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

C O U R T O F A P P E A L S

MARIA D. ENRIQUEZ and CLAUDIA 

HERNANDEZ,

Plaintiffs-Appellees,

and

MICHIGAN PAIN MANAGEMENT and 

MEDICAL TRANSPORTATION, LLC,

Intervening Plaintiffs-Appellees

and

SOUTHWEST MICHIGAN IMAGING 

SERVICES, LLC,

Intervening Plaintiff,

UNPUBLISHED

March 20, 2018

v No. 336128

Wayne Circuit Court

JOSE LUIS RIOS-CARRANZA and CORY 

ALAN GUERRA,

LC No. 15-013208-NI

Defendants,

and

EVEREST NATIONAL INSURANCE 

COMPANY,

Defendant-Appellant.

Before: GLEICHER, P.J., and BOONSTRA and TUKEL, JJ.

PER CURIAM.

In the midst of this first-party no-fault action, Everest National Insurance Company 

notified Maria Enriquez that it was rescinding her insurance policy and sent her a refund check 

for the full premium paid. Enriquez cashed the check, thereby accepting the rescission of her 

policy. This meant that Enriquez accepted that she had no insurance coverage at the time of her 
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accident. Given Enriquez’s acceptance, the circuit court should have dismissed plaintiffs’ and 

intervening plaintiffs’ claims against Everest. We reverse.

I. BACKGROUND

On May 4, 2015, Enriquez visited Fiesta Auto Insurance Agency and applied for a nofault policy from Everest. The application warned, “ALL HOUSEHOLD MEMBERS AGE 14 

OR OLDER, INCLUDING BUT NOT LIMITED TO SPOUSE(S), ROOMMATE(S), 

CHILDREN, FAMILY MEMBERS AND WARDS MUST BE LISTED AS POTENTIAL 

DRIVERS. . . . YOUR TOTAL POLICY PREMIUM CAN BE AFFECTED BY THIS 

INFORMATION.” Despite that Enriquez lived with her boyfriend and her 15-year-old daughter, 

she listed only herself as a potential driver on the application. An “applicant questionnaire” 

within the application queried, “Have you identified on this application all members of your 

household who are over the age of 14?” Enriquez marked the box for “yes.” The applicant was 

not permitted to select “no” as that option was marked “unacceptable,” another warning that 

listing all potential drivers was a prerequisite to coverage.

The application ended with a section labeled “APPLICANT’S STATEMENT-READ 

BEFORE SIGNING.” By signing, Enriquez acknowledged:

I agree that if I intentionally conceal or misrepresent a material fact or 

circumstance relating to the insurance, the policy shall be null and void. . . . I 

certify that all household members age 14 or older, including but not limited to 

spouse(s), roommate(s), children, family members and wards have been listed as 

potential drivers. . . . I understand that my total policy premium could be affected 

by this information.

Six days later, Enriquez was in a motor vehicle accident and filed a claim for first-party 

no-fault benefits. When Everest did not provide benefits in a timely fashion, Enriquez and 

Claudia Hernandez (Enriquez’s adult daughter who was a passenger during the accident) filed 

suit. During depositions, Enriquez and Hernandez admitted that Enriquez lived with her 

boyfriend and her 15-year-old daughter at all relevant times.

On June 14, 2016, a third-party claims administrator for Everest notified Enriquez 

through her attorney that the no-fault policy was “hereby rescinded” and therefore 

“nullifie[d] . . . as if it never existed” because Enriquez failed to list her teenage daughter as a 

potential driver on her application, an omission that artificially reduced her policy premium by 

$1,481.00. A check for $650.88 was included with the rescission notification, “which is a refund 

of the policy premium.” Similar notice was sent to Hernandez through counsel. Enriquez 

cashed the check on June 29.

Even before it rescinded the policy, Everest defended the suit based on Enriquez’s 

misrepresentation in the application. On June 23, 2016, after Everest sent the rescission 

notification but before Enriquez cashed the refund check, Everest filed a motion for summary 

disposition. In that motion, Everest noted that it had “rescinded Ms. Enriquez’s policy and 

issued a premium refund check to her.” Given the rescission, Everest contended that Enriquez 

did not have coverage at the time of her accident and the derivative claims of Hernandez and the 
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intervening plaintiffs who provided services and treatment also must fail. By the time Everest 

replied to Enriquez’s oppositional brief, Enriquez had cashed the premium refund check. 

Accordingly, Everest added to its argument that Enriquez accepted and ratified the rescission and 

was therefore estopped from contesting the rescission.

Ultimately, the circuit court denied Everest’s summary disposition motion because 

Enriquez could not speak English and because the applicant questionnaire did not allow an 

applicant to reply “no” when asked whether she listed all potential drivers in the application, 

giving her “no way . . . to truthfully answer the question.”

Everest now appeals.

II. ANALYSIS

We review de novo a circuit court’s ruling on a summary disposition motion. Johnson v 

Recca, 492 Mich 169; 173; 821 NW2d 520 (2012). 

A motion under MCR 2.116(C)(10) tests the factual support of a plaintiff’s 

claim. Summary disposition is appropriate under MCR 2.116(C)(10) if there is no 

genuine issue regarding any material fact and the moving party is entitled to 

judgment as a matter of law. In reviewing a motion under MCR 2.116(C)(10), 

this Court considers the pleadings, admissions, affidavits, and other relevant 

documentary evidence of record in the light most favorable to the nonmoving 

party to determine whether any genuine issue of material fact exists to warrant a 

trial. A genuine issue of material fact exists when the record, giving the benefit of 

reasonable doubt to the opposing party, leaves open an issue upon which 

reasonable minds might differ. [Zaher v Miotke, 300 Mich App 132, 139-140; 

832 NW2d 266 (2013) (quotation marks and citations omitted).]

Here, the circuit court should have dismissed the claims of plaintiffs and intervening 

plaintiffs because Everest rescinded the insurance policy and Enriquez accepted the rescission. 

In Wall v Zynda, 283 Mich 260, 264; 278 NW 66 (1938), the Michigan Supreme Court 

adopted the description of rescission provided by 1 Black, Rescission and Cancellation (2d ed), 

§ 1:

“To rescind a contract is not merely to terminate it, but to abrogate and 

undo it from the beginning; that is, not merely to release the parties from further

obligation to each other in respect to the subject of the contract, but to annul the 

contract and restore the parties to the relative positions which they would have 

occupied if no such contract had ever been made. Rescission necessarily involves 

a repudiation of the contract and a refusal of the moving party to be further bound 

by it. But this by itself would constitute no more than a breach of the contract or 

a refusal of performance, while the idea of rescission involves the additional and 

distinguishing element of a restoration of the status quo.”

The other party’s acceptance of the return of the consideration it paid toward the contract creates 

a “mutual agreement” or mutual “assent” to rescind the contract and excuses all the duties and 
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rights flowing from that contract. 13 Corbin, Contracts (rev ed), § 67.8, pp 47-49; 29 Williston, 

Contracts (4th ed), § 69:50, pp 119-121, § 73:15, pp 48-49. The endorsement and cashing of a 

check represents one party’s acceptance of the other party’s terms. See Puffer v State Mut 

Rodded Fire Ins Co of Mich, 259 Mich 698, 702; 244 NW 206 (1932) (“The failure of the parties 

to make a verbal agreement of settlement, separate from the indorsement on the check, is not of 

consequence.”); DMI Design & Mfg, Inc v ADAC Plastics, Inc, 165 Mich App 205, 210; 418 

NW2d 386 (1987) (“In this case, plaintiff’s action in negotiating the check speaks louder than 

plaintiff’s words.”); Fuller v Integrated Metal Tech, Inc, 154 Mich App 601, 614; 397 NW2d 

846 (1986) (in which the plaintiff’s claims were precluded because he endorsed and cashed a 

check tendered by the defendant in settlement of the parties’ disagreement).

Everest mailed the rescission notice and premium refund check to Enriquez’s attorney. 

This return of consideration restored the status quo. The circuit court erred in failing to consider

this argument in its ruling denying Everest’s motion for summary disposition. As the contract 

was legally rescinded, plaintiffs and intervening plaintiffs no longer had any ground to pursue 

suit against Everest.1

We reverse.

/s/ Elizabeth L. Gleicher 

/s/ Mark T. Boonstra 

/s/ Jonathan Tukel 

 1 Everest’s rescission of the insurance contract serves to eliminate Hernandez’s and the 

intervening plaintiffs’ claims as well, despite that they made no misrepresentation to the 

insurance company. See Bazzi v Sentinel Ins Co, 315 Mich App 763, 770; 891 NW2d 13 (2016)

(“[I]f an insurer is entitled to rescind a no-fault insurance policy because of fraud, it is not 

obligated to pay any benefits under that policy, including PIP benefits to a third party innocent of 

the fraud.”)