Rachel Amy Maurer v. Fremont Insurance Company

926 N.W.2d 848, 325 Mich. App. 685

Opinion

Shapiro, J.

In December 2012, plaintiff Rachel Amy Maurer 1 was catastrophically injured in an automobile accident. Her car, along with all the family cars, had been insured with defendant Fremont Insurance Company since 2006. In October 2014, almost two years after the accident, Fremont advised plaintiff's husband, Dale Maurer, who was the policyholder, that the policy was being rescinded by the company retroactive to 2006 and that it therefore had no obligation to pay for any of plaintiff's medical treatment, replacement services, or wage loss related to the 2012 accident.

Plaintiff sought a declaratory judgment stating that she was entitled to personal protection insurance (PIP) benefits from Fremont under the no-fault act, MCL 500.3101 et seq . Fremont filed a counterclaim for rescission. The parties filed competing motions for summary disposition.

The trial court ruled in plaintiff's favor, determining that Fremont's rescission claim was not filed within the statutory period of limitations. Fremont appealed, and for the reasons set forth below, we affirm.

I. FACTS

A. PREACCIDENT EVENTS

In 2006, Mr. Maurer contacted an insurance agent to purchase no-fault insurance for the three family vehicles. Shortly after, Mr. Maurer received a copy of the Fremont application that had been prepared by the agent, and the agent told him to sign and send it to Fremont. The vehicle in question was a 1992 Buick Regal that was used primarily by plaintiff. She was employed part-time by the United States Postal Service (USPS) as a clerk and delivered mail for half a day on some Saturdays as a relief driver when other drivers took time off. The application listed several questions about the use of the vehicles. One of these questions asked: "Any vehicles used in any business? This includes but is not limited to snowplowing, sales, artisan use, delivery of newspapers, food, mail or any other items." Next to that question, the agent had entered "No." Mr. Maurer testified that he noticed this answer and advised the agent that plaintiff sometimes used the car for mail deliveries on Saturdays. The agent told him not to worry about it and that it was not necessary to change the answer. The agent was independent but had authority from Fremont to bind it to policies.

No evidence was presented that plaintiff participated in completing the application or was aware of what answers were provided to the questions on the application.

Throughout the next several years, Mr. Maurer accepted automatic renewal of the policy by continuing to pay the premiums for all the vehicles when renewal notices were sent to him. In early 2012, Mr. Maurer contacted the insurance agent to advise him that the 1992 Buick Regal was being replaced with a 2004 Buick Century. Mr. Maurer provided uncontradicted testimony that when he did so, he again informed the agent that the vehicle used primarily by his wife, now the Buick Century, was being used, in part, to deliver mail.

B. POSTACCIDENT EVENTS

The auto accident in which plaintiff was injured 2 occurred on December 3, 2012. Fremont promptly learned of the accident, including the fact that plaintiff had been delivering mail at the time. On December 14, 2012, an application for no-fault benefits was submitted to Fremont. The application indicated that plaintiff was employed with the USPS as a mail carrier and that the accident occurred when she was working. The police report also indicated that plaintiff was delivering mail when the accident happened.

A suit was filed on plaintiff's behalf against the at-fault driver in 2013. Fremont was informed of this third-party tort case and monitored its progress. Because plaintiff was delivering mail when she was injured, her medical expenses were paid pursuant to the Federal Employees' Compensation Act, 5 USC 8101 et seq. However, under 5 USC 8132, USPS was entitled to reimbursement from any judgment obtained in plaintiff's third-party action, and USPS asserted a lien in anticipation of that event. After the third-party action was resolved, USPS's lien was satisfied from the tort recovery, and Fremont, as plaintiff's no-fault carrier, became liable to reimburse her for that amount. See Sibley v. Detroit Auto Inter-Ins. Exch. , 431 Mich. 164 , 170-171, 427 N.W.2d 528 (1988). Fremont did not agree to reimburse plaintiff the sum she paid to the federal government to reimburse it for the cost of her medical care. In January 2014, plaintiff filed suit seeking a judgment declaring that Fremont had to do so.

Although the accident occurred on December 3, 2012, Fremont did not seek to rescind the no-fault policy until after the tort suit concluded, nearly two years later. On October 27, 2014, Fremont sent a letter captioned as "Rescission of Policy" to Mr. Maurer. It stated that Fremont was rescinding the policy on the ground that in the 2006 application Mr. Maurer inaccurately answered the question regarding the business use of the vehicle. Fremont's letter described this as "material misrepresentations regarding driver information, usage of an insured vehicle and miles driven ...." According to the letter, "[u]pon rescission, the policy is void as of inception such that there is no coverage applicable for the claim filed by you ...." Consistent with Fremont's assertion of rescission, the letter included a check to Mr. Maurer for a refund of all premiums paid since 2006. Mr. Maurer returned the check to Fremont. In January 2015, Fremont filed a counterclaim for rescission in which it asked the trial court to declare that the policy issued to the Maurers was rescinded and void ab initio and to award "other equitable relief as is proper under the facts and circumstances ...."

The rescission letter did not assert that Fremont would have declined to insure the vehicle had it known that it was being used for occasional mail delivery. The letter stated that the policy was being rescinded because "[h]ad we been informed of the [business] use of the vehicles on the policy we would have adjusted the rate accordingly resulting in an increase of premium, and issued a different insurance contract to you with applicable endorsements under the circumstances." 3

And, although Fremont repeatedly refers to a contractual right to rescind in the case of fraud, the policy contained no rescission provision. The policy did, however, contain two relevant provisions.

First, the policy provided how the insurer could address errors or misrepresentations in the application for insurance coverage. It provided that Fremont could adjust its premiums retroactively if it discovered that the use category of the car was in error or had been changed. It stated that the change in premium would be made "at the time of such changes or when we become aware of the changes, if later." There is nothing in the record, however, to indicate that during the 22 months between the accident and the rescission letter Fremont sought any backpayment or increased its premiums.

Second, the contract contained a provision that specifically addressed intentional misrepresentation, i.e., fraud. That provision narrowly referred to an exclusion to be applied only to the person who committed the fraud. It read: "We will not cover any person seeking coverage under this policy who has intentionally concealed or misrepresented any material fact, made fraudulent statements, or engaged in fraudulent conduct with respect to the procurement of this policy...." 4

The parties filed cross-motions for summary disposition, and the trial court ruled that Fremont's rescission claim was barred by both the statute of limitations and the innocent-third-party doctrine. The innocent-third-party doctrine provided a bright-line rule that if the policyholder fraudulently provided false information on the application, any rescission based on that fraud would not apply to other persons covered by the policy who did not participate in the fraud. After the trial court's ruling, this Court held that the innocent-third-party doctrine had been abrogated. Bazzi v. Sentinel Ins. Co. , 315 Mich. App. 763 , 781, 891 N.W.2d 13 (2016) ( Bazzi I ), rev'd in part by Bazzi v. Sentinel Ins. Co. , 502 Mich 390 , 919 N.W.2d 20 (2018) ( Bazzi II ). 5 In light of that decision, the trial court allowed Fremont to file a delayed motion for reconsideration. With that motion, Fremont also filed an untimely motion to amend its affirmative defenses to add a claim alleging that plaintiff was not entitled to coverage under MCL 500.3113(b) because Mr. Maurer purchased the policy and plaintiff was the titleholder to and registrant of the vehicle. The parties again filed competing motions for summary disposition, and the trial court again granted summary disposition to plaintiff based on the statute of limitations. Fremont's motion to amend affirmative defenses was denied for lack of merit.

II. ANALYSIS

Fremont raises two issues on appeal: (1) whether the trial court erred by concluding that its rescission claim was untimely, and (2) whether MCL 500.3113(b) precluded plaintiff from recovering no-fault benefits. We review de novo a trial court's grant or denial of summary disposition. Batts v. Titan Ins. Co. , 322 Mich. App. 278 , 284, 911 N.W.2d 486 (2017).

III. STATUTE OF LIMITATIONS

Actionable fraud, also known as fraudulent misrepresentation, Titan Ins. Co. v. Hyten , 491 Mich. 547 , 555, 817 N.W.2d 562 (2012), requires that

(1) the [party] made a material representation; (2) the representation was false; (3) when the [party] made the representation, the [party] knew that it was false, or made it recklessly, without knowledge of its truth as a positive assertion; (4) the [party] made the representation with the intention that the [opposing party] would act upon it; (5) the [opposing party] acted in reliance upon it; and (6) the [opposing party] suffered damage. [ M&D, Inc v. McConkey , 231 Mich. App. 22 , 27, 585 N.W.2d 33 (1998) (quotation marks and citation omitted).]

Silent fraud, also known as fraudulent concealment, acknowledges that "suppression of a material fact, which a party in good faith is duty-bound to disclose, is equivalent to a false representation and will support an action in fraud." Id . at 28-29, 585 N.W.2d 33 (quotation marks and citations omitted). But in order for silent fraud to be actionable, the party having a legal or equitable duty to disclose must have concealed the material fact with an intent to defraud. Id. , 585 N.W.2d 33 ; Titan , 491 Mich. at 557 , 817 N.W.2d 562 .

Fremont's counterclaim asserted that the Maurers engaged in a material and fraudulent misrepresentation. Before the trial court, the parties agreed that claims of fraud are governed by the six-year limitations period in MCL 600.5813. Adams v. Adams (On Reconsideration) , 276 Mich. App. 704 , 709-710, 742 N.W.2d 399 (2007). They disagreed, however, about whether the claim accrued in 2006 when the initial application was inaccurately completed or in 2012 when the policy was last renewed before the accident.

Generally, "[a] claim accrues at the time the wrong upon which the claim is based was done regardless of the time when damage results." MCL 600.5827. Plaintiff argues that Fremont's counterclaim for rescission was filed after the expiration of the six-year limitations period because the claim for rescission accrued in 2006 when the alleged intentional misrepresentation was made. Plaintiff points out that Fremont's letter rescinding the insurance policy explicitly stated that the reason for the rescission was Mr. Maurer's failure to disclose the business use of the vehicle in the 2006 application for insurance. Further, Fremont sought to return all premiums paid since the policy was first issued in 2006, demonstrating its belief that the fraud occurred at the initial application. Accordingly, plaintiff argues, the wrongful act underlying the fraudulent misrepresentation claim occurred in 2006.

In its response to plaintiff's motion for summary disposition, Fremont developed a new position, arguing, contrary to its letter of rescission, that the rescission was not based on the 2006 application but rather on the failure of Mr. Maurer to advise Fremont of the business use of the vehicle when the policy renewed in 2012. 6 Fremont argued that at that time, Mr. Maurer violated his duty to disclose that the vehicle was being used for business purposes. However, any such duty to disclose was defined, or at least modified, by Fremont's statement on the 2012 declaration sheet that unambiguously directed the policyholder to provide notice of any error or change concerning coverage to the insured's agent, not to Fremont. The precise wording was "If the covered autos are not used as indicated above, contact your agent ." (Emphasis added; capitalization omitted.) Thus, as to the 2012 renewal, Mr. Maurer fulfilled his contractual responsibility when he again advised the agent of the car's use for mail delivery. 7 We conclude that Fremont's claim for rescission accrued in 2006 when Mr. Maurer submitted the application containing the misrepresentation. That was the wrong on which Fremont's claim rests. The allegation that Mr. Maurer failed to disclose the vehicle's use in 2012 fails, at least for purposes of summary disposition, because the evidence is uncontested that he complied with the directive on the declaration sheet to "contact your agent" in the event of any changes to or inaccuracies in the description of the vehicle's use. Thus, we affirm the trial court's conclusion that Fremont's counterclaim for rescission was untimely and that plaintiff was entitled to summary disposition 8 III. MCL 500.3113

Fremont filed an untimely motion to amend its affirmative defenses to add a defense based on MCL 500.3113(b). On appeal, Fremont pursues this defense but its statement of questions presented does not assert that the trial court erred by denying the motion to amend. "Independent issues not raised in the statement of questions presented are not properly presented for appellate review." Bouverette v. Westinghouse Electric Corp., 245 Mich. App. 391 , 404, 628 N.W.2d 86 (2001). Accordingly, whether the trial court so erred is not properly before us and, because the affirmative defense was never filed, Fremont may not seek to assert it on appeal. Nonetheless, we choose to address this unpreserved issue because it involves a question of law and the relevant facts are undisputed. Smith v. Foerster-Bolser Constr., Inc. , 269 Mich. App. 424 , 427, 711 N.W.2d 421 (2006).

Fremont's new argument is that plaintiff is not entitled to coverage under MCL 500.3113(b) because plaintiff was the titleholder and registrant of the vehicle but her husband was the policyholder. MCL 500.3113 provides, in part, that

[a] person is not entitled to be paid personal protection insurance benefits for accidental bodily injury if at the time of the accident any of the following circumstances existed:

* * *

(b) The person was the owner or registrant of a motor vehicle or motorcycle involved in the accident with respect to which the security required by [ MCL 500.3101 ] ... was not in effect.

MCL 500.3101(1) provides that "[t]he owner or registrant of a motor vehicle required to be registered in this state shall maintain security for payment of benefits under personal protection insurance, property protection insurance, and residual liability insurance."

The seminal case interpreting MCL 500.3113(b) is Iqbal v. Bristol West Ins. Group , 278 Mich. App. 31 , 748 N.W.2d 574 (2008). In that case, we considered the plain text of MCL 500.3113(b) and concluded that the critical question was whether the vehicle was insured, not whether the owner or registrant had been the purchaser of the policy.

[T]he phrase "with respect to which the security required by section 3101 ... was not in effect," § 3113(b), when read in proper grammatical context, defines or modifies the preceding reference to the motor vehicle involved in the accident , here the BMW, and not the person standing in the shoes of an owner or registrant. The statutory language links the required security or insurance solely to the vehicle. Thus, the question becomes whether the BMW, and not plaintiff, had the coverage or security required by MCL 500.3101. As indicated above, the coverage mandated by MCL 500.3101(1) consists of "personal protection insurance, property protection insurance, and residual liability insurance." While plaintiff did not obtain this coverage, there is no dispute that the BMW had the coverage, and that is the only requirement under MCL 500.3113(b), making it irrelevant whether it was plaintiff's brother who procured the vehicle's coverage or plaintiff. Stated differently, the security required by MCL 500.3101(1) was in effect for purposes of MCL 500.3113(b) as it related to the BMW. [ Id . at 39-40, 748 N.W.2d 574 .]

In sum, Iqbal followed the last-antecedent rule based on the plain language of the statute. "The 'last antecedent' rule of statutory construction provides that a modifying or restrictive word or clause contained in a statute is confined solely to the immediately preceding clause or last antecedent, unless something in the statute requires a different interpretation." Stanton v. Battle Creek , 466 Mich. 611 , 616, 647 N.W.2d 508 (2002). Thus, the phrase "with respect to which the security required by [ MCL 500.3101 ] ... was not in effect" modifies only the last antecedent or clause, which is "motor vehicle or motorcycle involved in the accident." See MCL 500.3113(b). The words "owner or registrant" are not part of the last antecedent.

Six years after Iqbal was decided, a panel of this Court read that decision as holding that at least one of the vehicle's owners had to obtain the policy in order "to avoid the consequences" of MCL 500.3113(b). Barnes v. Farmers Ins Exch , 308 Mich. App. 1 , 8-9; 862 N.W.2d 681 (2014). 9 We do not read Iqbal so narrowly and note that Barnes never addressed the plain text of the statute, which by the rules of grammar and the canons of legal interpretation 10 attaches the need for a policy to the vehicle and not the owner. Were the ruling in Barnes controlling under the facts of this case, we would declare a conflict with it. However, that is not necessary here because Barnes is plainly distinguishable. In that case, the purchaser of the insurance was neither a relative nor a resident of the same household as the plaintiff. In this case, the policy was purchased by plaintiff's husband, a wholly different scenario. 11 It would be very difficult to articulate any reason why the Legislature, by adopting MCL 500.3113, would have intended to prevent a spouse from procuring insurance on a family car when the vehicle was registered to the other spouse, or to completely deprive the spouse owning the car from no-fault benefits simply because the car owner let his or her spouse procure the policy. 12 Certainly Fremont has not articulated a basis to find such intent. In the absence of a compelling reason to do so, we will not interpret MCL 500.3113(b) in a way that would so undermine both the purpose of the no-fault act 13 and the institution of marriage. 14 Affirmed. As the prevailing party, plaintiff may tax costs. MCR 7.219(A).

Servitto, J., concurred with Shapiro, J.

Jansen, J. (dissenting ).

Defendant appeals as of right the trial court's amended final order closing the case in this first-party no-fault action. However, the crux of defendant's appeal is actually a challenge to the trial court's order granting summary disposition in favor of plaintiff, denying defendant's motion to amend its affirmative defenses, and denying defendant's motion for summary disposition. Because I would reverse, I respectfully dissent.

I. RELEVANT FACTS AND PROCEDURAL HISTORY

On December 3, 2012, plaintiff, Rachel Amy Maurer, was catastrophically injured in a motor vehicle accident. At the time of the collision, plaintiff was driving her personal vehicle, a Buick Century, within the course and scope of her employment with the United States Postal Service (USPS). Accordingly, plaintiff's medical expenses were paid pursuant to the Federal Employees' Compensation Act (FECA), 5 USC 8101 et seq . Plaintiff also successfully pursued a tort action, which sought third-party no-fault benefits pursuant to MCL 500.3135, against the driver who caused the collision, as well as the driver's employer.

At the time of the accident, plaintiff's car was insured by a no-fault insurance policy that plaintiff's husband, Dale Maurer, had obtained through defendant. On January 3, 2014, plaintiff filed a complaint for declaratory relief against defendant after the USPS had "asserted a lien claiming a right of reimbursement for expenses paid under FECA[.]" Plaintiff asked the trial court to enter a declaratory judgment ordering defendant to reimburse the USPS in the event that she obtained a tort recovery.

On December 5, 2014, after plaintiff succeeded in obtaining a tort recovery, she filed an amended complaint in which she claimed that the USPS had, in fact, asserted a lien for reimbursement of expenses paid under FECA, and she asked the trial court to enter a declaratory judgment against defendant for personal protection insurance (PIP) benefits, together with costs, interest, and attorney fees. Plaintiff also added a second breach-of-contract claim, alleging that despite having reasonable proof of her loss, defendant unreasonably refused to pay PIP benefits to her.

On January 5, 2015, defendant filed a counterclaim for rescission of the no-fault insurance policy issued to Mr. Maurer on the basis that Mr. Maurer had made material misrepresentations in his application for no-fault insurance on September 6, 2006 regarding the use of the Buick Century. Defendant claimed that Mr. Maurer's material misrepresentations increased its risk of loss by "impairing its ability to make a reasoned and informed underwriting decision relative to the policy that was issued." Accordingly, defendant claimed it was entitled to rescind ab initio the no-fault policy issued to Mr. Maurer.

On July 20, 2015, plaintiff moved for summary disposition of defendant's counterclaim for rescission, arguing that the innocent-third-party doctrine protected plaintiff's right of recovery, that defendant's rescission claim was time-barred by the six-year statute of limitations, or that alternatively, the doctrine of laches precluded defendant's claim. In an opinion and order dated September 29, 2015, the trial court granted plaintiff's motion for summary disposition, concluding that because Mr. Maurer was the one to file the application for insurance, plaintiff was protected by the innocent-third-party rule. Additionally, the trial court determined that the six-year statute of limitations in MCL 600.5813 barred defendant's rescission claim because the alleged misrepresentation occurred on September 6, 2006, which meant that defendant should have filed its claim before September 6, 2012.

Following this Court's decision in Bazzi v. Sentinel Ins. Co. , 315 Mich. App. 763 , 891 N.W.2d 13 (2016) ( Bazzi I ), rev'd in part by Bazzi v. Sentinel Ins. Co. , 502 Mich. 390 , 919 N.W.2d 20 (2018) ( Bazzi II ), defendant was permitted to file a motion for summary disposition on its rescission claim. Defendant argued that rescission was appropriate because Mr. Maurer had made material misrepresentations regarding the use of the Buick Century, namely that he failed to indicate that the vehicle was, in fact, being used for business purposes. Additionally, defendant argued that because plaintiff was injured "in a motor vehicle accident involving a vehicle which she owned, but for which she did not purchase the required no-fault insurance," coverage was precluded under MCL 500.3113(b). Defendant also argued that the statute of limitations, the doctrine of laches, and the innocent-third-party rule did not bar its claim for rescission. Finally, defendant filed a motion to amend its affirmative defenses to include plaintiff's failure to comply with MCL 500.3113(b).

Plaintiff filed her own motion for summary disposition pursuant to MCR 2.116(C)(10). Plaintiff argued that defendant's "only justification for refusing [to pay PIP benefits to plaintiff] [was] a legal theory that [had] already been rejected" by the trial court, i.e., rescission. Accordingly, plaintiff further argued that there was no justifiable reason for defendant to refuse to pay plaintiff PIP benefits, and summary disposition in favor of plaintiff should have been granted with respect to plaintiff's claims for work-loss benefits and the itemized allowable expenses claimed.

In a written opinion and order entered on October 12, 2016, the trial court granted plaintiff's motion for summary disposition, denied defendant's motion to amend its affirmative defenses, and denied defendant's motion for summary disposition. The trial court found that the six-year statute of limitations found in MCL 600.5813 barred defendant's rescission claim. Accordingly, the court did not find it necessary to address defendant's arguments regarding the doctrine of laches or the innocent-third-party rule. Likewise, the court denied defendant's motion to amend its affirmative defenses, stating that the court had "reviewed the argument, and... it [was] without merit ...."

Conversely, plaintiff's motion for summary disposition was granted. The trial court noted that plaintiff had requested entry of a judgment in the amount of $ 1,434,628.54 and that because defendant did not dispute the amount of damages, a judgment in that amount would be entered. This appeal followed.

II. STATUTE OF LIMITATIONS

Defendant first argues that the trial court erroneously denied its motion for summary disposition on the basis that its claim for rescission was brought after the six-year period of limitations found in MCL 600.5813 had expired. More specifically, defendant argues that because each renewal of Mr. Maurer's insurance policy formed a new contract, defendant's rescission claim accrued on September 6, 2012, the effective date of the policy in effect at the time of the underlying accident, and therefore, its rescission claim was timely. I agree.

This Court reviews de novo a trial court's decision regarding a motion for summary disposition. Lowrey v. LMPS & LMPJ, Inc. , 500 Mich. 1 , 5-6, 890 N.W.2d 344 (2016). A motion for summary disposition brought under MCR 2.116(C)(10)"tests the factual sufficiency of the complaint," Shinn v. Mich. Assigned Claims Facility , 314 Mich. App. 765 , 768, 887 N.W.2d 635 (2016), and should be granted when "there is no genuine issue regarding any material fact and the moving party is entitled to judgment as a matter of law," West v. Gen. Motors Corp. , 469 Mich. 177 , 183, 665 N.W.2d 468 (2003).

"The moving party has the initial burden to support its claim for summary disposition by affidavits, depositions, admissions, or other documentary evidence." McCoig Materials, LLC v. Galui Constr., Inc. , 295 Mich. App 684 , 693, 818 N.W.2d 410 (2012). The court must consider all the admissible evidence in the light most favorable to the nonmoving party. Liparoto Constr., Inc v. Gen. Shale Brick, Inc. , 284 Mich. App. 25 , 29, 772 N.W.2d 801 (2009). However, the party opposing summary disposition under MCR 2.116(C)(10)"may not rely on mere allegations or denials in pleadings, but must go beyond the pleadings to set forth specific facts showing that a genuine issue of material fact exists." Oliver v. Smith , 269 Mich. App. 560 , 564, 715 N.W.2d 314 (2006) (quotation marks and citation omitted). "A genuine issue of material fact exists when the record, giving the benefit of reasonable doubt to the opposing party, leaves open an issue upon which reasonable minds might differ." Bahri v. IDS Prop. Cas. Ins. Co. , 308 Mich. App. 420 , 423, 864 N.W.2d 609 (2014) (quotation marks and citation omitted).

It is well settled that a no-fault insurer is entitled to rescind ab initio an insurance policy on the basis that the insured made a material misrepresentation in his or her application for no-fault insurance. 21st Century Premier Ins. Co. v. Zufelt , 315 Mich. App. 437 , 446, 889 N.W.2d 759 (2016). " 'Rescission is justified without regard to the intentional nature of the misrepresentation, as long as it is relied upon by the insurer. Reliance may exist when the misrepresentation relates to the insurer's guidelines for determining eligibility for coverage.' " Id ., quoting Lake States Ins. Co. v. Wilson , 231 Mich. App. 327 , 331, 586 N.W.2d 113 (1998). However, an insurer must assert any claim for rescission within six years after the claim accrues. MCL 600.5813. A claim for rescission accrues when the wrong, in this case fraud or misrepresentation, is done, regardless of when the damage results. MCL 600.5827.

The issue here boils down to when defendant's rescission claim accrued. Plaintiff argues that the claim accrued on September 6, 2006, when Mr. Maurer first submitted an application for no-fault insurance, and therefore, defendant's counterclaim for rescission was untimely, as it was filed after September 6, 2012. Conversely, defendant argues that its rescission claim arose on September 6, 2012, when Mr. Maurer renewed the insurance policy, and therefore could be brought any time before September 6, 2018.

This Court has previously determined that a renewal contract is "a new or separate contract." 21st Century , 315 Mich. App. at 443-444, 889 N.W.2d 759 (quotation marks and citation omitted). Accordingly, when Mr. Maurer renewed his no-fault policy with defendant on September 6, 2012, he effectively entered into a new, separate, and distinct contract. In obtaining that contract, Mr. Maurer made the following representations regarding the use of vehicles covered under the policy:

1 PRIVATE PASSENGER PICKUP DRIVEN TO WORK OR SCHOOL 5 DAYS PER WEEK A DISTANCE [OF] OVER 3 MILES BUT LESS THAN 15 MILES ONE WAY BY A 54 YEAR OLD MALE

2 PRIVATE PASSENGER CAR DRIVEN TO WORK OR SCHOOL 5 DAYS PER WEEK A DISTANCE [OF] 3 MILES OR LESS ONE WAY BY A 52 YEAR OLD FEMALE

3 PRIVATE PASSENGER CAR USED FOR PLEASURE DRIVEN BY A 54 YEAR OLD MALE

4 PRIVATE PASSENGER CAR DRIVEN TO WORK OR SCHOOL 5 DAYS PER WEEK A DISTANCE [OF] 3 MILES OR LESS ONE WAY BY A 17 YEAR OLD FEMALE

The policy identified Mr. Maurer's and plaintiff's daughter as the principal or occasional driver of the Buick Century. Clearly, however, the Buick Century was driven by plaintiff, not her daughter, and was not simply a "private passenger car." Indeed, it is undisputed that at the time of the accident, plaintiff drove the Buick Century for business purposes.

Further, Mr. Maurer agreed to contact his agent "if the covered autos [were] not used as indicated above[.]" The policy contained an antifraud provision, providing that defendant would not

cover any person seeking coverage under this policy who has intentionally concealed or misrepresented any material fact, made fraudulent statements, or engaged in fraudulent conduct with respect to the procurement of this policy or to any accident or loss for which coverage is sought.

Put simply, the new contract entered into by Mr. Maurer on September 6, 2012, provided that defendant would be entitled to rescind Mr. Maurer's no-fault policy if he had made any material misrepresentations in order to procure no-fault coverage. Accordingly, the misrepresentation with respect to the contract in effect at the time plaintiff was injured occurred on September 6, 2012, when the renewal contract was entered into and took effect. Subject to any equitable defenses, defendant had until September 6, 2018, to bring a claim for rescission. MCL 600.5813. Therefore, I would conclude that defendant's counterclaim for rescission was timely filed on January 5, 2015, and that the trial court committed error requiring reversal by finding otherwise.

Further, I note that in my view, the majority's conclusion that defendant's rescission claim accrued in 2006 and is therefore now time-barred not only ignores the precedent previously set by this Court-that a renewal contract is "a new or separate contract," 21st Century , 315 Mich. App. at 444, 889 N.W.2d 759 -but it sets a terrible new precedent. In effect, the majority has given carte blanche to plaintiff, Mr. Maurer, or anyone else who makes material misrepresentations in an application for no-fault insurance. Moving forward, the majority has made it so that as long as an individual can avoid an accident for six years, they may make whatever fraudulent claims they please in order to obtain insurance, and still receive PIP benefits if an accident subsequently occurs. I cannot support such a conclusion.

III. MCL 500.3113(B)

Second, defendant argues that the trial court abused its discretion by denying its motion to amend its affirmative defenses to include that plaintiff's claim was barred by MCL 500.3113(b), and likewise, that the trial court erroneously denied defendant's motion for summary disposition. The basis of defendant's argument is that although plaintiff was the titleholder of the Buick Century, she was not the named insured on the no-fault policy: Mr. Maurer was, and Mr. Maurer does not qualify as an owner for purposes of the no-fault act. Accordingly, plaintiff is not entitled to recover from defendant because plaintiff was driving an uninsured motor vehicle at the time of the accident. Again, I agree.

This Court reviews for an abuse of discretion a trial court's decision to grant or deny a motion to amend affirmative defenses. Weymers v. Khera , 454 Mich. 639 , 654, 563 N.W.2d 647 (1997). Leave to amend "shall be freely given when justice so requires." MCR 2.118(A)(2). Amendment is generally a matter of right. In re Kostin Estate, 278 Mich. App. 47 , 52, 748 N.W.2d 583 (2008). "Leave to amend should ordinarily be denied only for particularized reasons such as undue delay, bad faith or dilatory motive, repeated failures to cure by amendments previously allowed, or futility." Id. ; Ostroth v. Warren Regency, G.P., L.L.C., 263 Mich. App. 1 , 5, 687 N.W.2d 309 (2004) (holding that leave to amend should not be granted when amendment would cause opposing party undue prejudice). As noted, this Court reviews de novo a trial court's determination on a motion for summary disposition. Lowrey , 500 Mich. at 5-6 , 890 N.W.2d 344 .

No-fault insurers are required to pay PIP benefits for accidental bodily injuries to the named insured, the named insured's spouse, and "a relative of either domiciled in the same household, if the injury arises from a motor vehicle accident." MCL 500.3114(1). Defendant, through the deposition testimony of Pete Buhl, admitted as much when he testified that as Mr. Maurer's spouse, plaintiff was "pulled in ... essentially [as] a named insured." Accordingly, if plaintiff had been driving a vehicle owned or titled to Mr. Maurer at the time of the accident, she would have been covered by the policy.

However, an individual is excluded from receiving PIP benefits if, at the time of the accident, that person "was the owner or registrant of a motor vehicle ... involved in the accident with respect to which the security required by [ MCL 500.3101 ] was not in effect." MCL 500.3113(b). Although Mr. Maurer obtained no-fault insurance for the Buick Century, the vehicle involved in the accident, he testified in his deposition that he was not the registrant; plaintiff was. The sole titleholder of the Buick Century was plaintiff. In fact, the policy states, in no uncertain terms, "IF THE COVERED AUTOS ARE NOT TITLED TO THE NAMED INSURED IDENTIFIED ABOVE, CONTACT YOUR AGENT." Accordingly, the relevant inquiry becomes whether Mr. Maurer was an owner for purposes of the no-fault act.

MCL 500.3101(2)(k)( i ) defines an "owner" as "[a] person renting a motor vehicle or having the use of a motor vehicle, under a lease or otherwise, for a period that is greater than 30 days." 1 There may be multiple owners of a motor vehicle, Ardt v. Titan Ins. Co. , 233 Mich. App. 685 , 691, 593 N.W.2d 215 (1999), and "it is not necessary that a person actually have used the vehicle for a thirty-day period before a finding may be made that the person is the owner. Rather, the focus must be on the nature of the person's right to use the vehicle," Twichel v. MIC Gen. Ins. Corp. , 469 Mich. 524 , 530, 676 N.W.2d 616 (2004).

In my view, the record is clear that Mr. Maurer does not qualify as an owner for purposes of the no-fault act. During his deposition, Mr. Maurer testified that plaintiff was the only titled owner of the Buick Century and that the only person to ever drive the Buick Century besides plaintiff was the Maurers' daughter, whose usage was characterized as occasional. Accordingly, I would conclude that plaintiff is barred from recovering PIP benefits from defendant because the Buick Century lacked the necessary security. MCL 500.3113(b).

Based on the foregoing, I would conclude that the trial court abused its discretion by refusing to allow defendant to amend its affirmative defenses to include MCL 500.3113(b). Additionally, the foregoing analysis makes it clear that plaintiff's recovery is barred regardless of the outcome of defendant's counterclaim for rescission, and summary disposition in favor of defendant is appropriate.

IV. ALTERNATIVE GROUNDS FOR AFFIRMANCE

Finally, plaintiff argues as alternative grounds for affirmance that even if the statute of limitations did not bar defendant's counterclaim for rescission, several other equitable defenses do. Specifically, plaintiff cites the doctrine of laches, the innocent-third-party doctrine, and the fact that when an insurance contract contains a remedy provision, rescission is unavailable in light of an adequate remedy at law.

The three issues raised by plaintiff as alternative grounds for affirmance were either not raised in the trial court or were purposely not addressed by the trial court. Accordingly, these issues are unpreserved. Mouzon v. Achievable Visions , 308 Mich. App. 415 , 419, 864 N.W.2d 606 (2014). However, because "the issue[s] ... concern[ ] a legal question and all of the facts necessary for [their] resolution are present," Dell v. Citizens Ins. Co. of America , 312 Mich. App. 734 , 751 n. 40, 880 N.W.2d 280 (2015), this Court has the authority to address the issues. Although "[a]n appellee may argue alternative grounds for affirmance without filing a cross-appeal if the appellee does not seek a more favorable decision," Hanton v. Hantz Fin. Servs., Inc. , 306 Mich. App. 654 , 669, 858 N.W.2d 481 (2014), I would conclude that none of plaintiff's alternative grounds for affirmance is persuasive.

First, plaintiff's laches argument fails. A party seeking an equitable remedy must first offer to do equity, and because laches is an equitable doctrine, a party with unclean hands may not assert the defense. Attorney General v. PowerPick Player's Club of Mich., LLC , 287 Mich. App. 13 , 52, 783 N.W.2d 515 (2010). When determining whether a party entered equity with unclean hands, the relevant inquiry is whether the party seeking the remedy sought to mislead the other. Isbell v. Brighton Area Sch. , 199 Mich. App. 188 , 190, 500 N.W.2d 748 (1993).

Even if MCL 500.3113(b) did not bar plaintiff's claim, based on the evidence placed before the trial court by both parties, reasonable minds could not differ on the fact that plaintiff cannot establish clean hands because of the material misrepresentations made by Mr. Maurer to obtain the insurance policy. Therefore, laches is unavailable as a defense to defendant's rescission claim. At his deposition, Mr. Maurer testified that he was aware that the insurance policy did not accurately reflect plaintiff's use of the Buick Century; however, on the advice of his insurance agent, Mr. Maurer did not correct the misrepresentation. Rather, Mr. Maurer testified that he relied on his agent's suggestion, "when we cross that bridge, we'll worry about it then." Further, the policy itself states that Mr. Maurer and plaintiff's daughter were the only drivers of the Buick Century, when in fact Mr. Maurer clearly testified that the Buick Century was titled to plaintiff and was only used by plaintiff as her "mail car." Additionally, even if plaintiff came to equity with clean hands, defendant pleaded rescission as an affirmative defense on February 21, 2014, in response to plaintiff's original complaint. At this point plaintiff had not yet prevailed in her tort action, and therefore any recovery was speculative at best. Although defendant did not file its counterclaim for rescission until 2015, it put plaintiff on notice of its intent to rescind the contract through its affirmative defenses, and by returning to Mr. Maurer via check the insurance premiums he had paid. Plaintiff is therefore unable to establish any unreasonable delay on behalf of defendant. See Yankee Springs Twp. v. Fox , 264 Mich. App. 604 , 611, 692 N.W.2d 728 (2004) (in which this Court previously determined that for the doctrine of laches to apply, there must be an "unreasonable delay that results in 'circumstances that would render inequitable any grant of relief to the dilatory plaintiff' ") (citation omitted).

Second, plaintiff argued that this Court incorrectly decided Bazzi I and that plaintiff is entitled to the protection of the innocent third-party doctrine. Since this case was argued, our Supreme Court decided Bazzi and held that its decision in Titan Insurance Co. v. Hyten , 491 Mich. 547 , 817 N.W.2d 562 (2012), "abrogated the innocent-third-party rule ...." Bazzi II , 502 Mich. at 396 , 914 N.W.2d 363 (2018). Our Supreme Court went on to conclude that although an insurer is entitled to seek rescission of an insurance contract based on a policyholder's fraud in the application for insurance, the insurer is not automatically entitled to rescission by operation of law. Bazzi II , 502 Mich. at 408-412 , 914 N.W.2d 363 . Rather, when a third party is involved, the trial court must balance the equities to determine whether the third party is "entitled to the relief he or she seeks." Id . at 410, 914 N.W.2d 363 (quotation marks and citation omitted). However, in this case, plaintiff does not qualify as a third party, and therefore Bazzi II is inapplicable. As discussed, plaintiff was the owner of the Buick Century, MCL 500.3101(2)(k)( i ), 2 but failed to obtain the necessary security required by the no-fault statute. Accordingly, plaintiff is barred from recovering PIP benefits, MCL 500.3113(b) and remand under Bazzi II is not required.

Finally, plaintiff argues that because the insurance contract at issue contains a remedy provision, and equitable rescission is unavailable in light of an adequate remedy at law. However, in light of the fact that MCL 500.3113(b) bars plaintiff's recovery, the insurance contract at issue is inapplicable to plaintiff, and this argument is without merit.

I would reverse and remand for the trial court to vacate its October 12, 2016 order and grant summary disposition in favor of defendant.

1 Dale Maurer is Rachel's conservator, and he filed this case on her behalf. He did not bring any claim in his own right. "Plaintiff" as used in this opinion refers to Rachel.

2 According to her physician's report, plaintiff suffered a traumatic brain injury, respiratory failure, multiple internal injuries, and multiple orthopedic injuries. In March 2016, her physician reported that she continues to suffer from

severe neurologic deficits that impair her both physically and mentally. At this time, she is not able to make informed decisions. Her comprehension and cognition [are] severely limited. She has very little insight and is unable to communicate consistently.

... She has right sided weakness involving both the arm and the leg .... She has severe spasticity and tone in the right arm and leg. She is totally dependent on others for all aspects of her care throughout the day. She will likely require assistance for the rest of her life.

3 The parties dispute the amount of the premium increase that would have been applied. Plaintiff, based on documents produced by Fremont in discovery, claims that the difference would have been $4 per policy term. Fremont relies on other documents showing that if the car had been listed as primarily used for business the premium would have been approximately $170 higher. Fremont would also have issued a policy endorsement entitled "Federal Employees Using Autos in Government Business," which would have limited Fremont's liability exposure in the event plaintiff caused an accident while delivering mail. That circumstance is not present here because although the accident occurred when plaintiff was delivering mail, she was not at fault in the accident.

4 The application also contained an "anti-fraud" warning that anyone making false statements in the application with intent to defraud was "guilty of insurance fraud." It did not, however, contain any language regarding rights or remedies.

5 We held this appeal in abeyance pending the Supreme Court's resolution of Bazzi . Maurer v. Fremont Ins. Co. , unpublished order of the Court of Appeals, entered May 31, 2018 (Docket No. 336514). Recently, the Supreme Court affirmed this Court's ruling that the innocent-third-party doctrine had been abrogated but reversed this Court's conclusion that the insurer was automatically entitled to rescission. Bazzi II , 502 Mich. at 407 , 919 N.W.2d 20 . The Court explained that rescission is an equitable remedy to be awarded in the trial court's discretion. Id. at 409-410 , 914 N.W.2d 363 .

6 A renewal policy is considered to be a new contract. See Russell v. State Farm Mut. Auto. Ins. Co. , 47 Mich. App. 677 , 680, 209 N.W.2d 815 (1973).

7 Fremont does not concede that Mr. Maurer informed the agent of the vehicle's use, but it does not offer any evidence to contradict Mr. Maurer's testimony. Nor has Fremont produced any proof of fraudulent intent. An insurance policy can be rescinded for fraud, but there must be an intentional misrepresentation of a material fact. Bazzi II , 502 Mich. at 408 , 914 N.W.2d 363 . As noted, in order for fraudulent concealment to be actionable, the party having a legal or equitable duty to disclose must have concealed the material fact with an intent to defraud. Titan Ins. Co. , 491 Mich. at 557 , 817 N.W.2d 562 . However, Fremont offers no proof of intentional misrepresentation and no proof that either plaintiff or Mr. Maurer acted with fraudulent intent. Indeed, the evidence is unrebutted that Mr. Maurer twice advised his agent-once in 2006 and again in 2012-that the vehicle was used to deliver mail. These actions are inconsistent with the actions of a person engaging in fraud or intentional misrepresentation. The application was submitted after the agent told Mr. Maurer that the answer to the question did not matter and to not worry about it.

The dissent reads the declaration sheets, specifically the sheet pertaining to the September 2012 renewal, as though Mr. Maurer was making representations regarding the use of the vehicles. However, this argument misunderstands the insurance renewal process. Deposition testimony from one of Fremont's claims managers established that Fremont prepared the declaration sheets and sent them to Mr. Maurer for review. Mr. Maurer was obligated to contact his insurance agent, not Fremont, to correct errors regarding the use of the vehicles. Again, there is no evidence contradicting Mr. Maurer's testimony that he informed his agent that plaintiff used the vehicle to deliver mail. If the agent failed to contact Fremont in turn, that does not support a fraud claim against the Maurers. Further, the dissent's focus on the declaration sheet identifying the Maurers' daughter as the driver of the vehicle is misplaced because it is undisputed that this mistake was attributable to Fremont.

In sum, Fremont has not proffered any evidence that Mr. Maurer set out to induce Fremont to sell him a policy with a lower premium or that he knew that the answer to the question at issue would result in a lower premium. It is well settled that fraud "is not to be lightly presumed, but must be clearly proved by clear, satisfactory and convincing evidence" and that "trial courts should ensure that these standards are clearly satisfied with regard to all of the elements of a fraud claim." Cooper v. Auto Club Ins. Ass'n , 481 Mich. 399 , 414, 751 N.W.2d 443 (2008) (quotation marks and citations omitted). For those reasons, Fremont failed to establish a question of fact as to fraudulent intent.

8 Given our ruling, we need not address the parties' equitable arguments regarding rescission in this case. We note, however, that Fremont argues in its reply brief that it is seeking a legal, not an equitable, rescission. But Fremont does not argue that a different limitations period applies to legal rescissions. Further, we note that there is no rescission clause in the policy. We also question whether the distinction drawn by Fremont is still meaningful after the merger of law and equity. According to one respected treatise:

In considering the availability and scope of judicial rescission, it is necessary to bear in mind that the great bulk of cases have been decided under the dual-court system of separate courts of law and of equity, with judicial rescission being historically an equitable remedy. This means that currently, in view of the widespread fusion of law and equity, many of the decided cases have no current value except to point to the existence of certain "equitable" principles which would still be followed by a court in determining whether rescission should be granted, although it was not a court of "equity." [2 Couch, Insurance, 3d, § 31:65, p. 31-117.]

9 The Supreme Court has granted leave to appeal in a separate case to determine whether Barnes was rightly decided. See Dye v. Esurance Prop. & Cas. Ins. Co. , 501 Mich. 944 , 904 N.W.2d 620 (2017).

10 See Scalia & Garner, Reading Law: The Interpretation of Legal Texts (St. Paul: Thomson/West, 2012), p 152 ("When the syntax involves something other than a parallel series of nouns or verbs, a prepositive or postpositive modifier normally applies only to the nearest reasonable referent.") (formatting altered).

11 Moreover, the relevant exclusion in the insurance policy itself is consistent with Iqbal and inconsistent with Barnes because it turned on whether the vehicle was insured and not who procured it. That provision provided that Fremont would not pay PIP benefits for bodily injury "[s]ustained to the owner or registrant of an auto or motorcycle involved in the accident and for which the security required under Michigan no-fault is not in effect."

12 When interpreting statutes, our goal is to discern the Legislature's intent. Batts , 322 Mich. App. at 284 , 911 N.W.2d 486 . "[S]tatutes should be construed so as to prevent absurd results, injustice, or prejudice to the interests of the public." Liberty Mut. Ins. Co. v. Mich. Catastrophic Claims Ass'n , 248 Mich. App. 35 , 45, 638 N.W.2d 155 (2001).

13 "The purpose of the Michigan no-fault act is to broadly provide coverage for those injured in motor vehicle accidents without regard to fault." Iqbal , 278 Mich. App. at 37, 748 N.W.2d 574 (quotation marks and citation omitted).

14 Our dissenting colleague essentially concludes that if anyone other than an owner of a vehicle procures the policy, the owner(s) may not recover no-fault benefits under MCL 500.3113(b). Our colleague cites no authority for this position. The dissent does not address the holding of Iqbal , which rejects that view. We presume that our colleague is relying on Barnes , which we have distinguished because this case involves spouses.

We also question the dissent's conclusion that Mr. Maurer does not qualify as an owner of the vehicle. The no-fault act defines owner, in part, as "[a] person renting a motor vehicle or having the use of a motor vehicle, under a lease or otherwise, for a period that is greater than 30 days." MCL 500.3101( l )( i ). Mr. Maurer testified that he did not drive plaintiff's vehicle, but there was no testimony or other evidence suggesting that Mr. Maurer did not have the right to use the vehicle. And to determine if he is an owner of the vehicle for purposes of the no-fault act, the focus is on the nature of his right to use the vehicle. Twichel v. MIC Gen. Ins. Corp. , 469 Mich. 524 , 530, 676 N.W.2d 616 (2004). However, given our disposition of the matter, we need not resolve whether Mr. Maurer is an owner of the vehicle.

1 Effective October 30, 2017, the definition of "owner" appears in MCL 500.3101(2)(l)( i ). See 2017 PA 140 .

2 Now MCL 500.3101(2)( l )( i ).