Court Opinion

ID: 9567310
Source: CourtListenerOpinion
Date Created: 2023-08-21 19:51:59.376539+00
Date Added: 2024-06-11T10:00:31.859642
License: Public Domain

NOBLE and CARMODY, Justices (dissenting) . It is axiomatic that a proper result cannot be reached by starting with an erroneous premise. In our view, the majority rest the opinion upon a determination that plaintiff’s failure to advise the insurance company that his driver’s license had been revoked because of a conviction of driving while intoxicated was not a misrepresentation of a fact material to the insurer’s decision whether to accept the risk, or in its appraisal of the degree of risk involved, or in fixing the rate of premium. The majority can only reach that determination by erroneously applying the rule that where the court has failed to find on any material issue, it is deemed to have been found against the party having the burden of proof. They, thus, jump at once to the conclusion necessary to support the result reached by them, that the applicant’s failure to disclose the license revocation did not affect the insurer’s position either in accepting the risk or in fixing the premium to be charged. That rule, of necessity, is clearly inapplicable under the circumstances of the instant case. The rule of a presumptive finding can never be substituted for substantial evidence to ■ support such finding. ■ Such a presumed- finding, if adopted) would be contrary to the undisputed evidence and other legal presumptions which would require it to he immediately set aside. The fact that there is no basis for such a determination is conclusively established by a provision of the policy itself stating that the insured agrees that the statements and declarations constitute his representations, and that the policy is issued in reliance upon the- truth of such representations. The parties have, therefore, agreed that these representations are material and, having so agreed, the insurance company’s reliance follows as a matter of law. Modisette v. Foundation Reserve Ins. Co., 77 N.M. 661, 427 P.2d 21, decided this date; 12 Appleman, Insurance Law & Practice, § 7295; Merchants Nat’l Bank of Newburyport v. New York Life Ins. Co., 346 Mass. 745, 196 N.E.2d 201; Kentucky Cent. Life & Acc. Ins. Co. v. Lynn, 304 Ky. 416, 200 S.W.2d 946; Fire Ass’n of Philadelphia v. Ward, 130 W.Va. 200, 42 S.E.2d 713. The insurer is presumed to have relied upon such representations. Danaher v. United States, 184 F.2d 673 (8th Cir. 1950). The majority emphasize the-testimony of the plaintiff that he correctly .informed the company’s agent of the answers to all questions contained in the declaration and in the supplementary rating statement, except the fact that his driver’s license had been revoked because of a conviction of driving while intoxicated. They then assume that because the company’s agent did not properly fill - in blanks reflecting answers to other questions, the company would not have placed any more importance to the revocation of a driver’s license than to other answers which the agent failed to note. An application for an insurance policy is an- offer, intended to be relied upon and to become a part- of the contract when accepted. Minich v. M. F. A. Mutual Ins. Co. (Mo.App.), 325 S.W.2d 56. A material misrepresentation made by an applicant-for insurance, in reliance on which either 'the policy is issued or the premium to he charged therefor is fixed, renders the policy voidable. See Gooch v. Motors Ins. Co., (Mo.App.), 312 S.W.2d 605. Absent fraud or mistake, one is bound by his written contract and an application and declaration being a part of the offer is contractual in its nature. Dickinson v. Bankers Life & Cas. Co. (Mo.App.), 283 S.W.2d 658. Applying these fundamentals, the courts are virtually, unanimous in holding that failure to disclose that the applicant had previously had his driverls license revoked for driving while intoxicated- was material to the risk and grounds for avoidance -of the policy. State Farm Mutual Auto Ins. Co. v. Gaekle, 131 F.Supp. 745 (N.D.Ind.1955) ; Maryland Cas. Co. v. Eddy, 239 F. 477 (6th Cir. 1917); Harris v. Allstate Ins. Co., (Tex.Civ.App.), 249 S.W.2d 669; Strong v. State Farm Mutual Ins. Co., 76 S.D. 367, 78 N.W.2d 828; Republic Mutual Ins. Co. v. Wilson, 66 Ohio App. 522, 35 N.E.2d 467; “Kravit v. United States Cas. Co., 278 Mass. 178, 179 N.E. 399. One difficulty with the position • of the majority is that the plaintiff admitted that he signed the instruments in blank. Under similar situations, a contention that the 'company’s agent by not correctly filling out the answers did not rely upon the answers given has been rejected. Cypher v. Nat’l Acc. & Health Ins. Co., 155 Pa.Super. 487, 38 A.2d 543; Prevete v. Metropolitan Life Ins. Co., 343 Pa. 365, 22 A.2d 691; Richardson v. Alta Life Ins. Co., 153 Pa. Super. 310, 33 A.2d 783; Beasley v. Metropolitan Life Ins. Co., 190 Tenn. 227, 229 S.W.2d 146. -Even a contention that a fraud on the company was committed by the company’s agent in unfaithfully recording the answers to the questions is unavailing'where the applicant failed to read the instrument he signed. It seems to be settled that the applicant’s duty is to do everything reasonably within his power to see that the statements contained in the application are, in' fact, true. By failing to read the instrument after it is filled out, the applicant himself becomes a party to the fraud on the insurance company and cannot recover on the policy. Cypher v. Nat’l Acc. & Health Ins. Co., supra. Under, the undisputed evidence, the failure, to adv-ise.of the license revocation constituted. a misrepresentation of a material fact in the application, declaration and supplemental rating statement which was material to the risk involved and concerned the rate to be charged for premiums. The applicant was bound by it, and the company had a right to either void the policy or increase the premium. It was contended in Stockinger v. Central Nat’l Ins. Co., 24 Wis.2d 245, 128 N. W.2d 433, as here, that the misstatements only concerned rating factors rather than whether the policy would have been issued. That court said: “ * * * This argument is, at best, an exercise in semantics, for it may be assumed that premium rates are directly proportional to the risk involved. It is a matter of common knowledge that automobile insurance companies charge higher premiums for under twenty-five drivers because of the greater risks involved in insuring such drivers. * * * ” Certainly, it can be assumed that an insurance company charges those who have had a driver’s license revoked for driving while intoxicated a higher premium because of the greater risk involved. The judgment should be reversed with instructions to enter a judgment declaring the policy void. For the reasons stated, we are unable to agree with the majority and,. therefore, dissent.