Sherman v Progressive Michigan Insurance Company

Summary

The Michigan Supreme Court held that appellate review of a trial court’s decision to grant or deny rescission is for abuse of discretion, while the underlying summary-disposition determination is reviewed de novo. The Court affirmed judgment for Progressive, concluding that Sherman made material misrepresentations in her insurance application, Progressive relied on them, and the equities required rescission rather than reformation. The Court further held that remand to rebalance the equities was unnecessary because the equities were one-sided.

Holdings

1. When rescission is requested through a motion for summary disposition under MCR 2.116(C)(10), the appellate court must first determine de novo whether there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law, and must then review the trial court's decision to grant or deny rescission for an abuse of discretion.
2. There was no genuine issue of material fact that Sherman made material misrepresentations concerning the garaging location of her vehicles and the resident relatives in her household, and that Progressive relied on those misrepresentations and would have issued a different contract had it known the accurate information.
3. Progressive was entitled to rescission of the insurance policy because Sherman made material misrepresentations, Progressive materially relied on them, and the record showed no mistake, fraud, or inequitable conduct by Progressive.
4. The Court of Appeals was not required to remand for the trial court to rebalance the equities because the trial court had already conducted a rescission analysis, the record was complete, and the equities overwhelmingly favored Progressive.

Questions Presented

1. What standard of review applies when a trial court grants or denies rescission through a motion for summary disposition under MCR 2.116(C)(10)?
2. Whether there was a genuine issue of material fact regarding Sherman's material misrepresentations and Progressive's reliance on them.
3. Whether the trial court abused its discretion by ordering reformation rather than rescission of the insurance policy.
4. Whether the Court of Appeals was required to remand for the trial court to rebalance the equities after finding an abuse of discretion.

Disposition

affirmed