In a case with significant implications for insurers, the MBL Appellate team – led by Executive Partner Kaitlyn Cramer – successfully defended the longstanding principle that rescission, not reformation, is the proper remedy for material misrepresentation.

After uncovering that Plaintiff misrepresented material information in her insurance application, the Trial Court initially ordered reformation of the policy. The MBL team appealed, and the Michigan Court of Appeals reversed — holding that reformation was not the appropriate remedy where rescission is the well-established course under these circumstances.

Plaintiff sought reconsideration, which was denied, and then pursued leave to appeal to the Michigan Supreme Court. During mini-oral argument last fall, Kaitlyn Cramer argued that the Court of Appeals correctly applied the proper standard of review and properly concluded that rescission, returning the parties to the status quo, was the appropriate remedy, rather than imposing an unanticipated risk on the insurer.

The Supreme Court followed Cramer’s arguments, holding that (1) rescission is reviewed for an abuse of discretion; (2) the trial court should have sat in equity and determined that rescission was appropriate, as the MBL insurance client did nothing wrong and Plaintiff had misrepresented material facts; and (3) no remand was necessary where the trial court had already weighed the equities but reached the wrong result, which the Court of Appeals appropriately corrected.

This decision brings a lengthy litigation journey to a close—spanning discovery, multiple appellate filings, and oral argument—and reaffirms that rescission remains the governing remedy in cases of material misrepresentation.

Congratulations to Kaitlyn and the team on this hard-fought win for the MBL client!