Court Opinion

ID: 6259347
Source: CourtListenerOpinion
Date Created: 2022-02-17 21:57:04.205864+00
Date Added: 2024-06-11T08:59:39.781201
License: Public Domain

*257Dissenting Opinion by
Mb. Justice O’Brien:
Plaintiff-appellant insurance company sought rescission of an insurance policy on the grounds of alleged nondisclosure of certain essential information in appellee’s application for insurance. Appellee Bosses filed preliminary objections in the nature of a demurrer arguing that by the terms of the master policy under which the certificate was issued to the appellee, right of rescission for nondisclosure was excluded. The court below sustained the preliminary objections, on two grounds. The first was that appellant had elected the remedy of no coverage for nondisclosure, and that remedy precluded rescission for nondisclosure. The second was that the policy provided that no statement by the policyholder should avoid the policy if evidence of individual insurability is waived by the company, and that appellant, by failure to ask for evidence of individual insurability, had waived it. The majority opinion affirms the decree of the court below for the same reasons as those relied upon by the chancellor.
1 can agree with neither of those reasons. The majority relies first on Paragraph 2 of Part C of the policy, which states: “Sicknesses for which the Member has received medical treatment or advice prior to the date of application will not be covered unless full disclosure of such medical treatment or advice was made on the application, and the Company issued a Certificate.” The majority holds that by providing this remedy for nondisclosure, the company, by the maxim, expressio unius est exelusio alterius, excludes all others. Yet that maxim has no application where, as here, the remedy expressed and the remedy allegedly excluded differ in tlieir scope. Under no circumstances could the company rescind after two years, since under Part J, Paragraph 8, the policy was incontestable after that period. However, Part C, Paragraph 2, excludes from coverage noudisclosed illnesses even after the noneon*258testability period. To read into this exclusion of coverage an intention to forego the essential contractual remedy of rescission for fraud is a perversion of rules of construction.
The second reason the majority relies upon for sustaining the preliminary objections is that the company waived evidence of individual insurability, and the policy precludes rescission on the basis of the policyholder’s statements where evidence of individual insurability is waived by the company.1
The majority’s reasoning in finding waiver as a matter of law defies all logic. The majority states that the company’s failure to question the insurability of appellant constituted a waiver of individual insurability. In my view, the majority’s starting point is all wrong. In the usual situation, evidence of individual insurability is required. Silence on the part of the company as to evidence of individual insurability, when there is no duty to speak, can hardly constitute waiver. Appellant provides a logical interpretation of “waiver of individual insurability”. Appellee was insured under a group policy. Under the terms of the group policy, if a certain percentage of participation by the group was reached, then for a period of time, an “open enrollment” period was allowed.2 Under open enroll-*259merit, any eligible member (a member of the group and under 70 years of age) must be issued unrestricted coverage. This is the meaning of waiver of evidence of individual insurability-—the necessity of admitting any applicant when the required percentage is reached.
When one realizes that waiver is not the norm, then he refrains from the verbal acrobatics engendered by an attempt to hold that the application itself is not *260evidence of individual insurability. The clauses quoted by the majority do not prove that the application is not evidence of individual insurability; they are perfectly' consistent with the application’s constituting evidence of individual insurability. And, in fact, common sense would dictate that the application is evidence of individual insurability. Yet it is not even necessary to prove that fact to show that there has been no waiver. Where the company has done nothing to indicate a waiver, then there is no waiver.
I dissent and would overrule the preliminary objections.
Mr. Justice Cohen joins in this dissenting opinion.

 Part J, Paragraph 6 says: “. . . All statements made by the Policyholder and the Member shall be deemed representations and not warranties. No such statement by the Policyholder shall avoid this policy unless it is contained in the Policyholder’s written application, and no such statement shall avoid the individual Member’s insurance under this policy unless it is contained in the Member’s written application. No such statement shall avoid the individual Member’s insurance if evidence of individual insurability has been waived by the Company.”

 Part J, Paragraph 2 says: “Effective Date of Individua! Insurance. The Company reserves the right to require each Member to furnish, at no expense to the Company, evidence of individual insurability satisfactory to the Company. The enrollment will be *259conducted on a Lodge and Chapter basis with each Lodge or Chapter permitted to qualify for waiver of selection based on a specific participation figure according to the size of the Lodge or Chapter as follows: (a) for groups of less than one hundred members, seventy-five per cent of those eligible must apply, (b) for groups of one hundred to two hundred members, sixty per cent of those eligible must apply and (c) for groups of more than two hundred members, fifty per cent of those eligible must apply. In the event a Lodge or Chapter attains the participation figure required for waiver of selection, a sixty-day ‘open enrollment’ period will be allowed for such Lodge or Chapter during which time all eligible Members who apply will be issued unrestricted coverage under Plan B. Each year thereafter a thirty-day ‘open enrollment’ period will be permitted provided that such Lodge or Chapter has maintained the percentage of insured participation required for the sixty-day ‘open enrollment’ period.
“The Company shall always retain the right to require, at no expense to the Company, satisfactory evidence of insurability from (a) a Member, if application is made after the close of any of the open enrollment periods referred to in the preceding paragraph, (b) a Member, if he applies for reinstatement of his insurance which has terminated because of failure to pay premiums when due and (c) a Member who applies for an increase in benefits.
“If and when evidence of insurability is waived, the Company may still require an applicant to answer all questions on the application for insurance. Members who are hospitalized at the time of application are not eligible.
“If, under the terms of the preceding paragraphs, evidence of individual insurability is required, an eligible Member shall become an insured Member on the date his application is accepted by the Company. If evidence of insurability is waived, an eligible Member shall become an insured Member on the later of (a) the effective date of this policy or (b) the date his application is received by the Company.”