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Court of Appeals Limits Bahri to Misrepresentations Made Pre-Suit
In Bahri v IDS Prop Cas Ins Co, 308 Mich App 420 (2014), the Court of Appeals held that a fraud provision in an insurance contract could bar a claim for PIP benefits when the policyholder made material misrepresentations in the presentation of their claim. The claimant in Bahri sought replacement services on a date that was before the date of the accident.
Bahri significantly expanded the use of MCR 2.116(C)(10) in first-party no-fault litigation because under Bahri, if it was shown that the insured committed fraud in making any part of their claim, the entire policy could be void as a matter of law.
This week, the Court of Appeals put a considerable limitation on Bahri, holding in Haydaw v Farm Bureau Ins Co, ___ Mich App ___ (2020) (Docket No. 345516), that fraud provisions such as the one at issue in Bahri do not speak to misrepresentations made after a suit for no-fault benefits is filed (such as at a deposition or in interrogatory responses).
We will continue to watch Haydaw closely as we anticipate an application for leave to appeal to the Michigan Supreme Court.
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