Southeast Michigan Surgical Hospital LLC v. Allstate Insurance Co

STATE OF MICHIGAN

COURT OF APPEALS

SOUTHEAST MICHIGAN SURGICAL FOR PUBLICATION
HOSPITAL, LLC, doing business as August 9, 2016
SOUTHEAST MICHIGAN SURGICAL
HOSPITAL, and JAMIE LETKEMANN,

Plaintiffs-Appellees,

v No. 323425
Wayne Circuit Court
ALLSTATE INSURANCE COMPANY, LC No. 11-015300-NF

Defendant-Appellant.

Before: RONAYNE KRAUSE, P.J., and SAWYER and STEPHENS, JJ.

SAWYER, J. (concurring in part and dissenting in part).

I concur with the majority’s conclusion that this case is controlled by our decision in
Bazzi v Sentinel Ins Co, ___ Mich App ___; ___ NW2d ___ (Docket No. 320518, issued June
14, 2016), and, therefore, we must reverse the trial court. Because Bazzi concluded that the
innocent third-party doctrine is no longer viable in light of the Supreme Court’s decision in Titan
Ins Co v Hyten, 491 Mich 547; 817 NW2d 562 (2012), the trial court erred in denying summary
disposition to defendant. Once the trial court determined that the policy was obtained through
fraud, defendant was entitled to summary disposition. The record firmly establishes that Kreklau
made material misrepresentations in the application, and such misrepresentations were material
to the risk and hazard associated with the policy because they induced Allstate to charge
drastically lowered premiums. Thus, Allstate’s rescission was effective with regard to
Letkemann. Moreover, since Letkemann is barred from recovering no-fault benefits under the
rescinded policy, so is Southeast Michigan Surgical Hospital, L.L.C. See Bahri v IDS Prop Cas
Ins Co, 308 Mich App 420, 424; 864 NW2d 609 (2014).

I also agree with the majority’s conclusion that neither of the alternative grounds
advanced by plaintiff to affirm the case have merit. But, because I believe that Bazzi was
correctly decided, I disagree with the majority’s conclusion that it was incorrectly decided, and I
dissent from the majority’s call to convene a conflict panel pursuant to MCR 7.215(J)(2).

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 Accordingly, I would merely reverse the trial court’s grant of summary disposition to
plaintiffs and remand this matter to the trial court for entry of an order granting Allstate’s motion
for summary disposition under MCR 2.116(C)(10).

/s/ David H. Sawyer

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