Court Opinion

ID: 9854825
Source: CourtListenerOpinion
Date Created: 2023-09-24 06:14:46.503065+00
Date Added: 2024-06-11T09:23:27.620630
License: Public Domain

RASMUSSEN, District Judge
(dissenting).
This matter is submitted to us on the testimony of the plaintiffs as to the occurrence of the events leading up to the application for a policy of insurance and the events after the application was made up to the issuance of the certificate on April 14, 1961. It is interesting to note that the only medical testimony presented to the trial court in this matter was presented hy the plaintiffs. On page eight of the transcript at line twelve the question was asked of Mr. Milligan:
“Q And you were told you had a heart condition, is this correct?
“A Yes.”
This is the only direct reference to Mr. Milligan’s condition requiring his hospitalization in the fall of 1961. No other medical testimony appears. On page thirty-eight of the transcript at line seven the question is asked:
“Q Would you state please what the doctor told you his condition was on the evening of March 7, 1961?
“A He said he was coming out of it—
“MRS. KLEIN: If the Court please, we will object to that on the ground that it is hearsay.
“MR. RODEN: I would state that this does not go to the truth of what the doctor said but merely to the question of this witness’s state of mind and intent at the time she filled out the application.
“THE COURT: I will admit it for that purpose.
“Q Mrs. Milligan, what did Dr. Forney tell you your husband’s physical condition was on the evening of .March 7, what caused his unconsciousness?
“A He told me he had had a toxic reaction from drinking Vodka and taking an antibiotic and stomach pills all at the same time and that there was nothing wrong with him, he would keep him there for observation over night.”
This is the only reference in the testimony to the physical condition of Mr. Mil-ligan at the time of his entry to the hospital on March 7, 1961. Counsel for the plaintiff and the majority have concluded that this problem occurring on March 7, 1961, was a syncope. However, there is no medical testimony to conclude this as the testimony offered was only for the purpose to show a state of mind of the witness in relation to her filling out the application to include her husband as a dependent under the insurance policy. Mrs. Milligan testified that she had been assured by the doctors that her husband was not suffering from any permanent disability on March 7, 1961, and that his condition at that time was not the result of a permanent impairment of his health.
Mrs. Milligan and Mr. Milligan testified at various times that they knew the doctor *198liad diagnosed an ulcer and that he had prescribed treatment for this ulcer and that Mr. Milligan had ceased taking baking soda in treatment of his stomach disorders and was now taking gelusil as recommended by the doctor.
Mr. Milligan testified that he had'been taking soda for his stomach disorders which he concluded were the result of over-eating or over-drinking, and that he concluded and his wife concluded that he did not have an ulcer and that the doctor was mistaken. Plis conduct following the doctor’s diagnosis, however, indicated, by his concern for the taking of gelusil, his awareness in applying for a life insurance policy, and the fact that he no longer treated his stomach disorders with soda, that he believed he did have an ulcer. The trial court submitted special interrogatories to the jury in which he posed the questions of whether Mrs. Milligan gave false answers to the questions contained in the medical report, to-wit:
Question: “Have dependents had any illness during the last three years?”
Question: “Have dependents ever been seriously ill?”
Question: “Do you know of any impairment in physical condition or health of dependents?”
Question: “Do you know of any chronic ailment, disease or other condition of dependents now existing which is likely to lead to hospitalization or operation?”
The jury answered all of these questions in the negative. The court then followed this instruction with this following instruction :
“QUESTION NO. 2.
If you answered all of Questions No. 1 (a) through 1(d) ‘No,’ then you need not answer these questions; however, if you answered any of the questions No. 1 (a) through 1(d) ‘Yes,’ then you must answer these additional questions with reference to the question or questions which you found to have been answered falsely by Aurora A. Milligan in the ‘Health Statement with Respect to Dependents (Plaintiffs’ Exhibit Number Three).”
The questions put were this then:
A. Were any of said false answers material to the defendant company’s risk?
B. At the time Aurora A. Milligan answered said question or questions did she know that any of said answers were false?
C. At any time before April 14, 1961, when the Certificate (Plaintiffs’ Exhibit Number Four) extending coverage to plaintiff Claude E. Milligan was issued, did either of the plaintiffs know that any of said questions had been answered falsely?
D. Were any of said questions answered falsely with intent to deceive the defendant insurance company?
From the wording of these questions to the jury in that they were not to answer the second group of questions unless they answered the first or a portion thereof “yes” precluded from the jury the determination if the plaintiffs knew of a change of condition of fact as to the health and condition of Mr. Milligan after March 8, 1961, but prior to April 14, 1961. The transcript is replete with testimony of both parties that each of them knew of the doctor’s diagnosis of an ulcer existing prior to April 14, 1961.
From the testimony of the plaintiffs and from the testimony of Mr. Kirkpatrick, the existence of an ulcer affects the issuance of an insurance policy both as to the life of the insured or to any health or hospitalization policy of the insured. The good health of the proposed insured is a condition precedent to the issuance of a policy, and only the insuring company can waive a physical condition existing in the insured.
The record does not support the finding of the trial court to the effect that there was no serious illness or impairment in *199physical condition or health or any chronic ailment, disease or condition likely to lead to hospitalization or operation.
Certainly the facts of this case bring it within the rule of law set forth in the decisions cited by the majority wherein it is stated:
“If, while the company deliberates, he discovers facts which make portions of his application no longer true, the most elementary spirit of fair dealing would seem to require him to make a full disclosure. If he fails to do so, the company may, despite its acceptance of the application decline to issue a policy (citing cases), or if a policy has been issued, it has a valid defense to a suit upon it.”
This court is not here called upon to determine whether or not the insurance company would have accepted the plaintiff Mr. Milligan as a dependent under the existing insurance policy issued to the group Mrs. Milligan belonged to. This court is only called upon to rule upon whether or not the plaintiffs were aware of a change of condition of fact concerning Mr. Milli-gan’s health at the time the policy was issued and that this change of condition was not communicated to the insuring company giving them the opportunity to rule whether or not they would accept Mr. Milligan as an insured dependent.
This court should not take away from the insuring company their right to make this determination.
It is my conclusion that the trial court erred in not submitting to the jury by special interrogatories the question of the knowledge of the plaintiffs at the time the policy was issued, and further in finding that there was no evidence that Mr. Milli-gan was suffering from any serious illness or impairment in physical condition or health or chronic ailment, disease or other condition likely to lead to hospitalization or operation. For this reason, this matter should be reversed and remanded for a new trial.