*1 Cunningham v 471 Citizens Ins 1984] CUNNINGHAM v CITIZENS INSURANCE COMPANY OF

AMERICA v CUNNINGHAM AUTO-OWNERSINSURANCE COMPANY 70392, 4, 1984, January 70573.

Docket Nos. Submitted at Grand 2, 1984. Rapids. April appeal applied Leave to for. Decided Plaintiff, Cunningham, Gary brought L. actions in the Kalamazoo injury Circuit Court after he received an in an automobile action, 70392, Appeals accident. In one Court of Docket No. plaintiff sought no-fault insurance benefits from defendant America, Company Citizens Insurance the insurer of his vehicle, and also certain other benefits from defendant Aetna Company pursuant group Life Insurance to a health insurance plan fully by plaintiffs employer self-funded and administered pursuant Aetna to an administrative service contract. Citi- contending plaintiffs policy zens resisted the claim plaintiff void ab initio and that the was not insured due his intentional falsification of information in his day insurance. Citizens discovered such falsification one after plaintiffs accident. Plaintiffs insurance binder was effective action, days Appeals before the accident. In another Court of 70573, plaintiff alleged Docket No. that if rescission ab initio on with Citizens is allowed then he is entitled to benefits Company, from defendant Auto-Owners Insurance as the servic- ing assigned court, facility. carrier for the claims The circuit Mullen, J., brought by plain- C. H. consolidated the actions tiff. In summary Docket No. 70392 the moved for judgment against granted plaintiffs Citizens. The trial court appeals judgment motion. Citizens from the and order to that summary In Docket No. 70573 moved for a Auto-Owners _effect. [1, 2, 4, [3, 7, ^[6] ^[5] Validity Compulsory, 73 Am Jur 7 Am Jur 42 ALR3d 229. insurance. 83 ALR2d 1104. 9-12] 7 Am Jur and construction of "no-fault” automobile insurance 7 Am Jur 2d, 2d, financial References Automobile Insurance Summary Judgment 2d, Automobile 2d, responsibility, Automobile for Points in Headnotes Insurance §§ §§ 26, 340, assigned §§ 27. 35, §§ 356. 36-38, risk automobile 45 et plans. seq. granted Plain- motion. judgment. Auto-Owners’ The trial court judgment entered for Auto-Owners. appeals from the final tiff appeals Appeals for its considera- consolidated The Court Held: tion. preclude not Citizens from insurance act does no-fault 1. The *2 policy rescinding plaintiff’s ab initio as so that is void policy. procurement plaintiff’s perjury of the in the result of of the no-fault insurance act 3220 and 3224 2. Sections insurance, liability only of automobile the cancellation address only a limitation on as Those sections serve not its rescission. applicants. Section policies to honest issued cancellation the vitality recognizes continuing of common- impliedly the law rescission. circumstances, wrongdoer, plaintiff, must the Under the consequences of Plaintiff’s fraud was his actions. suffer the reasonably timely Citizens did not fashion. discovered in delay plaintiff notifying to rescind unjustifiably of its decision policy. the policy plaintiff’s permissibly insurance rescinded 4. Citizens

ab initio. permitted plaintiff’s deception the Citizens to rescind 5. Since right policy to collect no-fault initio as his ab against assigned facility benefits, plaintiff’s the claims claim 3113(b) (Auto-Owners) of the no-fault insur- § must fail under ance act. judgment No. 70392 is reversed and the in Docket

judgment in Docket No. 70573 affirmed. J., in Docket No. dissented from the reversal V. to rescind a is his belief that to allow an insurer 70392. It policy run ab initio would of automobile contrary policy insurance act and of the no-fault the stated incompatible compulsory nature the act. would be with Appeals panel has of the Court He noted that another argument are rejected 3224 of act §§ they inapplicable rescis- relate to and not since cancellations ab He that the facts indicate sion initio. would conclude driving plaintiff’s opportunity rec- had an to discover policy neglected promptly. ord but to do so He noted requested granting implications the relief of not person many very cases a and that it is conceivable that in misrepresentation on an insurance would make an innocent coverage. deny application On the used to him which could be policy insurance scheme behind our basis of "persons tragedy due to the who suffer loss Cunningham Ins Co v Citizens this state shall have a source and a means of accidents in considerations, along recovery”, the other he would affirm with summary judgment in Docket No. 70392.

Opinion of the Court — — — No-Fault Insurance Rescission 1. Insurance Automobiles Perjury. — preclude an act does not insurer from The no-fault insurance rescinding policy so that it is void ab initio where an insurance procured of the insured’s deliberate as a result falsification of information and intentional reasonably discovered in a for insurance and such fraud was unjustifiably delay timely the insurer did not manner and (MCL notifying insured of its decision to rescind 500.3101et seq.; seq.). MSA 24.13101 et — — — Automobiles 2. Insurance No-Fault Cancella- — — Law. tion Rescission Common provisions regarding cancellation of a The no-fault insurance do not address the rescission of a of insurance only cancellation of serve as a limitation on the applicants; policies to honest section of the act issued *3 recognizes continuing validity impliedly the of common-law 24.13224). (MCL 500.3220, 24.13220, 500.3224;MSA rescission — — No-Fault 3. Insurance Insurance. Automobiles provides person that a is not entitled The no-fault insurance act protection personal insurance benefits to collect registrant assigned facility is owner or of a claims if he resulting in the which is involved in the accident motor vehicle required possess the no-fault claim for benefits if he does not (MCL 500.3113[b]; coverage MSA automobile insurance 24.13113[b]). — — — 4. Insurance Rescission. Automobiles No-Fault Insurance personal protection pursuant to A claimant for insurance benefits benefits from an the no-fault act is not entitled to receive assigned company servicing insurance as the carrier for the facility where it is determined that the claimant’s claims properly of on his vehicle was no-fault automobile insurance right personal to collect no-fault rescinded ab initio as to his possess required no-fault benefits and therefore he did not coverage vehicle at the time automobile insurance on his (MCL 500.3113[b]; accident which resulted in his claim occurred 24.13113[b]). MSA 133 V. J. Judgment — — Judgments Summary — of Material Fact Issues 5. Rules. Court ground only granted Summary judgment on the should any genuine to material fact where there is is no issue as there issue; genuine court must be satisSed it is no such supported at impossible or defense to be trial for the claim (GCR deñciency which be overcome cannot because some 1963,117.2[3]). Compul- — — — No-Fault Insurance 6. Automobiles Insurance sory Insurance. Michigan’s act automobile insurance is no-fault statute, compensa- purpose of to which is ensure insurance (MCL persons injured in automobile accidents 500.3101 tion to seq.; seq.). MSA 24.13101 et et — — 7. No-Fault Insurance. Insurance Automobiles requires act the owner or no-fault automobile insurance The security, usually registrant a motor maintain vehicle insurance, protec- payment personal for form of of beneñts insurance; of a which is not tion owner vehicle insured protec- pursuant recover the act not entitled to to (MCL 500.3101[1], beneñts under the act tion insurance 24.13101[1],24.13113[b]). 500.3113[b];MSA — — — Insurance 8. Automobiles No-Fault Failure Insurance Insure. highway operation upon public The of a motor vehicle security payment which there is not for the vehicle maintained pursuant personal protection to the no- of beneñts of misdemeanor, fault automobile insurance act constitutes a (MCL imprisonment 500.3102[2]; punishable by ñne and/or 24.13102[2]). — — — Termina- Automobiles No-Fault Insurance — Notice. tion provisions dealing Insurance Code with the termination coverage insurance act under the no-fault automobile protection prohibit terminating personal injury an insurer from (MCL 500.3220, prior giving prospective notice insured to its 24.13224). *4 500.3224; 24.132220, MSA — — — 10. Insurance Automobiles Insurance Termina- No-Fault Ab tion Initio. policy Termination ab initio of a no-fault Cunningham v contrary statutory purpose runs requiring that notice given policy before a could be terminated in order to allow opportunity an insurance; insured an to obtain other termina- contrary tion statutory purpose ab initio runs to such as it leaves the insured without insurance from the time he obtained policy person his initial and doesn’t allow that a reasonable period insurance; to obtain other rescission ab initio is not a remedy Michigan’s available to insurers under (MCL500.3224[3]; 24.13224[3]). insurance scheme MSA — — — 11. Insurance Automobiles No-Fault Insurance Cancel- — lation Ab Rescission Initio. provisions regarding The no-fault insurance cancellation of a policy apply of insurance to an insurer’s assertion that a (MCL may 500.3220, 500.3224; be rescinded ab initio 24.13224). 24.13220, — — Misrepre- — 12. Insurance Automobiles No-Fault — Policy. sentations Insured Public person misrepresentations A who makes on an for no- may fault automobile insurance be allowed to recover beneñts under the which misrep- he has obtained those resentations in the furtherance of the behind the com- pulsory "persons insurance scheme that who suffer loss due to tragedy of automobile accidents in this state shall have a recovery”. source and means Oudsema, William R. plaintiff.

Lilly, Domeny Jeffrey Durant, & P.C. (by E. Lilly), Dykema, Gwillim and Terrence J. Gos- Spencer, sett, Trigg Goodnow & (by Robert H. Barr), Gorlin and Richard A. for Citizens Insur- ance Company of America. Geary), Howard,

Howard & P.C. (by James H. for Auto-Owners Insurance Company. Early, Lennon, Peters & Crocker John T. (by Jr.),

Peters, for Aetna Life Insurance Company. *5 133 Mich Opinion of the Court P.J., Burns, and V. J. Brennan B.R.

Before: Kallman,* JJ. T. and J. in Kallman, filed action J. Plaintiff his

J. T. County Cir- 70392 in the Kalamazoo Docket No. benefits. Court, seeking no-fault cuit of America resisted Company Citizens was not cov- claim, contending plaintiff that Plaintiff no-fault insurance. ered pursuant GCR summary judgment moved (3). (1), (2), hearing, After a 1963, 117.2, subds motion under plaintiffs granted the trial court 117.2(3). as of 1963, appeals Citizens now GCR right. 1981, case, September in this in plaintiff

The his applica falsified intentionally deliberately Jim Madden Associ tion for insurance he ates, Inc., whether Citizens.1 When asked with driving of drunk within had been convicted "no”, although answered years, plaintiff last five March, had, fact, in he been so convicted agent issued a binder independent The insur application. based on this fraudulent into investigation routine company began ance its 5, 1981, Citi record. On plaintiffs driving October falsely lied and had zens had plaintiff discovered driving of his record in sworn the truth application. oc-

Plaintiff was in an accident which injured 4, 1981, Citizens day curred on October one before had It was too knowledge plaintiffs wrongdoing. effective late to undo accident. The binder was * Appeals by assignment. judge, sitting Circuit on Court many very cases 1The dissent claims it is conceivable person might misrepresentation on an insurance make an innocent deny coverage of an acci which could him in the event misrepresentation not the Court dent. The issue of innocent at before hypothetical issue time. We decline to address the raised the dissent. Cunningham v Citizens Opinion of the Court 11, 1981, or 24 before days September on 22, 1981, notified October accident. On returned rescinding policy, his it was pay it would not and stated that premiums, him no-fault benefits. in- seriously been parties third

Had innocent vehicle, we plaintiff’s with in a collision jured to hold compel us would public policy believe *6 existed, for at least the accident coverage for that Farm Mutual Auto- See State parties. third these 568; 242 App 67 Mich Kurylowicz, Ins Co v mobile (1976). In lv den (1976), 397 Mich 827 530 NW2d we are not concerned fact, however, in this case but, rather, with third parties rights with the to collect no- should be entitled person a whether has of insurance policy his benefits when fault fraud. procured been case and this distinction between We see no Allen, Ins Co v Automobile Mutual State Farm (1973). Here, plaintiff 71; 212 NW2d 821 App false, untrue that was an affidavit signed ministerial or There was no mistake fraudulent. rather, plaintiff’s lie. but, outright an error Allen, forgery In there was dishonest. actions were In policy. on the insurance the insured’s name is a Perjury case, perjury. committed profit If cannot is a one felony. Forgery felony. or benefit profit one forgery, from a should benefit merit be We see no distinction perjury? from a protect not should policy tween the two. Public expense at the wrongdoer from his own actions third an innocent party.2 addressed, extensively we ac- Although this issue has not been policy proposition knowledge authority exists for the that some insurance, mandates in a state which of automobile insurance issued as to coverage, initio even as void ab cannot be rescinded time, policy. same fraudulently At the obtained that the insured who majority juncture, appears of decisions to be no clear at this going there initio as way ab have allowed rescission either and some cases 133 Mich op Opinion the Court permit to false fraudulent

To protec- company will result in an insurance bind being indus- the insurance taken tive measures try. accepted, argument plaintiffs can is one If longer agents day readily nowill when foresee companies they by the issue binders allowed to be applies represent. have will who One approval acceptance and is final wait until to may take office. This from home received obey the that those who We not believe weeks. do dealings their should and are honest law consequences of a because to suffer adverse forced pro- wrongdoers’ Public fraudulent acts. few right; not be the courts need those who do tects attempt persons overly who of those solicitous relationships. perpetrate fraud their contractual provision agree any no- in the do not We seq.; act, MSA 24.13101 et 500.3101 et fault rescinding plaintiff’s precludes seq., Citizens from 500.3220; void initio. MCL so that ab 500.3224; MSA 24.13224 24.13220 and MCL right plaintiff argues bar Citizens’ which act to only initio, the can- rescind the ab address *7 coverage, fraudulently the but not as insured who has obtained See, e.g., parties. Farm Mutual Automobile to innocent third State (1966). Wall, 92; Super 92 222 282 The ALR annotation Co v cited NJ A2d by scope in insurer who the policy is limited its to whether an dissent mandating compulsory can avoid insurance issues a coverage in a state parties by rescinding policy. not collect to third the It does right discussing cases insurer’s the insured. vis-á-vis 574, p Kurylowicz, supra, read as To the can be extent that standing premise injury damage that or an automobile after absolute, specifically disagree it. with insurance becomes decisions we jurisdic- pre-no-fault Both from and decisions from this state coverage allow an which do mandate insurance tions insurer even where this affects the not liability policy to an rescind ab initio Pace, rights Keys parties. v See of third (1959). See, also, alia, 74; Fireman’s 358 Mich 99 NW2d 547 inter Knutsen, (1974); 383; Mutual Vt A2d 223 Utica Fund Ins Co v 132 324 (1970); 769; Indemnity Co, 173 855 v Va SE2d Ins Co National 210 Chavis, 507; Employees SC 176 SE2d Ins Co Governmental v (1970). Cunningham Ins v Citizens Opinion of the Court insurance, not its of automobile cellation be- important difference There is an rescission. noted which was and cancellation rescission tween Zynda, in Wall v Court Michigan Supreme (1938): 260, 264; 278 NW 66 283 Mich " it, merely to terminate is not a contract 'To rescind is, beginning; it from the abrogate and undo but obliga- parties from further merely to release not of the subject respect other to each tion and restore contract, the contract to annul but they have positions which would relative parties to the occupied if no such Re- had been made. contract ever repudiation of the con- a necessarily involves scission moving party to further of the and a refusal tract no more would constitute But this itself by it. bound perfor- a refusal of of the contract than a breach mance, involves the addi- rescission the idea of while of the of a restoration distinguishing element tional (2d and Cancellation on Rescission quo.’ 1 Black status ed), 1.”§ 500.3220; 24.13220 MCL opinion In our as a only 24.13224 serve 500.3224; MSA MCL policies of insurance cancellation limitation on the Allen, 80, supra, p In applicants. to honest issued it held: when proposition, accepted this Court judge trial and Kendall contend "Dodds asserting that under denying their motions erred not Farm could 500.3220; State MSA 24.13220 MCL statute, This with Allen. cancel its policy of restricting power to cancel an insurer’s power to declare insurance, does not limit the court’s forgery.”3 policy inoperative because of fraud or 500.3224; MSA Moreover, we believe power restricting to declare Although phrased court’s "the as not initio, the effect of policy” had Allen Court’s decision a upholding plaintiffs void ab policy. of the insurance rescission *8 Opinion of the Court recognizes continuing impliedly vital- 24.13224 ity 1 of rescission. Subsection of common-law to § "[failure disclose cancel- 3224 states upon any any insured lation coverage grounds deny not to insurance shall may who have an insurer on the accepted fraud basis very fact the risk thereafter”. specifically provided type Legislature that this permit misrepresentation not the insurer does coverage impliedly recognizes deny that other to misrepresentations do fraudulent permit statements coverage, is, insurer to rescind the coverage”. deny "to unjustifi-

This in which the insurer is not case plaintiff ably notifying delayed its decision to already policy. Here, the had rescind accident plaintiffs learned occurred before Citizens fraud, in a reason- this fraud was discovered ably timely circumstances, fashion. Under these plaintiff, wrongdoer, the conse- must suffer the quences actions. of his permissibly re- we hold that Citizens

Because plaintiffs initio, we ab scinded turn issue in Docket No. 70573. raised argues There, that if ab initio is rescission allowed, to from Auto- then he is entitled benefits servicing Company, car- Owners rier as assigned facility. Pursuant for the claims 500.3113(b); 24.13113(b), person is not protection entitled to collect assigned facility if he benefits is the owner or claims

registrant of a motor vehicle which not if he does is involved possess an accident and required no-fault automobile insurance decep- coverage. plaintiffs Since we conclude that permitted tion ab rescind personal right no-fault initio to his to collect as *9 Cunningham v Citizens Ins 481 V. J. J. by Brennan, Dissent benefits, against claim plaintiffs that we believe must fail under MCL assigned facility claims the 24.13113(b). 500.3113(b); MSA in 70392 is reversed Docket No. judment affirmed. in Docket No. is judgment Burns, P.J., B. concurred. R. Brennan, (dissenting). I respectfully J. J.

V. of Company Defendant Citizens dissent. grant reversal of the trial court’s America seeks plaintiff in under favor judgment a summary 117.2(3). under 1963, judgment Summary GCR 117.2(3) granted be where 1963, only should GCR any as to material fact. genuine is issue there no it is impossible be satisfied that The court must trial supported at the claim or defense to be which cannot be over- deficiency because of some Kretschmer, 363, 372; 207 come. Rizzo v 389 Mich (1973). opinion It is was my NW2d 316 a motion for for the trial court to entertain proper as resolved summary question judgment of law and no factual question was strictly dispute existed.

The crux of the instant case whether plaintiff in his misrepresentation application justify for automobile insurance will determina- tion that was void his ab initio. This Court has thrice considered issue factual situations similar State Farm Mutual Automobile case at In bar. Co v 568; 67 Mich 242 NW2d Kurylowicz, App (a lv den 397 Mich 827 (1976), (1976), case which accrued act”) of the "no-fault prior enactment insurance, applying

while for automobile had defendant indicated that his driver’s license during not been at time suspended any revoked fact, the five In preceding application. years 133 V. J. during period, five-year the defendant’s license suspended for one month. After had been policy, issued defendant’s defendant was involved person in an automobile accident in which one persons injured. other killed and five were Two later, defendant months was involved another August 23, 1971, accident. On State Farm declared May 10, a rescission of the retroactive to grounds alleging 1971, as the defendant had misrepresented material facts in his concerning previous suspension revocation or p examining Id., license. 570. After his driver’s public policy regulating the statutes auto- behind *10 liability Michigan in mobile insurance and similar jurisdictions, in Court cases other the held that misrepresentation the prevent of an insured would not against

recovery by par- the insurer third injured by p Id., ties who had been the insured. 578. The Court also held that where an automobile premiums, insurer retains notwithstand- ing grounds reasonably for cancellation discovera- during by 55-day statutory ble the insurer the period prescribed by as the in statute effect at the time, 500.3220; 24.13220, the insurer estopped grounds will be to assert that for rescis- p Id., sion exist thereafter. Kurylowicz

The Court’s decision in was followed Latham, in Frankenmuth Mutual Ins Co v (1981). App 66; In NW2d 329 Franken- misrepresentations muth, defendant made in his repre- He automobile insurance. any suspension sented that he was not under driving privileges any revocation in in Ohio or other state. driving had This was not the case as Latham have been mate-

infractions which would rial to Frankenmuth’s decision to issue insurance coverage. Approximately and months two one-half Cunningham v by V. J. issued, was an automobile owned the

after injured Latham struck and operated by and Court, found citing Kurylowicz, pedestrian. held that the correctly the trial court at time of the and in full force effect accident. Ins Co v Mutual Automobile

In State Farm (1973), Allen, 71; 212 NW2d 821 this App 50 Mich contrary holdings reached a result Court However, Latham, Allen supra. and Kurylowicz misrepresentation insured. did not involve a Rather, of the insured’s forgery it involved Kurylow- See application. on insurance name icz, differs supra, p 578. The instant case from Frankenmuth, Allen, supra, be- Kurylowicz, is not a third party, the insured plaintiff, cause of the seeking poli- to recover benefits party However, public my opinion cies. legal applied rationale reasons and Frankenmuth Kurylowicz apply with Court present situation in the equal force to the factual instant case. act” is a

Michigan’s "no-fault so-called statute, purpose in- persons is to compensation which ensure Aetna Life & jured in automobile accidents. Hill v Co, 725, Casualty 728; 263 79 Mich NW2d *11 Co, (1977); Pollock v Mutual 79 Frankenmuth (1977). 218, 222; 554 This Mich 261 NW2d Court, expounding upon statutory purpose, this stated as follows: persons who suffer policy

"It is the of this state in this tragedy loss due to the of automobile accidents recovery. a of state shall have a source and means questionable policy a policy, it is whether Given ab liability can ever be held void insurance App 471 133 by Brennan, V.J. occurs. Gener- by policy injury covered initio after held that: ally, it is " respect to insur- liability of the insurer with 'The becomes absolute whenever required by the act ance * * * damage by policy such occurs covered injury or his behalf and by made the insured or on no statement no violation policy provisions may be used to of the Long, Liability policy.’ The Law defeat or avoid Insurance, 3.25, pp 3-83—3-84. See Detroit Automobile § App 94; Exchange Ayvazian, 62 Mich v Inter-Ins (1975).” supra, p Kurylowicz, NW2d question did not decide the While the Court insurance liability of automobile policy whether an injury held void ab initio after can ever be occurs, is in- its discussion covered on that issue. panel’s position structive as to that Further, para- second it should be noted that quoted graph passage quoted of the above Latham, supra. panel another approval by with allowing an insur- only appear Not does of automobile ance to rescind a company contrary run insurance ab initio would legisla- Michigan of the the stated tion, incompatible with appears it also to be act. nature of the no-fault of a registrant requires The act the owner in the usually security, motor vehicle maintain insurance, per- of benefits of payment form of insurance, 500.3101(1); MSA MCL protection sonal 24.13101(1). is not a vehicle which operation misdemeanor, punishable so insured constitutes 500.3102(2); imprisonment, fine and/or 24.13102(2). possible In crimi- addition which is not nal the owner of a vehicle charge, personal protec- to recover insured is not entitled 500.3113(b); MSA tion insurance benefits. MCL 24.13113(b). *12 Cunningham v Citizens Ins V.J. J. Brennan, Legislature cognizant of the Michigan

The hardships insurance scheme could coverage bring persons to bear on whose insurance for some reason. To amelio- was to be terminated hardships, Legislature provided rate these given before a could be policy notice must be 24.13224(3). 500.3224(3); terminated. purpose period of this notice is to allow an prior insured to obtain other insurance to the ab initio coverage. termination of his Termination statutory purpose runs to the as leaves contrary the insured without from the time he policy obtained his initial and does not allow that time to person a reasonable obtain other insur- ance. of the Insurance portions Other Code also initio rescission ab indicate that a remedy is not to insurers under the compulsory available insur- ance of this scheme state.

Examination of the portions the Insurance dealing Code with termination of insurance cover- age indicates the statutes were drafted in such a manner as to an insurer prohibit from terminating protection injury prior giving prospective notice to its insured. MCL 500.3220; MSA 24.13220 states as follows: Subject following provisions "Sec. 3220. to the no coverage, insurer after a is a of licensed to liability write automobile days policy policy has been in effect 55 if the or renewal, immediately, effective shall cancel a except any or following more of the reasons: "(a) during That days following the 55 the date of original issue unacceptable thereof the risk is insurer. "(b) any operator, That the named insured or other either resident of the same custom- household or who arily operates an automobile insured under during

has operator’s suspended had his license 133 Mich J. Dissent bv V. suspension has period revocation and the final.”

become *13 augmented the Code of This section by 500.3224; 24.13224 which states: MSA MCL (1) policy of The of a insur- cancellation

"Sec. in subdivi- 55-day period enumerated within the ance (a) subject appeal by not be to of section shall sion by any the cancellation Failure to disclose the insured. application for not be upon any insurance shall insured grounds by coverage on of fraud an deny the basis to accepted may have the risk thereafter. who insurer "(2) chapter only, this no cancel- provisions For of the a written notice of shall be effective unless lation mail, receipt by is mailed certified return cancellation requested, the known the at last address to to insured records, its the the insurer either agent sup- or as policy, wrote the records the who plied by the insured. "(3) prior days shall mailed at least 20 notice be purpose For the

to the effective date of cancellation. by the chapter delivery of notice only, such written mailing. The notice equivalent the insurer shall be and shall contain the reasons for the cancellation shall statutory has type in bold the insured state that mailing appeal to days the date of right within 7 from department. approve shall The commissioner notice.” form of cancellation making ruling, court noted that In its the trial 24.13224(3) 500.3224(3); that mandates given shall shall cancellation and such notice days prior to the effective be mailed at least 20 to state date of cancellation. The court went on with that did cancel in accordance "Citizens not pol- requirements statutory therefore injury”. plaintiff’s icy inwas effect on the date of by plaintiff argues cited that the statutes they inapplicable judge since and the trial are Cunningham v Citizens Ins Co by V. J. relate to cancellations and not rescission ab initio. argument has been rejected by This this Court. In 577-578, Kurylowicz, supra, pp the Court stated: argues Farm the statutes "State cited judge inapplicable trial the defendants are since they relate to cancellations and not rescission ab initio. hold, require a construction Such would that we effect, of quent may avoid although may an insurer not cancel liability on insurance based fraud subse- payment policy, of a claim under the treat the policy nevertheless as void ab initio and policy altogether. on the We do not think Legislature intended such an absurd conse- quence.”

Another factor which should be considered is that Citizens had the information necessary *14 plaintiff’s driving obtain record for approximately prior 20 to the days accident. Citizens ordered plaintiff’s driving record approximately two weeks after receipt application. of the receiving After record, Citizens 5, did not review it until October 1981. This indicates that Citizens had opportu- an nity plaintiff’s to discover driving record but ne- glected to do so promptly.

It should be noted that other jurisdictions have held that an insurer may not rescind an automo- bile insurance policy ab initio. In Pearce v South- Co, ern Guaranty 33; 246 Ga 268 SE2d 623 (1980), the Georgia Supreme Court held "an automobile insurance policy providing basic third- party liability insurance personal and basic injury (no-fault) protection benefits pursuant issued to Georgia law cannot be un- retrospectively voided Ann, der Code 56-2409”. 246 Ga 39. Pearce in- § volved a factual situation where the insured mis- represented driving record the insurer order to procure no-fault insurance. Approxi- App 471 V.J. obtaining insurance,

mately month after one acci- in an automobile was involved insured passenger he were killed in which dent the sonal per- occupants vehicle sustained of the other declaratory judgment injuries. for An action court, result of filed in the federal district appealed Court of to the United States which was Appeals Appeals The Federal the Fifth Circuit. for following question Su- the Georgia: Court certified preme Court Georgia Act date of No-Fault "After the effective Act, Georgia Laws (Georgia Reparations Vehicle Motor 56-34B), Ann, chap 1974, 113, seq., Ga can pp et Code providing basic third- an automobile pro- injury liability insurance and basic

party resident, benefits, Georgia to a be voided issued tection ab initio based misrepresentations made upon insurance, provided by as Ga Code application for 56-2409, Ann, giving rise an automobile accident after § loss?” 246 Ga 35. to a claimed Georgia Supreme response question, the In Court held providing that an automobile third-party insurance and basic (no-fault) protection personal injury benefits basic pursuant Georgia law be voided cannot issued retrospectively. See, also,

246 Ga 39. Anno: Rescis- misrepresentation, avoidance, or or for fraud sion assigned compulsory, responsibility, ñnancial Sentry 1104; insurance, 83 ALR2d risk Indemnity Sharif, 280 SE2d 828; v Ga Co aff’d 248 Ga (1981). (1980), 395; 282 SE2d 907 core, turns on whether At its the instant case *15 appli- person misrepresentations on an who makes allowed cation automobile insurance should through policy he which to recover benefits has obtained misrepresentations. those wrongdoer While the courts are loathe reward Cunningham v Brennan, V.J. wrongful acts, are sometimes such concerns for secondary grant- implications of not Though requested ing in the instant relief. intentionally is indication there case misled applying benefits, for the while the insurer person many very cases a conceivable it is misrepresentation on innocent make an would deny be used which could such an him coverage Further, accident. the event of an our behind it is the "persons due to the who suffer loss scheme tragedy in this state shall accidents of automobile Kurylow- recovery”. a means of a source and have supra, p the basis of icz, 574. On above, I would affirm stated has been what trial court’s order granting plaintiff’s motion for summary judgment.