997 N.W.2d 307
Mich. Ct. App.2022Background
- March 8, 2020 motor-vehicle collision involving plaintiff Malick Gueye and defendant Shannon Lee Hood; Gueye sought no-fault PIP and UM/UIM benefits from State Farm.
- State Farm scheduled insurance medical examinations (IMEs) and an examination under oath (EUO); Gueye did not appear for a September 16, 2020 IME and missed other scheduled examinations; counsel informed State Farm Gueye would be out of the country and later said a lawsuit was forthcoming.
- State Farm denied Gueye’s no-fault benefits for failure to attend the IME; Gueye sued on March 8, 2021 asserting denial of UM/UIM and no-fault PIP benefits.
- State Farm moved for summary disposition, arguing (1) policy conditions (EUO/IME) barred Gueye’s UM/UIM suit and (2) statutory IME requirements and MCL 500.3153 authorized sanctions (including dismissal) for failure to attend IMEs for no-fault PIP.
- Trial court granted dismissal of both claims; Gueye sought reconsideration arguing dismissal of the no-fault claim was not a "just" sanction under MCL 500.3153.
- Court of Appeals: affirmed dismissal of UM/UIM claim (contract condition precedent), remanded to determine whether dismissal should be with or without prejudice, and vacated/ remanded the no-fault dismissal for further analysis under the "just" sanction framework.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UM/UIM claim can be dismissed for failure to attend EUO/IME required by policy | Gueye argued State Farm waived the EUO/IME requirement through communications and/or State Farm breached first by denying no-fault benefits | State Farm argued the policy unambiguously made EUO and IME conditions precedent to suit and Gueye failed to comply | Dismissal of UM/UIM claim affirmed: policy conditions precedent enforceable and Gueye failed to attend IME/EUO |
| Whether State Farm tacitly waived the EUO/IME requirement | Gueye said State Farm’s emails and lack of further scheduling amounted to waiver | State Farm said its repeated attempts to schedule show no waiver; no express or implied relinquishment of rights | Waiver not shown; communications did not demonstrate intent to relinquish the contractual right to require EUO/IME |
| Remedy for failure to comply with contractual EUO/IME (with or without prejudice) | Gueye argued dismissal should not automatically be with prejudice | State Farm argued dismissal appropriate; severity depends on willfulness | Remanded to trial court to determine whether dismissal of UM/UIM claim was with or without prejudice under Thomson standard (willful vs nonwillful noncompliance) |
| Whether dismissal of no-fault PIP claim for missed IME was a "just" sanction under MCL 500.3153 | Gueye argued dismissal was a disproportionate/drastic sanction and trial court failed to consider lesser alternatives or relevant factors | State Farm relied on statutory authority and MCL 500.3153 sanctions (including dismissal) for failure to attend IME | Vacated and remanded: trial court must apply discovery-sanction framework (Vicencio factors) / consider alternatives and explain on record whether dismissal is "just" under MCL 500.3153 |
Key Cases Cited
- McCormick v. Carrier, 487 Mich 180 (describes no-fault scheme and direct recovery from insurer)
- Stoddard v. Citizens Ins. Co. of Am., 249 Mich App 457 (UM/UIM coverage governed by contract terms)
- Yeo v. State Farm Ins. Co., 219 Mich App 254 (policy EUO condition precedent to suit is enforceable)
- Cruz v. State Farm Mut. Auto. Ins. Co., 466 Mich 588 (EUOs used to investigate fraud; scope of EUO authority under no-fault law)
- Muci v. State Farm Mut. Auto. Ins. Co., 478 Mich 178 (statutory sanctions for refusing IME; insurers may suspend benefits for repeated refusals)
- Thomson v. State Farm Ins. Co., 232 Mich App 38 (distinguishes dismissal with prejudice for willful noncompliance versus without prejudice for non-willful failure)
- Vicencio v. Ramirez, 211 Mich App 501 (factors trial courts should consider before dismissing as a sanction)
- Maldonado v. Ford Motor Co., 476 Mich 372 (standard of review and inherent authority to sanction litigants)