Transportation Law Hub

The Michigan Court of Appeals recently upheld the dismissal of all claims for Personal Injury Protection (PIP) benefits against a defendant insurer on the basis of fraud, pursuant to state statute MCL 500.3173a.

On Nov.  10, the appellate court published its opinion in Bakeman v Citizens Insurance Company of the Midwest, et al, Docket No. 357195, affirming the Macomb County Circuit Court’s order granting the defendant’s motion for summary disposition because there was no genuine issue of material fact that the plaintiff committed a fraudulent insurance act.

The plaintiff was a passenger in a vehicle driven by his wife and was involved in a single-vehicle accident on Feb. 23, 2019. Neither the plaintiff nor his wife had an auto insurance policy at the time so they sought to collect No-Fault benefits from the Michigan Automobile Insurance Placement Facility (MAIPF), which assigned the plaintiff’s claim to defendant Citizens.

“Nice to meet you, where you been?
I could show you incredible things.”

The plaintiff’s “acquaintance” referred him to Joseph Awada, the owner of Five Star Comfort Care, for physical therapy services. Mr. Awada also arranged for the plaintiff’s mother-in-law to provide attendant care services and instructed her on how to complete Five Star Comfort Care’s service provider forms.

The service provider completed the forms as instructed, indicating that she provided attendant care services to plaintiff for 12 hours a day, seven days per week from March 29, 2019 through May 31, 2019. The plaintiff then returned the completed forms to Mr. Awada when presenting for physical therapy at Five Star Comfort Care. The forms completed by the service provider were produced to the defendant insurer in support of the plaintiff’s attendant care claim.

“‘Cause we’re young, and we’re reckless
We’ll take this way too far.”

During the plaintiff’s deposition, he testified that his mother-in-law provided attendant care services for only eight hours per day, five days per week, in contradiction to the 12 hours per day, seven days per week that was claimed and submitted to the defendant insurer.  When presented with the forms, the plaintiff was “not sure” if he ever reviewed their contents. The plaintiff later asserted that he did, in fact, incur 12 hours of attendant care services, seven days per week as stated on the submitted forms, but his wife performed the remaining services, rather than his mother-in-law.

The appellate court examined whether the plaintiff committed a fraudulent insurance act pursuant to MCL 500.3173a(2), which was amended by 2019 PA 21, effective June 11, 2019. Today, MCL 500.3173a(4) is the relevant provision that has been amended in ways that do not affect the outcome of the appeal. 

In short, a claimant presenting or causing to be presented, an oral or written statement in support of a claim to the MAIPF for payment of another benefit “knowing that the statement contains false information concerning a fact or thing material to the claim commits a fraudulent insurance act under [MCL 500.4503] that is subject to the penalties imposed under [MCL 500.4511]. A claim that contains or is supported by a fraudulent insurance act as described in this subsection is ineligible for payment or benefits under the assigned claims plan.”

The plaintiff asserted: (1) there is no evidence of intent to defraud the MAIPF or the defendant insurer; and (2) the errors in the forms were immaterial. Addressing these arguments in turn, the appellate court concluded that the plaintiff’s subjective intent was irrelevant, and that plaintiff’s mere knowledge of the false information concerning a material fact to a claim was sufficient to constitute fraud.  Further, citing Candler, Tryc v Mich Veterans’ Facility, 451 Mich 129, 135-36; 545 NW2d 642 (1996), the appellate court determined that “the identity of the service provider,” and other inaccuracies in this case were “extensive” such that they were material to the plaintiff’s claim.

The appellate court found that there was no dispute that these forms were submitted to the assigned insurer and that the forms contained false information to support the plaintiff’s claim. 

“But I’ve got a blank space, [ ]
And I’ll write your name.”

Originally, the plaintiff testified that he did not sign any of the presented attendant care services forms, but he did recognize his signature on the forms. However, he later provided conflicting testimony that he did sign the forms.

The appellate court noted that the dispute regarding the signatures was limited to how the signatures were placed on the forms, not if the signatures belonged to the plaintiff.  Of note, the plaintiff never claimed that his signatures were forged or were made under duress. Accordingly, the appellate court determined that, in reviewing the testimony as a whole and the remainder of the record, the plaintiff personally signed the attendant care services forms.

“Don’t say I didn’t,
Say I didn’t warn ya.”

The plaintiff then asserted that he did not review the content of the forms, and therefore, lacked the requisite “knowledge” requirement that constitutes fraud. However, this argument was rejected outright. Citing Lease Acceptance Corp v Adams, 272 Mich App 209, 221; 724 NW2d 724 (2006), the appellate court emphasized that in the absence of coercion, mistake or fraud, one signing an agreement is presumed to know the nature of the document and to understand its contents, even if they do not actually read the agreement. The plaintiff never claimed that his signatures were forged, and consistently maintained that the signatures were his. Absent a showing of forgery, coercion or duress, the plaintiff was unable to rebut the presumption of knowledge as to the forms’ content.

Ultimately, the appellate court concluded that “reasonable minds could not differ that plaintiff personally signed the attendant care forms” “under circumstances that did not involve coercion, mistake, or fraud, then it is immaterial whether he read those forms.”  Thus, the appellate court held that the plaintiff committed a fraudulent insurance act and affirmed the trial court’s order granting summary disposition in favor of the defendant.

Judge Kathleen Jansen wrote a concurrence with the majority opinion finding that the plaintiff committed a fraudulent insurance act. Judge Jansen emphasized that “if it is plaintiff’s contention that a forgery occurred, the burden is on him at the summary disposition phase to make an offer of proof.” However, the plaintiff failed to provide any evidence that his signature was forged on the submitted forms. 

In no uncertain terms, the plaintiff, not the insurance company, has the burden of proof to demonstrate forgery.