Court Opinion

ID: 4644840
Source: CourtListenerOpinion
Date Created: 2020-12-19 05:09:12.122489+00
Date Added: 2024-06-11T08:00:48.108119
License: Public Domain

Order                                                                           Michigan Supreme Court
                                                                                      Lansing, Michigan

  December 18, 2020                                                                   Bridget M. McCormack,
                                                                                                    Chief Justice

  161159                                                                                   David F. Viviano,
                                                                                           Chief Justice Pro Tem

                                                                                         Stephen J. Markman
                                                                                              Brian K. Zahra
  PIONEER STATE MUTUAL INSURANCE                                                        Richard H. Bernstein
  COMPANY,                                                                              Elizabeth T. Clement
            Plaintiff-Appellant,                                                        Megan K. Cavanagh,
                                                                                                         Justices

  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.

         CLEMENT, 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 informed the litigation choices of both the plaintiff
  and defendant. This Court has since resolved that this rule is no longer in effect, see Bazzi
                                                                                                                2

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 operation 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 less 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)
(MARKMAN, 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 State 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.

       MARKMAN, J., joins the statement of CLEMENT, J.

                          I, Larry S. Royster, Clerk of the Michigan Supreme Court, certify that the
                    foregoing is a true and complete copy of the order entered at the direction of the Court.
                          December 18, 2020
        a1215
                                                                              Clerk