Rodney Harrison v. Allstate Property & Casualty Insurance Company, 334083

Background

Rodney Harrison sued his no-fault insurer, Allstate, for first-party no-fault benefits after a 2014 auto accident; Michigan Head & Spine Institute (MHSI) intervened seeking $71,245 for medical services.
Allstate moved for summary disposition under MCR 2.116(C)(10), arguing Harrison committed fraud in his wage-loss claim and that a fraud-exclusion in the policy voided coverage for Harrison and thus MHSI (which stands in his shoes).
The trial court granted Allstate’s motion and dismissed MHSI’s claim; Harrison had accepted a $1,500 settlement offer from Allstate, but MHSI continued the appeal.
Allstate did not attach the operative policy with the fraud exclusion to the specific (later) C(10) motion, but the policy had been filed with an earlier motion and thus was properly considered by the trial court.
The dispositive factual dispute concerned whether Harrison knowingly or recklessly made materially false statements about his pre- and post-accident employment and earnings that would satisfy the insurer’s burden to prove the fraud exclusion.
The Court of Appeals concluded genuine issues of material fact existed (conflicting testimony and incomplete records) and reversed the grant of summary disposition; it remanded for further proceedings and noted potential relevance of recent Covenant decision regarding providers’ claims and assignments.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Allstate met its burden to void coverage under the policy’s fraud exclusion based on Harrison’s alleged misrepresentations about employment and wages	Harrison (and MHSI) argued the evidence conflicts and raises credibility issues—Harrison testified to pre-accident earnings and return-to-work dates and offered explanations for inconsistent discovery responses	Allstate argued Harrison made material, false statements knowingly/recklessly (e.g., misstatements about employers, hours, income, return-to-work date) that trigger the fraud exclusion and bar recovery by him and intervenor MHSI	Reversed: genuine factual disputes exist about materiality, falsity, and scienter; insurer failed as a matter of law to show no material fact remains (summary disposition improper)
Whether MHSI can recover given Covenant Med Ctr and assignment issues	MHSI contends it has assignments from Harrison of his no-fault benefits and thus can pursue recovery despite Covenant	Allstate relies on Covenant to argue providers lack statutory causes of action against no-fault insurers	Court: remanded for trial-court determination of applicability of Covenant and whether MHSI’s pleadings should be amended to assert assignment (remand for further proceedings)
Whether trial court could consider the insurance policy not attached to the instant C(10) motion	MHSI noted policy was attached to motion for reconsideration; Allstate noted policy was attached to an earlier abandoned motion	Allstate relied on the policy submitted earlier in the case file	Court: policy having been filed earlier in the action could be considered under MCR 2.116(G)(5) so consideration was proper
Whether summary disposition was proper given conflicting testimonial and documentary evidence	Harrison argued missing or conflicting records and credibility disputes preclude summary disposition	Allstate argued the weight of evidence supports fraud and exclusion applies	Court: credibility and conflicting evidence preclude resolution on C(10); factual issues for trier of fact

Key Cases Cited

Johnson v. Recca, 492 Mich. 169 (review standard for C(10) motions) (explaining de novo review of C(10) and evidence viewed in favor of nonmoving party)
Bank of America, N.A. v. Fidelity Nat'l Title Ins. Co., 316 Mich. App. 480 (procedure for assessing genuine issues of material fact on summary disposition)
Dancey v. Travelers Prop. Cas. Co., 288 Mich. App. 1 (insurance-policy interpretation is a question of law)
Sherman-Nadiv v. Farm Bureau Gen. Ins. Co. of Mich., 282 Mich. App. 75 (contract interpretation rules apply to insurance policies)
Klapp v. United Ins. Group Agency, Inc., 468 Mich. 459 (give effect to every contract term; avoid surplusage)
E.R. Zeiler Excavating, Inc. v. Valenti Trobec Chandler, Inc., 270 Mich. App. 639 (moving party’s documentary-evidence burden under MCR 2.116(C)(10))
Bahri v. IDS Prop. Cas. Ins. Co., 308 Mich. App. 420 (elements insurer must prove to void policy for insured’s misrepresentation/fraud)
Shelton v. Auto-Owners Ins. Co., 318 Mich. App. 648 (insurer bears burden to prove applicability of policy exclusion as affirmative defense)
Ward v. Titan Ins. Co., 287 Mich. App. 552 (lack of supporting documentation is not necessarily fatal to wage-loss claim)
Pioneer State Mut. Ins. Co. v. Dells, 301 Mich. App. 368 (trial court cannot weigh credibility or resolve conflicting material evidence on C(10))
Mina v. Gen. Star Indem. Co., 218 Mich. App. 678 (fraud requires more than mistake or honest misstatement; scienter required)
Ormsby v. Capital Welding, Inc., 471 Mich. 45 (leave to amend pleadings after adverse C(10) ruling unless futile)
Covenant Med. Ctr., Inc. v. State Farm Mut. Auto. Ins. Co., 500 Mich. 191 (providers lack a statutory cause of action under the no-fault act; assignments by insureds may preserve providers’ claims)