                            STATE OF MICHIGAN

                            COURT OF APPEALS



CAROLYN ANDERSON,                                                    UNPUBLISHED
                                                                     July 31, 2018
               Plaintiff-Appellant,

and

AMERICAN ANESTHESIA ASSOCIATES,
SPINE SPECIALISTS OF MICHIGAN, and
OMEGA REHAB SERVICES, LLC,

               Intervening Plaintiffs,

v                                                                    No. 336999
                                                                     Wayne Circuit Court
MICHAEL ROY CLAY,                                                    LC No. 15-008247-NF

               Defendant,

and

AMERICAN COUNTRY INSURANCE
COMPANY,

               Defendant-Appellee.


Before: CAMERON, P.J., and JANSEN and O’CONNELL, JJ.

PER CURIAM.

        Plaintiff, Carolyn Anderson, appeals the trial court’s grant of summary disposition under
MCR 2.116(C)(10) (no genuine issue of material fact) in favor of defendant American Country
Insurance Company (ACIC). ACIC argued that Anderson fraudulently misrepresented several
aspects of her claim for benefits arising out of a September 2014 accident, including preexisting
injuries and her receipt of Social Security benefits. Because the trial court did not articulate any
reasons for granting ACIC’s motion and because ACIC misconstrued some of the evidence, we
reverse the trial court’s grant of summary disposition and remand for further proceedings.

                                         I. BACKGROUND


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        In September 2010, while working as a patient transporter at a medical center, Anderson
flipped over a stretcher. After this work accident, she complained of pain in her neck, back, and
right leg. Anderson’s doctor first certified her disabled from work in March 2012. In September
or October 2012, Anderson began receiving Social Security benefits for injuries sustained in the
September 2010 accident. Following the September 2010 accident, Anderson received attendant
care and household services on and off for about three years, through October 2013.

        Anderson began working as a driver for Sadell’s Transportation around May 2014. On
the morning of September 4, 2014, she was driving to pick up a patient when the car she was
driving was rear-ended. After the accident, Anderson complained of pain in her neck and back
that radiated into her arms and left leg. Starting the day of the accident, Anderson’s fiancé,
Costello Hickson, began providing Anderson with household services and attendant care.

        In November 2014, Anderson applied for personal protection insurance (PIP) benefits.
When ACIC refused to pay, Anderson filed a complaint. After discovery, ACIC moved for
summary disposition under MCR 2.116(C)(10), arguing that Anderson fraudulently
misrepresented several aspects of her claim. First, ACIC maintained that Anderson testified that
she did not require household services or attendant care before the 2014 accident when her
medical records show otherwise. Second, ACIC stated that Anderson wrongly denied receiving
workers’ compensation, Social Security payments, or any other wage loss benefits, and ACIC
contended that Anderson was perpetrating fraud on the Social Security Administration. Third,
ACIC added that Anderson claimed no complaints and no medical treatment for her neck or back
before the 2014 accident, contrary to her medical records. Fourth, ACIC argued that Anderson
overrepresented the amount of care Hickson could have provided in light of his work schedule.
The trial court agreed and granted ACIC’s motion for summary disposition.

                                        II. DISCUSSION

        This Court reviews a grant of summary disposition under MCR 2.116(C)(10) de novo.
Bahri v IDS Prop Cas Ins Co, 308 Mich App 420, 423; 864 NW2d 609 (2014). Summary
disposition is appropriate if “there is no genuine issue as to any material fact, and the moving
party is entitled to judgment or partial judgment as a matter of law.” MCR 2.116(C)(10).

               A motion under MCR 2.116(C)(10) tests the factual sufficiency of the
       complaint. In evaluating a motion for summary disposition brought under this
       subsection, a trial court considers affidavits, pleadings, depositions, admissions,
       and other evidence submitted by the parties, MCR 2.116(G)(5), in the light most
       favorable to the party opposing the motion. Where the proffered evidence fails to
       establish a genuine issue regarding any material fact, the moving party is entitled
       to judgment as a matter of law. [Maiden v Rozwood, 461 Mich 109, 120; 597
       NW2d 817 (1999).]

The trial court is not permitted to make findings of fact or assess credibility at the summary
disposition stage. Lima Twp v Bateson, 302 Mich App 483, 492; 838 NW2d 898 (2013).

      Insurance policies are contracts, and this Court applies the rules of contract interpretation
when construing an insurance policy. Rory v Continental Ins Co, 473 Mich 457, 461; 703 NW2d

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23 (2005). The unambiguous terms of a contract govern, and courts do not have the authority to
modify unambiguous terms. Id.

               To void a policy because the insured has wilfully misrepresented a
       material fact, an insurer must show that (1) the misrepresentation was material,
       (2) that it was false, (3) that the insured knew that it was false at the time it was
       made or that it was made recklessly, without any knowledge of its truth, and (4)
       that the insured made the material misrepresentation with the intention that the
       insurer would act upon it. A statement is material if it is reasonably relevant to
       the insurer’s investigation of a claim. [Mina v Gen Star Indemnity Co, 218 Mich
       App 678, 686; 555 NW2d 1 (1996), rev’d in part on other grounds 455 Mich 866
       (1997) (citation omitted).]

When an insurance company asserts a fraud exclusion barring payment of benefits, it bears the
burden of demonstrating fraud by a preponderance of the evidence. Stein v Home-Owners Ins
Co, 303 Mich App 382, 387-391; 843 NW2d 780 (2013).

       A trial court is not required to state findings of fact and conclusions of law when deciding
a motion, MCR 2.517(A)(4), and cannot make factual findings when ruling on a motion for
summary disposition, Lima Twp, 302 Mich App at 492. Nonetheless, the trial court did not
explain its reasoning except to agree with ACIC, so remand for articulation of the trial court’s
reasoning is necessary to “facilitate appellate review.” Triple E Produce Corp v Mastronardi
Produce, Ltd, 209 Mich App 165, 177; 530 NW2d 772 (1995). Remand is particularly necessary
because ACIC misconstrued some of the evidence, and we cannot discern to what extent ACIC’s
misinterpretation of the evidence influenced the trial court’s decision.

       ACIC has likened this case to Bahri, 308 Mich App at 425-426, in which this Court
affirmed the trial court’s grant of summary disposition because the plaintiff misrepresented her
claim for PIP benefits. In Bahri, the plaintiff submitted a statement for replacement services that
predated the accident, and she requested reimbursement for replacement services for activities
that she alleged she could not do when the insurance company produced surveillance video
showing the plaintiff performing those activities. Id.

        Other insurance fraud cases have similarly clear evidence of fraud. For example, this
Court agreed with an insurance company’s assertion of fraud when evidence showed that the
plaintiff forged his brother’s signature on calendars showing that the brother provided
replacement services for three months when the plaintiff in fact moved to another city to live
with his girlfriend, who then took over providing replacement services. Candler v Farm Bureau
Mut Ins Co of Mich, 321 Mich App 772, 776, 781-782; 910 NW2d 666 (2017). This Court also
affirmed a trial court’s conclusion that the injured party’s parents could not have provided 24/7
care for their son because he was incarcerated for part of the claimed time period and the
services they provided during his incarceration were “not properly compensable as attendant care
services.” Meemic Ins Co v Fortson, ___ Mich App ___, ___; ___ NW2d ____ (2018) (Docket
No. 337728); slip op at 2-3.

      In contrast, a recent unpublished opinion rejects an assertion of fraud. Cox v Farm
Bureau Mut Ins Co of Mich, unpublished per curiam opinion of the Court of Appeals, issued

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June 14, 2018 (Docket No. 336326). The trial court concluded that the plaintiff’s request for
replacement services was inconsistent with his payment for a rental car while he was disabled
and seeking replacement services. Id. at 7. This Court rejected that inconsistency as a basis for
“fraud as a matter of law.” Id. Other reasonable inferences arose from the evidence that gave
rise to a genuine issue of material fact. Id. at 7-9. The inconsistencies cited in this case are
similar to the level of inconsistencies described in Cox, unpub op.

        ACIC first contended that Anderson’s medical records show that she needed replacement
services and attendant care before the 2014 accident, contrary to her testimony that she did not.
ACIC is incorrect that Anderson required attendant care through March 2014. The discharge
instructions ACIC cited for epidural injections in January, February, and March 2014 merely
recommend that an adult stay with Anderson for the day and night following each procedure.
These instructions do not show that Anderson required attendant care through March 2014. On
the contrary, there is no evidence that Anderson received attendant care after October 2013,
when her doctor’s treatment plan that included replacement services ended. Moreover, although
Anderson answered that she did not require these types of services before the September 2014
accident, she listed home health care in August 2013 in her written discovery. ACIC’s
exaggeration of the significance of the 2014 discharge instructions, combined with Anderson’s
disclosure that she had home health care in August 2013, undermine this first assertion of fraud.

        Second, ACIC contends that Anderson did not disclose her preexisting medical
conditions and treatment, which were the same following the accident. When she applied for
PIP benefits after the September 2014 accident, Anderson indicated that she received medical
treatment for the same or similar injuries before the accident, and she provided her doctor’s name
and address. ACIC later obtained medical records from this doctor. Anderson further described
her injuries and medical treatment before the accident both in written discovery and at her
deposition, including injuries to her “upper neck spine[.]” ACIC is correct that, at her
deposition, Anderson denied being treated for neck pain before the accident. ACIC incorrectly
maintains that Anderson complained of neck pain to her doctor two months before the accident
when the April and July 2014 medical notes show that she only complained of back pain. She
had epidural steroid injections in her cervical spine in early 2014 that alleviated her neck pain.
Moreover, Anderson required more aggressive treatment for neck pain after the September 2014
accident than at any time before the accident. ACIC also places too much significance on
Anderson’s claim that she felt “fine” before the September 2014 accident because she qualified
that statement by noting continued pain in her back and legs. Anderson was able to care for
herself in the months before the accident, compared to when she required attendant services in
the fall of 2013, so her qualified statement that she felt “fine” does not carry the significance
ACIC assigned to it.

        Further, ACIC emphasizes Anderson’s testimony that a doctor did not recommend
surgery after her 2011 surgery but before the September 2014 accident. At her deposition,
Anderson first answered yes to the question whether a doctor recommended lumbar surgery, but
explained that her doctor recommended a preventive measure that was not surgery, before
answering no the second time she was asked if her doctor recommended lumbar surgery.
Anderson’s explanation was consistent with her medical records, in which her doctor
recommended a trial dorsal column stimulator in August 2013. Her doctor described it as “the
least invasive procedure” compared to surgery, reasonably leading Anderson to understand that it

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was not surgery. In addition, ACIC misquotes the July 2014 notes to argue that her doctor
recommended surgery shortly before the September 2014 accident. In the July 2014 notes,
Anderson’s doctor advised that further surgery was a potential risk of the trial dorsal column
stimulator procedure, not a recommended course of action.             ACIC identified some
inconsistencies regarding Anderson’s medical history, but its misinterpretation of some of the
evidence weakens its contention that Anderson fraudulently concealed information about her
medical history and treatment.

        ACIC next contends that Anderson fraudulently concealed her receipt of Social Security
benefits before the September 2014 accident because she checked no in response to the question
whether she received workers’ compensation, Social Security, or any other wage loss benefits on
the application for PIP benefits. Anderson countered that she believed this question to relate to
the accident at issue, i.e., the September 2014 accident, because the preceding and subsequent
questions were specific to the accident at issue. Anderson revealed her receipt of Social Security
benefits for injuries sustained in the September 2010 work accident both in written discovery and
at her deposition. Additionally, Anderson agreed that she stopped working after the 2010
accident and testified that she next worked for four months after she began to receive Social
Security benefits in 2012, which is permissible under the rules governing the trial work period.
In addition, even if she continued working after the September 2010 accident, how much she
earned when she did work was unclear and insufficient to show that she fraudulently received
Social Security benefits in contravention of the trial work period regulations. Therefore, ACIC’s
inference of fraud from Anderson’s continued receipt of Social Security benefits while working
is not supported by conclusive evidence. In addition, Anderson’s forthright responses in
discovery and the placement of the question on the PIP benefits application in the middle of
questions specific to the subject accident show that Anderson’s interpretation of the limited
scope of the question was a reasonable explanation for her no response to that question.

        Finally, ACIC maintained that Anderson exaggerated the amount of attendant care she
received because Hickson could not possibly have provided 16 hours of care each day. 1 ACIC
argues that Hickson’s testimony led to the conclusion that he only showed houses between 11
p.m. and 4 a.m., when Anderson was asleep. This conclusion, however, is not the only
reasonable inference. Anderson moved in with Hickson one month after the accident, and he
started working as a limousine driver over one year after the accident, at which time he switched
from working full-time to part-time as a real estate agent, work he did largely from home.
Hickson also testified that Anderson’s sleep schedule was sporadic and she sometimes napped
during the day. He also suggested that she sometimes stayed at home alone for brief periods of
time. Hickson could have shown property when Anderson napped during the day or left
Anderson home alone while he showed property. Therefore, Hickson’s testimony did not leave
11 p.m. to 4 a.m. as the only window of time when he could have shown houses. Although there
may be a factual question of how many hours of care Hickson provided and whether Anderson




1
  To the extent that Hickson stated that he cared for her “all day, every day,” we note that he only
requested reimbursement for 16 hours per day.


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intended to submit a knowingly mistaken claim, the evidence was not so inconsistent as to
warrant summary disposition based on fraudulent misrepresentation.

       In sum, ACIC misinterpreted some evidence and exaggerated other evidence. Unlike
other cases with surveillance video or other blatant evidence of fraud, ACIC identified
inconsistencies that may or may not reflect fraud. Without the trial court’s explanation of what
evidence established fraud, we cannot affirm the trial court’s grant of summary disposition. 2

        We reverse the trial court’s grant of ACIC’s motion for summary disposition and remand
for the trial court to elucidate its reasons for granting summary disposition in favor of ACIC or to
allow the case to proceed to trial. We also vacate the trial court’s grant of ACIC’s motion for
attorney fees, which followed from the trial court’s grant of summary disposition. We do not
retain jurisdiction.

                                                             /s/ Thomas C. Cameron
                                                             /s/ Peter D. O’Connell




2
  We do not address Anderson’s alternative argument that the fraud exclusion did not apply to
her. We note that Anderson states on appeal that she was driving a car owned by Sadell’s,
although the record does not establish this fact. If she was driving a car owned by Sadell’s with
their permission, she was an “insured” as defined in Sadell’s insurance policy, and she was
subject to the fraud exclusion in the policy. In that scenario, this case is distinguishable from
Shelton v Auto-Owners Ins Co, 318 Mich App 648, 652-653; 899 NW2d 744 (2017), in which
the Court first noted that the injured party was not an insured under the applicable policy.


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