Citizens Ins. Co. of Midwest v. Perry

1

CITIZENS INSURANCE COMPANY OF THE MIDWEST, Plaintiff, v. KIMBERLY PERRY and CODY ADKINS, Defendant.

No. 22-12302

United States District Court, E.D. Michigan, Southern Division

March 27, 2024

OPINION GRANTING PLAINTIFF'S UNOPPOSED MOTION FOR SUMMARY JUDGMENT [23]

LAURIE J. MICHELSON, UNITED STATES DISTRICT JUDGE.

In February 2022, Cody Adkins was driving his mother's car on the highway when he lost control and hit a tree. Adkins did not have insurance to cover his medical expenses. His mother did, and Adkins was living with her at the time of the accident. That would ordinarily make Adkins a resident relative entitled to recover personal injury protection benefits from his mother's insurer, Citizens Insurance Company of the Midwest, under the Michigan No-Fault Act. But Citizens says that policy is void ab initio because it was obtained through fraud-Adkins was not disclosed as a household member or driver on his mother's insurance application.

So Citizens brought a declaratory judgment action against Adkins and his mother (see ECF No. 1) and now moves for summary judgment (see ECF No. 23). Citizens asks this Court to declare that it is entitled to rescind Kimberly Perry's policy and that it has no obligation to pay Adkins' PIP benefits. Perry and Adkins answered Citizens' complaint (see ECF Nos. 8-9), but they have not responded to the summary judgment motion.

For the reasons that follow, the Court will grant the unopposed motion.

I. Background

On a motion for summary judgment, the Court views the facts in the light most favorable to the nomovant, in this case Adkins and Perry. See Raimey v. City of Niles, 77 F.4th 441 447 (6th Cir. 2023); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). “But the situation here is unique because [Defendants] didn't oppose [Citizens'] motion for summary judgment. When that occurs, ‘[t]he facts presented and designated by the moving party were the facts at hand to be dealt with by the trial court.'” Garnett v. Akron City Sch. Dist. Bd. of Educ., No. 22-3864, 2023 WL 6632836, at *1 (6 th Cir. Oct. 12, 2023) (last alteration in original) (quoting Guarino v. Brookfield Twp. Trs., 980 F.2d 399, 404 (6th Cir. 1992)). Thus, the Court may rely on, but must still “critically examine[,] the accuracy and context of this evidence advanced by the movant.” In re St. Clair Clinic, Inc., 73 F.3d 362, 1996 WL 6531, at *2 (6th Cir. 1996) (unpublished table decision).

A.

In October 2021, Kimberly Perry applied for auto insurance, including personal injury protection coverage (“PIP benefits” or “no-fault benefits”), from Citizens Insurance Company of the Midwest through Knight Insurance Agency. (See ECF No. 1-1, PageID.16.) Perry listed herself as the only “resident and driver” of the two vehicles for which she sought insurance. (See id.) She did not identify Cody Adkins, her adult son, on her application, nor did she later add Adkins as a resident or “regular or occasional driver of an insured vehicle.” (Id. at PageID.19.)

Perry was approved for a one-year policy for both cars beginning on November 5, 2021. (See id. at PageID.21; ECF No. 8, PageID.106.) About three months into that policy, in February 2022, Adkins was driving his mother's Chevrolet Cruze when he got into an accident. (ECF No. 23-3.) He was speeding down a 70-mile-per-hour highway when he “lost control of the[] vehicle,” “ran right off of [the] roadway[,] and struck a tree,” according to the police report. (Id. at PageID.202-203.) Perry's car sustained “disabling damage” and Adkins was physically injured. (See id. at PageID.202.) He was hospitalized for three days (see ECF No. 23-4) and treated for various broken bones (see ECF No. 23-7, PageID.233).

Adkins did not own a vehicle or have automobile insurance at the time of the accident. (See id. at PageID.235.) So he filed a claim to recover PIP benefits from Citizens through the policy issued to his mother. (See ECF No. 1, PageID.6; ECF No. 8, PageID.106.) Citizens denied the claim. (See ECF No. 23-6.) It sent Adkins a letter two days after the car accident stating that, “based on [its] investigation to date and the information provided,” Citizens was “not liable” for paying Adkins' PIP benefits under his mother's insurance policy. (Id. at PageID.213.) Instead, said Citizens, Adkins should file a claim with the Michigan Automobile Insurance Placement Facility, a program created under the Michigan No-Fault Act to provide PIP benefits to people who are injured in auto accidents but who do not have insurance coverage.

(See id.); Mich. Comp. Laws § 500.3172(1). Adkins did. (See ECF No. 8, PageID.106; ECF No. 23, PageID.191.)

B.

The MAIPF “ha[d] not denied benefits” to Adkins as of the filing of Citizens' motion. (ECF No. 23, PageID.190.) But neither had it paid. (See id. at PageID.174-175.) So in August 2022, the University of Michigan Hospital sued Citizens and the MAIPF in state court, seeking to recover the medical expenses it incurred while treating Adkins' accident-related injuries. (See ECF No. 23-5 (hospital's complaint).) Farmers Insurance Exchange was later substituted for the MAIPF by stipulated order, presumably because the MAIPF assigned Adkins' claims to Farmers pursuant to Section 3172 of the No-Fault Act. See Stipulated Order, Regents of Univ. of Mich. v. Citizens Ins. Co. of Midwest, No. 22-001144-NF (Mich. Cir. Ct. Jan. 10, 2023); Mich. Comp. Laws § 500.3172.

About a month after the hospital filed suit, Citizens turned to this Court for relief. (See ECF No. 1.) It brought this lawsuit against Perry and Adkins, asking the Court to declare that (1) it has a right to rescind the insurance policy it issued to Perry and (2) Adkins is not entitled to any coverage under the policy. (Id. at PageID.7, 12.) Citizens asserts that because Perry failed to identify Adkins as a household resident and driver on her auto insurance application, she obtained her policy through fraud. (See id. at PageID.8-9.) Had Adkins been named in Perry's application, “there would have been a substantial increase in the premium” she was charged, says Citizens. (Id. at PageID.6-7.) In turn, Citizens contends that Perry's policy is void ab initio and unenforceable. (Id. at PageID.11-12.) And because it is as though it never existed, Perry's policy does not cover Adkins' PIP claim. (Id. at PageID.13.)

Following the close of discovery, Citizens moved for summary judgment on both counts, requesting the same declaratory relief it requested in its complaint. (See ECF No. 23.) The Court has reviewed the record and briefing and finds that oral argument is not needed to resolve the unopposed motion. See E.D. Mich. LR 7.1(f).

II. Standard

Under Federal Rule of Civil Procedure 56, “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”

Because Citizens seeks summary judgment on claims for which it would bear the burden of persuasion at trial, its initial summary judgment burden is higher. Its showing “must be sufficient for the court to hold that no reasonable trier of fact could find other than for [it].” Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986) (quoting William W. Schwarzer, Summary Judgment Under the Federal Rules, 99 F.R.D. 465, 487-88 (1984)); see Surles v. Andison, 678 F.3d 452, 455-56 (6th Cir. 2012).

Although Citizens' summary judgment motion is unopposed, the Court “still ha[s] a job to do.” Garnett, 2023 WL 6632836, at *2; see Delphi Auto. Sys., LLC v. United Plastics, Inc., 418 Fed.Appx. 374, 381 (6th Cir. 2011) (“[A] district court cannot grant summary judgment in favor of a movant simply because the adverse party has not responded.” (quoting Carver v. Bunch, 946 F.2d 451, 454-55 (6th Cir. 1991))). The Court “must review carefully the evidence that was designated by the moving party” to ensure it has discharged its burden. Jones v. Kimberly-Clark Corp., 238 F.3d 421, 2000 WL 1800475, at *3 (6th Cir. 2000) (per curiam) (unpublished table decision).

But “it is not the role of the district court to develop facts for the nonmoving party,” Spurlock v. Whitley, 79 Fed.Appx. 837, 839 (6th Cir. 2003), and “[n]othing in either the Rules or case law supports an argument that the trial court must conduct its own probing investigation of the record,” Guarino, 980 F.2d at 406. Indeed, “[i]t is ‘utterly inappropriate for the court to abandon its position of neutrality in favor of a role equivalent to champion for the non-moving party: seeking out facts, developing legal theories, and finding ways to defeat the motion.'” Garnett, 2023 WL 6632836, at *2 (citation omitted). “The court may rely on the moving party's unrebutted recitation of the evidence in reaching a conclusion that facts are uncontroverted and that there is no genuine issue of material fact.” Jones, 2000 WL 1800475, at *3.

III. Analysis

Under the Michigan No-Fault Act, see Mich. Comp. Laws §§ 500.3101-.3179, a person who is injured in a motor vehicle accident may be covered by the insurance policy issued to a relative “domiciled in the same household” if the injured person did not carry their own no-fault insurance policy at the time of the accident id. § 500.3114(1). But even claims for such PIP benefits are susceptible to common law defenses that were not abrogated by the No-Fault Act, such as common law fraud. See Meemic Ins. Co. v. Fortson, 954 N.W.2d 115, 121 (Mich. 2020); Bazzi v. Sentinel Ins. Co. (Bazzi II), 919 N.W.2d 20, 25, 28-29 (Mich. 2018). If an insurer can show that the insured relative (1) knowingly or recklessly (2) made a material misrepresentation (3) that was false (4) with the intention that the insurer should act in reliance upon the...