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Summary Disposition Obtained By Michael F. Schmidt Enforcing Insurers’ Rescission Of An Auto Insurance Policy For Material Misrepresentation In The Application

Ardith McCormick v Nationwide Mutual Fire Insurance Company, Oakland County Circuit Court.

Plaintiff brought suit to recover for the theft of her motor vehicle. Nationwide had denied the claim on the basis that its investigation of the theft disclosed that the plaintiff had made several material misrepresentations in the application for the policy, that she failed to disclose two household members who were also drivers. We filed a motion for summary disposition supported by an underwriter’s affidavit that the application contained several material misrepresentations, that had the insurer known the true facts it would not have issued the policy as to the one misrepresentation, and would have charged a higher premium as to the other and thus the policy was appropriately rescinded. The plaintiff argued that the misrepresentations were not material because neither of the household members who were not disclosed were using the vehicle at the time of the loss. We argued in a reply brief that the Michigan appellate cases had rejected this exact argument in numerous cases and that rescission does not depend on the cause of the injury, rather the misrepresentation must be viewed as it relates only to the procurement of the policy of insurance. The trial court agreed with our argument and granted summary disposition to Nationwide that the policy had been appropriately rescinded and that the plaintiff had no claim under the policy.