Opinion ID: 19544
Heading Depth: 1
Heading Rank: 1

Heading: analysis

Text: We review a grant of summary judgment de novo. Summary judgment is to be granted if the record, as a whole, establishes that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.3 Once a proper motion for summary judgment is made, the non-moving party must set forth specific facts showing that there is a genuine issue for trial.4 The mere claim of an alleged factual dispute between the parties will not defeat a properly supported motion. In this diversity case we apply the substanative law of Mississippi. Under that law, if an insured makes a material misrepresentation on his application for insurance, and the insurance company provides a policy in reliance thereon, the 3 F.R.C.P. 56; Mulberry Square Productions, Inc. v. State Farm Fire and Cas. Co., 101 F.3d 414 (5th Cir. 1996). 4 Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986). 4 policy is void ab initio.5 This result appertains whether the applicant intentionally or knowingly made the misrepresentation.6 A policy may not be avoided, however, based on the applicant’s failure to disclose facts about which the insurer did not inquire.7 “[T]he company has no right to rescind the policy because there was information, not asked on the application and not volunteered by the applicant, the knowledge of which would have caused the company to refuse to insure.” 8 Melton does not challenge the district court’s conclusion that his responses were material or that Nationwide relied on the statements in his application in issuing the policy. His appeal focuses on whether there is a misrepresentation as a matter of law. In interpreting the meaning and scope of a representation contained in an application for insurance, Mississippi law applies rules generally available for the interpretation of written instruments.9 Melton’s representation must be defined with reference to the question posed by Nationwide. Melton and Nationwide offer 5 Nationwide Mutual Fire Ins. Co. v. Dungan, 634 F.Supp. 674 (S.D. Miss. 1986), aff’d 818 F.2d 1239 (5th Cir. 1987); Dukes v. South Carolina Insurance Co., 590 F.Supp. 1166 (S.D. Miss. 1984) aff’d 770 F.2d 545 (5th Cir. 1985); Tolar v. Bankers Trust Savings & Loan Ass’n, 363 So.2d 732 (Miss. 1978). 6 Dungan, 634 F.Supp. 674; Dukes, 590 F.Supp. 1166. 7 Mattox v. Western Fidelity Insurance Co., 694 F.Supp. 210 (N.D. Miss. 1988). See also National Union Fire Ins. Co. v. Continental Illinois Corp., 643 F.Supp. 1434 (N.D. Ill. 1986). 8 Mattox, 694 F.Supp. 210. 9 Home Ins. Co. of New York v. Cavin, 137 So. 490 (Miss. 1931). See also National Union Fire Ins. Co., 643 F.Supp. 1434 (applying the rule of construction for ambiguous insurance policies to an ambiguous representation drafted by the insurer under Illinois law). 5 two different interpretations of the “past losses” question. Melton claims to have understood the question to ask only about past losses on the premises sought to be insured. Nationwide urges us to conclude that the question solicited information about all prior losses. When, as is often the case, the questions on an insurance application reasonably are susceptible of only one interpretation, the legal effect of the applicant’s responses presents a question of law.10 Such was the case in Dungan, where the court found that the applicant’s lack of candor in the face of unambiguous questions by the insurer amounted to a misrepresentation. 11 We also find helpful the decision in Mattox v. Western Fidelity Ins. Co.,12 a case decided in favor of the insured. In Mattox the health insurance application asked whether the applicant had diabetes. Agents for Western understood this to mean elevated sugar levels in the blood. This definition of diabetes was not communicated to Mattox who had never been diagnosed by her doctor as being diabetic. At most, she had demonstrated elevated blood sugar levels. Mattox responded in the negative to the application’s diabetes inquiry. The court concluded that Mattox made no misrepresentation. 10 Cavin, 137 So. 490; Dungan, 634 F.Supp. 674; Mattox, 694 F.Supp. 210. 11 Nationwide makes much of the similarities between this case and Dungan, but in doing so overlooks the paramount distinction that in Dungan the application clearly and unambiguously requested information that the applicant withheld. Further, the “past losses” question in Dungan was significantly different from the analogous question in the present case. Dungan was asked to describe each item damaged or stolen when explaining his past losses; there was no mistaking that the question solicited information regarding property other than that to be insured. In any case, the district court did not fully consider whether the “past losses” question was ambiguous because it was able to rely on any of the several material omissions that unquestionably existed on Dungan’s application. 12 694 F.Supp. 210 (N.D. Miss. 1988). 6 The facts at bar fall somewhere between the relevant facts in Dungan and Mattox. The court found Dungan’s omissions were misrepresentations because the information was “unequivocally solicited.” The oral questioning of Melton by Easley did not define the scope of “past losses.” The simple inquiry “past losses” was not such that it necessarily triggered a response beyond that keyed to the subject property which Melton gave. On the summary judgment record before us we cannot say that Melton did or did not misrepresent his answer to the past losses inquiry. More is required before that factual call may be made. The record does not suffice for a summary judgment disposition of the issues presented in the claim and counterclaim. Accordingly, the summary judgment is VACATED, and the matter is REMANDED to the trial court for further proceedings consistent herewith. 7