Court Opinion

ID: 9757961
Source: CourtListenerOpinion
Date Created: 2023-08-28 23:06:02.528924+00
Date Added: 2024-06-11T07:26:33.783704
License: Public Domain

Robert L. Brown, Justice, dissenting. It is a sad commenRtary when an applicant’s signature on an insurance application becomes meaningless as well as the applicant’s declaration that the facts in his application are true. Yet, the majority concludes today that an applicant for insurance who signs an application that says he has had no losses in the past is not bound by his signature. This is so, according to the majority, even though the applicant signs under a statement: “I hereby declare that the facts stated in the above application are true.” The effect of today’s decision is that any applicant for insurance can now renege on any statement in his or her application by simply saying: “I was never asked that question” or “I did not read the application.” All an insured has to do is make either of those declarations, and the matter will automatically be sent to trial. The majority fails to cite to the blackletter principles espoused by other jurisdictions. One such principle is that it is the duty of every person to read what he or she signs. See Foster v. Auto-Owners Ins. Co., 703 N.E.2d 657 (Ind. 1998). Another is that when an applicant signs an insurance application, that person is responsible for the information contained in it. See id. The signer of an insurance application is conclusively bound by it regardless of whether he or she actually reads it. See Curanovic v. New York Cent. Mut. Fire Ins. Co., 307 A.D.2d 435, 762 N.Y.S.2d 148 (2003). An insured has a duty to review the entire application and to correct inaccurate or incomplete answers. See id. Contrary to the majority, I do not view Interstate Fire Ins. Co. of Chattanooga, Tenn. v. Ingram, 256 Ark. 986, 511 S.W.2d 471 (1974), or Southern Nat’l Ins. Co. v. Heggie, 206 Ark. 196, 174 S.W.2d 931 (1943), as controlling this case. Both cases involved issues of fraud, negligence, or mistake where an insurance agent incorrectly wrote down the wrong answer given by the insured. That is what created an issue of fact. Here, there was no disputed issue of fact. Neither Neill nor Nationwide averred that Neill was asked about prior losses. But even if the insured was not asked specifically about prior fire losses, his application showed the answer “none” under the question relating to prior losses. Neill declared that this fact was true by signing his name under a declaration of truthfulness, and it was not. I conclude that Neill had a duty to read the application and is bound by what he signed, which is precisely what we held in Carmichael v. Nationwide Life Ins. Co., 305 Ark. 549, 810 S.W.2d 39 (1991). The facts in Carmichael are analogous to the facts before us. There, the insured’s beneficiary appealed from a grant of summary judgment in favor of the insurance company. Following the insured’s death, the insurer completed a routine investigation to determine whether the decedent’s answers on his application for life insurance were true. During the investigation, the insurer discovered that the insured had previously been diagnosed with diabetes prior to applying for life insurance. However, on the insured’s application, the box responding to the question of whether he had in fact been previously treated for diabetes was marked “no.” The insurance company then refused to pay the benefits under the policy to the insured’s beneficiary. The beneficiary filed suit against the insurance company, and the company moved for summary judgment, which was granted. On appeal, the beneficiary asserted, as here, that the agent either failed to obtain the decedent’s response to each question on the application or failed to accurately record the answers given. The insurance company responded and urged that the decedent insured made misrepresentations which were material to its acceptance of risk under the policy. In addition, the company claimed that by signing the declaration at the bottom of the application for insurance, the decedent certified that the information contained therein was correct to the best of his knowledge. We agreed with the insurance company and said: It is well established in Arkansas that one is bound under the law to know of the contents of a paper signed by him and he cannot excuse himself by saying he did not know what it contained. Pittsburg Steel Co. v. Wood, 109 Ark. 537, 160 S.W. 519 (1913). Thus, the fact that the decedent signed the application certifying the information contained in it was correct to the best of his knowledge is at least probative evidence of his misrepresentation. 305 Ark. at 552, 810 S.W.2d at 41 (emphasis added). We then held that the court did not err in granting the insurance company summary judgment because the beneficiary had not met proof with proof and created an issue of material fact. ' Similarly, in the case before us there is no disputed issue of fact. Stated differently, there is no issue about whether the Nationwide agent wrote down incorrect answers or whether he specifically asked about prior losses. The question squarely before us is whether an insurance applicant is bound by what he signs. The majority says he is not. In doing so, the majority has apparently overruled the Carmichael case. Neill had had three prior fire losses, and his application was blatantly false. Regardless of that fact, Nationwide is now required, under the majority’s reasoning, to take the matter to trial, though there is no disputed issue of material fact. The far better course, in my judgment, is to bind a person by what he or she signs. The impact of this decision on commerce in general is marked and will, no doubt, cast doubt on multiple representations made in connection with multiple endeavors. I respectfully dissent. Arnold, C.J., and Thornton, JJ., join in this dissent.