Where an insurance company was denied summary disposition, that decision must be reversed because there was no genuine issue of material fact that the policyholder made a material misrepresentation in her application for insurance and that the insurer relied on that misrepresentation to issue her a policy.
“In these consolidated appeals, Citizens United Reciprocal Exchange, doing business as CURE Auto Insurance, appeals by leave granted the trial court’s order denying CURE’s motion for summary disposition. We reverse and remand for further proceedings. …
“Toneysha Sanders applied for auto insurance through CURE for two vehicles, a Ford Explorer and a Ford Expedition. For each vehicle, the application asked Toneysha, ‘Is the vehicle solely owned by, and registered to the applicant?’ Toneysha responded, ‘Yes’ to each question. The application also listed both vehicles as ‘Financed (Lease).’ CURE issued Toneysha a policy, and soon thereafter, she was involved in an accident while driving the Explorer with her sister (Varnesha Sanders) and daughter (AT) as passengers.
“After the accident, CURE discovered that Toneysha made several misrepresentations on her application for insurance, and it therefore informed Toneysha of its intent to rescind her policy. CURE alleged in relevant part that Toneysha failed to disclose that her fiancé, Janorris Hopkins, was a co-owner and coregistrant of the insured vehicles at the time of the application. This was significant, according to CURE, because Hopkins did not live with Toneysha and was not yet married to her, and CURE does not insure vehicles that have nonrelative, nonresident co-owners.
“As part of this action, CURE moved for summary disposition, asking that the trial court find in relevant part that there was no genuine issue of material fact that Toneysha fraudulently obtained the insurance policy from CURE by making material misrepresentations about the ownership of the insured vehicles in her application for insurance. The court rejected CURE’s argument, holding that there existed a genuine issue of material fact whether Toneysha fraudulently obtained the policy because it was reasonable to infer that Toneysha was confused about the ownership of the vehicles she sought to insure. …
“CURE sought to rescind its policy with Toneysha on grounds that Toneysha fraudulently obtained the policy by making a material misrepresentation in her application for insurance. …
“There can be no serious dispute that Toneysha made misrepresentations in her application for insurance. Toneysha sought to insure two vehicles. For each vehicle, the application for insurance asked, ‘Is the vehicle solely owned by, and registered to the applicant?’ Toneysha responded, ‘Yes’ each time. When CURE moved for summary disposition, it came forward with evidence establishing that this answer was false. …
“This evidence established that Toneysha made a material misrepresentation in her application for insurance and that CURE relied on that representation to issue Toneysha a policy that it would not otherwise have issued. In other words, this evidence established that Toneysha obtained her policy with CURE through fraud, specifically innocent misrepresentation. The burden then shifted to the nonmoving parties ‘to establish that a genuine issue of disputed fact exists.’ …
“In response to CURE’s motion, the nonmoving parties failed to come forward with any evidence tending to suggest that Hopkins was not, in fact, a co-owner of the Explorer; Toneysha did not even deny that Hopkins was a co-owner of the Explorer at her deposition. …
“The trial court therefore erred when it denied CURE’s motion for summary disposition. There was no genuine issue of material fact that Toneysha made a material misrepresentation in her application for insurance and that CURE relied on that misrepresentation to issue Toneysha a policy. Rescission was thus potentially justified. The trial court’s order denying CURE’s motion for summary disposition is reversed, and the case is remanded for the trial court to decide, in its discretion, whether the policy should be rescinded as to the parties involved.
“Reversed and remanded for further proceedings.”