Percy Baker v. Edward Darrell Marshall
323 Mich. App. 590
Mich. Ct. App.2018Background
- Plaintiff Percy Baker was injured as a passenger in a collision and claimed uninsured-motorist and PIP benefits under her IDS no-fault automobile policy.
- IDS denied both uninsured-motorist and PIP benefits and Baker sued IDS in May 2015 for benefits under the policy.
- IDS’s original and amended answers denied liability and asserted multiple affirmative defenses but did not plead that the policy was void for fraud or rely on the policy’s fraud-exclusion clause.
- IDS moved for partial summary disposition in February 2016 on the ground that other parties were insured; that motion did not invoke the fraud-exclusion clause.
- In May 2016, for the first time, IDS moved for summary disposition arguing Baker had committed fraud and the policy’s fraud-exclusion clause barred coverage; the trial court granted summary disposition on that basis.
- The Court of Appeals reversed, holding IDS waived the fraud defense by failing to plead it as an affirmative defense under MCR 2.111(F).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IDS waived the fraud defense by failing to plead it as an affirmative defense | Baker: IDS waived fraud by not asserting it in its responsive pleadings as required by MCR 2.111(F) | IDS: Fraud-exclusion defense is not an affirmative defense because it directly controverts Baker’s prima facie entitlement (relying on Stanke) | Held: IDS waived the fraud defense; it is an affirmative defense and must be pleaded, so summary disposition on that basis was erroneous |
| Whether an insurance exclusionary clause is an affirmative defense | Baker: Exclusionary clause is an affirmative defense that must be pleaded | IDS: Some exclusions may directly controvert a prima facie case and are not always affirmative defenses | Held: Reliance on an exclusionary clause is an affirmative defense; here fraud-exclusion does not directly negate prima facie entitlement |
| Applicability of Stanke limited to its facts | Baker: Stanke does not control because owned-vehicle exclusion directly negated entitlement there; fraud-exclusion differs | IDS: Stanke supports treating some defenses as not affirmative when they negate prima facie case | Held: Stanke is distinguishable; fraud here requires acknowledging a prima facie claim then barring recovery, so it is affirmative |
| Resulting remedy | Baker: Summary disposition should be reversed and claim reinstated | IDS: Summary disposition proper based on fraud exclusion | Held: Reversed and remanded for reinstatement of Baker’s claim against IDS; Baker may tax costs |
Key Cases Cited
- Barnard Mfg Co, Inc. v. Gates Performance Engineering, Inc., 285 Mich. App. 362 (explaining de novo review of summary disposition)
- Stanke v. State Farm Mut. Auto. Ins. Co., 200 Mich. App. 307 (defining affirmative defense as one that does not controvert a plaintiff’s prima facie case)
- Dell v. Citizens Ins. Co. of Am., 312 Mich. App. 734 (failure to raise an affirmative defense under MCR 2.111(F) constitutes waiver)
- Shelton v. Auto-Owners Ins. Co., 318 Mich. App. 648 (recognizing reliance on an insurance policy exclusion as an affirmative defense)