a sliver of a question of fact here in this case.” Defendant now appeals as on leave granted. 

 On appeal, defendant argues that, given plaintiff’s undisputed residency in the Parham’s 

home, there is no genuine issue of material fact that Philip Parham made fraudulent 

misrepresentations on the insurance forms, thus making the policies void ab initio. 

 This Court reviews de novo decisions on motions for summary disposition. Sherry v East 

Suburban Football League, 292 Mich App 23, 26; 807 NW2d 859 (2011). Summary disposition 

under MCR 2.116(C)(10) is appropriate “when there is no genuine issue of material fact and the 

moving party is entitled to judgment as a matter of law.” Id. “In presenting a motion for 

summary disposition, the moving party has the initial burden of supporting its position by 

affidavits, depositions, admissions, or other documentary evidence.” Quinto v Cross & Peters 

Co, 451 Mich 358, 362; 547 NW2d 314 (1996). “The burden then shifts to the nonmoving party 

to demonstrate that a genuine issue of disputed fact exists for trial.” McCoig Materials, LLC v 

Galui Const, Inc, 295 Mich App 684, 693; 818 NW2d 410 (2012). The affidavits, pleadings, 

depositions, admissions, and other documentary evidence submitted by the parties must be 

viewed in a light most favorable to the nonmoving party. Sherry, 292 Mich App at 27. “There is 

a genuine issue of material fact when reasonable minds could differ on an issue after viewing the 

record in the light most favorable to the nonmoving party.” Allison v AEW Capital Mgt, LLP, 

481 Mich 419, 425; 751 NW2d 8 (2008). 

 Generally speaking, under Michigan law, “[i]nsurance policies are contracts and, in the 

absence of an applicable statute, are subject to the same contract construction principles that 

apply to any other species of contract.” Titan Ins Co v Hyten, 491 Mich 547, 554; 817 NW2d 

562 (2012) (citation and quotation marks omitted). Therefore, unless prohibited by statute, 

insurers may use common-law defenses to avoid policies, including duress, waiver, estoppel, 

fraud, and unconscionability. Id. at 554-555. Fraud includes fraudulent misrepresentations, 

innocent misrepresentations, and silent fraud. Id. To establish a claim of fraudulent 

misrepresentations, such as defendant alleges in the present case, the party alleging fraud must 

show: 

(1) That defendant made a material representation; (2) that it was false; (3) that 

when he made it he knew that it was false, or made it recklessly, without any 

knowledge of its truth and as a positive assertion; (4) that he made it with the 

intention that it should be acted upon by plaintiff; (5) that plaintiff acted in 

reliance upon it; and (6) that he thereby suffered injury. [Id. (citation omitted).] 

In the context of an application for insurance, a misrepresentation is “material” when 

“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 Life Ins Co of Mich, 465 Mich 244, 254; 632 NW2d 126 (2001); 

see also Montgomery v Fid & Guar Life Ins Co, 269 Mich App 126, 129; 713 NW2d 801 (2005). 

An insurer seeking to avoid a policy based on allegations of fraud or material misrepresentations, 

has the burden of proving the occurrence of fraud or material misrepresentations. Stein v HomeOwners Ins Co, 303 Mich App 382, 391; 843 NW2d 780 (2013); Szlapa v Natl Travelers Life 

Co, 62 Mich App 320, 325; 233 NW2d 270 (1975). 
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 In this case, the trial court properly denied defendant’s motion for summary disposition 

because defendant failed to satisfy its initial burden of bringing forth evidence to establish that 

any misrepresentation by Philip was “material.” That is, defendant offers no evidence to 

establish that knowledge of plaintiff’s presence in the home would have led defendant to reject 

Philip’s application for insurance or to charge a higher premium for the policy. Cf. Montgomery, 

269 Mich App at 129 (“Because defendant's underwriter stated in his affidavit that defendant 

would not have issued the policy if it had been aware of the decedent's smoking habit, the 

misrepresentation about the decedent's smoking habit was material.”). In the absence of such 

evidence, defendant has failed to support its position that “material” misrepresentations rendered 

the policy voidable ab initio and the trial court thus properly concluded that a material question 

of fact remained. See id.; see also Meyer v City of Ctr Line, 242 Mich App 560, 575; 619 NW2d 

182 (2000) (finding summary disposition improperly granted where the moving party failed to 

support is position). In sum, the trial court properly denied defendant’s motion for summary 

disposition under MCR 2.116(C)(10).2

 Affirmed. 

/s/ Cynthia Diane Stephens 

/s/ Joel P. Hoekstra 

/s/ Deborah A. Servitto 

 

2

 On appeal, in light of Titan Ins Co, 491 Mich at 559-571, the parties also discuss whether MCL 

257.520(f)(1) or plaintiff’s status as an innocent third-party precluded defendant from attempting 

to avoid the policy on the basis of Philip’s misrepresentations. Similar issues are currently 

before this Court on remand for consideration as on leave granted. See Bazzi v Sentinel Ins Co, 

497 Mich 886; 854 NW2d 897 (2014). Having determined that defendant was not entitled to 

summary disposition, we find it unnecessary to consider these additional issues in this case.