[SOLVED] Background and Facts, Ida Cannon was injured

Background and Facts, Ida Cannon was injured in an auto accident while operating a vehicle owned by Ivy Harp. Cannon was hospitalized for nine days. Because she did not own a vehicle and was not covered under any other policy, she submitted a claim for benefits to Farm Bureau Insurance Company, the insurer of Harp’s vehicle. In her application for benefits, she claimed that she had been employed at the time of the accident as an events coordinator for Elite and Fabulous Events.
After Cannon’s discharge from the hospital, Harp filed a claim for attendant care services that she and her daughter, Dianna Lewis, had provided to Cannon. Farm Bureau discovered that some of the claims were fraudulent— for instance, Harp claimed to have provided services while she was on vacation in Aruba, and Lewis claimed to have provided services when she was in the hospital giving birth. As a result, Farm Bureau cut off Cannon’s benefits. Cannon filed a suit in a Michigan state court against the insurer to recover on her claims. Farm Bureau filed a motion for summary judgment, which the court denied. Farm Bureau appealed.
In the Language of the Court
PER CURIAM [By the whole court].
Farm Bureau moved for summary disposition, arguing that Cannon’s fraudulent claims triggered the following fraud exclusion in the policy:
C. Fraud or Concealment;
The entire policy will be void if, whether before or after a loss, you, any family member, or any insured under this policy has:
1. Intentionally concealed or misrepresented any material facts or circumstance;
2. engaged in fraudulent conduct; or
3. made any false statements relating to this insurance or to a loss to which the insurance applies.
Farm Bureau argues that the [lower] court’s refusal to enforce the policy’s fraud exclusion to void Cannon’s claim was an error.
The insurer bears the burden of proving that a party’s intentional misrepresentation triggered a policy’s fraud exclusion. [Emphasis added.]
Farm Bureau’s policy definition of “insured” includes “any person using your covered auto, who is not insured for vehicle liability coverage by any other insurance policy. Because Cannon was permissibly using Harp’s vehicle at the time of the accident, and Cannon did not have coverage under any other policy, she was eligible for benefits under the policy issued by Farm Bureau to Harp. There is no genuine issue of material fact that Harp was in Aruba [for ten days]. This fact is documented by the flight reservations and Harp’s Facebook postings. Harp submitted a reimbursement request for 15 hours of services for every day of this period. Accordingly, there is no genuine issue of material fact that Harp submitted a false reimbursement claim for attendant care services offered to Cannon [for that period]. There also was no genuine issue of fact that Lewis gave birth. Lewis’s attempt to reconcile this fact with her claim for services for this date was objectively false. Thus, Harp [and] Lewis made material representations as to the provision of attendant care services with knowledge that the statements were false, with the intent that Farm Bureau would pay for reimbursement. These misrepresentations are sufficient to trigger the broad fraud-exclusion provision in the policy. [Emphasis added.]
Decision and Remedy A state intermediate appellate court reversed the lower court’s order denying Farm Bureau’s motion for summary judgment and remanded the case for appropriate findings regarding fraud with respect to the claims for attendant care services filed by Harp and Lewis.
Critical Thinking
• Legal Environment: A Michigan state statute entitles Cannon to certain benefits that cannot be precluded by Harp and Lewis’s fraud under the policy’s fraud-exclusion clause. Can Farm Bureau nevertheless challenge the sufficiency and credibility of Cannon’s entitlement to recover any benefits by offering evidence to justify its denial of recovery? Explain.
• Ethical After the lower court denied Farm Bureau’s motion, the insurer submitted newly discovered evidence that Cannon had not earned any wages from Elite and Fabulous Events, contrary to the representations in her application for benefits. Should the court consider this evidence on remand? Should Cannon be given a chance to respond? Discuss.

Question: Background and Facts, Ida Cannon was injured