SMITH v. GLOBE LIFE INS. CO.

Opinion

YOUNG, J.

This case involves a dispute regarding defendant insurer's avoidance of a credit life and disability insurance policy on the ground that the insured made misrepresentations concerning his health on the application.

We granted leave in this case to determine whether defendant Globe Life Insurance Company is entitled to summary disposition with regard to plaintiff Debra L. Smith's complaint alleging: (1) breach of contract involving the credit life and disability insurance policy, and (2) violations of the Michigan Consumer Protection Act (MCPA), M.C.L. § 445.901 et seq.; MSA 19.418(1) et seq., concerning the manner in which defendant represented the benefits and conditions of the policy in question.

Reversing the Court of Appeals in part, we conclude that defendant is entitled to summary disposition regarding plaintiff's breach of contract claim. Defendant's evidence established that plaintiff's deceased father, Robert Smith, made material misrepresentations in his insurance application. Contrary to the Court of Appeals conclusion, there is no genuine issue of material fact regarding the application's authenticity. In addition, defendant was not required to establish that it issued the insurance policy in reliance on Smith's misrepresentations.

However, we agree with the Court of Appeals that defendant is not entitled to summary disposition regarding its alleged violations of the Michigan Consumer Protection Act. Although § 4(1)(a) of the act generally exempts from the MCPA transactions that are "specifically authorized" by law, § 4(2) provides an exception to that exemption by permitting certain private actions to be brought pursuant to § 11. That exception is applicable to plaintiff's claim.

Accordingly, we affirm in part and reverse in part the judgment of the Court of Appeals.

I. Factual and Procedural Background

On December 4, 1992, plaintiff's deceased father, Robert Smith, bought a new truck financed through Ford Motor Credit Company (FMCC). At the time, Smith was forty-seven years old and employed full-time. As part of his financing package, he purchased a combined credit life and disability policy issued by defendant. Only the credit life insurance policy is at issue here. The certificate of insurance provided the following eligibility requirements:

On Smith's application for insurance, slash marks had been made in boxes labeled "NO" as responses to the following inquiries:

Above Smith's signature, the application also warned:

The credit life insurance policy provided in relevant part that defendant would be responsible for the balance due on the FMCC loan if Smith died while the policy was in force.

Smith had made two payments on the FMCC loan when he suffered a fatal heart attack on January 27, 1993. As personal representative of her father's estate, plaintiff notified defendant of Smith's death and made a claim for benefits pursuant to the certificate of insurance. Defendant denied coverage, asserting that the policy was void because Smith had misrepresented his state of health on the application. Defendant rescinded the policy, returning premiums paid for the policy to the car dealership.

After defendant denied the claim, plaintiff filed a complaint alleging breach of contract and violations of the Michigan Consumer Protection Act.1 Relying on conditions of coverage provided in the certificate of insurance quoted above, count I alleged that defendant was aware that decedent met the conditions and denied his claim in bad faith. Count II alleged that defendant misrepresented the advantages, benefits, terms, and conditions of the insurance policy in violation of the MCPA.

In its motion for summary disposition, defendant claimed it would not have insured Smith had it been aware of his true medical background. In support of its motion, defendant submitted: (1) a copy of Smith's application revealing negative responses to the aforementioned health inquiries, (2) medical records establishing Smith had been diagnosed with coronary heart disease in 1986 and was being treated for this condition at the time of his death, (3) interrogatory responses establishing Smith was an insulin-dependent diabetic, and (4) an affidavit by a former underwriter who claimed defendant would have denied the certificate of insurance had it been aware of Smith's condition at the time he applied for coverage.

Opposing the motion, plaintiff submitted an affidavit and claimed: (1) the slash marks through the "NO" responses were not in Smith's handwriting, and (2) defendant failed to proffer evidence establishing that it had received the insurance application when the insurance policy was issued. Plaintiff also claimed that she was not bound by any statements made in the application and that defendant was precluded from admitting the application into evidence because the application was not attached to plaintiff's certificate of insurance.

The trial court granted the motion for summary disposition pursuant to MCR 2.116(C)(10). It concluded: (1) an insurer is not obligated to attach the application to the certificate of insurance, (2) Smith had not truthfully answered the application inquiries, and (3) the signature appeared authentic. The trial court noted that there was a question whether Smith authored the slash marks through the "NO" boxes on the application. However, the court concluded that the issue was "largely beside the point" because the answers appeared to be "adoptively [Smith's]."

Addressing the MCPA claims, the trial court concluded that the MCPA does not apply to activity regulated by the State Commissioner of Insurance, citing Kekel v. Allstate Ins. Co., 144 Mich.App. 379, 375 N.W.2d 455 (1985). Accordingly, the trial court dismissed plaintiff's complaint.

The Court of Appeals reversed. 223 Mich.App. 264, 266, 565 N.W.2d 877 (1997). It concluded that there was no genuine issue of material fact regarding the authenticity of Smith's signature. However, the Court held that a factual question existed regarding whether Smith had authored the slash marks through the "NO" boxes and whether defendant had received and relied on the application when issuing the policy.

Addressing whether defendant was exempt from the alleged violations of the MCPA, the Court of Appeals considered § 4(1)(a) of the act which provides:

It concluded that a "common-sense reading" of the language reveals that the Legislature did not intend to exempt illegal conduct. Id. at 281, 565 N.W.2d 877, citing Attorney General v. Diamond Mortgage Co., 414 Mich. 603, 327 N.W.2d 805 (1982). Concluding that Kekel erroneously interpreted § 4(1)(a), the Court of Appeals held, as a matter of law, that defendant was not entitled to summary disposition. Id. at 282-283, 565 N.W.2d 877.

The Court also concluded that Kekel erroneously interpreted § 4(2) of the MCPA, which reads:

The Court reasoned that, while § 4(2)(a) generally exempts from the MCPA deceptive acts made unlawful by chapter 20 of the Insurance Code, the first phrase of § 4(2) expressly permits private actions to be brought pursuant to § 11.

II. Analysis

A motion for summary disposition under MCR 2.116(C)(10), which tests the factual support of a claim, is subject to de novo review. Spiek v. Dep't of Transportation, 456 Mich. 331, 337, 572 N.W.2d 201 (1998).

This Court in Quinto v. Cross & Peters Co., 451 Mich. 358, 362-363, 547 N.W.2d 314 (1996), set forth the following standards for reviewing motions for summary disposition brought under MCR 2.116(C)(10):

A. Breach of Contract

As stated, the Court of Appeals held that two factual issues precluded the trial court's grant of summary disposition to defendant: (1) whether Smith had authored the slash marks through the "NO" boxes on the application, and (2) whether defendant had relied on the application when issuing the policy. We disagree on both points.

First, the Court of Appeals erred in holding that there was a question of material fact regarding whether Smith "made or caused to be made the marks in the box describing the state of his health...." 223 Mich.App. at 275, 565 N.W.2d 877. Defendant submitted a copy of the completed application bearing Smith's signature immediately below the provision warning that all questions must be answered "honestly and truthfully." Plaintiff does not dispute that the signature on the insurance application is Smith's.

In an attempt to rebut defendant's prima facie showing, plaintiff stated in her affidavit that the slash marks placed through the "YES" and "NO" boxes on the application "are not in my father's handwriting." Plaintiff essentially suggests that Smith may have signed the application in blank and that someone at the dealership filled in the boxes as shown in the application. This Court in General American Life Ins. Co. v. Wojciechowski, 314 Mich. 275, 283, 22 N.W.2d 371 (1946), rejected a similar attempt to avoid an insurer's claim of misrepresentation voiding an insurance contract:

As in Wojciechowski, plaintiff's argument here constitutes mere speculation, not a reasonable inference from the evidence, and thus does not rise to the level of creating a genuine issue of material fact for trial. Because plaintiff has offered no proof that someone else answered the health inquiries contained in the application without Smith's knowledge or direction, plaintiff has failed to create a genuine issue of material fact regarding the application's authenticity.3

Second, we agree with defendant that the Court of Appeals erred in concluding that, under M.C.L. § 500.2218; MSA 24.12218, defendant was required to prove that it relied on the misrepresentations contained in Smith's application for insurance. We review de novo questions involving statutory interpretation. Putkamer v. Transamerica Ins. Corp. of America, 454 Mich. 626, 631, 563 N.W.2d 683 (1997).

MCL 500.2218; MSA 24.12218 limits the right of an insurer to rescind an insurance policy on the basis of false statements made in the insurance application. The statute provides in relevant part:

This Court has not had occasion to address directly whether § 2218 requires an insurer to show that it actually relied upon a false statement made in an insurance application before the insurer may avoid payment under the policy.4 The Court of Appeals imposed such a requirement in Howard v. Golden State Mutual Life Ins. Co., 60 Mich.App. 469, 477, 231 N.W.2d 655 (1975). See also United of Omaha Life Ins. Co. v. Rex Roto Corp., 126 F.3d 785, 787 (C.A.6, 1997); Auto-Owners Ins. Co. v. Comm'r of Ins., 141 Mich.App. 776, 781, n. 3, 369 N.W.2d 896 (1985). However, it is clear that the Howard Court never considered the precise language used in the statute.5

As an initial matter, we find it significant that § 2218 does not expressly mention reliance. Moreover, while the insurer, under § 2218, necessarily must have relied on a false statement in an insurance application in order for such a statement to have materially affected the insurer's "acceptance of the risk," the statute also permits the insurer to rescind the policy if the false statement materially affected the "hazard assumed" by the insurer. In Wickersham v. John Hancock Mut. Life Ins. Co., 413 Mich. 57, 63, 318 N.W.2d 456 (1982), we recognized that the Legislature's use of "either" and "or" indicates that the terms "acceptance of the risk" and "hazard assumed" have different meanings. We must give effect to both terms in order to avoid rendering either term mere surplusage. Smith v. Employment Security Comm., 410 Mich. 231, 250, 301 N.W.2d 285 (1981).

As we explained in Wickersham, supra at 63, 318 N.W.2d 456:

On the other hand, the term "hazard assumed" refers to the circumstances of the loss. Id. at 62, 318 N.W.2d 456. In order for a misstatement to be material to the hazard assumed, the misstatement "`must be shown in some way to have affected [the hazard] or contributed to the loss....'" Id. at 62, 318 N.W.2d 456, quoting Prudential Ins. Co. of America v. Saxe, 77 U.S. App DC 144, 156, 134 F.2d 16 (1943). Thus, in Wickersham, supra, at 63, 318 N.W.2d 456, we observed that the insured's undisclosed heart problems did not affect or contribute to the hazard assumed because the insured died in a swimming accident.6

Accordingly, while a misrepresentation in an insurance application clearly cannot affect an insurer's "acceptance of the risk" unless the insurer relied on the misrepresentation in issuing the policy, we conclude that such a misrepresentation materially affects the "hazard assumed" by an insurer whenever the facts misrepresented are causally connected to the loss. When such a causal relationship exists, an insurer is entitled to rescind the policy under § 2218 even without a showing of reliance.7

In this case, Smith misrepresented his health, stating that he did not have a heart condition. In fact, Smith died of a heart attack. Under these circumstances, it is beyond question that Smith's misrepresentation is causally connected to the loss. The misrepresentation materially affected the hazard assumed, Smith's death, regardless of whether defendant actually relied on that misrepresentation. Therefore, under § 2218, defendant was not required to establish reliance in order to avoid payment under the policy.

Accordingly, we reverse the Court of Appeals decision on the breach of contract claim and reinstate the trial court's order granting summary disposition to defendant.

B. Michigan Consumer Protection Act

Turning to the issue whether defendant is exempted from plaintiff's claim of MCPA violations, we first examine whether defendant is exempted by § 4(1)(a). The language of § 4(1)(a) provides that the MCPA is inapplicable to a "transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state...." MCL 445.904(1); MSA 19.418(4)(1). Defendant asserts that its application and certificate of insurance forms were submitted to8 and implicitly approved by9 the State Commissioner of Insurance. Hence, it contends, the immediate transaction, the sale of credit life insurance, was "specifically authorized" and, therefore, was exempted under § 4(a)(1).10 Plaintiff, however, essentially responds that the statute does not specifically authorize the fraudulent insurance practices that she claims were committed in this case.

As the Court of Appeals recognized, our decision in Diamond Mortgage 11 controls the resolution of this issue. In Diamond Mortgage, the defendant, a real estate broker, also advertised and offered loans to homeowners at an eleven-percent interest rate. The financing arrangement resulted in the defendant receiving a "brokerage or prepaid finance fee" that the Attorney General alleged was actually an interest charge and, moreover, usurious. Id. at 607, 327 N.W.2d 805. The Attorney General also claimed that the defendant used confusing and inconsistent forms and that its method of doing business violated the MCPA. Id.

The defendant in Diamond Mortgage argued that it was exempt from the MCPA under § 4(1)(a) because it had a real estate broker's license and that one of the activities contemplated was that a licensee would negotiate the mortgage of real estate. Id. at 616, 327 N.W.2d 805. Like plaintiff here, the defendants in Diamond Mortgage responded that "no statute [or regulatory agency] specifically authorize[d] misrepresentations or false promises" made in conducting that activity. Id. at 617, 327 N.W.2d 805.

In concluding that the defendants were not exempt from the MCPA, this Court reasoned:

In short, Diamond Mortgage instructs that the focus is on whether the transaction at issue, not the alleged misconduct, is "specifically authorized." Thus, the defendant in Diamond Mortgage was not exempt from the MCPA because the transaction at issue, mortgage writing, was not "specifically authorized" under the defendant's real estate broker's license.

Applying this analysis in Kekel, the Court of Appeals concluded that the defendant insurer in that case was exempted from the plaintiff's alleged violations of the MCPA pursuant to M.C.L. § 445.903; MSA 19.418(3). It explained:

Consistent with these rulings, we conclude here that, when the Legislature said that transactions or conduct "specifically authorized" by law are exempt from the MCPA, it intended to include conduct the legality of which is in dispute. Contrary to the "common-sense reading" of this provision by the Court of Appeals, we conclude that the relevant inquiry is not whether the specific misconduct alleged by the plaintiffs is "specifically authorized." Rather, it is whether the general transaction is specifically authorized by law, regardless of whether the specific misconduct alleged is prohibited. Therefore, we conclude that § 4(1)(a) generally exempts the sale of credit life insurance from the provisions of the MCPA, because such "transaction or conduct" is "specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state or the United States."12 As a consequence, we reverse the judgment of the Court of Appeals, in part, on this issue.

However, we agree with the Court of Appeals that the Kekel Court misconstrued § 4(2) of the MCPA. In addition to the broad exemption provided in § 4(1)(a), § 4(2) provides in relevant part:

Except for the purposes of an action filed by a person under [MCL 445.911; MSA 19.418(11) ], this act does not apply to an unfair, unconscionable, or deceptive method, act, or practice that is made unlawful by:

Thus, § 4(2)(a) specifically exempts from the MCPA unfair, unconscionable, or deceptive methods, acts, or practices made unlawful by chapter 20 of the Insurance Code.13 Yet, the first phrase of § 4(2) explicitly provides that the exemption is inapplicable to actions filed under § 11 of the MCPA, which provides in relevant part:

Giving effect to both § 4(1) and § 4(2), we conclude that private actions are permitted against an insurer pursuant to § 11 of the MCPA regardless of whether the insurer's activities are "specifically authorized." Although § 4(1)(a) generally provides that transactions or conduct "specifically authorized" are exempt from the provisions of the MCPA, § 4(2) provides an exception to that exemption by permitting private actions pursuant to § 11 arising out of misconduct made unlawful by chapter 20 of the Insurance Code. Therefore, the exemptions provided by §§ 4(1)(a) and 4(2)(a) are inapplicable to plaintiff's MCPA claims to the extent that they involve allegations of misconduct made unlawful under chapter 20 of the Insurance Code.

For these reasons, we conclude that defendant is not entitled to summary disposition with regard to plaintiff's MCPA claims. To the extent that Kekel and its progeny14 are inconsistent with this holding, they are overruled.

III. Conclusion

We reverse the Court of Appeals decision on the breach of contract claim. There is no genuine issue of material fact regarding the authenticity of the insurance application. Moreover, under the circumstances of this case, defendant was not required to establish that it relied on Smith's misrepresentation when issuing the policy. Therefore, the trial court's grant of summary disposition for defendant on the breach of contract claim is reinstated.

We affirm the Court of Appeals in part and reverse in part with regard to the alleged violations of the MCPA. Contrary to the Court of Appeals conclusion, § 4(1)(a) exempts the sale of insurance from the provisions of the MCPA. However, we agree with the Court of Appeals that § 4(2) provides an exception to that exemption by permitting private actions pursuant to § 11. Therefore, defendant is not entitled to summary disposition of plaintiff's MCPA claims. This case is remanded to the trial court for further proceedings.

WEAVER, C.J., and BRICKLEY, TAYLOR, and CORRIGAN, JJ., concurred with YOUNG, J.

MARILYN J. KELLY, J. (concurring in part and dissenting in part).

In addition to joining Justice Cavanagh's dissenting opinion regarding plaintiff's Michigan Consumer Protection Act claim, I respectfully dissent from the majority's resolution of plaintiff's breach of contract claim. I disagree that defendant is entitled to summary disposition1 because Robert Smith made a material misrepresentation in an insurance application, absent any showing that defendant relied on the misrepresentation.

When a material misrepresentation of fact affects acceptance of the risk or hazard assumed by an insurer, MCL § 500.2218; MSA 24.12218 permits the insurer to void the policy. Wiedmayer v. Midland Mut. Life Ins. Co., 414 Mich. 369, 374, 324 N.W.2d 752 (1982). The statute provides, in pertinent part:

Although the majority finds it "significant that § 2218 does not expressly mention reliance," and purports to rely on In re Certified Question, Wickersham v. John Hancock Mut. Life Ins. Co.2 as authority for its holding, it avoids the following analysis in Wickersham:

A review of all the subsections under this statute fails to support the claim of plaintiff that a causal relation between the false statement and loss is required. In 1957, the Legislature amended M.C.L. § 500.2218; MSA 24.12218 by adding the four numbered paragraphs to this section. 1957 PA 91. The added paragraphs, in part, define misrepresentation and materiality. These additional provisions further indicate a legislative intent to determine materiality at the time the insured signs the application and the insurer decides whether to issue a policy to the applicant.

* * *

Because § 2218(2) expressly requires an insurer to establish that the prospective insured misrepresented a fact that induced4 the insurer to contract, an express reference to reliance would be surplusage.

Interpreting § 2218, the Court of Appeals has formulated a test. It succinctly provides that, to void a policy on the basis of a misrepresentation under the statute, an insurance company must

The majority observes that the Howard decision did not consider the precise language used in § 2218. However, it neglects to mention that the Howard panel formulated this test immediately after quoting § 2218. Id., at 476-477, 231 N.W.2d 655.

As noted above, the majority cites Wickersham, supra at 63, 318 N.W.2d 456 for the proposition that a misrepresentation affecting the hazard assumed by the insurer, as distinguished from the risk accepted, does not require reliance.5 However, in Wickersham, this Court merely addressed the narrow question

In Wickersham, the plaintiff filed a claim against an insurer for recovery of life insurance proceeds after her husband died in a swimming accident. Id., at 60, 318 N.W.2d 456. The plaintiff conceded that her husband had misrepresented his medical record before he applied for the policy. She argued that the misrepresentation was not material, because it involved an undisclosed health problem that was unrelated to his death. However, the defendant insurer countered that the misrepresentation deceived it into accepting the insurance application, which otherwise it would have rejected.

This Court explained that, for a misstatement to be material to the hazard assumed, it must have affected the hazard assumed or contributed to the loss.6 Id., at 62, 318 N.W.2d 456. On the basis of the narrow question presented for review, this Court held that the misrepresentation did not affect or contribute to the hazard assumed.7 Id., at 62-63, 318 N.W.2d 456. Consequently, it was ruled not material to the hazard assumed. Id.

We held that, as regards a material misrepresentation, § 2218 does not require establishing a causal relationship between the misrepresentation and the circumstances of the loss before recovery is barred. Id., at 65, 318 N.W.2d 456. We also explained:

By omitting portions of Wickersham, and misconstruing the remainder, the majority reached an erroneous conclusion: that Wickersham supports the proposition that defendant was not required to establish reliance in order to avoid payment under the policy. Although Wickersham failed to expressly address the issue of reliance, the majority fails to provide any explanation for Wickersham's pointed reference to it. Id., at 71, 318 N.W.2d 456.

An insurer has the burden of establishing a claim of misrepresentation. Szlapa v. Nat'l Travelers Life Co., 62 Mich.App. 320, 325, 233 N.W.2d 270 (1975). Defendant moved for summary disposition. Therefore, it had the burden of establishing the absence of a genuine issue of material fact on the three elements required to void the insurance policy for misrepresentation. It was obligated, as well, to support its position by affidavits, depositions, admissions, or other documentary evidence. Quinto v. Cross & Peters Co., 451 Mich. 358, 362, 547 N.W.2d 314 (1996).

Defendant submitted an affidavit by a former underwriter to support its claim that the misrepresentation was material to its acceptance of the risk or hazard assumed. The affidavit stated that defendant would have refused to insure Smith had it been aware of his medical condition at the time it issued the policy.

Unlike the defendant insurer in Wickersham, defendant Globe failed to allege that it was deceived by Smith's misrepresentation. The affidavit asserted that knowledge of the misrepresentation would have adversely affected its decision to insure Smith. However, it failed to declare that defendant received the application before insuring plaintiff or that it relied on it.8

Therefore, defendant omitted to allege reliance on the misrepresentation by affidavit or other documentary evidence. It failed to meet its burden of establishing this element of the Howard test, and failed to establish a misrepresentation under the definition provided by the Legislature in M.C.L. § 500.2218(2); MSA 24.12218(2). Therefore, it was not entitled to summary disposition on the breach of contract claim.

I believe that the majority erred in concluding that the defendant insurer was entitled to summary disposition with regard to plaintiff's breach of contract claim. By awarding defendant insurer summary disposition absent any allegation of reliance, the majority encourages insurers to search their records in an effort to find any inconsequential mistake to deny coverage. I would affirm the Court of Appeals judgment on this issue and remand for further proceedings.

MICHAEL F. CAVANAGH, J. (concurring in part and dissenting in part).

I join Justice Kelly's dissenting opinion regarding the breach of contract issue.1 While I concur in the result reached by the majority regarding the MCPA claim, I am in disagreement with the majority's analysis of subsections 4(1)(a) and 4(2). Confusion in analyzing MCPA claims has resulted from: construing the exemptions too broadly, rendering the vast majority of private suits exempt under subsection 4(1)(a),2 construing the exemptions too narrowly so as to remove all exemptions,3 or construing the transaction or conduct at issue overly broad4 or narrow,5 rendering the MCPA or its exemptions meaningless. It is my opinion that a proper inquiry should be first to determine whether the specific transaction or conduct at issue, as opposed to the general transaction, is "specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of this state...." MCL 445.904(1)(a); MSA 19.418(4)(1)(a). The next inquiry should characterize the party filing suit and the act or practice at issue to determine whether the act should apply to the method, act, or practice.

MCPA subsection (4)(1)(a)

Subsection 4(1) provides:

The majority correctly notes that Attorney General v. Diamond Mtg. Co., 414 Mich. 603, 327 N.W.2d 805 (1982), controls the resolution of this case, and that this Court cautioned that the exemption provided in subsection 4(1)(a) will continue to apply where a party seeks to attach labels to a transaction or conduct that is specifically authorized. 414 Mich. at 617, 327 N.W.2d 805. The majority then characterizes the transaction or conduct at issue as "the sale of credit life insurance," which it asserts is exempt from subsection 4(1)(a) because it is specifically authorized. Op. at 38. The majority then revokes this exemption by reading an exception in subsection 4(2) to the exemption in subsection 4(1)(a). In effect, this allows the court to ignore the exemption provided in subsection 4(1)(a) every time a private action is filed against an insurer under § 11.6 Because § 11 is the only section in which a private party may file suit, under the majority view, we should never examine the exemptions section when a private action has been filed against an entity encompassed by subsections 4(2)(a)-(e). As stated in Diamond, I disagree that subsection 4(1)(a) is meaningless. Id. The Legislature provided an exception to the exemption within subsection 4(2) for private actions by placing qualifying language in front of the exemption for acts already made unlawful by specified public acts. If it had intended such a result, it seems that the Legislature would have placed a similar limiting clause in subsection 4(1)(a) providing:

It did not. Alternatively, the Legislature could have placed such language preceding both exemptions 1 and 2, thus mandating that the exception for private suits applies to all subsections of § 4.

Without analysis, the majority reads subsection 2 as an exception to subsection 1. I cannot agree. Thus, I would not remove the exemption for conduct "specifically authorized" in these cases.

In this case, plaintiff complains that defendant utilized both a certificate of insurance and an application for insurance, and that these documents provided inconsistent eligibility requirements. Thus, plaintiff does not complain that defendant "sold insurance," as characterized by defendant and the majority. Alternatively, as noted in Diamond, this conduct should not be characterized as "misrepresentations or false promises," as this would never be "specifically authorized." Id. at 617, 327 N.W.2d 805. Instead, we must ask whether defendant was specifically authorized to use separate insurance eligibility forms, for a single transaction, that contain inconsistent or differing conditions for coverage eligibility. Defendant argued that an insurer is not required to attach an insurance application to the certificate of insurance. However, it has not asserted that it is specifically authorized to utilize separate forms with inconsistent eligibility requirements. Defendant does not provide an explanation regarding the inconsistent requirements. Defendant informs us that credit insurers are required to submit all policies, certificates, applications, notices, etc., under M.C.L. § 550.612; MSA 24.568(12), and that the insurance commissioner implicitly approves them by failing to object within thirty days under M.C.L. § 550.613; MSA 24.568(13). However, defendant has not argued that it has submitted the forms at issue. Even assuming that these forms were submitted and implicitly approved, there is no indication that the commissioner was aware that the forms were being used together for a single insurance sale transaction. Furthermore, I question whether the insurance commissioner's silence may be construed as a "specific authorization" under subsection 4(1)(a). Defendant would have us hold that conduct generally or implicitly allowed is exempt. Such a broad interpretation of such narrow language would result in all MCPA claims being barred. Businesses are generally allowed to transact business. The MCPA protects consumers from the unfair transaction of business.

To illustrate, in Temborius v. Slatkin, 157 Mich.App. 587, 403 N.W.2d 821 (1986), the plaintiff filed suit against a car dealership and salesman under the MCPA. She alleged that the dealer represented that an automobile would be delivered to her upon payment to a third party, when the dealer knew that the third party would be unable to complete the transaction because of the third party's financial difficulties. Id. at 593, 403 N.W.2d 821. The Court held that if plaintiff's evidence was believed, the jury could find violations of the MCPA. Id. at 598, 403 N.W.2d 821. This is a good example of the unfair trade practice that is barred by the MCPA. However, under the majority's interpretation of "transaction or conduct," the defendant's conduct would be exempt under subsection 4(1)(a) because the sale of automobiles is specifically authorized by the Secretary of State, M.C.L. § 257.248; MSA 9.1948. Op. at 39.

Under the majority view, any activity that is regulated by a regulatory board or officer acting under statutory authority of this state or the United States, is specifically authorized. The majority effectively adopts the Kekel interpretation of the statute. The Kekel Court provided:

The majority does not direct us to a law administered by the insurance commissioner that provides that "sale of insurance is authorized." Like most businesses, it is merely regulated. Under this broad labeling, all MCPA claims will be blocked by subsection 4(1)(a) unless they fall within the exceptions listed in subsections 4(2)(a)(e). I suggest the majority cannot provide meaningful examples where a consumer would not be blocked by subsection 4(1)(a) under its reading of the terms "specifically authorized."

Under M.C.L. § 445.903; MSA 19.418(3), the MCPA protects consumers from unfair, unconscionable, or deceptive methods, acts, or practices in the conduct of "trade or commerce." Trade or commerce is defined, in part, as:

In simple terms, the MCPA protects consumers from unfair business practices regarding the sale of personal, family, or household goods or services. Because such businesses are regulated, the consumer has little or no redress under the provisions of the MCPA according to the majority.

Instead, I read the statute consistent with our determination in Diamond that general transactions or conduct subject to licensing are not necessarily exempt from the MCPA. Plaintiff correctly notes that "subject to regulation" is not the same as "specifically authorized."7 In the instant case the transaction or conduct at issue is defendant's use of inconsistent insurance eligibility forms. Defendant has failed to show that this conduct is specifically authorized. At most, defendant has shown that when used separately, the forms are implicitly allowed. This is insufficient.

MCPA subsection (4)(2)

In this case, plaintiff, daughter of the deceased insured, is "a person" as defined by M.C.L. § 445.902(c); MSA 19.418(2)(c), which includes a natural person.

Furthermore, plaintiff filed under subsection 11(2) which provides:

The court in Robertson v. State Farm Fire & Casualty Co., 890 F.Supp. 671, 674-675 (E.D.Mich., 1995), correctly explained the organization of the different sections of the MCPA:

Plaintiff's complaint alleged violations of the MCPA. Specifically, she alleged violations of M.C.L. § 445.903(a)-(e); MSA 19.418(3)(a)-(e), and requested actual damages and attorney fees pursuant to § 11. Therefore, plaintiff's suit is not barred by the exemption provided in subsection 4(2).

I disagree with the conclusion that we should ignore subsection 4(1)(a) when a private suit is filed against an insurer, yet utilize it to bar most consumer claims that do not fall under the exception listed in subsections 4(2)(a)-(e). However, I agree that defendant was not entitled to summary disposition on its MCPA claim. I would hold that because defendant has failed to provide evidence that its conduct, using inconsistent insurance eligibility forms in a single transaction, is specifically authorized, it is not exempt from suit under subsection 4(1)(a) of the MCPA. I would also hold that because plaintiff is a person filing under § 11, defendant is not exempt under subsection 4(2).