Court Opinion

ID: 9460540
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:53:43.677696+00
Date Added: 2024-06-11T17:36:40.334453
License: Public Domain

MULLIGAN, Circuit Judge
(dissent-
ing) :
Although I fully sympathize with Dr. George Robitaille, I am of the view that the verdict of the jury in his favor here is unconscionable and should be set aside.
*901The salient facts are not in dispute. When Dr. Robitaille was discharged from the Navy on July 1, 1969, at the age of 34, he was the victim of an incurable disease, multiple sclerosis. In fact, in December, 1969, he said it was obvious in retrospect that this disease had plagued him for nearly two years prior to his discharge. Although he enjoyed excellent health for most of his naval career, in the last two years of service he was afflicted with a series of disorders and symptoms which were most unusual for a man his age. In 1967, he began to notice a loss of force in the urinary, stream which ultimately resulted in total retention in December, 1967. In June, 1968, he developed what he was to later term a “distressing positional vertigo associated with nystagmus.” In layman’s language, he had attacks of dizziness and oscillation of the eyeballs. He also suffered from blurred vision, which was originally considered to have resulted from congenital nuclear cataracts. In early 1969, he became aware of a numbness in the ulnar distribution of both hands and also experienced a vague sensory disturbance in his right leg. Dr. Robitaille was an internist, and the symptoms were so disturbing that he underwent two complete neurological examinations. He obviously suspected the true nature of the symptoms since he asked Dr. Patterson whether they could be caused by multiple sclerosis. While Dr. Patterson’s examination showed no abnormalities, Dr. Kramer, a third physician with whom he discussed the matter, advised him that he considered this combination of symptoms to be “most uñusual in a man of his age and [they] required further explanation.” These examinations and this advice were given to Dr. Robitaille in April, 1969.
On June 17, 1969, Dr. Robitaille applied to Guardian Life for the policies in suit: a life insurance policy in the amount of $50,000, with a provision for waiver of premium in the event of total disability; a “non-cancellable” disability policy providing benefits of $800 per month for total disability for life; another disability policy providing an additional $800 a month for a five-year period, plus $400 per month for hospital benefits; and a fourth policy, termed a professional overhead expense disability policy, providing monthly benefits of $600 for a 12-month period. In his application for these policies, Dr. Robi-taille filled out and executed an application which included “Representations to the Medical Examiner.” The key questions at issue here and his responses thereto are set forth in the majority opinion. It is, in my view, crucial to this case that not a single response to any of the searching questions gave the slightest indication that Dr. Robitaille had suffered any of the disorders which gave rise to his fear that he was a possible victim of multiple sclerosis. Dr. Robitaille was not a layman but a specialist in internal medicine, and it is totally unreasonable to suppose that he failed to appreciate the significance of these disorders to an insurer who was issuing life and disability policies in reliance upon his representations. Within a few months thereafter, Dr. Robitaille’s physical condition had so deteriorated that he could not continue in private practice. In November, 1969, he was hospitalized and the diagnosis of multiple sclerosis was finally made.
I
The appellant insurer has never claimed that Dr. Robitaille fraudulently concealed, or was guilty of bad faith in failing to reveal, the crucial symptoms. The preoccupation of the majority with the issue of his good faith is thus not really germane. The key questions in the application were not inquiries calling for an opinion. No questions were directed to his evaluation of his physical health or his freedom from a particular disease. The questions were factual and called for answers which were susceptible of precise formulation. Massachusetts follows the traditional distinction between subjective and objective representations, and it is well settled in that *902state that an innocent misrepresentation of a material fact avoids the policy.1
I think that it is abundantly clear that Dr. Robitaille’s responses to the factual inquiries of the insurer were palpable misrepresentations. His rationalization for answering or not answering questions fully as set forth in part III of the majority opinion is at best disingenuous. It is difficult to understand why he failed to report his blurred vision, his nystagmus and the diagnosed congenital nuclear cataracts when he was asked if he had any impairment of sight or any disease or disorder of the eyes. His explanation that he thought that the symptoms were due to naval gunfire in 1961 of course does not excuse his failure to report the disorders which he actually suffered. (On trial, the naval gunfire was identified as pistol fire on a practice range.)
Any doubts of misrepresentation tend to disappear when we consider his answer to question 9. There, he was asked whether or not he had undergone any diagnostic tests in the past five years. He responded: “Yes, as a matter of routine. All normal.” In fact, during the previous five years he had undertaken a series of diagnostic tests which cannot be sensibly characterized as routine, since they were occasioned by the symptoms which he considered so troubling. In addition to an eye examination, a cys-toscopy, urinalysis and glucose tolerance tests, he submitted to two complete neurological examinations by Dr. Grossi and Dr. Patterson. All of these were prompted by the complete urine retention of December, 1967, the blurred vision, the numbness of hands and leg, the disturbing vertigo and the nystagmus— none of which are reported in the application. Perhaps the most serious and blatant misrepresentation is found in his answer to question 13:
In the past 5 years have you consulted or been treated or examined by any physician or practitioner (a) not named above? — Ans. No. or (b) for any cause not recorded above? — Ans. No.
The only physician named in the application was Dr. Urschel, who treated him for what Dr. Robitaille characterized as “[mjild prostatitis in 1967.” He made no reference at all to his two complete neurological examinations by Dr. Grossi and Dr. Patterson in April, 1969; his consultation with a third neurologist, Dr. Kramer; his examinations by Dr. Sacks and Dr. Bete for vertigo and nys-tagmus in June, 1968, and his complete opthamology examinations by Dr. Has-kins in November, 1968.
I believe it is even more significant that when asked whether or not these examinations were occasioned by any “cause not recorded above,” he simply responded “No.” All of these consultations were prompted by the very symptoms which created his apprehension that he might have contracted multiple sclerosis. The question does not call for the diagnosis of the physicians visited or consulted but rather for the reasons which caused Dr. Robitaille to seek medical attention. On his trial, Dr. Robi-taille admitted that a full and complete answer to the question would have required him to divulge his examinations with Dr. Haskins and Dr. Patterson and also, by implication, Dr. Sacks. Dr. Bete’s examination was an annual physical, but this certainly could have been characterized as the reason for consultation. The application requested “complete information . . . [sjpecify-[ing] . . . conditions, severity, date, duration, frequency of attacks, after effects, and name and address of each medical practitioner and of each hospital.” I do not think that there is any doubt but that Robitaille made numerous misrepresentations of fact which, if material, avoid the policy irrespective of his good faith in answering them.
*903The appellee now urges that Dr. Robitaille’s signature on the application giving the customary authorization to the insurer to contact any physician by whom, or any hospital at which, he was treated, in effect, made his naval medical history available to the -insurer, and therefore excuses any misrepresentations he may have made. If this proposition were to be accepted as the law, it would not only encourage inadvertence and deceit by applicants but would, for all practical purposes, eliminate the defense of misrepresentation in life insurance cases. Risk selection is still the responsibility of the insurer and not the applicant. The majority opinion states that “in light of Dr. Robitaille’s disclosure of all relevant diagnoses and his consent to an examination of the records at Newport Hospital, one must ask whether he nevertheless was under a duty to furnish details to Guardian.” The answer, of course, is an unequivocal “Yes.” It is a fundamental proposition in insurance law that the insurer has the right to rely upon the representations made in the application which induce the contract. It is only where the applicant’s answers put the insurer reasonably on notice of some disability or disorder calling for further investigation that a waiver might be found.2 Here, the answers supplied by Dr. Robitaille were not at all “indicative of something more [that was] tantamount to notice of the unrevealed.” Cherkes v. Postal Life Insurance Co., 285 App.Div. 514, 516, 138 N.Y.S.2d 788, 790 (1st Dep’t 1955) (Peck, J.). Dr. Robitaille’s answers not only were not revelatory, they were positively reassuring: his prostatitis was described as “mild” with “[n]o recurrence since 1967;” his high tone hearing loss, attributed to naval gunfire in 1961, was characterized as “[s] light” with “No difficulty, no change in audiograms since then;” his physical examinations were “routine” and “all normal.” As we have indicated, he revealed no other consultations or examinations. I cannot subscribe to the view, and there is no authority at all for the proposition, that these responses should have put the insurer on notice that Dr. Robitaille might possibly be a bad risk.
II
Although there were unquestioned misrepresentations here, I agree that it does not follow that the insurer has established its right to rescind and cancel the policy. The pertinent statute (Mass.Gen.Law Ann. c., 175, § 186) provides that a misrepresentation will avoid the policy if it is made with actual intent to deceive or where “the matter misrepresented . . . increased the risk of loss.” The insurer did not choose to establish fraud or bad faith, as we have indicated, but rather relied upon the statutory alternative “increased the risk of loss.” On trial, the insurer produced the medical director of Guardian Life, Dr. Lambkin, who testified that the insurer would not have accepted the risk had Dr. Robitaille properly answered the inquiries in the application. He testified that the facts not disclosed would have “markedly increased the risk of loss to the company.” His explanation is revealing:
Well, in my opinion, with the sequence of an episode of acute urinary *904retention, then later positional vertigo, then blurring of vision of one eye and finally with numbness of the hands would have strongly suggested an organic neurological disorder of a progressive nature.
The only other physician to testify on materiality was Dr. Pepper, former Senior Medical Director of Connecticut Mutual Life Insurance Company, who, on the basis of Dr. Robitaille’s medical history as revealed on trial, testified that “[e]very insurance company that I know about would have to decline or postpone this application.”
It is significant that the appellee produced not a single medical expert to contradict the testimony that this insurer, or any prudent insurer, would not have accepted the risk.
The majority argues that even if Dr. Robitaille had answered the questions fully, the insurer would not necessarily have diagnosed that he was a victim of multiple sclerosis. This is not really the issue. The question is whether or not a prudent insurer, alerted by complete and forthright answers in the application to the existence of a combination of symptoms indicative of neurological disorder, would have declined to accept the applicant because of the increase of risk. The amalgam of symptoms in a person of 34 years of age would unquestionably provoke some suspicion that serious neurological illness was present. It certainly created such apprehension in the mind of the applicant, Dr. Robitaille.3 Dr. Greer did examine the applicant for the insurer on July 8, 1969, after Dr. Robitaille had filled out the medical statement which successfully obscured any indication of his disturbing symptoms. Had a full disclosure been made in the application, it would either have been refused or a further investigation would have ensued, which would have unquestionably led to a refusal. This was the testimony at trial, and there was nothing to rebut it. In June, 1969, Dr. Robitaille had been a victim of multiple sclerosis for two years; it was not in its early stages, and' only five months later, he was so incapacitated that he was hospitalized and diagnosed as a victim of the debilitating and incurable disease.
Ill
We eventually come to the position of the majority that, in any event, the question of materiality was one for the jury, and that, since the jury found against the company, the court below did not commit reversible error in refusing to set aside its verdict. Although no case in Massachusetts has taken the position that multiple sclerosis as a matter of law increases the risk of loss, this would not preclude a federal court from making the prediction that such a decision would represent the law of that Commonwealth. This is, it seems to me, particularly appropriate when we consider that four of the policies in suit involve disability benefits and multiple sclerosis is obviously disabling. However, I would not urge this point. I believe that the appropriate procedure here is to set aside the verdict and remand for a new trial. Respect for the jury system does not mandate that we embrace an aberrational verdict. It is conceded that the determination, of materiality is normally one to be made by the jury, but the jury must be properly instructed.4 Here the interrogatory submitted to the jury simply asks whether or not the defendant made or failed to make any statement in his application which “increased the risk of loss under the policies.” There is no in*905dication in the interrogatory or any place in the charge to the jury as to the meaning of the term “increase in the risk of loss.” The best proof of increase of risk is the practice of prudent insurers.5 Would such an insurer issue a policy had it known the truth which the applicant’s answers had concealed? Although the only medical evidence submitted on this point was on behalf of the company, no indication was given to the jury that this was an appropriate criterion. The comment of the majority that the jury was “fully aware of the proper legal standard which was to guide them” is thus misleading. The test of materiality has long been a subject of discussion by legal scholars in insurance law.6 In this case, a group of laymen without any medical testimony bearing on the materiality of the misrepresentation except that in favor of the insurer, promptly returned a contrary verdict. The majority describes the facts here as “complex and technical” and yet the jury returned a verdict for the insured after only 20 minutes of deliberation. The result was predictable under these circumstances.
Dr. Robitaille, who, as a young physician with a large family, stood at the threshold of a private practice after 10 years of service in the armed forces of his country, and who became the victim of a dread disease, is a highly sympathetic figure even to a dissenting judge. Of course, no normal American jury can be expected to have any empathy for the insurer; insurance companies are, after all, less than charismatic institutions. It is particularly important, therefore, in a case such as this that the jury be properly and fully charged so that a just verdict can be rendered. The decision to reverse and remand here does not constitute a rejection of the jury system, but rather a recognition that the jury can only function appropriately if it is properly instructed as to the applicable law.
It seems to me that the verdict below is not sustainable and that it is not our role to sit idly by and supinely accept it.7 It is true that the insurer made no *906objection to the interrogatory at trial or indeed on appeal. The majority characterize it as “ironic” that the only objection made to the interrogatory was by the appellee. More pungent adjectives come to mind. The fact that counsel did not take exception below only accentuates the travesty, and our action now is a fortiori mandated.

. See Metropolitan Life Ins. Co. v. Burno, 309 Mass. 7, 33 N.E.2d 519 (1941); W. Vance, Insurance § 68 (3d ed. B. Anderson 1951).

. Flanagan v. John Hancock Mutual Life Ins. Co., 349 Mass. 405, 208 N.E.2d 497, 500 (1965); Pahigian v. Manufacturers’ Life Ins. Co., 349 Mass. 78, 206 N.E.2d 660, 666 (1965). See also Variety Homes, Inc. v. Postal Life Ins. Co., 287 F.2d 320, 323 (2d Cir. 1961); New York Life Ins. Co. v. Strudel, 243 F.2d 90, 93-94 (5th Cir. 1957); United States v. Kiefer, 97 U.S.App.D.C. 101, 228 F.2d 448 (1955), cert. denied, 350 U.S. 933, 76 S.Ct. 305, 100 L.Ed. 815 (1956); Cohen v. Penn Mutual Life Ins. Co., 48 Cal.2d 720, 312 P.2d 241, 246 (1957). In Great Northern Life Ins. Co. v. Vince, 118 F.2d 232, 236 (6th Cir.), cert. denied, 314 U.S. 637, 62 S.Ct. 71, 86 L.Ed. 511 (1941) (Michigan law), the court said that “even its own earlier records do not put the insurer upon notice of the falseness of statements in an application unless there is some circumstance which directs attention to them.” See also Schrader v. Prudential Ins. Co., 280 F.2d 355, 360-362 (5th Cir. 1960).

. In December, 1969, Dr. Kramer, supporting Dr. Robitaille’s application for a medical discharge from the Navy, reported his conversation with him in the spring of that year and stated: “It seems clear to me that there can be no question now that the symptoms he related did present evidence of multiple sclerosis at that time. This combination of symptoms — dysfunction on a chance basis alone could not occur in a young man in the absence of neurological disease.”

. Levie v. Metropolitan Life Ins. Co., 163 Mass. 117, 39 N.E. 792 (1895).

. See Daniels v. Hudson River Fire Ins. Co., 66 Mass (12 Cush.) 416, 424 (1853); Penn Mutual Life Ins. Co. v. Mechanics’ Savings Bank & Trust Co., 72 F. 413, 429 (6th Cir. 1896) (Taft. J.). See also MacKenzie v. Prudential Ins. Co., 411 F.2d 781, 782 (6th Cir. 1969); Sovereign Camp, W. O. W. v. Moore, 237 Ala. 156, 186 So. 123 (1938); Mack v. Pacific Mutual Life Ins. Co., 167 Minn. 53, 208 N.W. 410 (1926); Volunteer State Life Ins. Co. v. Richardson, 146 Tenn. 589, 244 S.W. 44 (1922) (applying state laws resembling the Massachusetts law).

. See, e. g., R. Keeton, Insurance Law § 5.-7(a) (1971) ; W. Vance, supra § 62.

. Although this is a diversity action, the law of Massachusetts is not relevant to the question of whether or not this court may consider an erroneous charge on its own motion where the appellant failed to object below. This is a matter of procedure, as to which federal law controls. McNamara v. Dionne, 298 F.2d 352, 355 (2d Cir. 1962). The appropriate federal provision, Fed.R. Civ.P. 51, provides, inter alia, that “[n]o party may assign as error the giving or the failure to give an instruction unless he objects thereto before the jury retires to consider its verdict, stating distinctly the matter to which he objects and the grounds of his objection.” In the ordinary case, therefore, an appellant will be precluded from asserting on appeal alleged errors in the charge which he failed to bring to the attention of the trial judge. E. g., Spano v. Koninklijke Rotterdamsche Lloyd, 472 F.2d 33 (2d Cir. 1973) (per curiam); Nielsen v. Charles Kurz & Co., 295 F.2d 692 (2d Cir. 1961), cert. denied, 369 U.S. 876, 82 S.Ct. 1147, 8 L.Ed.2d 278 (1962); Curko v. William Spencer & Son, Corp., 294 F.2d 410 (2d Cir. 1961). However, an appellate court can consider, on its own motion in exceptional cases, errors committed in the charge below, even though no requests to charge were submitted and no objections to the charge were made, whenever it is necessary to do so in order not to countenance plain error, egregious error or a miscarriage of justice. Hormel v. Helvering, 312 U.S. 552, 556-557, 61 S.Ct. 719, 85 L.Ed. 1037 (1941); Sibbach v. Wilson & Co., 312 U.S. 1, 16, 61 S.Ct. 422, 85 L.Ed. 479 (1941); Mazer v. Lipschutz, 327 F.2d 42 (3d Cir. 1964); Ferrara v. Sheraton McAlpin Corp., 311 F.2d 294 (2d Cir. 1962); McNello v. John B. Kelly, Inc., 283 F.2d 96 (3d Cir. 1960); Troupe v. Chicago, D. & G. Bay Transit Co., 234 F.2d 253, 259-260 (2d Cir. 1956); Moore v. Waring, 200 F.2d 491 (2d Cir. 1952); Finn v. Wood, 178 F.2d 583, 584 (2d *906Cir. 1950); Shokuwan Shimabukuro v. Higeyoshi Nagayama, 78 U.S.App.D.C. 271, 140 F.2d 13 (1944). Although plaintiff failed to object to the charge given below, it did request the court to charge that the “test of materiality of a fact or a matter is determined by whether a reasonably careful underwriter would have regarded the fact or matter if revealed at the time of effecting the insurance, as substantially increasing the chances of loss insured against so as to bring about a rejection of the risk or the charging of an increased premium.” Thus the attention of the court was directed to the problem of the appropriate standard of materiality.