Court Opinion

ID: 4675906
Source: CourtListenerOpinion
Date Created: 2021-04-09 09:07:27.118077+00
Date Added: 2024-06-11T08:03:29.241472
License: Public Domain

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to
                 revision until final publication in the Michigan Appeals Reports.

                          STATE OF MICHIGAN

                             COURT OF APPEALS

ESTATE OF CALVIN BERNARD, by WALTER                               UNPUBLISHED
BERNARD, JR., Personal Representative,                            April 8, 2021

               Plaintiff-Appellant,

v                                                                 No. 348048
                                                                  Wayne Circuit Court
JANICE MARIE AVERS, ANCHOR BAY                                    LC No. 17-005348-NI
PACKAGING CORPORATION, and GRANGE
INSURANCE COMPANY OF MICHIGAN,

               Defendants-Appellees.

ESTATE OF CALVIN BERNARD, by WALTER
BERNARD, JR., Personal Representative,

               Plaintiff-Appellant,

v                                                                 No. 348049
                                                                  Wayne Circuit Court
JANICE MARIE AVERS and ANCHOR BAY                                 LC No. 17-005348-NI
PACKAGING CORPORATION,

               Defendants,

and

GRANGE INSURANCE COMPANY OF
MICHIGAN,

               Defendant-Appellee.

Before: LETICA, P.J., and GLEICHER and O’BRIEN, JJ.

GLEICHER, J. (concurring in part and dissenting in part).

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        I concur with the majority’s conclusion and analyses regarding plaintiff’s third-party claim
alleging a serious impairment of body function under MCL 500.3135(1), and the majority’s
vacation of the attorney fee award. My disagreement with the majority centers on plaintiff’s first-
party claim. In my view, the issue is controlled by this Court’s recent decision in Williams v Farm
Bureau Mut Ins Co of Mich, __ Mich App __; __ NW2d __ (2021) (Docket No. 349903).

       The majority affirms the trial court’s grant of summary disposition of plaintiff’s first-party
claim, holding that defendant Grange Insurance Company properly rescinded the no-fault policy
under which Calvin Bernard sought first-party benefits. Citing this Court’s opinion in Bahri v IDS
Prop Cas Ins Co, 308 Mich App 420; 864 NW2d 609 (2014), the majority concludes that “clear
evidence” supports that Bernard made fraudulent representations in support of his claim for
replacement services and “suppressed the truth with the intent of defrauding Grange.” The fraud-
exclusion provision in the policy therefore permitted Grange to rescind the policy, the majority
holds.

        The majority acknowledges that in Meemic Ins Co v Fortson, 506 Mich 287; 954 NW2d
115 (2020), the Supreme Court held that a fraud-exclusion provision in a no-fault policy could not
be applied to mandatory no-fault benefits but asserts that the Meemic Court “left open the question
of whether Bahri [had been] properly decided.” Meemic did, in fact, decide that Bahri’s central
holding is not applicable to cases like the one before us. In its final paragraph, Meemic holds that
a “contractual antifraud provision is invalid and unenforceable because it is not based on a
statutory or unabrogated common-law defense.” Id. at 316 (emphasis added). This holding is
incompatible and irreconcilable with Bahri, in which this Court upheld and applied a contractual
antifraud provision. See Bahri, 308 Mich App at 425 (“We agree with the trial court that the fraud
exclusion applied in the instant case.”). Williams adhered to Meemic virtually word for word by
holding that a “contractual antifraud provision is invalid and unenforceable because it is not based
on a statutory or unabrogated common law defense.” Williams, ___ Mich App at ___, slip op at
3. The majority offers no explanation of why or how the case now before us falls outside that rule.

         With its silence, the majority fails to contend with—or even acknowledge—Meemic’s
central holding. Instead, the majority rejects Williams, characterizing it as “wrongly decided.”
Williams is a published opinion and binding precedent of this Court. MCR 7.215(C)(2). See also
MCR 7.215(J)(1) (“A panel of the Court of Appeals must follow the rule of law established by a
prior published decision of the Court of Appeals issued on or after November 1, 1990, that has not
been reversed or modified by the Supreme Court, or by a special panel of the Court of
Appeals . . . .). The defendant in Williams did not file an application for leave to appeal, and the
time for doing so has expired. The majority’s discomfort with Williams could have precipitated a
call for a conflict panel, but the majority does not do so. Instead, contrary to the court rules and to
the principles of stare decisis, the majority declines to follow Williams, a case that faithfully
applied Meemic and constitutes clearly established precedent of this Court.

         The majority’s refusal to be bound by Williams is but a small transgression compared with
its failure to follow the letter and spirit of Meemic, on which Williams rests. In holding a
postprocurement fraud defense “invalid and unenforceable” in cases exactly like this one, the
Supreme Court observed that a postprocurement fraud defense “fails because it is not the type of
common-law fraud that would allow for rescission.” Meemic, 506 Mich at 310. The Court
explained that “[a]t common law, the defrauded party could only seek rescission, or avoidance of

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the transaction, if the fraud related to the inducement to or inception of the contract.” Id. at 305.
Williams conscientiously adhered to that analysis.

       Contrary to the majority in this case, Williams neither “overrules” nor “abrogates” Bahri.
The Supreme Court undermined a portion of Bahri’s holding in Meemic, and a fair reading of
Meemic leads to the inescapable conclusion that when it comes to postprocurement fraud, Bahri’s
foundation is precedentially rotten. Following Bahri, rather than Meemic, deeply tarnishes the
majority opinion, regardless of how the majority feels about Williams.

        Based on Williams, I would hold that Grange was precluded from rescinding the policy at
issue, and that summary disposition of plaintiff’s first-party claims were improperly granted. In
Meemic, 506 Mich at 304 n 10, the Supreme Court pointed out that “[a]n insurer can reject
fraudulent claims without rescinding the entire policy.”

        I would remand for a jury to determine whether plaintiff was entitled to any of the first-
party benefits he seeks. At a trial, Grange is certainly entitled to defend against payment of benefits
with evidence of Bernard’s dishonesty and his ability to perform tasks requiring strength, mobility,
or physical resilience. The surveillance evidence Grange presented in support of summary
disposition is relevant to whether the services for which payment is sought were necessary.
Williams instructs that the remedy for Bernard’s fraud—if fraud is proven—is a fact finder’s
determination that his benefit claims are unavailing, not recission of the policy. I would remand
for such a determination.

                                                               /s/ Elizabeth L. Gleicher

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