If this opinion indicates that it is “FOR PUBLICATION,” it is subject to 

revision until final publication in the Michigan Appeals Reports.

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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

RONNIE MOUSSA EL-ACHKAR,

Plaintiff,

and

OAKWOOD HEALTHCARE, INC., 

PHYSIOMATRIX, INC., GENEX PHYSICAL 

THERAPY, INC., ELITE CHIROPRACTIC 

CENTER, PC, and PRIME CARE 

CHIROPRACTIC, PC,

Intervening-Plaintiffs,

UNPUBLISHED

December 3, 2020

v No. 348380

Wayne Circuit Court

SENTINEL INSURANCE COMPANY, LTD., LC No. 13-005965-NI

Defendant/Third-Party PlaintiffAppellant,

and

HARTFORD INSURANCE COMPANY OF 

ILLINOIS,

Defendant,

and

HALA BAYDOUN BAZZI and MARIAM BAZZI,

Third-Party Defendants,

and

CITIZENS INSURANCE COMPANY,

Appellee.
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Before: REDFORD, P.J., and RIORDAN and TUKEL, JJ.

PER CURIAM.

Defendant-Third-Party Plaintiff-Appellant, Sentinel Insurance Company, Ltd. (Sentinel)

appeals by right the trial court’s final order requiring it to reimburse Defendant-Appellee Citizens 

Insurance Company (Citizens) the amount it paid plaintiff Ronnie El-Achkar to settle his claims 

for no-fault benefits. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

El-Achkar suffered injuries as a passenger in a motor vehicle accident on August 8, 2012, 

that occurred near the Ford Road and Mercury Drive intersection in Dearborn. A white Honda 

driven by El-Achkar’s friend, Ali Bazzi, traveled over 100 miles per hour on westbound Ford Road 

and collided with a black Dodge pickup that had lawfully completed a left turn onto the roadway. 

Ali and El-Achkar were ejected from the Honda. Ali and El-Achkar each suffered injuries and 

sought PIP benefits from Sentinel, the insurer of the Honda. In Bazzi v Sentinel Ins Co (Bazzi I), 

315 Mich App 763, 768-769; 891 NW2d 13 (2016), aff’d in part and rev’d in part Bazzi v Sentinel 

Ins Co (Bazzi II), 502 Mich 390; 919 NW2d 20 (2018) (footnote omitted), this Court summarized 

the pertinent facts as follows:

Plaintiff, Ali Bazzi (plaintiff), is seeking to recover personal protection 

insurance (PIP) benefits for injuries he sustained in an automobile accident while 

driving a vehicle owned by third-party defendant Hala Bazzi (plaintiff’s mother).[] 

Intervening plaintiffs, Genex Physical Therapy, Inc., Elite Chiropractic Center, PC, 

and Transmedic, LLC, are healthcare providers who provided services to plaintiff 

as a result of those injuries and are seeking payment for those services. The vehicle 

driven by Bazzi was insured under a commercial automobile policy issued by 

defendant Sentinel Insurance to Mimo Investments, LLC.4

4 Defendant Citizens Insurance Company’s involvement and potential liability in 

this case is as the servicing insurer under the Michigan Assigned Claims Plan. See 

MCL 500.3172(1).

Sentinel maintains that the policy was fraudulently procured by Hala Bazzi and 

third-party defendant Mariam Bazzi (plaintiff’s sister and the resident agent for 

Mimo Investments) in order to obtain a lower premium because of plaintiff’s 

involvement in a prior accident. Sentinel maintains that the vehicle was actually 

leased to Hala Bazzi for personal and family use, not for commercial use by Mimo, 

and, in fact, that Mimo was essentially a shell company, which had no assets or 

employees or was not otherwise engaged in actual business activity. Sentinel also 

alleges as fraud that the third-party defendants failed to disclose plaintiff would be 

a regular driver of the vehicle. In fact, Sentinel pursued a third-party complaint 

against Hala and Mariam Bazzi, seeking to rescind the policy on the basis of fraud 

in the application.5
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5 The trial court entered a default judgment against the third-party defendants in 

favor of Sentinel.

Sentinel thereafter moved for summary disposition of plaintiff’s claim 

against Sentinel for PIP benefits, as well as the intervening plaintiffs’ claims 

because the policy was rescinded on the basis of fraud. The trial court denied the 

motion, concluding that plaintiff had a claim because of the innocent-third-party 

rule.

In the Bazzi case, Sentinel sought summary disposition but the trial court denied the motion 

which prompted Sentinel to seek leave to appeal that decision to this Court which denied leave.1 

Sentinel then sought leave to appeal to our Supreme Court which, in lieu of granting leave, 

remanded the case to this Court for consideration as on leave granted.2 Because our Supreme 

Court directed this Court to hear Sentinel’s appeal, the parties in this case stipulated to the entry 

of an order staying further proceedings pending the resolution of Sentinel’s pending appeal in the 

Bazzi case.

On remand of Sentinel’s appeal in the Bazzi case, this Court reversed the trial court’s ruling 

and held that Sentinel could rescind the policy covering the vehicle in which Ali and El-Achkar 

were injured because of fraud in the policy’s procurement, and therefore, Sentinel had no 

obligation to pay PIP benefits for Ali, an innocent third party to the policy fraud. Bazzi I, 315 

Mich App at 767-769. Ali appealed this Court’s decision to our Supreme Court to consider 

“whether the judicially created innocent-third-party rule, which precludes an insurer from 

rescinding an insurance policy procured through fraud when there is a claim involving an innocent 

third party, survived [our Supreme] Court’s decision in Titan Ins Co v Hyten, 491 Mich 547; 817 

NW2d 562 (2012), which abrogated the judicially created easily-ascertainable-fraud rule.” Bazzi 

II, 502 Mich at 396. Our Supreme Court held “that Titan abrogated the innocent-third-party rule 

but that the Court of Appeals erred when it concluded that Sentinel was automatically entitled to 

rescission in this instance.” Id. Our Supreme Court affirmed in part, reversed in part, and 

remanded to the trial court to consider whether, in its discretion, rescission is an available remedy. 

Id.

Following remand of the Bazzi case, the trial court in this case ordered a Bazzi hearing and 

required interested parties to file briefs and appear for the hearing. Sentinel moved to rescind its 

insurance policy and Citizens opposed Sentinel’s motion. The trial court held a hearing on 

Sentinel’s motion on February 28, 2019.

In the Bazzi case, after conducting the equitable balancing directed by our Supreme Court 

in Bazzi II, the trial court entered a final order that its previous decision rescinding the Sentinel 

policy would not change and remained effective resulting in holding Sentinel not responsible for 

 

1 See Bazzi v Sentinel Ins Co, unpublished order of the Court of Appeals entered May 21, 2014 

(Docket No 320518).

2 See Bazzi v Sentinel Ins Co, 497 Mich 886; 854 NW2d 897 (2014).
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any claims made by Ali. The trial court ordered further that Sentinel not reimburse Citizens or 

any Michigan Automobile Insurance Placement Facility for any claims related to Ali.

After the hearing, the trial court ordered the stay lifted in this case, and it entered a final 

order ruling that the equities weighed against Sentinel in the balancing of the equities analysis 

prescribed by our Supreme Court in Bazzi II, ordered Sentinel responsible for El-Achkar’s no-fault 

claims, and ordered Sentinel to reimburse Citizens $125,000, the amount that Citizens paid to settle 

El-Achkar’s claims. Sentinel now appeals.

II. STANDARD OF REVIEW

We review for an abuse of discretion a trial court’s decision to grant or deny a motion for 

rescission of an insurance contract. Bazzi II, 502 Mich at 409. An abuse of discretion occurs when 

the decision falls outside the range of reasonable and principled outcomes. Berryman v Mackey, 

327 Mich App 711, 717; 935 NW2d 94 (2019). An abuse of discretion necessarily occurs when 

the trial court makes an error of law. Id. The trial court’s factual findings are reviewed for clear 

error, and a finding is clearly erroneous if the reviewing court is left with a definite and firm 

conviction that a mistake has been made. Id.

III. ANALYSIS

Sentinel argues that, because it validly rescinded its no-fault insurance policy because of 

Hala’s fraudulent procurement of it, the policy was void ab initio as to all claimants for PIP benefits 

under it, requiring no balancing of the equities as between Sentinel and El-Achkar, and if equities 

balancing was required, the trial court erred by ruling that the equities favored El-Achkar so that 

Sentinel’s rescission did not apply to him. We disagree.

The burden of establishing a right to rescission lies with the party seeking rescission. 

Gardner v Thomas R Sharp & Sons, 279 Mich 467, 469; 272 NW 871 (1937). In Mendelson 

Orthopedics PC v Everest Nat’l Ins Co, 328 Mich App 450, 458-460; 938 NW2d 739 (2019) 

(quotation marks and citations omitted), this Court analyzed Bazzi II and explained that our 

Supreme Court reaffirmed the right of insurers to raise common law defenses such as fraud in the 

procurement to seek rescission of a no-fault insurance policy to avoid liability, but clarified that 

insurers are not categorically entitled to rescission because “a claim to rescind a transaction is 

equitable in nature, it is not strictly a matter of right but is granted only in the sound discretion of 

the court, and when a party seeks rescission, the trial court must balance the equities to determine 

whether the party is entitled to the relief it seeks.” In Mendelson, this Court faced a factual scenario 

very similar to this case. A third party sought PIP benefits from a no-fault insurer that discovered 

its insured had procured a policy through fraud, and the insured then rescinded the policy. Id. at 

461. This Court explained that Bazzi II confirmed that an insurer may rescind and treat a policy 

as void ab initio as between the insurer and the insured; however, Bazzi II directed that, “when 

two equally innocent parties are affected, the court is required, in the exercise of [its] equitable 

powers, to determine which blameless party should assume the loss[.]” Id. at 460 (quoting Bazzi 

II, 502 Mich at 410) (quotation marks and citations omitted). In Mendelson, this Court determined 

that the trial court appropriately recognized the insurer’s right to rescind the policy and treat it as 

void ab initio respecting the insured, but the trial court failed to hold a hearing and to balance the 

equities as between the injured third party and the insurer which required a distinct and separate 
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analysis. Consequently, this Court reversed and remanded to the trial court for further proceedings 

to balance the equities as between the injured third party and the insurer. Id. at 462.

In Pioneer State Mutual Ins Co v Wright, ___ Mich App ___, ___; ___ NW2d ___ (2020), 

slip op at 2-3, lv application pending, a case involving an injured third party who sought PIP 

benefits under a no-fault insurance policy procured by a family member who made a material 

misrepresentation in her application for insurance, this Court again addressed the issue of the 

balancing of the equities as between two innocent parties, the insurer and the injured third party. 

To facilitate its review and clarify how courts must balance the equities, this Court adopted and 

distilled the essence of JUSTICE MARKMAN’S five-factor test stated in his concurrence in Farm 

Bureau Gen Ins Co of Mich v ACE American Ins Co, 503 Mich 903, 906-907; 919 NW2d 394 

(2018) (MARKMAN, J., concurring), as follows:

Reduced to their essence, five factors were identified and they address: (1) the 

extent to which the insurer could have uncovered the subject matter of the fraud 

before the innocent third party was injured; (2) the relationship between the 

fraudulent insured and the innocent third party to determine if the third party had 

some knowledge of the fraud; (3) the nature of the innocent third party’s conduct, 

whether reckless or negligent, in the injury-causing event; (4) the availability of an 

alternate avenue for recovery if the insurance policy is not enforced; and (5) a 

determination of whether policy enforcement only serves to relieve the fraudulent 

insured of what would otherwise be the fraudulent insured’s personal liability to 

the innocent third party. [Id. at ___, slip op at 7.]

This Court considered and applied the five-factor test. Id. at ___, slip op at 8-9. This Court 

explained that “[b]alancing the equities is not concerned with laying blame, but determining which 

of the innocent parties should bear a loss.” Id. at ___, slip op at 9, citing Bazzi II, 502 Mich at 411. 

This Court concluded that the “trial court’s analysis was specific to the facts and circumstances of 

the case and went no farther than what was equitable. Therefore, we cannot conclude that the trial 

court abused its discretion by refusing to grant rescission.” Id.

In this case, application of the five-factor test to the facts supports the trial court’s decision. 

The trial court properly considered the equities as between Sentinel and El-Achkar and correctly 

ruled that Sentinel failed to carry its burden of establishing the right to rescind the policy as 

between Sentinel and El-Achkar.

Respecting the first factor, whether Sentinel could have uncovered the fraud before ElAchkar sustained injury, the record reflects that Sentinel issued the subject policy on April 29, 

2012, to Mimo Investments, LLC for commercial coverage for a one-year period based on payment 

of a $3,467 premium to cover three vehicles including the Honda involved in the August 8, 2012 

accident, without conducting any real investigation regarding the company, the ownership of the 

insured vehicles, or who the intended drivers of the vehicles would be. The record does not reflect 

that Sentinel engaged in any investigation after issuance of the policy up to the time of the accident. 

Whether investigation before the accident would have revealed the fraud is unclear from this record 

and the perpetrators of the fraud may have been able to keep the truth concealed from Sentinel. 

The record reveals, however, that after the accident Sentinel investigated and discovered the fraud 

without much difficulty because Ali drove the Honda involved in the accident. The trial court 
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concluded that Sentinel could have done more to discover the fraud before the accident. We do 

not find that the trial court clearly erred in this regard, but because the perpetrators of the fraud 

may have concealed their subterfuge from Sentinel we conclude that this factor neither weighs for 

nor against rescission.

Regarding the second factor, whether the injured third party had a relationship with the 

fraudulent insured, the record reflects that El-Achkar had no relationship with Hala, Mariam, or 

Mimo Investments, LLC, and he had no knowledge of the fraud. El-Achkar lacked a familial 

relationship with any of Ali’s family and knew nothing about the procurement of the subject 

insurance policy. This factor, therefore, favors El-Achkar and weighs against rescission of the 

policy as between him and Sentinel.

The third factor also weighs against rescission of the policy as between El-Achkar and 

Sentinel. The record reflects that Ali drove the vehicle and picked up El-Achkar to go to a bakery 

for something to eat around midnight. No evidence in the record indicates that El-Achkar acted 

recklessly or negligently in the injury causing event. The record establishes that El-Achkar rode 

as a passenger in the Honda and lacked control over the ensuing events including the crash caused 

by Ali’s reckless driving.

Respecting the fourth factor, the record reflects that El-Achkar lacked another insurance 

policy under which he could claim no-fault benefits. He had no insurance policy of his own. ElAchkar sued Hartford, the insurer of his father’s vehicle, after his claim for benefits had been 

denied, apparently believing that he could claim benefits from that policy. His father’s vehicle, 

however, was covered under a commercial insurance policy that did not cover family members 

residing in the family household.3 The fourth factor, therefore, weighs against rescission.

Sentinel argues that El-Achkar is entitled to recover through the Michigan Assigned Claims 

Plan (MACP)/Michigan Automobile Insurance Placement Facility under MCL 500.3171 et seq.,

and this fact should be considered in the equities balancing if its proposed two-factor test is not 

adopted by this Court. Under Belcher v Aetna Cas & Surety Co, 409 Mich 231, 251; 293 NW2d 

594 (1980), however, our Supreme Court explained that “before recovery of benefits may be 

obtained through an assigned claims plan, it must be determined that no personal protection 

insurance is ‘applicable to the injury’.” Further, as explained by this Court in Spectrum Health 

Hosp v Michigan Assigned Claims Plan, 330 Mich App 21, 31-32; 944 NW2d 412 (2019):

the “owner or registrant of a motor vehicle required to be registered in this state” to 

purchase PIP insurance to cover injuries to persons caused by motor vehicles. MCL 

500.3101(1). The Legislature provided that the policies required under MCL 

500.3101(1) must cover more than just the named insured; policies must also cover 

injuries incurred in motor vehicle accidents by the named individual's spouse and 

any relative of either domiciled in the same household. MCL 500.3114(1). When 

an injured person is not covered by his or her own insurance policy or a policy 

owned by a relative, the Legislature provided that the insurers of the various 

 

3 The record indicates that, similar to the subject policy in this case, the commercial policy covering 

El-Achkar’s father’s vehicle may have been procured by fraud and subject to rescission.
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vehicles involved or occupied during the accident, or the insurers of persons 

operating such vehicles, must cover the loss. See MCL 500.3114(2) through (5); 

MCL 500.3115. Even when there does not appear to be any applicable PIP 

coverage, the Legislature provided that an injured person could obtain PIP benefits 

through the MACP. See MCL 500.3172(1). All self-insurers or insurers writing 

insurance as provided by the no-fault insurance act are required to participate in the 

MACP, with the associated costs being “allocated fairly among insurers and selfinsurers.” MCL 500.3171(2). In this way, the Legislature ensured that every 

person injured in a motor vehicle accident would have access to PIP benefits unless 

one of the limited exclusions in the no-fault act applies, and the losses suffered by 

uninsured persons injured in motor vehicle accidents could be indirectly passed on 

to the owners and registrants of motor vehicles through insurance premiums.

Belcher and Spectrum Health make clear that the MACP provides coverage as a last resort. 

Therefore, only if El-Achkar was not otherwise covered by a no-fault policy against which he 

could make a claim would he be eligible to seek coverage through the MACP. The equities 

balancing test as between an insurer and injured third party determines whether an injured third 

party may claim coverage under a no-fault policy. That determination, therefore, must be made 

first before the injured third party may seek coverage provided by the MACP. Accordingly, the 

fact that an injured third person can seek PIP benefits from the MACP as a last resort should not 

and cannot be factored into the equities balancing test’s fourth-factor inquiry because that factor 

would be rendered nugatory since the availability of coverage under the MACP if considered 

would always require concluding that the factor favors rescission. Accordingly, the availability of 

coverage through the MACP should not be considered as part of the five-factor test adopted by 

this Court in Pioneer. Sentinel’s argument, therefore, lacks merit.

The fifth factor requires consideration whether policy enforcement only serves to relieve 

the fraudulent insured of personal liability to the innocent third party. JUSTICE MARKMAN

explained in his concurrence in Farm Bureau that courts conducting equities balancing must 

determine:

whether enforcement of the insurance policy would subject the insurer to coverage 

for tort liability for an at-fault insured. In such a case, equity may weigh in favor 

of rescission because enforcement of the policy would transfer liability to the 

innocent third party from the insured who committed the fraud to the insurer that 

did not commit wrongdoing. [Farm Bureau, 503 Mich at 906.]

In this case, Ali constituted the party at fault for the accident’s occurrence because of his 

reckless driving. Ali was not insured under the commercial policy issued to Mimo Investments,

LLC even if that policy had not been procured through fraud by Hala and Mariam. Enforcement 

of the policy would not transfer Ali’s tort liability to El-Achkar from the insured, Mimo 

Investments, LLC, to the innocent insurer. Further, the record reveals that the insured, Mimo

Investments, LLC, was nothing more than a shell company with no assets or employees and was 

formed primarily to perpetrate the fraud. Even if El-Achkar sued the LLC and Ali for tort liability, 

it is doubtful that he could obtain any relief. Under the circumstances presented in this case, the 

fifth factor weighs against rescission.
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Weighing the equities between Sentinel and El-Achkar under the five-factor test adopted 

in Pioneer establishes that the equities weigh against rescission. The record reflects that the trial 

court considered the five factors and, although it did not fully articulate its reasoning, found that 

the factors weighed against rescission. Further, it gave Sentinel an opportunity to persuade it 

otherwise but Sentinel failed to do so. The trial court essentially found that Sentinel could have 

done a better job of investigating and uncovering the fraud of the LLC, and it found that, although 

Ali and El-Achkar were friends, no evidence established that El-Achkar had any knowledge about 

the procurement of the subject insurance policy because he had not lived in the Bazzi household 

and lacked any relationship with Hala, Mariam, or the LLC. The trial court, did not clearly err in 

this regard and it correctly concluded that Sentinel failed to meet its burden to establish a right to 

rescind the policy as to El-Achkar.

Sentinel argues that the trial court erred by not adopting its two-factor test. Sentinel 

contends that trial courts may consider two factors alone for equities balancing determinations: (1) 

whether fraud or misrepresentation existed at the inception of the insurance contract that was 

material to Sentinel’s decision to issue the policy, and (2) whether the facts established that the 

insurer failed to rescind and/or continued to collect premiums after it had actual knowledge of the 

true facts. We disagree.

The trial court correctly rejected the two-factor test advocated by Sentinel because it 

completely fails to take into consideration any of the equities as related to El-Achkar, the injured 

third party. Analysis of Sentinel’s test reveals that, so long as an insurer may rescind a policy for 

fraud in the procurement by the insured, no other parties or equities need be considered and 

weighed. Sentinel’s two-factor test does not comport with Bazzi II’s directive. Our Supreme Court 

held that the equities must be weighed as between an innocent insurer and an innocent injured third 

party to determine whether the insurer may rescind its policy in relation to claims made by the 

injured third party for coverage, despite the fact that the insurer may validly rescind the policy as 

between the insurer and the insured. The trial court correctly rejected Sentinel’s two-factor test

because it focuses solely on the insurer without any regard for the injured third party. Application 

of the five-factor test adopted in Pioneer, however, fulfills the Bazzi II directive and permits a just 

and equitable outcome. Therefore, we hold that the trial court did not abuse its discretion by 

denying Sentinel’s motion to rescind the subject policy because Sentinel failed to establish its 

entitlement to rescission of the policy based upon a balancing of the equities as between itself and 

El-Achkar.

Affirmed.

/s/ James Robert Redford 

/s/ Michael J. Riordan 

/s/ Jonathan Tukel