Supreme Court Clarifies the Limits of Fraud as a Defense to PIP Claims

In Meemic Ins Co v Fortson, ___ Mich ___ (2020) (Docket No. 158302), the Court held that a “contractual antifraud provision” was “invalid and unenforceable,” against a claimant who was not the individual that committed the fraud, because the clause was “not based on a statutory or unabrogated common-law defense.”

The Court affirmed the result of a published Court of Appeals decision, Meemic Ins Co v Fortson, 324 Mich App 467 (2018), but for different reasons.

The Court distinguished Bahri v IDS Prop Cas Ins Co, 308 Mich App 420 (2014) as Bahri involved “fraud by an individual who is both a policyholder and the claim beneficiary.” Fortson, ___ Mich at ___; slip op at 16 n 15 (emphasis in original).

The Court also distinguished Bazzi v Sentinel Ins Co, 502 Mich 390 (2018) on the grounds that the insurer in this case was not seeking rescission of the policy based on fraud in the application for insurance. Fortson, ___ Mich at ___; slip op at 18.

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