Michigan Supreme Court

Lansing, Michigan

Bridget M. McCormack

,

Chief Justice

David F. Viviano,

Chief Justice Pro Tem

Stephen J. Markman

Brian K. Zahra

Richard H. Bernstein

Elizabeth T. Clement

Megan K. Cavanagh,

Justices 

# Order

December 18, 2020

161159

PIONEER STATE MUTUAL INSURANCE

COMPANY,

Plaintiff

- Appellant,

and

OAK PARK IMAGING,

Plaintiff,

v SC: 161159

COA: 347072

Macomb CC: 2015

- 002978

- CZ

VANETTA WRIGHT, DANA REYNARD

HARRIS, and STATE FARM MUTUAL

AUTOMOBILE INSURANCE COMPANY,

Defendants

- Appellees,

and

MENDELSON ORTHOPEDICS, PC, and

SYNERGY SPINE AND ORTHOPEDIC

SURGERY CENTER, LLC,

Intervening Defendants

- Appellees.

________________________________________/

On order of the Court, the application for leave to appeal the February 11, 2020

judgment of the Court of Appeals is considered, and it is DENIED, because we are not

persuaded that the questions presented should be reviewed by this Court.

C LEMENT

, J. ( concurring ).

I concur with the Court’s order denying leave. I write separately simply to note that

it seems to me that the equities of whether rescission will deny a plaintiff access to

alternative sources of recovery may play out differently in the future than it did in this case.

When this litigation began, it was at least an open question whether the “innocent

- third

party rule” was still in effect, and that info rmed the litigation choices of both the plaintiff

and defendant. This Court has since resolved that this rule is no longer in effect, see BazziI, Larry S. Royster, Clerk of the Michigan Supreme Court, certify tha t the

foregoing is a true and complete copy of the order entered at the direction of the Court.

December 18, 2020

a1215 2

Clerk v Sentinel Ins Co , 502 Mich 390 (2018), which I tend to think may change the equitable

calculus moving forward. I would note, for example, that the Court of Appeals here

acknowledged that the claimants could have brought more insurers into the litigation to

avoid the oper ation of the “one

- year

- back rule” of MCL 500.3145(1), and that doing so

may even have been prudent, but not doing so was nevertheless excusable in equity given

the state of the law when this litigation began. What was prudent but excusable here may

be les s excusable in the future now that the status of the innocent

- third

- party rule has been

resolved

— although this will presumably need to be balanced against avoiding duplicative

“kitchen sink” pleading. As for insurers, now that they know that rescission is a potential

remedy, in fairness and equity they should be encouraged to seek out such a remedy as

soon as possible, to avoid prejudicing claimants. I would note that among the factors listed

in Farm Bureau Gen Ins Co v Ace American Ins Co , 503 Mich 903, 906 (2018)

( M ARKMAN , C.J., concurring), and adopted by the Court of Appeals in this case, is the

question of “the extent to which the insurer could have uncovered the subject matter of the

fraud before the innocent third party was injured[.]” Pioneer Stat e Mut Ins Co v Wright

, 331 Mich App ___, ___ (2020) (Docket No. 347072); slip op at 7. It would, I think, be

consistent with the spirit of this inquiry to add to it the question of the extent to which the

insurer could have uncovered the subject matter of the fraud in a more timely manner after

the litigation began, to see if it may equitably bear a degree of responsibility for the

plaintiff’s inability to recover against some other insurer.

M ARKMAN , J., joins the statement of C LEMENT , J.