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Preprocurement or Postprocurement Fraud? That is the Question
In this no-fault insurance coverage dispute, the Court of Appeals vacated the trial court’s orders granting summary disposition in favor of the insurance company and remanded for further proceedings consistent with the holding in Meemic Ins Co v Fortson, 506 Mich 287 (2020). The trial court was tasked with the responsibility of deciding whether or not the material misrepresentations or fraud constituted preprocurement fraud or postprocurement fraud, and thus whether the insurance company could rescind the policy. If preprocurement, yes; if postprocurement, no.
More importantly, the trial court was directed to consider whether a renewal policy constitutes a new and separate contract. It appears that the Court of Appeals would answer “no” given the rights of the parties were controlled by the terms of the original contract.
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