Extent to which a contractual antifraud provision defense is valid & enforceable when applied to coverage mandated by the No-Fault Act (the Act) (MCL 500.3101 et seq.) or whether it is a common-law defense that has not been abrogated; Shavers v. Attorney Gen.; Rohlman v. Hawkeye-Sec. Ins. Co.; Rory v. Continental Ins. Co.; Marquis v. Hartford Accident & Indem. (After Remand); Bazzi v. Sentinel Ins. Co.; Cruz v. State Farm Mut. Auto. Ins. Co.; MCL 500.3113; Quality Prods. & Concepts Co. v. Nagel Precision, Inc.; Innovation Ventures v. Liquid Mfg.; Abbate v. Shelden Land Co.

The court held that plaintiff-insurer’s (Meemic) “contractual antifraud provision is invalid and unenforceable because it is not based on a statutory or unabrogated common-law defense.” Thus, it affirmed the Court of Appeals in result only, vacated its opinion, and remanded the case to the trial court for further proceedings. Meemic sought to void its policy with defendants-insureds and stop paying no-fault benefits to their son (who is “neither a party to the insurance contract nor a beneficiary of the claim allegedly obtained by fraud”). Although the benefits are mandated by statute, Meemic sought “to avoid its statutory obligations by enforcing the antifraud provision in the policy.” The issue before the court was the extent to which a contractual defense like the one in this case is valid and enforceable when applied to coverage mandated by the Act or whether it is a common-law defense that has not been abrogated. The court held “that such contractual provisions are valid when based on a defense to mandatory coverage provided in the [Act] itself or on a common-law defense that has not been abrogated by” the Act. Because Meemic’s fraud defense was grounded on neither the Act nor the common law, it was invalid and unenforceable.

Justice Zahra, joined by Justice Clement, concurred “in the result reached by the majority that the instant fraud-exclusion provision is unenforceable.” But unlike the majority, they “would affirm the Court of Appeals decision on the basis of the Cruz standard and would hold that the fraud-exclusion provision is inconsistent with the [Act] and, therefore, void as against public policy.”