Title: JEFFREY LEE OADE V JACKSON NATL LIFE INSUR
Citation: N/A
Docket Number: 114786
State: Michigan
Issuer: Michigan Supreme Court
Date: July 30, 2001

____________________________________________________________________________________________ 
____________________________________________________________________________________________________________________________ 
____________________________________ 
Michigan Supreme Court 
Lansing, Michigan 48909 
C hief Justice 
Justices 
Maura D. Corrigan  
Michael F. Cavanagh 
Elizabeth A. Weaver 
Marilyn Kelly 
Clifford W. Taylor 
Robert P. Young, Jr. 
Stephen J. Markman 
Opinion 
FILED JULY 30, 2001  
JEFFREY LEE OADE and Thomas E.  
Walsh, Personal Representative of 
the Estate of SHEILAH CHOUINARD,  
Plaintiffs-Appellees,  
v  
No. 114786  
JACKSON NATIONAL LIFE INSURANCE  
COMPANY OF MICHIGAN,  
Defendant-Appellant.  
BEFORE THE ENTIRE BENCH  
YOUNG, J.  
I. INTRODUCTION  
In this life insurance dispute, plaintiffs, Jeffrey Lee  
Oade and Sheilah Chouinard, seek to recover benefits from a  
Jackson 
National 
Life insurance policy issued and delivered to  
Gary Oade.  Plaintiffs, the son and friend of Mr. Oade,  
respectively, are the named beneficiaries of the insurance  
 
policy.
 Defendant claims that the policy never became  
effective because Mr. Oade failed, as required by the terms of  
the insurance application, to provide updated information  
about his health and medical treatment between the date he  
signed the application and the day the policy was issued.  We  
granted leave to address the applicability of the statutory  
requirement 
under 
MCL 
500.2218(1), 
that 
a 
misrepresentation 
in  
an application of insurance be material in order to make the  
insurance policy avoidable.  
Because Mr. Oade had an explicit, contractual continuing  
duty to ensure that the answers in his insurance application  
remained true until the effective date of the policy, we hold  
that Mr. Oade’s failure to supplement his medical history  
rendered 
his 
original 
answers 
false, 
making 
them  
“misrepresentations” within the meaning of MCL 500.2218(2).  
However, contrary to the Court of Appeals decision, we  
conclude 
that 
these 
misrepresentations 
were 
material, 
and 
that  
defendant was therefore entitled to avoid the contract.  
Accordingly, we reverse the Court of Appeals decision and  
reinstate summary disposition in favor of defendant.  
II. FACTUAL AND PROCEDURAL BACKGROUND  
On November 29, 1993, Mr. Oade, a fifty-three year-old  
store owner, contacted his insurance agent and completed a  
Jackson 
National 
Life 
Insurance 
Company 
of 
Michigan  
2  
 
 
 
 
application for a “preferred” $100,000 life insurance policy.1  
In order to evaluate the insurance risks posed by an applicant  
and consistent with standard underwriting procedures, the  
Jackson National application required answers to certain  
questions about an applicant's health status. 
That  
application further required that the applicant inform  
defendant in writing if the applicant’s health or any of the  
answers or statements contained in the application changed  
between the time the original answers were given and the date  
the policy was issued and delivered.2  
The application contained the following questions  
relevant to the resolution of this case:  
1Mr. Oade applied for a “preferred” life insurance 
policy.  After evaluating Mr. Oade’s medical history, Mr. Oade 
was finally approved for a “standard” policy which was more 
expensive than the “preferred” policy.  Though both parties 
neglect to provide an explanation of the difference between 
the two policies, it appears that a “preferred” policy is 
issued to applicants who are in “better” health.  
2The interim insurance receipt is another document that 
Mr. Oade signed. 
The language on the interim insurance  
receipt provided:  
I . . . understand and agree that:  
1.
 no policy will go into force unless all my 
statements 
and 
answers in this application continue to be 
true as of the date I receive the policy:  
2.  if my health or any of my answers or statements 
given in this or any other supplement to this application 
change prior to delivery of the policy, I must so inform 
the Company in writing . . . .  
3  
  
  
2. 
Have you ever been treated for, or ever 
had any indication of: 
 * * *  
d. Chest pain, discomfort or tightness; 
palpitations, high blood pressure, rheumatic fever, 
heart murmur, heart attack or blood vessels?  
3. Have you, in the past five years:  
a. Consulted or been treated by a physician or 
other medical practitioner?  
b. Been a patient in a hospital, clinic, or 
medical facility?  
In answering the application questions, Mr. Oade denied,  
in response to question 2(d), that he had been treated for  
chest pain, discomfort or tightness, palpitations, rheumatic  
fever, heart murmur, heart attack or other disorder of the  
heart or blood vessels.  However, he disclosed that he had  
been treated for high blood pressure.  In response to question  
3(a) and (b), he denied that he had been hospitalized but  
disclosed that he  had been treated by a physician or other  
medical practitioner 
during the preceding five years.  
Defendant did not contest the accuracy of the initial answers  
Mr. Oade made in response to the application.  
On December 25, 1993, between the submission of Mr.  
Oade’s application and defendant’s approval and delivery of  
the policy, Mr. Oade went to a hospital emergency room,  
complaining of chest pains. He was admitted to the hospital  
and stayed overnight while tests were performed.  As noted,  
4  
 
the application for insurance required Mr. Oade to provide  
updated 
health 
information.  In particular, Mr. Oade’s initial  
answers that he had not been a patient in a hospital in the  
preceding five years, and had never been treated for chest  
pains 
thus 
became 
inaccurate 
information 
concerning 
his 
health  
status.  Despite the requirement to provide updated health  
information, it is undisputed that Mr. Oade did not inform  
defendant of his December hospitalization for chest pains.  
On January 4, 1994, after evaluating Mr. Oade’s  
application, defendant approved him for a “standard” policy  
rather than the “preferred” policy he had originally sought.  
Oade paid the additional premium on January 6, and the policy  
was delivered that day.  
Mr. Oade died suddenly from a heart attack on  
September 1, 1994.  Plaintiffs submitted a claim to defendant  
for payment of the death benefits provided in the life  
insurance policy.  Defendant investigated, discovered the  
undisclosed hospitalization, and denied the claim on the  
ground that, although required to do so under the terms of the  
insurance application, Mr. Oade failed to report his change in  
medical history.  Defendant declared that, because Mr. Oade  
had violated conditions precedent to create insurance  
coverage, the policy never became effective.  
5  
 
 
Following defendant’s refusal to pay under the policy,  
plaintiffs brought this action in the circuit court where both  
parties filed cross-motions for summary disposition.  The  
circuit court granted summary disposition in favor of  
defendant, holding that Mr. Oade’s failure to communicate in  
writing the “material changes” to his answers in the  
application prevented the policy from taking effect.  
The plaintiffs appealed, and the Court of Appeals  
reversed in an unpublished per curiam decision.3  The Court of  
Appeals recognized that parties may mutually agree that  
certain conditions be met before an insurance contract will  
become effective.  
However, the Court reasoned that such  
contract terms must not conflict with applicable statutes.  
The Court held that the case was governed by MCL 500.2218(1).  
It rejected defendant’s argument that the insurer was not  
claiming misrepresentation permitting rescission of an  
existing policy, but that the policy never became effective in  
the first instance.  
In applying the statute, the Court of Appeals attempted  
to determine whether the undisclosed health information was  
material within the meaning of MCL 500.2218(1).  In so doing,  
the Court relied on Zulcosky v Farm Bureau Life Ins Co of  
Michigan, 206 Mich App 95; 520 NW2d 366 (1994), for the  
3Unpublished opinion per curiam, issued February 26, 1999 
(Docket No. 202501).  
6  
 
 
proposition that a misrepresentation is not material if the  
insurer would have issued “a” policy, albeit a different one  
issued at a higher rate.  
Applying these principles to the facts of the case, the  
Court of Appeals concluded that, because plaintiffs had  
presented the deposition and affidavit of one of defendant’s  
underwriters indicating that there was a possibility that Mr.  
Oade would have been offered a policy at a higher rate,  
plaintiffs had established a genuine issue of fact concerning  
the materiality of Mr. Oade’s failure to disclose.  
This Court granted  defendant’s application for leave to  
appeal.4  
III. STANDARD OF REVIEW  
Issues of statutory interpretation are questions of law  
and are therefore reviewed de novo.  Cardinal Mooney High  
School v Michigan High School Athletic Ass’n, 437 Mich 75, 80;  
467 NW2d 21 (1991).  
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. Smith v Globe Life Ins Co, 460 Mich 446, 454; 597  
NW2d 8 (1999).  
IV. ANALYSIS  
The Court of Appeals relied on the materiality  
4463 Mich 864 (2000).  
7  
 
 
 
requirement found in MCL 500.2218(1):  
No misrepresentation shall avoid any contract 
of insurance or defeat recovery thereunder unless 
the 
misrepresentation 
was 
material. 
No  
misrepresentation shall be deemed material unless 
knowledge 
by 
the 
insurer 
of 
the 
facts  
misrepresented would have led to a refusal by the 
insurer to make the contract.  
Although we agree with the Court of Appeals that MCL 500.2218  
applies to the facts of the instant case, we disagree with its  
conclusion that Mr. Oade’s misrepresentations were not  
material.  
A. APPLICABILITY OF MCL 500.2218  
The touchstone of the statute’s applicability is a  
“misrepresentation.”
 
MCL 
500.2218(2) 
defines 
a  
“misrepresentation” 
as 
a 
“false 
representation.” 
A  
“representation,” in turn, is statutorily defined as a  
“statement as to past or present fact, made to the insurer by  
or by the authority of the applicant for insurance or the  
prospective insured, at or before the making of the insurance  
contract as an inducement to the making thereof.” 
MCL  
500.2218(2).  
When he submitted his insurance application, Mr. Oade  
indicated on the application that he had not been a patient in  
a hospital in the preceding five years and that he had never  
been treated for chest pains.  However, between the submission  
of Mr. Oade’s application and defendant’s approval and  
delivery of the policy at issue, Mr. Oade was hospitalized for  
8  
chest pains.  It is undisputed that Mr. Oade did not inform  
defendant of this event.  
The question, then, is whether Mr. Oade engaged in a  
misrepresentation for purposes of MCL 500.2218(2).  We  
conclude that he did.  Under the express language of the  
insurance application, Mr. Oade had a continuing duty to  
ensure that the answers in his insurance application remained  
true as of the date he received the policy.  In relevant part,  
the application variously states:  
It is represented that the statements and 
answers given in this application are true, 
complete, and correctly recorded to the best of my 
. . . knowledge and belief.  
* * *  
I understand that no policy based on this 
application will be effective unless all of my 
statements and answers continue to be true as of  
the date I receive the policy.  I understand that  
if my health or any of my answers or statements 
change prior to delivery of the policy, I must so 
inform the company in writing.  
* * *  
I understand that my statements and answers in 
this application must continue to be true as of the 
date I receive the policy.  I understand that if my 
health or any of my answers or statements change 
prior to delivery of the policy, I must so inform 
the Company in writing.  
Likewise, the interim insurance receipt provides as follows:  
[N]o policy will go into force unless all my 
statements 
and 
answers in this application continue to be 
true as of the date I receive the policy:  
* * *  
9  
 
  
If my health or any of my answers or  
statements given in this or any other supplement to 
this application change prior to delivery of the 
policy, I must so inform the Company in writing 
. . . .  
Despite contractually promising that his answers would  
“continue to be true” as of the effective date of the policy,  
Mr. Oade failed to do so.  This failure rendered Mr. Oade’s  
previous 
answers 
false, 
thereby 
making 
them 
misrepresentations  
under MCL 500.2218(2).  
Having determined that the statute applies, we turn to  
the 
Court 
of 
Appeals 
decision 
that 
Mr. 
Oade’s  
misrepresentations were not material and that defendant  
therefore could not avoid the insurance contract.  
B. MATERIALITY REQUIREMENT  
MCL 500.2218(1) provides:  
No misrepresentation shall avoid any contract 
of insurance or defeat recovery thereunder unless 
the 
misrepresentation 
was 
material. 
No  
misrepresentation shall be deemed material unless 
knowledge 
by 
the 
insurer 
of 
the 
facts  
misrepresented would have led to a refusal by the 
insurer to make the contract.  
The Court of Appeals relied on its prior decision in  
Zulcosky v Farm Bureau Life Ins Co, supra, for the proposition  
that a change in facts is “material” only where the correct  
information would cause the insurer to reject the applicant  
altogether. 
Zulcosky would not find materiality where the  
correct information would merely prompt the insurer to offer  
10  
 
a policy at a higher premium.  However, this is contrary to  
the binding precedent of this Court. Our decision in Keys v  
Pace, 358 Mich 74, 82; 99 NW2d 547 (1959), made clear that a  
fact or representation in an application is “material” where  
communication 
of 
it 
would 
have 
had 
the 
effect 
of  
“substantially increasing the chances of loss insured against  
so as to bring about a rejection of the risk or the charging  
of an increased premium.” Keys, in turn, is consistent with  
the plain language of MCL 500.2218(1), which defines  
materiality in terms of the insurer’s refusal “to make the  
contract” (emphasis added), not “a” contract.  
In this case, the undisputed evidence presented to the  
trial court made clear that the correct information would have  
led the insurer to charge an increased premium, hence a  
different 
contract. 
 
Indeed, 
defendant’s 
underwriter 
stated 
in  
her affidavit that defendant “may have been willing to offer  
a more expensive ‘rated’ insurance contract at approximately  
double the premium cost that Mr. Oade had paid for the  
‘standard’ insurance policy in this instance.”  
Thus, the Court of Appeals erred in focusing on whether  
defendant would have issued any contract of insurance to Mr.  
Oade.  The proper materiality question under the statute is  
whether “the” contract issued, at the specific premium rate  
agreed upon, would have been issued notwithstanding the  
misrepresented facts.  The Court of Appeals contrary decision  
11  
in Zulcosky is overruled.  
Because there is no genuine issue of material fact on the  
issue of materiality, defendant is entitled to summary  
disposition under MCR 2.116(C)(10).  
V. RESPONSE TO THE DISSENT  
Contrary to the dissent, we conclude that it is  
altogether irrelevant that plaintiff’s health did not change  
during the prepolicy period.  The dissent, in concluding that  
the case presents a question of material fact, asserts that  
plaintiff offered evidence that he had not suffered a heart  
attack.
 It further asserts that plaintiff’s personal  
physician affirmed that decedent’s health “did not change in  
anyway [sic]” between the date he applied for the insurance  
policy and when it was delivered. Post at 9. On the basis of  
this evidence, the dissent concludes that “the fact issue  
concerning the materiality of decedent’s misrepresentations  
should be resolved by the trier of fact.” Post at 15.  
However, the focus of inquiry under the statutory  
“materiality” test is whether a reasonable underwriter would  
have regarded Mr. Oade’s updated answers regarding his  
hospitalization for chest pains as sufficient grounds for  
rejecting the risk or charging an increased premium, not  
whether the status of Mr. Oade’s health had changed.  Because  
there is no dispute that defendant would have, at minimum,  
issued an insurance policy at a higher premium rate, no  
12  
 
reasonable jury could conclude that it would have issued the  
same contract.  
To create an issue of fact on the materiality question,  
plaintiffs were free to bring forth evidence drawing into  
question the testimony of defendant’s underwriter.  Because  
plaintiffs did not do so, the trial court properly granted  
summary disposition to defendant under MCR 2.116(C)(10).  
VI. CONCLUSION  
While we agree with the Court of Appeals that MCL  
500.2218 
applies 
here, 
we 
conclude 
that 
Mr. 
Oade’s  
misrepresentations were material, thereby entitling defendant  
to avoid the insurance contract.  Accordingly, we reverse the  
Court 
of 
Appeals 
decision and reinstate summary disposition in  
favor of defendant.  
CORRIGAN, C.J., and WEAVER, TAYLOR, and MARKMAN, JJ.,  
concurred with YOUNG, J.  
13  
___________________________________ 
v 
S T A T E O F M I C H I G A N  
SUPREME COURT  
JEFFREY LEE OADE and Thomas E.  
Walsh, personal representative 
of the estate of SHEILAH CHOUINARD,  
Plaintiffs-Appellees,  
No. 114786  
JACKSON NATIONAL LIFE INSURANCE  
COMPANY OF MICHIGAN, a Michigan 
corporation,  
Defendant-Appellant.  
KELLY, J. (concurring in part and dissenting in part).  
I concur in part IV(A) of the majority's opinion. Because  
the decedent violated his contractual duty by failing to  
update his medical history, true statements in his insurance  
application became false at the time the contract was made.  
The false statements were "misrepresentations" within the  
meaning of MCL 500.2218(2).  
However, I dissent from the majority's conclusion in its  
part IV(B) that there was no genuine issue of material fact  
concerning 
the 
materiality 
of 
the 
misrepresentations.  
Plaintiff introduced sufficient evidence to raise a fact  
question whether defendant would have issued the same policy  
at the same premium if timely notified of decedent's 1993  
episode and hospitalization.  Because the issue should be  
resolved by the trier of fact, I would affirm the Court of  
Appeals decision that summary disposition for defendant was  
improper.  
I. Misrepresentation and § 2218(2)  
A trial court's ruling on a motion for summary  
disposition under MCR 2.116(C)(10), which tests the factual  
support for a claim, is reviewed de novo. See Smith v Globe  
Life Ins Co, 460 Mich 446, 454; 597 NW2d 28 (1999).  
Affidavits, 
pleadings, 
depositions, 
admissions, 
and  
documentary evidence filed in the action or submitted by the  
parties, are considered in the light most favorable to the  
party opposing the motion.  MCR 2.116(G)(5).
 This case  
involves statutory interpretation, a question of law, that is  
also subject to de novo review. See Oakland Co Rd Comm'rs v  
Michigan Property & Casualty Guaranty Ass'n, 456 Mich 590,  
610; 575 NW2d 751 (1998).  
As the majority points out, "representation" and  
"misrepresentation" are defined in the act:  
A representation is a statement as to past or 
present fact, made to the insurer by or by the 
authority of the applicant for insurance or the 
prospective insured, at or before the making of the  
2  
 
insurance contract as an inducement to the making 
thereof. 
A 
misrepresentation 
is 
a 
false  
representation, and the facts misrepresented are 
those facts which make the representation false. 
[MCL 500.2218(2).]  
Unless defined in the statute, every word or phrase of a  
statute should be accorded its plain and ordinary meaning.  
See Western Mich Univ Bd of Control v Michigan, 455 Mich 531,  
539; 565 NW2d 828 (1997). Where a statute does not define a  
word, courts may consult dictionary definitions to ascertain  
the word's plain meaning.  See Popma v Auto Club Ins Ass'n,  
446 Mich 460, 470; 521 NW2d 831 (1994).  
Although § 2218(2) defines a misrepresentation as, in  
essence, a "false statement as to past or present fact . . .  
at or before the making of the insurance contract . . . ," it  
does not define "statement." Resorting to a dictionary, one  
finds 
that 
"statement" 
is 
"something 
stated," 
"a 
communication  
or declaration in speech or writing, setting forth facts,  
particulars, etc.," or "a single sentence or assertion."1  
In the present case, it is undisputed that, at the time  
he completed the insurance application, decedent provided  
accurate answers to the questions relating to his health and  
medical treatments. The application required him to provide  
1Random House Webster's College Dictionary (1995).  
3  
an update to defendant if any of his answers changed between  
the time of his application and the time defendant issued the  
policy.  
Because of decedent's December 1993 hospitalization, his  
statements that he had not been hospitalized in the preceding  
five years and had never been treated for chest pains were  
rendered false. Given that he did not update the statements,  
decedent's application contained false statements regarding  
his health at the time defendant issued the policy.2 Because  
there were false statements or representations by decedent at  
the time the policy was delivered to him, there were  
misrepresentations within the meaning of § 2218(2).  
The case of Guardian Life Ins Co of America v Aaron,3 is  
instructive. In Aaron, the defendant answered in his  
application for insurance with plaintiff Guardian Life  
2See 6 Couch, Insurance, 3d, § 82:2, pp 82-6, 82-7, ns 8­
9 (1998). Statements set forth in an application for insurance 
are "continuing representations" until the date the contract 
becomes binding; see generally Stipcich v Metropolitan Life  
Ins Co, 277 US 311, 316; 48 S Ct 512; 72 L Ed 895 (1928), 
explaining 
the 
"continuing 
representation" 
concept. 
This 
Court 
has 
recognized 
the 
concept 
of 
"continuing 
representations," 
at 
least where an indorser of a note gives a financial statement 
to a bank to secure a line of credit. See First State Savings  
Bank v Dake, 250 Mich 525, 528; 231 NW 135 (1930). In Dake, 
this Court called the financial statement a "continuing 
representation" of defendant's responsibility. There, the 
indorser 
represented 
that 
the 
information 
within 
the 
financial 
statement was and continued to be true and correct unless  
notice of a change was given.  
3181 Misc 393; 40 NYS2d 687 (1943).  
4  
 
Insurance Company that he had never been refused life  
insurance. That answer was true at the time. However, before  
Guardian accepted the policy, the defendant applied for and  
was refused life insurance by a second insurance company. He  
failed to give Guardian this information before it accepted  
the policy.  
The New York court held that the defendant's failure to  
provide updated information constituted a misrepresentation  
under the applicable New York statute. See id. at 395-396.4  
The court reasoned that, because the defendant had a duty to  
disclose new information, statements in his application  
constituted continuing representations.  They were considered  
as having been made before the time of the delivery of and  
4The New York statute provisions implicated in Aaron are  
remarkably similar to § 2218. In particular, § 149(1) of the 
New York Insurance Law defined, at that time, a representation 
as "a statement as to past or present fact made to the insurer 
. . . , at or before the making of the insurance contract as 
an inducement to the making thereof." A "misrepresentation" 
was defined as "a false representation." Gay v NY Property Ins  
Underwriting Ass'n, 1985 WL 1665 (SD NY). The statute further  
provided:  
(2) No misrepresentation shall avoid any 
contract of insurance or defeat recovery thereunder 
unless such misrepresentation was material. No 
misrepresentation shall be deemed material unless 
knowledge 
by 
the 
insurer 
of 
the 
facts  
misrepresented would have led to a refusal by the 
insurer to make such contract. [Greene v United Mut  
Life Ins Co, 38 Misc 2d 728, 730; 238 NYS 2d 809  
(1963).  NY Ins Law § 149, revised and renumbered 
and is now McKinney's Insurance Law § 3105 (1985).]  
5  
 
payment for the policy. See id. at 395. There, the defendant's  
earlier statement that he had never been refused insurance was  
rendered false because he did not update his application.  It  
was deemed a misrepresentation under the New York insurance  
statute.  
Also instructive is Cosby v Transamerica Occidental Life  
Ins Co,5 describing an insurance applicant's change of health  
as rendering untrue his responses in an insurance policy  
application where the application provided that "[a]ll of the  
statements and answers given in this application to the best  
of my . . . knowledge and belief continue to be true and  
complete as of the date of delivery of the policy."  
Finally, there is Fjeseth v New York Life Ins Co, 20 Wis  
2d 295; 122 NW2d 49 (1963).  In that case, the decedent  
asserted on an insurance application that he had never had  
pain in his chest. He asserted that he had not consulted or  
been examined by a physician in the previous ten years. After  
he completed the application, but before the policy was  
delivered, the plaintiff suffered chest pains and went to a  
doctor. The plaintiff failed to disclose these facts to the  
defendant insurer. A provision in the policy conditioned it  
becoming effective on the continued truth of such answers up  
to the time that the policies went into effect. See id. at  
5860 F Supp 830, 834 (ND Ga, 1993).  
6  
 
 
304. The Supreme Court of Wisconsin held that the plaintiff's  
failure to update constituted a material misrepresentation  
under Wis Stat § 209.06(1). See id. at 305. At the time, Wis  
Stat § 209.06(1) provided:  
No oral or written statement, representation, 
or warranty made by the insured or in his behalf in 
the negotiation of a contract of insurance shall be 
deemed material or defeat or avoid the policy, 
unless such statement, representation, or warranty 
was false and made with intent to deceive, or  
unless the matter misrepresented or made a warranty 
increased the risk or contributed to the loss.  
[Fjeseth, supra at 305, n 1; § 209.06(1) has been 
revised and renumbered and is now Wis Stat § 
631.11.]  
Following the reasoning in Aaron, Cosby, and Fjeseth, I  
would conclude that decedent's December 1993 hospitalization  
rendered 
false 
his 
statements in the application regarding his  
hospitalization and chest pain history. As a consequence, his  
application contained false statements or representations at  
the time the policy was delivered to him. These constitute  
misrepresentations within the meaning of § 2218(2).  
II. Materiality  
The next question is whether defendant may avoid the  
insurance policy, as a matter of law, on the basis that the  
misrepresentations 
were 
material. 
Under 
§ 
2218(1), a  
misrepresentation is deemed "material" when knowledge by the  
insurer of the facts misrepresented would have led to a  
refusal by the insurer to "make the contract." MCL  
7  
 
500.2218(1).  
The Court of Appeals relied on Zulcosky v Farm Bureau  
Life Ins,6 for the proposition that a misrepresentation is  
"material" only where the insurer would have rejected the  
application altogether. See id. at 99, citing In re Certified  
Question, Wickersham v John Hancock Mut Life Ins Co, 413 Mich  
57, 65; 318 NW2d 456 (1982); Clark v John Hancock Mut Life Ins  
Co, 180 Mich App 695, 699-700; 447 NW2d 783 (1989).7  
As the majority observes, the Zulcosky test for  
materiality appears contrary to Keys v Pace, 358 Mich 74; 99  
NW2d 547 (1959). In Keys, we articulated the proper test for  
materiality as follows:  
"The generally accepted test for determining 
the materiality of a fact or matter as to which a 
representation is made to the insurer by an  
applicant for insurance is to be found in the 
answer to the question whether reasonably careful 
and intelligent underwriters would have regarded 
the fact or matter, communicated at the time of 
effecting 
the 
insurance, 
as 
substantially 
increasing the chances of loss insured against[,] 
so as to bring about a rejection of the risk or the 
charging of an increased premium." [Id. at 82, 
quoting 29 Am Jur, Insurance, § 525.]  
However, even under the seemingly more stringent Keys test,  
there exists a genuine factual dispute whether decedent's  
misrepresentations were "material."  
6206 Mich App 95; 520 NW2d 366 (1994).  
7We denied leave to appeal in Zulcosky. 448 Mich 929  
(1995).  
8  
Defendant submitted an affidavit from one of its  
underwriters 
in 
support 
of 
its 
claim 
that 
the  
misrepresentations 
were material to its acceptance of the risk  
or hazard assumed. The affiant stated that she would have  
provided a policy at a higher premium had she known of the  
1993 hospital visit when issuing the policy, hence a different  
contract.  
Plaintiff proffered evidence that one day after the 1993  
hospital visit, medical tests ruled out a heart attack as the  
cause of the decedent's chest pain. Also, about two weeks  
later, decedent passed a cardiovascular stress test.  It  
showed that his level of cardiovascular fitness was above  
average for someone his age.  
Plaintiff also introduced an affidavit from Dr. John  
Hall, the decedent's personal physician. In it, Dr. Hall  
stated that decedent's health "did not change in anyway [sic]"  
between the date he applied for the insurance policy and when  
it was delivered.  
A jury reasonably could conclude, on the basis of the  
record, that a reasonable underwriter would have issued the  
same policy to decedent even had he given it notice of his  
hospitalization. It reasonably could conclude, also, that a  
reasonable underwriter would not have charged an increased  
premium.  
9  
The majority notes that the underwriter's affidavit was  
"uncontradicted" 
in 
stating  that defendant would have charged  
a higher premium had it known of decedent's hospitalization.  
It asserts, also, that plaintiff's evidence that the  
decedent's health did not change is "altogether irrelevant."  
Slip op at 12.  This evidence leads it to conclude that a  
reasonable jury could only find that defendant would have  
charged 
an 
increased 
premium. 
Id. 
This 
conclusion  
impermissibly invades the province of the factfinder by  
resolving an unsettled question of fact.  
I 
disagree 
that 
the 
affidavit 
from 
defendant's  
underwriter 
precludes a finding that a genuine factual dispute  
exists here whether defendant would have charged an increased  
premium. First, as the majority observes, the Keys test for  
materiality is an objective inquiry. See Keys, supra at 82.  
Thus, the evidence from defendant's underwriter, while  
relevant, is not dispositive. Instead, the question is what a  
reasonable underwriter would have decided had it known of the  
misrepresented facts when it issued the policy of insurance.  
Id. In this regard, I find evidence that the decedent's health  
did not change during the prepolicy period very relevant.  It  
challenges the credibility of the affiant.  See generally,  
McDaniels v American Bankers Ins Co of Florida, 227 AD2d 951,  
952; 643 NYS2d 846 (1996). The affiant did not assert that the  
10  
mere fact of the hospitalization would have occasioned an  
automatic premium increase irrespective of whether there was  
a change in the applicant's health.8  The affiant did not  
indicate that she had been informed that there had been no  
change in decedent's health within two months after the  
hospitalization.  
Moreover, plaintiff introduced evidence questioning the  
veracity of the defendant's underwriter's assertions in the  
affidavit.  Specifically, plaintiff proffered evidence that  
his 1993 hospitalization was not due to a heart attack and  
that he passed a cardiovascular stress test shortly after the  
hospitalization
 Also, he showed that his health did not  
change between the date he applied for the insurance policy  
and the date it was delivered.  Therefore, the affidavit does  
8The majority asserts that "the undisputed evidence 
presented to the trial court made clear that the correct 
information would have led the insurer to charge an increased 
premium, hence a different contract." Slip op at p 11. The  
correct information was that, at the time of and after the 
1993 hospitalization, no test or medical opinion evidenced 
that defendant had had a heart attack.  The affiant based her  
conclusion that the defendant would not have entered into the  
insurance contract on her belief, stated in the affidavit, 
that the decedent "had been admitted to Sparrow Hospital in 
December 1993 complaining of shortness of breath, chest pains 
and a probable heart attack . . . ."  
Hence, the affiant's reference to charging an increased 
premium was based on inaccurate or incomplete information. 
Also, it did not state that any hospitalization, regardless of 
the triviality of its cause, would have given rise to a 
different contract having been offered.  
11  
 
not stand unchallenged. See Meyer v Blue Cross & Blue Shield  
of Minnesota, 500 NW2d 150, 153 (Minn App 1993).  
In Meyer, the defendant's underwriter testified that the  
defendant would have denied coverage had it known of the  
insured's physical condition. The court found that a question  
of fact existed on the issue, nonetheless.  It stated that  
"materiality is a fact question based on the objective facts  
of the particular case, and '[a] jury is not required to  
accept even uncontradicted testimony if improbable or if  
surrounding facts and circumstances afford reasonable grounds  
for doubting its credibility.'" Id. at 153, quoting Blazek v  
North Am Life & Casualty Co, 251 Minn 130, 137; 87 NW2d 36  
(1957).  
The same is true respecting defendant's self-serving  
affidavit in support of the motion for summary disposition.  
Surely the majority would not assert that any affidavit by its  
underwriters, if not directly refuted, would eliminate a fact  
question on materiality.  By way of hypothetical example,  
assume that questions in the insurance application asked the  
applicant, "Do you use tobacco in any form other than  
cigarettes?"  "Did you ever use tobacco in any other form?"  
Assume that the applicant answered "No" and that, between the  
date he submitted the application and received the policy, he  
smoked a cigar in celebration of a newborn child.  Assume,  
12  
 
  
also, that he did not inform the insurer of that fact.  Assume  
that, in subsequent litigation, the insurer's underwriter  
submitted an affidavit in support of the insurer's motion for  
summary disposition.  Assume he asserted that the insurer  
would not have issued the insurance policy to the applicant  
had it known about the cigar.  Would that assertion, if not  
directly rebutted, require a finding, as a matter of law, that  
the 
failure 
to 
disclose 
the 
cigar 
was 
a 
material  
misrepresentation?  
In Brown v Pointer,9 this Court expressed its agreement  
with 
the 
proposition 
that 
summary 
disposition 
is 
inappropriate  
where a factual assertion in a movant's affidavit depends on  
the affiant's credibility. In particular, it stated:  
[W]here the truth of a material factual  
assertion of a movant's affidavit depends on the 
affiant's credibility, there inheres a genuine 
issue to be decided at a trial by the trier of fact 
and a motion for summary judgment cannot be  
granted. Arber v Stahlin, 382 Mich 300, 309; 170  
NW2d 45 (1969); Durant v Stahlin, 375 Mich 628,  
647-648; 135 NW2d 392 (1965). [Id. at 354.]  
In this case, plaintiff's evidence of the state of  
decedent's 
health 
after 
the 
hospitalization 
afforded  
reasonable 
grounds 
to 
doubt 
the 
credibility 
of 
the  
underwriter's affidavit.  Thus, plaintiff created a triable  
fact question whether defendant would have charged an  
9390 Mich 346; 212 NW2d 201 (1973).  
13  
 
 
increased premium had it known of the hospitalization that,  
decedent's physician said, showed no change in decedent's  
health.  See Skinner v Square D Co, 445 Mich 153, 161; 516  
NW2d 475 (1994), "[t]he court is not permitted to assess  
credibility, or to determine facts on a motion for summary  
judgment."  
Moreover, 
the 
court should be cautious in concluding that  
no factual dispute exists solely on the basis of an  
"uncontradicted" affidavit from an insurance company's  
underwriter. See Gibbons v John Hancock Mut Life Ins Co, 227  
AD2d 963, 964; 643 NYS2d 847 (1996); Volunteer State Life Ins  
Co v Richardson, 146 Tenn 589; 244 SW 44 (1922); 6 Couch,  
Insurance, 3d, § 82:7, p 82-15.  
In Volunteer State L Ins Co, the Tennessee Supreme Court  
articulated well the concerns associated with accepting as  
dispositive statements from insurance companies regarding the  
materiality of a misrepresentation:  
It is not to be left to the insurance company 
to say after a death has occurred that it would or 
would not have issued the policy had the answer 
been truly given. It is true the practice of an 
insurance company with respect to particular 
information may be looked to in determining whether 
it would have naturally and reasonably influenced 
the judgment of the insurer, but no sound principle  
of law would permit a determination of this  
question merely upon the say so of the company  
after the death has occurred.  [244 SW 49 (emphasis  
added).]  
14  
 
When reviewing the ruling on defendant's motion for  
summary disposition, we  construe the facts in the light most  
favorable to plaintiff.  That, coupled with the reasoning  
already set forth, leads me to conclude that the fact issue  
concerning the materiality of decedent's misrepresentations  
should be resolved by the trier of fact.  Summary disposition  
in defendant's favor, therefore, was improper.  
III. Conclusion  
I would hold that, because decedent failed to update his  
health 
information, 
his 
application 
contained  
misrepresentations on the date the insurance policy was  
delivered.  Thus, because a genuine factual dispute exists  
regarding whether the misrepresentations were material, I  
would affirm the Court of Appeals conclusion that summary  
disposition for defendant was improper.  
CAVANAGH, J., concurred only in the result reached by  
KELLY, J.  
15