Court Opinion

ID: 9766169
Source: CourtListenerOpinion
Date Created: 2023-08-29 04:35:48.863898+00
Date Added: 2024-06-11T07:30:20.167727
License: Public Domain

John A. Fogleman, Justice, dissenting. I do not agree that subsection (c) of Ark. Stat. Ann. § 66-3208 (Repl. 1966) may be invoked on the basis of the true facts, without regard to the qualifying words “[t]o the best of your knowledge” prefacing the questions in the application. By its own words, this subsection relates only to risks which would have been refused, or which would have been accepted only on a conditional or limited basis, or at a higher premium, if the true facts had been made known to the insurer “as required either by the application for the policy or contract or otherwise.” The application for the policy or contract required a good faith answer to the best of appellee’s knowledge only. As pointed out in the majority opinion, there was substantial evidence that the answer of appellee as to his lack of knowledge of his wife’s previous cancer was not a misrepresentation, omission, concealment or incorrect statement. At least as to the answer to question 1, this makes the premise of the majority opinion that the “true facts” that there was an earlier malignancy dependent upon the words “or otherwise.” If these words are to be given their broadest general meaning so that the insurance company could use this section as a defense in any case where the “true facts” with reference to an increased hazard have been disclosed by any means from any source, then the drafters of the code have been guilty of a shameful waste of verbiage. They should have put a period in subsection (c) after “known to the insurer.” They could also have economized on words by eliminating the word “made” immediately preceding. They should not be given such a broad general meaning. The words “or otherwise” obviously relate to the words “as required by the application,” so that the alternatives are: * .* * if the true facts had been known to the insurer (1) as required by the application for the policy or contract, or (2) as required otherwise.1  This construction is mandatory because all of §66-3208(1) relates to statements by an insured or annuitant in an application for a policy or a contract,, or in negotiations for a policy or a contract. If there were not negotiations other than through application the statutory provision would have ended with the words “application for the policy or contract” omitting the alternative provided by the words “either” and “or otherwise.” Consequently, the true facts do relate to appellee’s knowledge of conditions because of the wording of the questions in the application, in keeping with the language “as required * * * by the application * * * or [as required by appellant] otherwise.” Since there was substantial evidence that Reeves did not know his wife had previously had cancer, the judgment should stand insofar as that question is concerned because Pekar’s proffered testimony would have had no bearing at all,2 in view of the finding that Reeves’ answer to question 1 was neither a misrepresentation, concealment nor incorrect statement. I realize that the majority opinion is hinged partially upon the evidence showing clearly that appellee did know that his wife had previously had a growth. Whatever misrepresentations, concealment or incorrect statement was involved here did not entitle appellant to cancel the policy or constitute a defense to appellee’s claim. No evidence was offered by appellant, through Pekar or anyone else, to show that the company would reject the application, that the agent would not be permitted to accept it or send it into the home office, that the company would not have issued the policy or that the premium would have been increased, that the policy would have been limited in amount or coverage, or that the statement was material to acceptance of the risk or the hazard assumed, if the answer to question 2 was in the affirmative. Pekar’s testimony in this regard was significantly limited to the effect of an affirmative answer to question 1. He only stated that, in case of an affirmative answer to question 1 or 2, the applicant would have been required to indicate the name of the person treated, the name and address of the attending physician, and the cause for hospitalization or treatment. Weirdly enough, the question with reference to lumps, growths or swellings is not limited to those for which a member of the family had been treated, attended or hospitalized. Perhaps the failure of appellant to pursue this facet of the case was deliberate and significant. We certainly should not say that the fact that a member of the family once had a lump, growth or swelling was, as a matter of law, material to the acceptance of the risk or that the company would necessarily have rejected the application or limited the policy. I would, however, modify the judgment because I feel that the the policy limits benefits to a period beginning 10 days before diagnosis. Under the evidence here, only $920 in benefits accrued after the earliest possible beginning date. I would reduce the judgment from $2,064 to $920. This would automatically eliminate penalties and attorney’s fees. Even if the full judgment were affirmed, there was never a time when appellee claimed, or when appellant could have confessed judgment to, an amount that small, so I agree that the award of penalty and attorney’s fees was error.  For an application of the words in a statute, see Monroe v. Monroe, 226 Ark. 805, 294 S. W. 2d 338.   I agree that Pekar’s testimony was admissible, but the court’s later finding made its exclusion harmless error.