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

LATASHA NELSON,

Plaintiff-Appellant,

UNPUBLISHED

December 22, 2020

v No. 347963

Wayne Circuit Court

KWADWO OWUSU, HIZMO TRUCKING, LLC, 

and PROGRESSIVE MICHIGAN INSURANCE 

COMPANY,

LC No. 17-012095-NI

Defendants-Appellees.

Before: GADOLA, P.J., and RONAYNE KRAUSE and O’BRIEN, JJ.

PER CURIAM.

Plaintiff, Latasha Nelson, appeals as of right the order of the trial court granting defendants, 

Kwadwo Owusu and Hizmo Trucking, LLC, summary disposition under MCR 2.116(C)(8), and 

granting defendant, Progressive Michigan Insurance Company (Progressive), summary disposition 

under MCR 2.116(C)(10). We remand for further proceedings consistent with this opinion. 

I. FACTS

This case involves a policy of no-fault insurance issued by Progressive to Christopher 

Johnstone. Plaintiff and Johnstone previously had a dating relationship. At the time of the events 

of this case, plaintiff lived in Sterling Heights and Johnstone lived in Hillsdale. Plaintiff and 

Johnstone both assert that they never lived together at Johnstone’s Hillsdale address, but that 

plaintiff occasionally spent a few days at Johnstone’s home. On those occasions, plaintiff parked 

her car at his home. 

In December 2016, Johnstone obtained a no-fault insurance policy from Progressive. In 

January 2017, plaintiff purchased a Kia Forte. Plaintiff testified that while at the Kia dealership, 

she was told that she would need proof of insurance to purchase the vehicle. She called Johnstone, 

who told her to call his insurance agent, Cory Richardson of Stop 1 Insurance Agency (Stop 1). 

When plaintiff called Richardson, he told her that the request to add her and the Kia to Johnstone’s 

policy needed to be made by Johnstone, as the policy holder. 
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Plaintiff waited at the dealership while Johnstone called Richardson and requested that 

plaintiff and the Kia be added to his policy. Richardson then called plaintiff and asked for her 

identification, registration, and payment. Plaintiff sent a copy of her driver’s license to 

Richardson, which showed her address in Sterling Heights. Plaintiff testified during her deposition 

that she told Richardson that she did not live with Johnstone, and that he assured her that it was 

not a problem to add her to Johnstone’s policy, stating “that’s okay, we do this all the time.” 

Plaintiff denied that Richardson told her that Johnstone needed to own the vehicle, or that she 

needed to be living at Johnstone’s home, for her to be added to his insurance policy. 

Johnstone testified that when plaintiff purchased the Kia, she asked him to add her to his 

insurance policy because she could not afford her own policy. Johnstone testified that he called 

Richardson and explained the situation, and the agent told him that “they do that all the time.” 

Johnstone maintained that he told Richardson that he and plaintiff lived at different addresses, and 

that the agent told him that it did not matter. Johnstone also testified that at the time plaintiff was 

added to his policy, he and plaintiff were no longer dating. 

Richardson testified that Stop 1 arranges the issuance of insurance policies from various 

insurers, including Progressive. With regard to adding plaintiff to Johnstone’s policy, Richardson 

recalled that the Kia dealership called him, and he spoke with plaintiff and told her that he would 

need to speak to Johnstone because he was the policy holder. 

Richardson then spoke to Johnstone by telephone. Richardson testified that he told 

Johnstone that plaintiff could not be added as an additional driver on Johnstone’s policy unless 

Johnstone had a financial interest in the new vehicle or plaintiff resided with Johnstone. He 

recalled that Johnstone told him that he did not have a financial interest in plaintiff’s vehicle, but 

that plaintiff was his girlfriend and lived with him. Richardson explained that Johnstone seemed 

hesitant when providing this information, and he therefore asked Johnstone to electronically sign 

the household members acknowledgment statement, which stated that all of the information he 

had given regarding members of his household was accurate. Richardson testified that he did not 

ask plaintiff whether she lived with Johnstone, and instead relied on Johnstone’s statement that 

plaintiff lived with him. Richardson testified that he was concerned when he received a copy of 

plaintiff’s driver’s license stating an address different from Johnstone’s address. Richardson 

processed the application, and plaintiff was added to Johnstone’s policy. 

Approximately one month after purchasing the Kia, plaintiff was driving the vehicle when, 

while stopped at a traffic light in Detroit, her vehicle was struck by a truck driven by defendant 

Kwadwo Owusu and owned by defendant Hizmo Trucking. Plaintiff claimed injuries as a result 

of the collision. Initially, Progressive paid benefits to plaintiff under Johnstone’s policy. 

However, in April 2018, Progressive informed Johnstone that his no-fault policy had been 

rescinded as of the date it was issued because Progressive had determined that Johnstone or an 

insured person under the policy, had “concealed, misrepresented or made incorrect statements or 

representations regarding a material fact or circumstance; or engaged in fraudulent conduct in 

connection with your application.” 

Plaintiff filed this action against Owusu, Hizmo Trucking, and Progressive, alleging 

negligence by Owusu and Hizmo Trucking, and alleging a claim for first-party personal protection 

insurance (PIP) benefits against Progressive. Progressive moved for summary disposition under 
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MCR 2.116(C)(10), arguing that Johnstone’s no-fault policy was void ab initio, and therefore was 

properly rescinded, because Johnstone made material misrepresentations when adding plaintiff to 

his no-fault policy by claiming that plaintiff was a member of his household and that plaintiff’s 

vehicle was garaged at his home. Progressive asserted that both plaintiff and Johnstone made false 

representations, innocent misrepresentations, and participated in silent fraud. Owusu and Hizmo 

Trucking moved for summary disposition under MCR 2.116(C)(8) on the basis that Progressive’s 

rescission of the policy precluded plaintiff from recovering tort damages against Owusu and 

Hizmo Trucking under MCL 500.3135(2)(c). Following a hearing, the trial court granted 

defendants’ motions for summary disposition. Plaintiff now appeals as of right. 

II. DISCUSSION

A. SUMMARY DISPOSITION

Plaintiff contends that the trial court erred by granting defendants summary disposition. 

Plaintiff argues that Progressive was not entitled to rescind Johnstone’s policy on the basis of 

material misrepresentation, and further, that she is an innocent third party entitled to benefits under 

the policy despite any alleged misrepresentations. 

1. STANDARD OF REVIEW

We review de novo the trial court’s decision to grant or deny summary disposition. ElKhalil v Oakwood Healthcare, Inc, 504 Mich 152, 159; 934 NW2d 665 (2019). When reviewing 

a motion for summary disposition granted under MCR 2.116(C)(10), we consider all documentary 

evidence submitted by the parties in the light most favorable to the nonmoving party. Johnson v 

VanderKooi, 502 Mich 751, 761; 918 NW2d 785 (2018). Summary disposition under MCR 

2.116(C)(10) is warranted when there is no genuine issue as to any material fact and the moving 

party is entitled to judgment as a matter of law. Dawoud v State Farm Mut Auto Ins Co, 317 Mich 

App 517, 520; 895 NW2d 188 (2016). 

A motion for summary disposition under MCR 2.116(C)(8) tests the legal sufficiency of 

the complaint, and may be granted only when the claims alleged are so clearly unenforceable that 

no possible development of the facts could justify recovery. Maiden v Rozwood, 461 Mich 109, 

119; 597 NW2d 817 (1999). When considering a motion under MCR 2.116(C)(8), a court 

considers only the pleadings, accepting as true all well-pleaded allegations and construing them in 

a light most favorable to the nonmoving party. Nyman v Thomson Reuters Holdings, Inc, 329 

Mich App 539, 543; 942 NW2d 696 (2019). 

We also review de novo issues involving the interpretation of statutes and of contracts, 

Titan Ins Co v Hyten, 491 Mich 547, 553; 817 NW2d 562 (2012). However, equitable relief, 

including rescission, is granted only in “the sound discretion of the trial court.” Bazzi v Sentinel 

Ins Co, 502 Mich 390, 409; 919 NW2d 20 (2018). We therefore review the trial court’s decision 

to grant Progressive the equitable relief of rescission for an abuse of the trial court’s discretion. 

Pioneer State Mut Ins Co v Wright, ___ Mich App ___, ___; ___ NW2d ___ (2020) (Docket No. 

347072); slip op at 4. 
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2. MATERIAL MISREPRESENTATION 

An insurance policy is a contract; the principles of construction that apply to contracts 

generally also apply to insurance policies. Meemic Ins Co v Fortson, ___ Mich ___, ___; ___ 

NW2d ___ (2020) (Docket No. 158302); slip op at 6. As with any other contract, “[a]ny clause in 

an insurance policy is valid as long as it is clear, unambiguous and not in contravention of public 

policy.” Id., quoting Farm Bureau Mut Ins Co of Mich v Nikkel, 460 Mich 558, 566; 596 NW2d 

915 (1999). In this case, Johnstone’s no-fault insurance policy issued by Progressive contained a 

fraud exclusion clause that provides, in pertinent part:

This policy was issued in reliance upon the information provided on your insurance 

application. We may void this policy at any time, including after the occurrence of 

an accident or loss, if you: 

1. made incorrect statements or representations to us with regard to any 

material fact or circumstance; 

2. concealed or misrepresented any material fact or circumstance; or

3. engaged in fraudulent conduct;

at the time of application. This means that we will not be liable for any claims or 

damages that would otherwise be covered. 

When we have not voided or reformed the policy, we may still deny coverage for 

an accident or loss if you, in connection with the policy application, in connection

with any requested change, or at any time during the policy period, have concealed 

or misrepresented any material factor circumstance or engaged in fraudulent 

conduct and that concealment, misrepresentation, or fraudulent conduct was 

material to a risk we assumed. 

We may deny coverage for an accident or loss if you or a person seeking coverage 

has concealed or misrepresented any material fact or circumstance, or engaged in 

fraudulent conduct, in connection with the presentation or settlement of a claim. 

“[U]nless a contract provision violates law or one of the traditional defenses to the 

enforceability of a contract applies, a court must construe and apply unambiguous contact 

provisions as written.” Rory v Continental Ins Co, 473 Mich 457, 461; 703 NW2d 23 (2005). 

Pursuant to this unambiguous provision, Progressive is permitted to void the terms of the policy if 

Johnstone made incorrect statements or representations to Progressive with regard to any material 

fact or circumstance, concealed or misrepresented any material fact or circumstance, or engaged 

in fraudulent conduct at the time of application. 

Although an automobile insurance policy is a contract subject to common-law rules of 

contract interpretation, it is also governed by statutory provisions. The no-fault act governs the 

coverage mandated by the act, and the insurance policy governs optional coverages not mandated 

by the act. Meemic Ins Co, ___ Mich at ___; slip op at 6. An automobile insurance policy is 

subject to common-law contract defenses that may be invoked to avoid enforcement of the policy 
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unless those defenses are prohibited by statute. Bazzi, 502 Mich at 399-400. An insurer may raise 

the common law defense of fraud in the procurement of the policy as a defense to a claim for 

coverage mandated by the no-fault act, Meemeic Ins Co, ___ Mich at ___; slip op at 7, and the nofault act does not preclude an insurer from rescinding a policy on the basis of fraud. Bazzi, 502 

Mich at 401. 

The common-law defense of fraudulent misrepresentation may support an equitable 

remedy, such as the rescission of a contract. Titan, 491 Mich at 557-558. “Rescission is justified 

without regard to the intentional nature of the misrepresentation, as long as it is relied upon by the 

insurer. Reliance may exist when the misrepresentation relates to the insurer’s guidelines for 

determining eligibility for coverage.” 21st Century Premier Ins Co v Zufelt, 315 Mich App 437, 

446; 889 NW2d 759 (2016) (quotation marks and citation omitted). 

In this case, Progressive moved for summary disposition before the trial court, seeking 

rescission of the policy on the basis that Johnstone and plaintiff made material misrepresentations 

in the procurement of the policy. Progressive asserted that Johnstone misrepresented that plaintiff

was a member of his household and that plaintiff’s vehicle was garaged at his home, and that both 

plaintiff and Johnstone were participants in making false representations, innocent 

misrepresentations, and silent fraud.

To establish fraudulent misrepresentation, the plaintiff must demonstrate that (1) the 

defendant made a material representation, (2) the representation was false, (3) the defendant knew 

the representation was false when it was made, or made it recklessly, without knowing if it was 

true and as a positive assertion, (4) the defendant made the representation intending that the 

plaintiff act on the representation, (5) the plaintiff acted in reliance upon it, and (6) as a result, the 

plaintiff suffered damage. Titan, 491 Mich at 555. A representation is material if the insurer 

would not have issued the policy, in the manner or at the rate at which it was issued, if the insurer 

had known of the misrepresentation or nondisclosed fact. Oade v Jackson Nat’l Life Ins Co of 

Mich, 465 Mich 244, 253-254; 632 NW2d 126 (2001). An insurer’s statement that it would not 

have issued the policy had it known of the undisclosed information is sufficient to establish that 

the misrepresentation was material. See Lash v Allstate Ins Co, 210 Mich App 98, 103-104; 532 

NW2d 869 (1995). 

Silent fraud, also known as fraudulent concealment, requires that (1) the defendant 

suppressed a material fact, (2) the defendant had the duty to disclose the fact, and (3) the defendant 

concealed the fact with the intent to defraud. Titan Ins Co, 491 Mich at 557. A person may be 

guilty of fraudulent concealment if he or she “remains silent when fair dealing requires him [or 

her] to speak.” US Fidelity & Guaranty Co v Black, 412 Mich 99, 127; 313 NW2d 77 (1981). 

In contrast to fraud and silent fraud, innocent misrepresentation does not require that the 

defendant knew or should have known that the representation was false. Roberts v Saffell, 280 

Mich App 397, 405; 760 NW2d 715 (2008). Rather, under a theory of innocent misrepresentation 

false statements relied upon by the claimant are actionable regardless of whether the person making 

the statements acted in good faith. Id. A party’s innocent misrepresentation may allow a party to 

a contract to seek a legal or equitable remedy. See Titan Ins Co, 491 Mich at 555. 
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Progressive asserted that plaintiff had been added to Johnstone’s policy based upon the 

misrepresentations that plaintiff lived with Johnstone at his Hillsdale address and that the Kia was 

garaged at that address. Progressive asserted that Johnstone’s failure to disclose that plaintiff lived 

elsewhere and garaged the car elsewhere were misrepresentations of material fact, and that had 

that information been disclosed, Progressive would not have permitted plaintiff or the Kia to be 

added to the policy. Progressive further asserted that plaintiff was not an innocent third party 

because she was involved in the process of acquiring coverage for herself under Johnstone’s policy 

and was aware of the misrepresentations. 

A review of the record indicates that there is no dispute that misrepresentations were made 

to Progressive regarding plaintiff’s residence and the location where the Kia was garaged. Plaintiff 

was represented to be a member of Johnstone’s household and it was represented that the Kia was 

garaged at Johnstone’s address. Because both plaintiff and Johnstone testified that plaintiff did 

not live at Johnstone’s address at the time he sought to add her to his policy and the Kia was not 

garaged at Johnstone’s address, there is no dispute that the representations made to Progressive 

were false. 

There is disagreement, however, regarding who provided the misinformation to 

Progressive. Johnstone testified that he told Richardson that plaintiff did not live with him, while 

Richardson testified that Johnstone told him that plaintiff did, in fact, live with him. Plaintiff 

testified that she did not tell Richardson that she lived with Johnstone, and provided him with a 

copy of her driver’s license showing her Sterling Heights address; Richardson confirmed that 

plaintiff did not state that she was living with Johnstone, but also testified that he told her that she 

could only be added to the policy if she resided with Johnstone or if Johnstone had an ownership 

interest in the vehicle. Both plaintiff and Johnstone testified that Richardson assured them that it 

was not a problem that plaintiff was not living at Johnstone’s Hillsdale address, suggesting that 

both plaintiff and Johnstone were aware that there was a question whether her separate address 

was a barrier to plaintiff being added to Johnstone’s policy. In any event, the incorrect address 

was provided to Progressive, either by Johnstone or Richardson, and plaintiff took no steps to 

correct the incorrect information provided to Progressive. 

The trial court found that plaintiff’s deposition testimony established that she lived in 

Sterling Heights at the time Johnstone completed the application to add plaintiff to his policy. The 

trial court also found that Richardson, as an independent agent, acted as the agent of Johnstone 

and plaintiff in conveying to Progressive the misrepresentation that plaintiff lived at Johnstone’s 

address for purposes of adding plaintiff to Johnstone’s policy. The trial court concluded that 

because Richardson was acting as the agent of Johnstone and plaintiff, and because plaintiff did 

not advise Progressive of the misrepresentations in the policy even after receiving a copy of the 

policy with the incorrect address, Progressive was entitled to rescission. 

When a policy of insurance is facilitated by an independent insurance agent, the 

independent insurance agent is considered to be the agent of the insured rather than the agent of 

the insurer. Johnson v USA Underwriters, 328 Mich App 223, 237; 936 NW2d 834 (2019). This 

Court has held that it is not a defense to misrepresentations appearing in an application for 

insurance for the insured to assert that the insurance agent completed the application and guided 

the insured through the process, nor is it a defense that the insured failed to read the application. 

See Montgomery v Fidelity & Guaranty Life Ins Co, 269 Mich App 126, 129-130; 713 NW2d 801
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(2005). Here, either Johnstone, or Richardson acting as Johnstone’s agent, provided incorrect 

information to Progressive with the result that Progressive acted upon that information and issued 

a policy to Johnstone that covered plaintiff and her vehicle. Because the unambiguous language 

of the policy permits Progressive to void the policy if Johnstone made incorrect statements or 

representations to Progressive with regard to any material fact or circumstance, concealed or 

misrepresented any material fact or circumstance, or engaged in fraudulent conduct at the time of 

application, Progressive was entitled to void the policy. 

3. MATERIALITY OF THE MISREPRESENTATIONS

Plaintiff contends, however, that the information regarding her legal domicile was not 

material, and therefore a misrepresentation regarding her domicile cannot be a basis for rescission. 

We disagree. 

“[A] fact or representation in an application is ‘material’ where 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, 465 Mich at 253-

254, quoting Keys v Pace, 358 Mich 74, 82; 99 NW2d 547 (1959). A representation thus is deemed 

material if the insurer would not have issued the policy in the manner or at the rate at which it was 

issued if the insurer had known of the misrepresentation or nondisclosed fact. See id. at 253-254. 

An insurer’s statement that it would not have issued the policy had it known of the undisclosed 

information is sufficient to establish that the misrepresentation was material. See Lash, 210 Mich 

App at 103-104. 

Plaintiff argues that even if she or Johnstone failed to provide her correct address, where 

she lived was immaterial because, according to the testimony of Janeen Copic, Progressive’s 

litigation underwriting specialist, the real determining factor in Progressive’s decision to issue a 

policy of insurance is the location where a vehicle is garaged. The record is clear, however, that 

plaintiff was not garaging her vehicle at Johnstone’s address because she was not living there; she 

was instead garaging it at her Sterling Heights address where she lived. Moreover, Copic’s 

affidavit is clear that had Progressive been aware that plaintiff was not living at Johnstone’s 

address as represented, and also was garaging her vehicle at her address in Sterling Heights, it 

would not have added plaintiff’s vehicle to Johnstone’s no-fault policy because Progressive would 

not insure a vehicle housed at another address. We conclude that the trial court did not clearly err 

in concluding that the misrepresentation in the application was thus a material misrepresentation. 

4. COPIC AFFIDAVIT

Plaintiff also contends that the trial court erred by relying upon Copic’s affidavit to support 

the finding that Progressive was entitled to rescind Johnstone’s policy because Copic did not have 

personal knowledge of plaintiff’s claim under the policy. We disagree that the trial court erred by 

relying upon Copic’s affidavit. 

During her deposition, Copic testified that as a litigation underwriting specialist for 

Progressive, she handles the underwriting of insurance policies, and reviews policies when a case 

proceeds to litigation. In her affidavit in this case, Copic averred, in pertinent part:
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1. I am an employee of The Progressive Group of Insurance 

Companies of which Progressive Michigan Insurance Company is a member 

(“Progressive”) and I am familiar with the manner and process in which records are 

created and maintained by virtue of my duties and responsibilities. 

2. I have personal knowledge of the matter stated in this Affidavit and 

if called to testify, I will attest to the facts stated as true. 

* * *

5. Latasha Nelson was added as an insured to Christopher Johnstone’s 

policy of insurance with Progressive, policy number 912705948 on January 18, 

2017.

6. Based upon our investigation, Latasha Nelson lives at [street 

address], Sterling Heights, Michigan 48312.

7. During our investigation, Latasha Nelson testified that she has lived 

at and garaged the 2017 Kia Forte at that address for four years. 

8. Christopher Johnstone lives at [street address], Hillsdale, Michigan, 

the policy address.

9. Accordingly, Latasha Nelson did not reside with Christopher 

Johnstone at the policy address and her 2017 Kia Forte that was involved in this 

accident and insured under Christopher Johnstone’s policy with Progressive was 

not garaged at the policy address, but at Latasha Nelson’s actual residence. 

10. Had Progressive known that Latasha Nelson did not reside with 

Christopher [Johnstone] and that the 2017 Kia Forte was regularly garaged at an 

address other than the policy address, it would not have written the policy as this 

would have been an unacceptable risk as Progressive does not write policies for 

vehicles kept in multiple households. 

11. These material misrepresentations made by Christopher Johnstone 

and Latasha Nelson regarding the Progressive policy resulted in Progressive 

rescinding this policy of insurance on April 26, 2018, with a refund of all policy 

premiums, thereby affording no coverage on the date of the accident. 

On appeal, plaintiff argues that Copic’s averments in her affidavit cannot establish the 

materiality of Johnstone’s alleged false representations of fact under MCR 2.119 because she 

lacked personal knowledge of Progressive’s decision to rescind1Johnstone’s policy. However, 

 

1 We note that an insurer cannot unilaterally rescind a no-fault policy; an insurer can void a policy 

and seek rescission, but rescission is an equitable remedy solely within the discretion of the court. 

See Bazzi, 502 Mich at 409. 
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materiality is not established by information regarding why the insurer voided the policy; rather 

materiality is sufficiently established by an insurer’s statement that it would not have issued the 

policy if it had known of the misrepresentation or undisclosed information. See Lash, 210 Mich 

App at 103-104. 

Copic’s affidavit and deposition testimony were clear that if plaintiff or Johnstone had 

disclosed that plaintiff’s vehicle was primarily garaged at her home in Sterling Heights, 

Progressive would not have added either plaintiff or her vehicle to the policy. In her capacity as a 

litigation underwriting specialist she was familiar with the risks that Progressive was willing to 

insure, and Copic therefore was able to offer her personal knowledge concerning whether 

Progressive would have insured plaintiff and her vehicle if it had been aware of the 

misrepresentations in the application. Therefore, we reject plaintiff’s claim that Copic was not 

able to offer competent evidence regarding the materiality of the false representations made during 

the application process. 

5. DUE PROCESS

Plaintiff also contends that she was deprived of due process because the trial court chose 

to reach the issue whether Richardson was an agent of Progressive or an independent agent without 

allowing her to brief and address the issue. Again, we disagree. 

At the hearing on the motions for summary disposition, the trial court found that 

Richardson was an independent agent because he was not employed by Progressive. The trial 

court found that Richardson therefore was an agent of the insured, not the insurer. Plaintiff 

challenged this finding, and argued that Richardson’s status as an independent agent was at issue 

in a separate declaratory judgment action that plaintiff had filed against the insurance agency, and 

that the question was more properly decided initially in that case. The trial court, however, 

explained that determination of Richardson’s status as an agent was relevant to the resolution of 

this case. Although the trial court was unwilling to stay the proceedings in this case, the trial court 

invited plaintiff’s counsel to file a motion for reconsideration to address the issue. Plaintiff did 

not file a motion for reconsideration. Plaintiff now contends that the trial court denied her right to

due process because she was not permitted an opportunity to be heard on the issue. 

Both the United States and Michigan Constitutions prohibit the government from depriving 

a person of life, liberty, or property without due process of law. US Const, Am XIV; Const 1963, 

art 1, § 17. The “deprivation of life, liberty, or property by adjudication must be preceded by 

notice and an opportunity to be heard.” Bonner v City of Brighton, 495 Mich 209, 235; 848 NW2d 

380 (2014). In this case, plaintiff supports her assertion that she was denied due process by citing 

Al-Maliki v LaGrant, 286 Mich App 483, 485-486; 781 NW2d 853 (2009), in which this Court 

concluded that the plaintiff’s procedural due process rights were violated because the plaintiff was 

denied notice and an opportunity to be heard when the trial court decided a motion for summary 

disposition on the basis of an issue that had been conceded by the defendant, and thus was not 

addressed by the plaintiff. Id. at 488-489. 

Here, Progressive sought summary disposition on the basis that plaintiff and Johnstone had 

concealed information and actively made fraudulent representations during the application 

process. Plaintiff argued that she did not make misrepresentations during the application process, 
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and suggested that any error in the application was the responsibility of Richardson. Plaintiff’s 

argument thus by necessity invites an assessment of Richardson’s status as an independent agent

and whether his alleged misrepresentations can be imputed to Johnstone and plaintiff. Plaintiff 

was not precluded from addressing this aspect of the analysis, and could have done so in response 

to Progressive’s motion for summary disposition. However, plaintiff did not focus on 

Richardson’s status as an independent agent in her responsive briefing in the trial court, possibly 

in light of Richardson’s unequivocal and unchallenged testimony that he sold no-fault policies for 

multiple insurance companies. Moreover, the trial court did not preclude plaintiff from arguing 

this issue, and invited plaintiff to brief the issue in the context of a motion for reconsideration. 

Accordingly, plaintiff’s contention that she was deprived of notice and the opportunity to be heard

is without merit. 

B. BALANCING THE EQUITIES 

Although an insurer may raise the defense of fraud,2rescission is equitable in nature; it is 

not a matter of right, and the remedy is entrusted to the sound discretion of the trial court. In 

exercising its discretion and deciding whether an insurer is entitled to the remedy of rescission, the 

trial court must weigh “the equities,” and rescission should not be granted when the result would 

be inequitable or unjust. Bazzi, 502 Mich at 410. Specifically, if two parties are equally innocent, 

the trial court must determine which of the blameless parties must bear the loss. Id. at 410-411.

In Pioneer State Mut Ins Co, ___ Mich App at ___; slip op at 5, this Court determined that 

the factors set forth in Justice MARKMAN’S concurrence in Farm Bureau Gen Ins Co of Mich v 

ACE American Ins Co, 503 Mich 903, 906-907 (2018), for balancing the equities was a “workable 

framework” that provided appropriate guidance regarding this discretionary exercise. This Court 

stated:

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 

 

2 Previously, Michigan courts adhered to the rule that insurers were prohibited from asserting the 

defense of fraud once an insurable event occurred and there was an innocent, injured third party, 

if the fraud perpetrated by the insured was easily ascertainable upon investigation. However, our 

Supreme Court in Titan, 491 Mich at 571, did away with the judicially-created “easilyascertainable-fraud” and “innocent-third-party” rules. Bazzi, 502 Mich at 403. 
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the innocent third party. [Pioneer State Mut Ins Co, ___ Mich App at ___; slip op 

at 5.]

In this case, the trial court stated that it found unpersuasive plaintiff’s argument that she is 

an innocent third party and that therefore the equites weigh against rescinding the policy as to her. 

The trial court, however, did not specify whether it found plaintiff was or was not an innocent third 

party, nor did the trial court apply the balancing test articulated in Pioneer State Mut Ins Co, which 

it must do before ordering the remedy of rescission once it determines that plaintiff is an innocent 

third party. On remand, if plaintiff is determined to be an innocent third party, the trial court must 

weigh the factors set forth in Pioneer State Mut Ins Co before deciding whether Progressive may

rescind the no-fault policy with respect to plaintiff. 

C. DEFENDANTS OWUSU AND HIZMO TRUCKING

The trial court granted summary disposition in favor of defendants Owusu and Hizmo 

Trucking because it determined that Progressive was entitled to rescind the no-fault policy with 

respect to plaintiff, which effectively meant that plaintiff was uninsured at the time of the accident. 

See Esurance Prop & Cas Ins Co v Mich Assigned Claims Plan, ___ Mich App ___, ___; ___ 

NW2d ___ (2019) (Docket No. 344715); slip op at 4-5 (when a policy of no-fault insurance is 

rescinded, the policy is considered to have not existed). Accordingly, the trial court determined 

that plaintiff was not entitled to recover damages from Owusu and Hizmo Trucking under MCL 

500.3135(2)(c) (“Damages must not be assessed in favor of a party who was operating his or her 

own vehicle at the time the injury occurred and did not have in effect for that motor vehicle the 

security required by [MCL 500.3101] at the time the injury occurred.). On remand, the trial court 

shall determine what, if any, effect its determination on remand has on its decision to grant 

summary disposition in favor of Owusu and Hizmo Trucking. 

Remanded for further proceedings consistent with this opinion. We do not retain 

jurisdiction.

 

/s/ Michael F. Gadola

/s/ Colleen A. O’Brien