In Porsha Williamson and Lateshea Williams, et. al No. 357070 (Mich. Ct. App. Sep 22, 2022), and Oliver Bakeman, et. al No. 357195 (Mich. Ct. App. Nov 10, 2022), the Michigan Court of Appeals considered whether false statements made in support of a no-fault claim to the Michigan Auto Insurance Placement Facility (MAIPF) is grounds for dismissal pursuant to MCL 500.3173a.

Background on Williamson

On October 30, 2018, Charles Williamson was a pedestrian who suffered injuries after being struck by a car. He applied for PIP benefits through the MAIPF, who assigned his claim to AAA. Before passing away on October 23, 2019, he filed suit for breach of contract and declaration relief. His daughters then opened an estate and proceeded with the lawsuit as his personal representatives.

The legal representatives responded to interrogatories submitted by AAA in which they made claims for replacement services and attendant care services. They attached forms/calendars identifying services by a third party rendered in November and December in 2019, after Williamson’s passing. The interrogatories were signed by one of the legal representatives of the Estate.

AAA moved for summary disposition arguing that the Estate knowingly presented material misrepresentations in support of its claim for no-fault benefits by submitting reimbursement forms after Williamson had passed and, as such, would be barred from recovering benefits.

The Estate argued that the service forms that AAA relied on for dismissal were predated forms completed before Williamson’s death that the Estate’s counsel had to produce during discovery. The Estate relied on Haydaw v. Farm Bureau Ins co, 332 Mich App 710 to argue that false statements made during discovery do not allow an insurer to avoid coverage. The trial court ultimately found for AAA, and the Estate appealed.

The Court of Appeals’ Ruling on Williamson

On appeal, the Estate argued that the trial court erred by holding that its submission of service forms dated after Williamson’s death constituted a fraudulent insurance act that was materials to its claim for no-fault benefits and that barred its claim for no-fault PIP benefits. Specifically, the Estate argued that the forms were not submitted in support of its claim but instead to comply with a discovery request.

The Court of Appeals relied on Candler, 321 Mich App which explained that an individual commits a fraudulent insurance act when:

• the person presents or cause to be presented an oral or written statements, (2) the statement is part of or in support of a claim for no-fault benefits, and (3) the claim for benefits was submitted to the MAIPF. Further, (4) the person must have known that the statement contained false information, and (5) the statement concerned a fact or thing material to the claim.

The Legislature amended MCL 500.3173a after Candler to clarify that the statute applies to statements presented in support of a claim to the MAIPF. The Estate challenged the application of the second prong arguing that the service forms were not statements made in support of a claim for no-fault benefits because they were produced during discovery.

The Court focused on the definition of “claim” for purposing of complying with the statute. It relied on the Supreme Court case of Griffin, which noted that making a claim for insurance benefits is not the same as filing a lawsuit. A claim for benefits is simply a demand to an insurer by its insured for payments that are believed to be due after an accident.

The Court of Appeals ultimately reversed the trial court’s decision, finding that false statements submitted during discovery, after an action for recovery has been filed, are not statements offered in support of a claim to the MAIPF or the assigned insurer. Specifically, statements made for the first time during discovery cannot form the basis of a fraudulent insurance act under MCL 500.3173a(4).

Here, the service forms dated after Williamson’s death were submitted in responses to a discovery request, after the claim was submitted to the MAIPF, assigned to AAA, denied by AAA, and litigation had ensued. The Court reasoned that a false statement made in a filing submitted during discovery is not a statement made to the MAIPF, rather it’s a false statement made during discovery to the Court.

Background on Bakeman

Bakeman was involved in a single-vehicle accident on February 23, 2019 as a passenger in a car driven by his then-wife. He received PIP benefits through the MAIPF. He was hospitalized for six weeks following the accident and was prescribed “attendant care and house care 7 days per week, 12 hours per day.”

During a deposition that was “plagued” by connectivity issues, Bakeman testified that his service provider, Watson, provided attendant care services for eight-hours per day, five days per week from March 29, 2019 through May 31, 2019. He explained that the owner of a physical therapy facility, Awada, gave Watson the forms to fill out and instructed her how to do so. Bakeman testified that he was “not sure” whether he reviewed the contents of the forms before taking them.

The claim forms submitted to defendant via Awada claimed 12 hours of care a day, 7 days a week, during that period. The forms were submitted prior to litigation.  Bakeman’s signature was on those forms. He testified at one point that he “believed” that his signature had been copied onto the forms by someone else, but ultimately testified that he did in fact sign and date the forms himself.

Defendant moved for summary disposition arguing that by knowingly signing the inaccurate claim forms and submitting them to Awada, plaintiff committed a fraudulent insurance action. Plaintiff argued that the trial should have “assumed” that Bakeman did not sign the forms on the basis of his testimony. The trial court disagreed and granted summary disposition. Plaintiff appealed the ruling.

The Court of Appeals’ Ruling on Bakeman

On appeal, plaintiff argued that the errors in the forms were “immaterial.” First, he argued that Bakeman did in fact receive the total amount of care set forth in the forms, although some provided by his then-wife instead of Watson. When compared to Candler, the plaintiff submitted forms indicating that he received services from his brother but in fact they were received from his girlfriend, in which the court rejected that the discrepancy was immaterial. The court noted that every daily form contained false information from March 29, 2019 through May 15, 2019. The MAIPF was effectively billed for more than twice as many hours of services than were actually provided, which the court concluded was not an “immaterial’ discrepancy.

The Court’s analysis and focus was on whether or not plaintiff actually signed the service forms. The Court expanded on plaintiff’s inconsistent deposition testimony, which it noted was due to plaintiff being an unsophisticated party and not due to any intentional act to misrepresent facts. Ultimately, when reviewed plaintiff’s testimony as a whole, reasonable minds could not differ that plaintiff actually signed the forms. Specifically, plaintiff never testified that his signature was forged or that he was coerced. Rather, he consistently maintained that the signatures were his.

As such, the court concluded that plaintiff did commit a fraudulent insurance act, and summary disposition was properly granted in favor of defendant.

Driving Forward

Both Williamson and Bakeman remind us that committing a false statement doesn’t need to be intentional, and that timing is everything. The Court found that the false statement made by plaintiff in Williamson was not “in support of a claim” as the forms were only produced to comply with a discovery request, but found that the false statements made by plaintiff in Bakeman were in support of a claim for household services and attendant care.

The Court makes it clear that the second element under MCL 500.3173a(4) (whether the statement supports a “claim” for no-fault benefits) refers only to statements made to the MAIPF during the pre-litigation claims process. Although both cases involved false statement relating to service care forms, the purpose and timing for producing them very was different.

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