Case Title: Lundmark v. MUTUAL OF OMAHA INS.

Citation: 498 P.2d 867, 80 Wash. 2d 804

Docket Number: 

State: washington

Court: Washington Supreme Court

Date: 1972-07-06T00:00:00Z

Document:
80 Wn.2d 804 (1972) 498 P.2d 867 JOHN P. LUNDMARK, Respondent, v. MUTUAL OF OMAHA INSURANCE COMPANY, Appellant. No. 42052. The Supreme Court of Washington, En Banc. July 6, 1972. Lee, Carney, Smart & Bever, by Fred T. Smart, John F. Biehl, and Milton C. Smith, for appellant. *805 Jackson, Ulvestad & Goodwin, by Daniel G. Goodwin and James A. Grutz, for respondent. WRIGHT, J. This action on an individual disability insurance policy presents a narrow issue. The 10 assignments of error reach one basic issue. Is an application for a policy of insurance admissible in evidence when there was a substantial change made after the initial application as a result of information voluntarily supplied by the applicant, which change was not attached to the policy? John P. Lundmark, respondent (plaintiff), desired to purchase insurance and contacted appellant (defendant), as a result of advertising. One Norman Winchar, an agent of appellant called upon respondent and took an application, which was in the handwriting of Winchar. The initial interview took place in respondent's home during the evening of November 5, 1966. There is some dispute as to whether Winchar accurately recorded all of the information he was given on that occasion. All questions relating to specific diseases or physical infirmities were answered "no" except for an indication that respondent had respiratory trouble. The application contained the following: Respondent signed the application under a printed declaration that his statements and answers were true to the best of his knowledge and belief, and that he agreed the insurer was not bound by any statement made by or to the agent unless written on the application. The agent signed a certification that he had truly and accurately recorded the information supplied by the applicant. Several days later and before the policy was delivered, respondent learned he had an ulcer of the stomach, of which he was unaware when the application was signed. *806 He promptly, voluntarily, telephoned appellant's office with that information. He first asked to speak to Winchar, who was out. He then talked to Mr. Russ Hartung, the unit manager. Respondent told about the ulcer and after that, on or about December 21, 1966, Hartung and Winchar called on respondent. The original policy, then in the hands of the agents, was not delivered due to the new information, but was returned to the home office. Following that, an interoffice memorandum was written which reads as follows: Based upon the new information, the policy was rewritten to exclude coverage for the lung condition. The policy as rewritten was delivered in January, 1967. From January to October, 1967, respondent continued to work for the telephone company, and had an above-average attendance record. In October, 1967, he had a stomach operation and thereafter was unable to work. His physician testified the disability resulted form the stomach condition and except for the stomach condition, respondent could have worked up to retirement. Respondent made claim for total disability, which claim was rejected. This action was instituted by respondent to collect benefits under the policy. Starting May 18, 1970, the *807 matter was tried to a jury which returned a verdict May 26, 1970, in favor of plaintiff. Judgment was entered pursuant to the verdict. [1] Upon the trial, the court excluded from evidence the application and interoffice memorandum which exclusion was based upon RCW 48.18.080, which reads in part: It was the theory of respondent and of the trial court that since the interoffice memorandum was a substantial amendment of the application it was required that the memorandum be also attached to the policy. In the absence of the memorandum being attached to the policy, neither the original application nor the memorandum was admissible. With that view, we agree. The case of Hein v. Family Life Ins. Co., 60 Wn.2d 91, 376 P.2d 152 (1962), holds that the insured has a duty to read the insurance application when he receives it with his policy and to call any inaccuracies to the attention of the insurer. In such a situation, the insured is entitled to have the whole application before him, if any part is to be used against him as a defense. Sandberg v. Metropolitan Life Ins. Co., 342 Pa. 326, 20 A.2d 230 (1941). After receipt of the interoffice memorandum by the appellant's home office, the information therein was acted upon and the policy was issued. The application therein, absent the memorandum, was not complete. Therefore, the trial court was correct. We affirm. HAMILTON, C.J., FINLEY, ROSELLINI, HUNTER, HALE, NEILL, and STAFFORD, JJ., concur. Petition for rehearing denied October 18, 1972.