Opinion ID: 1452435
Heading Depth: 3
Heading Rank: 2

Heading: The Impostor Defense

Text: A few decisions outside California have allowed an insurer to contest a claim despite the incontestability clause when an impostor claimed to be the named insured. The first was Maslin v. Columbian Nat. Life Ins. Co. (S.D.N.Y. 1932) 3 F. Supp. 368 ( Maslin ). In Maslin, the insurance company issued policies insuring Samuel Maslin. After the period of contestability expired, the company asserted the defense that an impostor posing as Samuel Maslin made the application and took the physical examination for the policies.... ( Id. at p. 369.) The court recognized the general rule that after the passage of the stipulated time [of contestability] the insurance company is precluded from contesting the policy on the ground of false representations by the insured, even those made fraudulently. ( Ibid. ) The view is that even though dishonest people are given advantages under incontestability clauses which any right-minded man is loath to see them get, still the sense of security given to the great majority of honest policyholders by the presence of the clause in their policies makes it worth the cost. The time allowed to the insurance company after issuance of the policy to investigate the case and uncover any fraud is deemed a fair check against trickery or deception by the insured. ( Ibid. ) Nevertheless, the Maslin court found the defense of the alleged impersonation of Samuel Maslin by another who is said to have made the application and, more important still, to have taken the physical examination, is not barred by the incontestability clause. In substance, the defendant's position is that it never insured the life of the plaintiff's son at all and never had any contract or contractual dealings with him; that the man it insured was another person altogether, a healthy man whom the defendant's medical examiner saw and accepted as a risk and who chose to call himself Samuel Maslin.... If the facts pleaded are borne out by the proof, the defendant is under no liability to the plaintiff. There cannot be the slightest doubt that the person whom an insurance company intends to make a contract with and intends to insure is the person who presents himself for physical examination. ( Maslin, supra, 3 F. Supp. at pp. 369-370.) Relying on the rule applicable to contracts generally that where a man, pretending to be some one else, goes in person to another and induces him to make a contract, the resulting contract is with the person actually seen and dealt with and not with the person whose name was used, the Maslin court concluded that if the defendant can prove that a healthy man impersonated a diseased Samuel Maslin and took the medical examination under the name of Samuel Maslin, then the diseased Samuel Maslin who was the plaintiff's son did not become a policyholder.... The defendant's only contract was with the man who made the application and took the examination. [¶] It is obvious that the interposition of these matters by the defendant is not a contest of the policies within the meaning of the incontestability clause. The insurer does not by this defense dispute the validity of the policies issued by it. It says in effect that the man it insured under these policies was not the plaintiff's son, Samuel Maslin. ( Maslin, supra, 3 F. Supp. at p. 370.) The second case and, with Maslin, one of the two most cited cases on this question, is Ludwinska v. John Hancock Mut. Life Ins. Co. (1935) 318 Pa. 84 [178 A. 28, 98 A.L.R. 705] ( Ludwinska ). In Ludwinska, Bertha Ludwinska applied for a life insurance policy and took the physical examination but represented herself to be her sister, Victoria Ludwinska, who was confined in an asylum. Victoria died after the two-year contestability period. The trial court found that the incontestability clause barred asserting the impersonation as a defense. The appellate court disagreed: The difficulty we find with this conclusion is that the court did not go back far enough to ascertain whether there was any contract between Victoria and the insurance company that would permit the operation of the incontestable clause.... [¶] In all insurance policies, as in other contracts, there must be some point where the minds of the parties meet in contractual relation [citations] on all its elements before any contract whatever exists. ( Id. at p. 30.) The Ludwinska court found that the incontestability clause can rise no higher than the policy; the incontestable clause cannot of itself create the contract. [¶] Here from the pleadings it is conceded that Victoria did not and could not sign the application for insurance.... Therefore, a contractual relation between Victoria and the company never existed.... [¶] Where one contracts with an individual face to face and intends to contract with the person before him, the contract, if any, is made with that particular person, regardless of what name he may assume for the transaction and regardless of whether the assumed name actually is the name of a living person with whom the other party was under the impression he was contracting.... [¶] ... [T]here never was a contract concerning the life of Victoria.... What the insurance company really did was to insure Bertha, if it insured anyone. The name affixed to the application does not govern unless the name identifies the human being it purports to.... Insurance companies do not insure names. They insure lives. The name Victoria was not insured. ( Ludwinska, supra, 178 A. at pp. 30-31, fn. omitted.) In a discussion that, although dicta, is particularly significant here, the Ludwinska court went on to contrast its facts with facts like those here: Had Victoria of sound mind signed or authorized Bertha to sign the application, and a policy had subsequently issued to her, then the substitution of Bertha for Victoria in the medical examination would have been an affirmative defense to be proven by the company [i.e., a defense subject to the incontestability clause].... ( Ludwinska, supra, 178 A. at p. 31.) We thus see that the two leading impostor cases involve a person impersonating the named insured both in the application and the examination. Subsequent cases recognizing the impostor defense contained similar facts. ( Petaccio v. New York Life Ins. Co. (1937) 125 Pa.Super. 15 [189 A. 697, 698] [the defense was that the man whose death was proven was not the person who signed the application for the insurance and presented himself to, and was examined and passed by, defendant's medical examiner]; Valant v. Metropolitan Life Ins. Co. (1939) 302 Ill. App. 196 [23 N.E.2d 922, 922-923] [[t]he defense interposed was that the person who signed the application and submitted to a medical examination was not [the person] named in the policy  that someone had impersonated him]; Obartuch v. Security Mut. Life Ins. Co. (7th Cir.1940) 114 F.2d 873, 875 [named insured either did not sign the insurance application or signed it not knowing its contents or intending to obtain insurance, and another person took the medical examination]; see also Maxwell v. Cumberland Life Ins. Co. (1987) 113 Idaho 808 [748 P.2d 392, 394] [describing Ludwinska and Obartuch as cases where an impostor tried to obtain life insurance as if he were another person].) As discussed below, two decisions applying New Jersey law recognized a defense under facts similar to those here, but the law regarding incontestability clauses in New Jersey is very different than in California.