21st Century Premier Insurance Company v. Zufelt, 889 N.W.2d 759

21st Century issued an auto policy to Barry Zufelt in June 2012 after he omitted an April 18, 2012 accident from his application; the policy allowed rescission for material misrepresentation or nondisclosure.
Barry’s driving record actually exceeded the insurer’s eligibility points threshold when the application was made; plaintiff’s underwriter later stated they would not have issued coverage had they known of the accident.
The policy automatically renewed in December 2012; by renewal Barry’s record later reflected fewer points, but the insurer had not been informed of the April 2012 accident.
In March 2013 Barry was injured in a crash with Daniel Novak; University of Michigan Regents provided significant medical care and sought PIP reimbursement from the insurer.
21st Century sued to rescind the policy ab initio for Barry’s misrepresentation; the trial court granted summary disposition for plaintiff, rescinded the policy, and entered judgment against Regents for reimbursement of medical payments.
Regents appealed, arguing (among other things) that the renewal cured any initial ineligibility and that equitable estoppel barred rescission.

Issue	Plaintiff's Argument	Defendant's (Regents') Argument	Held
Whether policy may be rescinded for applicant's misrepresentation	Policy permits rescission for material misstatement or nondisclosure; insurer relied on misrepresentation	Rescission requires fraud/intentional misrepresentation	Rescission permitted without proof of intent where insurer relied on misrepresentation
Whether renewal created a new contract curing initial misrepresentation	Renewal incorporated original terms; initial misrepresentation tainted renewal	Renewal is a new, separate contract so later eligibility cured the defect	Renewal did not cure misrepresentation; original terms controlling and rescission allowed
Whether insurer had duty to monitor or was estopped from rescinding after renewal	No duty to continuously check record; insurer unaware of misrepresentation at renewal	Renewal declarations and confirmation induced reliance; estoppel bars denial of coverage	Equitable estoppel fails: no justifiable reliance and insured’s misrepresentation precludes estoppel
Entitlement to reimbursement of medical payments to Regents	Rescission voids coverage; insurer entitled to reimbursement for benefits paid	Regents entitled to PIP as a covered claimant at time of loss	Judgment for insurer against Regents for reimbursement affirmed

Maiden v Rozwood, 461 Mich. 109 (standards for de novo review of summary disposition)
Lash v Allstate Ins Co, 210 Mich. App. 98 (insurer may rescind no-fault policy for material misrepresentation)
Burton v Wolverine Mut Ins Co, 213 Mich. App. 514 (rescission justified without regard to intent if relied upon)
Lake States Ins Co v Wilson, 231 Mich. App. 327 (reliance supports rescission when misrepresentation relates to eligibility)
Russell v State Farm Mut Auto Ins Co, 47 Mich. App. 677 (renewal generally a separate contract unless original terms carry forward)
Titan Ins Co v Hyten, 491 Mich. 547 (insurer may pursue remedies to avoid liability despite discoverability of applicant fraud)
West Am Ins Co v Meridian Mut Ins Co, 230 Mich. App. 305 (elements of equitable estoppel)
Zurich Ins Co v CCR & Co, 226 Mich. App. 599 (contract interpretation by looking within the four corners)

Affirmed. No costs awarded.