Sherman v Progressive Michigan Insurance Company
Key claim: The Michigan Supreme Court held that appellate review of a trial court’s decision to grant or deny rescission of an insurance policy is reviewed for abuse of discretion, not de novo, and affirmed that an insurer was entitled to rescind a no-fault policy ab initio when the insured made material misrepresentations in her application.
Abstract
Michigan Supreme Court opinion decided 2026-04-20. Michigan Supreme Court Lansing, Michigan
Syllabus Chief Justice: Justices: Megan K. Cavanagh Brian K. Zahra Richard H. Bernstein Elizabeth M. Welch Kyra H. Bolden Kimberly A. Thomas Noah P. Hood
This syllabus constitutes no part of the opinion of the Court but has been Reporter of Decisions: prepared by the Reporter of Decisions for the convenience of the reader. Kimberly K. Muschong
SHERMAN v PROGRESSIVE MICHIGAN INSURANCE COMPANY
Docket No. 167826. Argued on application for leave to appeal December 11, 2025.
Decided April 20, 2026.
Plaintiff, Janice Sherman, filed an action in the Washtenaw Circuit Court seeking to
recover personal protection insurance (PIP) benefits through her insurer, defendant Progressive
Michigan Insurance Company. Plaintiff purchased a no-fault insurance policy from defendant for
two vehicles. Plaintiff was a passenger in one of her vehicles when an unidentified driver rear-
ended the vehicle, injuring plaintiff. Defendant denied plaintiff’s claim for PIP benefits after
discovering that plaintiff had made material misrepresentations in her insurance application
regarding where she garaged her vehicles and who resided with her. Defendant notified plaintiff
that it was rescinding the policy ab initio, and it refunded the premium payments she had made.
In her complaint, plaintiff alleged that defendant had unlawfully refused to pay her benefits and
had breached the contract. Defendant moved for summary disposition, and the trial court, Carol
Kuhnke, J., denied the motion and ordered reformation of the policy. Defendant filed an
interlocutory appeal in the Court of Appeals, which reversed and remanded for entry of judgment
in favor of defendant. Plaintiff moved for reconsideration, and the Court of Appeals, CAMERON,
P.J., and N. P. HOOD and YOUNG, JJ., vacated its previous opinion and issued a new opinion
clarifying the applicable standard of review, but again concluding that the trial court had erred by
ordering reformation of the contract in light of the fact that the case involved misconduct by
plaintiff but not by defendant. ___ Mich App ___ (Docket No. 364393) (September 5, 2024).
Plaintiff applied for leave to appeal in the Supreme Court, which ordered oral argument on the
application. ___ Mich ___; 20 NW3d 560 (2025).
In a unanimous opinion by Justice ZAHRA, in lieu of granting leave to appeal, the Supreme
Court held:
A trial court’s decision to grant or deny rescission is reviewed for an abuse of discretion,
rather than de novo. The Court of Appeals applied the proper standards of review to determine (1)
that there was no genuine issue of material fact that plaintiff misrepresented material information
in her insurance application and that defendant relied on her misrepresentations, and (2) that the
trial court abused its discretion by ordering reformation of the insurance policy rather than
rescission.
1. Appellate courts must review a trial court’s decision to grant or deny the equitable remedy of rescission for an abuse of discretion. Although decisions on equitable relief are generally reviewed de novo, decisions granting or denying rescissions and injunctions are reviewed for an abuse of discretion rather than de novo. Court of Appeals caselaw reflected some confusion about the proper standard of review when rescission was requested through a motion for summary disposition under MCR 2.116©(10). In such situations, multiple Court of Appeals opinions have recited the clear error standard for factual findings, even though summary disposition under MCR 2.116©(10) does not involve any factual findings but instead requires the trial court to view the facts in the light most favorable to the nonmoving party. When rescission is requested through a motion for summary disposition under MCR 2.116©(10), the appellate court must first determine de novo that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. The appellate court must next determine whether the trial court abused its discretion in granting or denying the equitable remedy of rescission.
2. The Court of Appeals applied the proper standards of review and correctly concluded
that (1) there was no genuine issue of material fact that plaintiff made misrepresentations and that defendant relied on her misrepresentations and would have issued plaintiff a different contract had it known the accurate information, and (2) the trial court abused its discretion in denying defendant rescission of the contract. The trial court, sitting in equity, should have examined defendant’s conduct related to the procurement of the policy to determine whether rescission was the proper remedy. The record contained no allegation of wrongdoing against defendant. Therefore, defendant was entitled to rescission because it made no mistake, committed no fraud, and materially relied on plaintiff’s misrepresentations when issuing her an insurance policy. Given the one-sided nature of the equities in this case, there was no plausible basis for the trial court to find that a result favoring plaintiff and disfavoring defendant was warranted as a matter of equity.
3. The Court of Appeals was not required to remand the case to the trial court to rebalance
the equities after determining that the trial court abused its discretion. In previous cases, this Court has remanded to the trial court to weigh the equities when the trial court failed to conduct a rescission analysis in the first instance. Unlike those cases, the trial court here conducted a rescission analysis and abused its discretion in granting plaintiff reformation of the insurance policy. Remand for rebalancing the equities was unnecessary because the equities here were one- sided: plaintiff made material misrepresentations, there were no third-party interests at stake, and it was undisputed that defendant did not act improperly.
Affirmed.
Justice HOOD did not participate because he was on the Court of Appeals panel that issued
the decision under review. Michigan Supreme Court Lansing, Michigan
OPINION Chief Justice: Justices: Megan K. Cavanagh Brian K. Zahra Richard H. Bernstein Elizabeth M. Welch Kyra H. Bolden Kimberly A. Thomas Noah P. Hood
FILED April 20, 2026
STATE OF MICHIGAN
Why this matters
The Michigan Supreme Court held that appellate review of a trial court’s decision to grant or deny rescission of an insurance policy is reviewed for abuse of discretion, not de novo, and affirmed that an insurer was entitled to rescind a no-fault policy ab initio when the insured made material misrepresentations in her application.