Experience, expertise and common sense.
Motor Vehicle Litigation / March 13, 2020
Court/Case No: 31st Judicial Court /18-1976059
Tried/Argued Before: Judge
Verdict: $0 – Motion for Summary Disposition granted
Name of Judge(s): Honorable Alexis G. Krot
Keys to the Case:
The cause of action was brought by a medical provider attempting to recover no-fault benefits stemming from an assignment from an underlying assignment of claimant. Here, claimant made a claim under Defendant’s policy that was issued to a named insured. However, Defendant investigated and determined that the underlying named insured secured the policy by making material misrepresentations. Specifically, the underlying named insured procured the policy through a fraudulent transaction. As a result, the policy was rightfully rescinded as to its inception. Within the motion, we argued that as a result of the fraudulent transaction by the underlying insured, there is no route for recovery for the Plaintiff as the assignee of the claimant. Further, Defendant relied in good faith of the payment of the underlying named insured when it completed the application online for the insurance policy. Defendant would not, and did not, have any reason to believe that the transaction would be rooted in a fraudulent purchase. Since the policy was rescinded by Defendant, there is no contract/policy for the Plaintiff to make a claim under as assignee.
Moreover, when weighing the equities under an “innocent third-party doctrine” as illustrated in Bazzi, the purchase was fraudulent. Plaintiff is not more innocent than Defendant when evaluating the totality of the circumstances. If there is a party for Plaintiff to recover against, it is not Defendant, but instead, the underlying insured or claimant.
Ultimately, the Court had no objection to our position and happily granted the motion. When asked how the Court reached the decision, Judge Krot indicated on the record that she agreed with the Defendant’s position and based her decision on the fact that the policy was acquired through a fraudulent transaction by the named insured, and thus Plaintiff does not have a cause of action under Defendant’s policy. In other words, Plaintiff was estopped from bringing the cause of action as there was never a formation of a contract when the named insured attempted to acquire said policy. Further, Judge Krot agreed with Defendant’s position that Plaintiff is not more innocent than Defendant when evaluating the totality of the circumstances.
As a result, Judge Krot dismissed Plaintiff’s claim against Defendant.
Defense SW attorney(s) Involved in Case: