Where a judge denied an insurance company’s request to rescind a policy issued to the mother of a driver who was killed in a fatal accident, that decision should be upheld, as the insurer failed to meet its burden to demonstrate that rescission was warranted as to the decedent, an innocent third party.
“In this insurance company priority dispute arising from a fatal motor vehicle accident, defendant Fremont Insurance Company appeals as of right the trial court’s order granting summary disposition in favor of plaintiff Allstate Insurance Company. For the reasons set forth in this opinion, we affirm.
“This case arises out of a June 5, 2020 fatal motor vehicle accident. On that date, 30-year old Jeremy Cundiff was driving his moped when he was hit by an unknown vehicle. The driver of the other vehicle fled the scene. Cundiff was seriously injured and taken to the hospital by ambulance. The traffic crash report indicates that Cundiff was not wearing a helmet and was suspected of having consumed alcohol, although alcohol was not believed to be a contributing factor to the accident. Cundiff passed away as a result of his injuries on June 15, 2020.
“At the time of the accident, Cundiff lived with his mother, Sharon Pabst.
“Pabst had obtained a policy of insurance from Fremont in 2013.
“Fremont moved for summary disposition under MCR 2.116(C)(10), arguing that Pabst admitted Cundiff lived with her, yet she failed to disclose Cundiff as another driver in her home. Furthermore, Fremont would not have issued the policy had it known about Cundiff and his operating-while-intoxicated conviction.
“Here, the trial court applied the above framework, balanced the equities, and concluded that it would not be equitable to enforce rescission of the policy against Cundiff as an innocent third party.
“Hence, Fremont failed to meet its burden to demonstrate that rescission was warranted as to Cundiff. ‘Balancing the equities is not concerned with assigning blame but, rather, with determining which of the innocent parties should bear a loss.’ ... Accordingly, trial court did not abuse its discretion in prohibiting rescission as to Cundiff as an innocent third party, and it did not err in granting summary disposition in Allstate’s favor.”
Dissenting judge’s comments
SWARTZLE, J. (dissenting). “I respectfully dissent. As an initial matter, although the majority accurately quotes the standard of review as found in Pioneer State Mut Ins Co v Wright , 331 Mich App 396, 405; 952 NW2d 586 (2020), that standard of review is wrong insofar as it permits an appellate court to review a ‘trial court’s factual findings’ for ‘clear error’ when, as here, the trial court’s decision was made under MCR 2.116(C)(10). Under that court rule, a trial court cannot make a factual finding when reviewing the movant’s arguments; rather, the trial court must view the evidence in the light most favorable to the nonmovant to determine whether ‘there is no genuine issue of any material fact.’ MCR 2.116(C)(10); Jackhill Oil Co v Powell Prod, Inc , 210 Mich App 114, 117; 532 NW2d 866 (1995). There is a ‘square peg in a round hole’ situation when one speaks of ‘clear error’ and ‘no genuine issue of material fact’ in the same breath.”
Allstate Ins. Co. v. Fremont Ins. Co.; MiLW 08-108103, 8 pages; Michigan Court of Appeals unpublished per curiam; Borrello, J., Young, J.; Swartzle, J., dissenting; on appeal from Wayne Circuit Court; Charlynn L. Turner for appellant; Alice E. Bell for appellee.
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