Insurer granted summary disposition after accident; insured deemed to have made misrepresentations that voided coverage on ex-husband's car
Gail Silvernail sued Liberty Mutual Insurance Company for PIP benefits (medical coverage and limited wages and service expenses). Silvernail was driving a car insured by Shellie Andrews with Liberty Mutual, however, Andrews was neither the titled owner nor the primary driver of the vehicle. At the time the policy was written the car was owned by Andrews' ex-husband, however, Andrews, by statute, was the "owner or registrant" because she possessed the vehicle on an indefinite basis.
Liberty Mutual argued that it would not insure a company car not "owned, leased or used regularly" by the named insured. It argued that since its rules were published on a website, the vehicle's insureds committed false representations in securing and maintaining coverage on this car without changing the title. The accident victim, Silvernail, argued that Andrews made no false representations and was never asked who owned the car; she also pointed out that she was an entirely innocent party in the transaction, with no knowledge of the ownership, registration or insurance status of the vehicle. She also pointed out that under Michigan's statutory definition of "owner or registrant" Andrews qualified as an "owner" under Michigan law because she enjoyed possession of the vehicle. She argued that when Andrews added her sister, Silvernail, to her policy, no questions were asked and so she was unaware that insuring the vehicle under its current registration would violate Liberty Mutual's rules.
The Court of Appeals held that even if it was simply a good faith mistake, Andrews' failure to disclose to Liberty Mutual that she didn't have title to the vehicle, still constituted a misrepresentation allowing the insurer to cancel the coverage that Andrews purchased. Andrews was obligated to disclose to Liberty Mutual facts which she did not recognize were important to Liberty Mutual; and the insurer owed no duty to ask those questions when it took her premium dollars. What's more, the Court held that this wasn't even a question of fact: it ruled that the insurance company was entitled to win summarily without a trial by the jury.
This case is especially interesting becuase just last week an insurer invalidated coverage because the driver of an uninsured vehicle was deemed the "owner," simply because his girlfriend's parents allowed him access to the car. So you're damned either way: if the owner doesn't buy insurance on a vehicle you get access to, you get no benefits, regardless of your knowledge; and if the owner does buy coverage, you still have no coverage--if the "owner" didn't have the proper title. Coverages are written to collect premiums, only, apparently: not to provide insurance.
Apparently when it comes to Michigan Courts and cases involving insurers, the insureds are damned by the fine print, no matter what they do. It didn't help that the insured in this case drew a Court of Appeals panel including the insurer's best friend and captive judge, Henry Saad.