Court Opinion

ID: 9624664
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:12:57.217498+00
Date Added: 2024-06-11T18:05:52.240971
License: Public Domain

Evans, Judge,
dissenting. Plaintiff obtained a verdict in the court below, but the majority reverses with direction that a judgment be entered for the defendant. This holding is based upon plaintiff’s misrepresentations to the insurance company respecting the condition of his health and hospitalizations. The majority holds that "the insurer need only show the representation was false and that it was material in that it changed the nature, extent or character of the risk.”
The insurer, in order to avoid the policy, must not only show that the representation was false and that it was material and changed the nature of the risk, but it must go a step further and show that it relied upon the representations in issuing the policy. The defendant filed an affirmative defense, as follows: "The misrepresentation of plaintiff in the application for insurance was material to the acceptance of the risk and the hazard assumed by the defendant. The defendant in good faith would not have issued the policy, or, had it issued it, it would not have issued it at the premium rate as applied for, or would not have provided coverage with respect to any previous condition or aggravation thereof, had the true facts been known to it.” (Emphasis supplied).
As to the foregoing defense, the burden was upon the defendant to sustain same by evidence, in order to rebut plaintiff’s case. And, having failed to deny that paragraph of plaintiff’s complaint alleging defendant was indebted to plaintiff in the principal amount of $2,200 the only defense defendant had in this case was the above affirmative defense.
In Davison Chemical Corp. v. Hart, 68 Ga. App. 413, 416 (23 SE2d 107), we find the following: "The plaintiff is re- . lieved of this burden of proof when the defendant admits the plaintiff’s right to recover under the plaintiff’s allegations or sets up an affirmative defense which would defeat the right to recover.”
*16In the case sub judice, the defendant had the right to rely on its affirmative defense, which in effect, contended there was no liability by it to plaintiff. However, it had the burden of proving its affirmative defense, including its assertions that: (a) The alleged misrepresentations were material to the acceptance of the risk; (b) It would not have issued the policy, or only for an increased premium rate, had the true facts been known; and (c) It would not have provided coverage with respect to any previous condition or aggravation thereof had the true facts been known to it. The defendant completely failed to offer proof in support of any of the foregoing portions of his affirmative defense, and in fact, the only evidence offered by it was the testimony of Dr. William Smith, a chiropractor, who testified with reference to treatments he had given plaintiff for various ailments. The defendant offered no evidence of any kind to show that the alleged misrepresentations were material to the acceptance of the risk; nor did it offer any proof to show that it would not have issued the policy, or would have issued it at an increased premium rate; or that it would not have provided coverage with respect to any previous condition or aggravation thereof had the true facts been known to it. It did not even offer any evidence to prove the true facts were not known to the insurer at the time of issuing the policy. The defendant simply failed to sustain its affirmative defense, and yet the majority opinion is predicated upon the theory that it has done so.
As to the law applicable to such defense, this court in Lawler v. Life Ins. Co. of Ga., 91 Ga. App. 443, 445 (85 SE2d 814) held: "We now hold that the trial judge erred in directing a verdict for the insurance company because there was no evidence whatever to the effect that the insurance company relied on the fraudulent misrepresentations in reinstating the policy of insurance. There is no presumption and no required inference that the company relied on the misrepresentations contained in the application for reinstatement made by the insured from the mere fact that the application was filed and the policy reinstated. The company may *17have known the truth about the insured from some other investigation, doctor’s examination, etc. 'A misrepresentation not acted on is not ground for annulling a contract.’ Code § 96-202. The law on this subject is so well settled as not to require citation of additional authority.
"The court erred in directing a verdict for the defendant.” (Emphasis supplied).
In Vaughn v. Nat. Life &c. Ins. Co., 189 Ga. 121 (1) (5 SE2d 238) the Supreme Court of Georgia held: "To void a policy of life insurance upon the ground that the insured made false representations in the application therefor, the insurer must in every case prove that the representations were both untrue and were material to the risk. Falsity of such representations, standing alone, will not render the policy void.”
In Life & Cas. Ins. Co. v. Burkett, 38 Ga. App. 328 (4) (144 SE 29), it is held: "Under the facts of this case, the materiality of the alleged false representations made by the insured as to applications for other insurance, and as to his health and the attendance of doctors upon him, was a jury question; and, the jury having found for the insured, this court cannot reverse the judgment upon the general grounds of the motion for a new trial.”
In Peninsular Life Ins. Co. v. Screen, 100 Ga. App. 670 (3) (112 SE2d 174), this court held: "In Lawler v. Life Ins. Co., 91 Ga. App. 443 (85 SE2d 814) it was held that the trial court erred in directing a verdict for the insurance company where one of the elements of actual fraud, i.e., reliance by the defendant on the false statements, was not proved. The same is true in this case. The stipulation of facts sets out that the insurance policy was issued 'pursuant’ to the application but does not state, nor is there elsewhere in the record any proof that it was issued in reliance on the false statements therein contained to the effect that the plaintiff had not, for a period of five years prior to making the application, been attended by a physician. This being the case a verdict in favor of the defendant was not demanded by the evidence, and the trial court properly de*18nied the motion for a judgment notwithstanding the verdict.” (Emphasis supplied).
In State Farm Mut. Auto. Ins. Co. v. Wendler, 120 Ga. App. 839, 841 (172 SE2d 360), it is held: "One of the prerequisites of fraud as often listed by cited authority is: that the injured party must have relied on the fraudulent statement. Alpha Kappa Psi Bldg. Corp. v. Kennedy, 90 Ga. App. 587, 591 (83 SE2d 580); Doanes v. Nalley Chevrolet, Inc., 105 Ga. App. 846, 847 (125 SE2d 717); Dickey & Co. v. Leonard, 77 Ga. 151.”
I would affirm the lower court, and I therefore dissent.