Personal protection insurance (PIP) benefits under the No-Fault Act; Amendment to affirmative defenses; Rescission; Personal representative (PR); Defense medical examination (DME)

The court concluded that decedent-Richardson “made a material misrepresentation when she applied for her insurance policy.” While defendant-insurer (Integon) “unduly delayed asserting rescission as an affirmative defense, the trial court did not abuse its discretion by allowing Integon to amend its affirmative defenses because” plaintiff-PR was unable to show prejudice due to the delay. Further, the court found that the trial court did not err by granting Integon summary disposition “on the basis of the misrepresentation and declaring the policy void ab initio.” The case concerned a claim for PIP benefits. Plaintiff argued “that Integon’s delay in asserting rescission as an affirmative defense was prejudicial because it denied Richardson an opportunity to conduct discovery with the defense ‘in mind.’” Plaintiff referred “specifically to Richardson’s deposition testimony and contends that Integon’s ‘sandbagging’ prevented Richardson from providing detailed testimony concerning the insurance-application process to counter [insurance agent-A’s] testimony about the process. A review of Richardson’s deposition testimony, however, shows that she was unable to recall details about the insurance-application process.” Plaintiff also argued “that Integon failed to pursue rescission of the policy ‘with any sense of fair-minded litigation or integrity’ because Integon represented in its answers to interrogatories in [9/20] that it denied Richardson’s claim solely on the basis of the DME notwithstanding that Integon’s defense focused on rescission by that time.” The court agreed. “Although Integon undeniably aimed to pursue a rescission defense at the time that it answered the interrogatories, it failed to indicate as such when specifically asked ‘each defense’ that it intended to assert. Integon’s failure to alert plaintiff of the defense was dishonest and lends credence to plaintiff’s claim of ‘sandbagging.’” Nonetheless, plaintiff could not “establish prejudice within the meaning of MCR 2.118(C)(2) because she has failed to demonstrate an inability to respond to the defense that she would not have suffered if Integon had raised [it] sooner.” The court held that while “Richardson is now deceased, her deposition testimony shows that she did not recall the details of the insurance-application process about which she was asked other than the fact that [A] filled out the application.” Plaintiff failed “to indicate other questions that Richardson could have been asked to challenge Integon’s claim that rescission was warranted.” In short, plaintiff did not “indicate with any specificity what would have been done differently if Integon had moved to amend its affirmative defenses sooner. Accordingly, the trial court did not abuse its discretion by allowing Integon to amend its affirmative defenses to add rescission as an affirmative defense.” Affirmed.