Opinion ID: 777328
Heading Depth: 2
Heading Rank: 2

Heading: Decedent's Statements Were Made in Bad Faith

Text: 15 The District Court concluded that statements made in Decedent's insurance application, based on Decedent's false representations as to his drug abuse and counseling, were made in bad faith. The District Court correctly noted that courts applying Pennsylvania law have routinely held that misrepresentations regarding alcohol abuse are deemed to be made in bad faith as a matter of law and extended this holding to include misrepresentations regarding drug use. See, e.g., Van Riper v. The Equitable Life Assurance Soc'y of the United States, 561 F.Supp. 26, aff'd without opinion, 707 F.2d 1397 (3d Cir. 1983); 6 Couch on Insurance § 88:20 (3d ed. & Supp.2000). We agree that to equate alcohol abuse to drug abuse is both reasonable and logical. 16 Appellants argue that most cases supporting the inference of bad faith result from an untruthful no answer to a yes or no question. Here, Appellants allege, that Jamison's answers were truthful, and argue that it is a question of fact as to whether the incomplete answers can be deemed bad faith. It is not, however, a question of fact, because we have specifically held that [f]raud is presumed ... from knowledge of the falsity. Coolspring Stone Supply, Inc. v. Am. States Life Ins. Co., 10 F.3d 144, 148 (3d Cir.1993); Evans v. Penn Mut. Life Ins. Co., 322 Pa. 547, 186 A. 133, 138 (1936) (inference of fraud is irresistible when, for example, unreported illness or disability of the insured was so serious and so recent that he could not have forgotten it); Grimes v. Prudential Ins. Co., 401 Pa.Super. 245, 585 A.2d 29, 31 (1991). Given that the drug use and treatment/counseling for drug and alcohol use were substantial, and proximate in time (even ongoing) when Decedent completed his application, Appellants' so-called ambiguity argument is frivolous, and we affirm the District Court's conclusion of bad faith.