Opinion ID: 1306499
Heading Depth: 2
Heading Rank: 4

Heading: Had or been advised to have a surgical operation?

Text: Dr. Epstein entered an affirmative answer to each portion of question 5 and noted the following on the portion of the application which requested details of affirmative answers: 5 ABCD  Vein ligation  Hernia, Providence Hosp. Oakland, 1963, M.C. Green MD 330 Elm St., Oakland, Cal. The vein ligation was a surgical operation involving the tying of the patient's veins; evidently, Thompson suffered from varicose veins, and the ligation was necessary to relieve this condition. The pertinent portions of question 6 asked: Have you ever had or been told you had: ... B.... pain or pressure in the chest, or any disorder of the heart, blood or blood vessels? C.... any disorder of the lungs, bronchial tubes, throat or respiratory systems? .... .... .... .... . .
Epstein entered negative answers to each of these questions. The alleged misrepresentations consist of Thompson's apparent failure to report to Epstein approximately 10 medical consultations he had at Kaiser Hospital with five different doctors which commenced on June 3, 1964, two months before the insurance medical examination, and ended only the day before the examination took place. During these consultations he (1) had complained of chest pain, (2) had an electrocardiogram performed, (3) was treated for phlebitis (vein inflammation), (4) was advised to keep off his feet to avoid the possibility that a clot in a leg vein might break off and travel to his lungs, (5) had his legs X-rayed for intermittent claudication (leg pain), and (6) was advised to undergo a chemical sympathectomy (injection of local anesthetic) to relieve the foregoing leg pain. We first review the rules of law applicable in appraising a claim of misrepresentation in procuring insurance. (5) It is generally held that an insurer has a right to know all that the applicant for insurance knows regarding the state of his health and medical history. ( Cohen v. Penn Mut. Life Ins. Co., 48 Cal.2d 720, 727 [312 P.2d 241]; Burns v. Prudential Ins. Co., 201 Cal. App.2d 868, 869-870 [20 Cal. Rptr. 535].) Material misrepresentation or concealment of such facts are grounds for rescission of the policy, and an actual intent to deceive need not be shown. ( Cohen v. Penn Mut. Life Ins. Co., supra, p. 725; Cal.-West. States etc. Co. v. Feinstein, 15 Cal.2d 413, 423 [101 P.2d 696, 131 A.L.R. 608]; McAuliffe v. John Hancock Mut. Life Ins. Co., 245 Cal. App.2d 855, 857 [54 Cal. Rptr. 288]; see Ins. Code, § 331.) (6) Materiality is determined solely by the probable and reasonable effect which truthful answers would have had upon the insurer. (Ins. Code, § 334; Burns v. Prudential Ins. Co., supra, p. 871.) The fact that the insurer has demanded answers to specific questions in an application for insurance is in itself usually sufficient to establish materiality as a matter of law. ( Cohen v. Penn Mut. Life Ins. Co., supra, p. 726; Cal.-West. States etc. Co. v. Feinstein, supra, p. 423; but see Ransom v. Penn Mutual Life Ins. Co., supra, 43 Cal.2d 420, 427.) (7) On the other hand, if the applicant for insurance had no present knowledge of the facts sought, or failed to appreciate the significance of information related to him, his incorrect or incomplete responses would not constitute grounds for rescission. ( Cohen v. Penn Mut. Life Ins. Co., supra, 48 Cal.2d 720, 726; Ransom v. Penn Mutual Life Ins. Co., supra, 43 Cal.2d 420, 426; McAuliffe v. John Hancock Mut. Life Ins. Co., supra, 245 Cal. App.2d 855, 857; Jefferson etc. Life Ins. Co. v. Anderson, 236 Cal. App.2d 905, 909-910 [46 Cal. Rptr. 480]; MacDonald v. California-Western States Life Ins. Co., 203 Cal. App.2d 440, 448 [21 Cal. Rptr. 659]; see Ins. Code, §§ 332, 333.) Moreover, [Q]uestions concerning illness or disease do not relate to minor indispositions but are to be construed as referring to serious ailments which undermine the general health. ( Ransom v. Penn Mutual Life Ins. Co., supra, p. 427; see Cohen v. Penn Mut. Life Ins. Co., supra, p. 725; Jefferson etc. Life Ins. Co. v. Anderson, supra, p. 910; McAuliffe v. John Hancock Mut. Life Ins. Co., supra, p. 857; MacDonald v. California-Western States Life Ins. Co., supra, p. 448.) (8) Finally, as the misrepresentation must be a material one, An incorrect answer on an insurance application does not give rise to the defense of fraud where the true facts, if known, would not have made the contract less desirable to the insurer. [Citations.] ( Ransom v. Penn Mutual Life Ins. Co., supra, p. 427; see Burns v. Prudential Ins. Co., supra, 201 Cal. App.2d 868, 872.) And the trier of fact is not required to believe the post mortem testimony of an insurer's agents that insurance would have been refused had the true facts been disclosed. ( McAuliffe v. John Hancock Mut. Life Ins. Co., supra, p. 858.) (4b) Although there are several items on Occidental's list of alleged misrepresentations, many items appear to relate to the ailment which Thompson affirmatively disclosed in answering question 5, namely, his varicose vein problem which led to the vein ligation surgery. As we shall see, the remaining items seemingly pertained to minor matters likely to have been of no interest to Occidental. Since Thompson disclosed his basic problems with his veins and circulation, the trial court might have concluded that it was the responsibility of the examining doctor to elicit additional details as to causes, consultations, treatment, diagnosis and prognosis. It is suggested by the dissent, however, that Thompson knowingly concealed from Occidental that he suffered from two major problems, namely, varicose veins and arteriosclerosis, that the two conditions were unrelated, and that the latter condition had substantially reduced Thompson's life expectancy. Yet this theory (which was not raised in defendant's briefs in this case) finds no support in the record. The dissent relies primarily upon testimony by one of defendant's witnesses, Dr. Thompson, who never examined decedent Thompson during his life, and who consequently never discussed the arteriosclerosis condition with him. Contrary to the suggestion in the dissenting opinion ( post, p. 924), none of the physicians with whom decedent consulted testified that decedent was ever advised that he had arteriosclerosis, that this condition was unrelated to the past varicose vein problem disclosed to Dr. Epstein, or that this new malady ... would shorten his life span by one-half to two-thirds. ( Post, p. 930.) In fact, with respect to the intermittent claudication (leg pain) which Thompson was experiencing, Dr. Pellegrin told Thompson merely that it had something to do with circulation.... According to Dr. Pellegrin, You don't want to get somebody all wound up and alarmed and concerned about themselves and find out it isn't bad at all, and they are tense and anxious for no reason at all. From this testimony, the judge and jury could reasonably conclude that Thompson believed that he had a single leg circulation problem, related to his varicose vein condition. Accordingly, the finding that Thompson did not misrepresent his medical condition is supported by the evidence and the reasonable inferences which could be drawn from that evidence. As we have often stated, our reviewing power begins and ends with the determination whether there is any substantial evidence to support the trial court's findings. (E.g., Green Trees Enterprises, Inc. v. Palm Springs Alpine Estate, Inc., 66 Cal.2d 782, 784 [59 Cal. Rptr. 141, 427 P.2d 805].) On the present record, we cannot say that the trial court's finding is wholly unsupported by substantial evidence when viewed in the light of the foregoing legal principles. There are at least four additional possible bases to support the finding that Thompson did not misrepresent or conceal the facts. (1) The court may have found that, in addition to disclosing his leg vein problems and surgery, Thompson also mentioned to Dr. Epstein the additional consultations regarding vein inflammation and leg pain but Epstein, in the course of hurrying to complete the brief examination, intentionally or inadvertently failed to record the information. [5] (See Rutherford v. Prudential Ins. Co., 234 Cal. App.2d 719, 726-729 [44 Cal. Rptr. 697].) (2) The court may have believed that Thompson, as an ordinary layman, failed to recollect or appreciate the significance of the subject matter of the various Kaiser consultations. For example, the terms phlebitis, intermittent claudication, and chemical sympathectomy might well have been meaningless jargon to him. (3) Next, the court may have found that most of Thompson's undisclosed problems related to minor indispositions rather than serious ailments undermining the general health. For example, the chest pain of which he had complained was diagnosed as mild pneumonia and pleurisy caused by the pneumonia from which Thompson recovered in a single day following office treatment by a doctor. The electrocardiogram performed on Thompson showed no significant or abnormal tracings, and the X-rays of Thompson's legs were likewise negative. (4) Finally, the court may have determined that the subject matter of the Kaiser consultations would not have affected Occidental's decision to issue a policy; the court was not required to accept the contrary testimony of Occidental's officer. [6] (9) Occidental asserts that there is no substantial evidence in the record to explain the incomplete responses on the insurance application. Yet we must remember that Thompson himself was unavailable for direct interrogation, and Dr. Epstein, who recorded Thompson's responses, was unable to remember the substance of their conversation. (See fn. 5, ante. ) Under such circumstances, were the burden of proof upon them, the insured's beneficiaries would have a nearly insurmountable proof problem in establishing a satisfactory explanation for the various omissions in decedent's application for insurance. Yet under the authorities, the burden of proving misrepresentation rests upon the insurer. (See Farmers Auto. etc. Exch. v. Calkins, 39 Cal. App.2d 390, 393 [103 P.2d 230]; Mayfield v. Fidelity & Casualty Co., 16 Cal. App.2d 611, 616 [61 P.2d 83]; Evid. Code, § 520.) Some cases have even assumed that fraud must be proven by clear and convincing evidence. (See K. King and G. Schuler Corp. v. King, 259 Cal. App.2d 383, 396 [66 Cal. Rptr. 330]; Farmers Auto. etc. Exch. v. Calkins, supra, p. 393; but see Sierra Nat. Bank v. Brown, 18 Cal. App.3d 98, 104-106 [95 Cal. Rptr. 742] [preponderance of evidence sufficient].) Thus, the burden was on Occidental to negate to the satisfaction of the trier of fact the various plausible explanations for the incomplete answers on Thompson's application. (4c) Under the facts in this case, it is conceivable the court could have found that Thompson withheld pertinent information and to that extent misrepresented the facts. Yet, as we have pointed out, the court was entitled to find to the contrary based upon its appraisal of the testimony, the credibility (or lack thereof) of Occidental's witnesses, and the fair inferences arising from the evidence. It is not our function to second guess the trier of fact in such matters. [7]