Court Opinion

ID: 9442279
Source: CourtListenerOpinion
Date Created: 2023-08-03 18:42:03.678743+00
Date Added: 2024-06-11T17:29:02.423288
License: Public Domain

BONE, Circuit Judge.
I concur in the result reached 'by the court but I cannot agree that there was insufficient consideration to support the conditional reinstatement of the policy. Whether or not the court is correct in holding that the Company had no right to refuse reinstatement at the time the insured reapplied, I think that, in consideration of the uncertain state of the law in this regard as disclosed by the discussion in the cases in the majority opinion, the Company’s contention that it had that right is not so lacking in foundation as to make this assertion unreasonable and wholly incompatible with honesty and good faith. It is my view that the Company’s forbearance to assert a claimed right not to reinstate the policy should be held to constitute sufficient consideration to support the new condition which it exacted. See 1 Williston on Contracts (Rev.Ed.) § 130, footnote 6, and § 135; c.f., Restatment of Contracts § 76(b), illustration 4.
However, we held in Richardson v. Travelers Insurance Co., 9 Cir., 171 F.2d 699 that an incontestable clause such as appears in the instant policy, precludes reformation. I dissented from that proposition but the decision represented the considered judgment of this court. Certainty and uniformity in the application of such a rule (in the absence here of a contrary Arizona rule) would seem to call for its application to the facts of the present case.
Indeed, application of the rule to the facts of this case appears to me to have more justification than appeared in the Richardson case. In that case the insurer sought reformation during the lifetime of the insured, and reformation, if granted, would not have defeated recovery by the beneficiaries under the policy. In this case the Company sought reformation after the death of the insured, and the reformation, as granted by the trial court, served to destroy the insurance protection of the policy and defeat recovery by the beneficiaries under the policy except for the amount of the cash surrender value, this being a sum less than one-tenth of the face amount of the policy.
Appellee does not try to distinguish this case from the facts of the Richardson case. It contends that the Richardson case’ was incorrectly decided, and that, in any event, it should have no application here for the reason that we are here applying the law of Arizona rather than the law of California. In the Richardson case this court found no California cases in point, see 171 F.2d at page 700, and therefore settled the question according to its conception of the proper rule of law. Appellee has cited no *735Ariaona statutory or case authority (dealing with the incontestability issue) which would indicate that the law of that state requires a different result and I have been unable to find any Arizona decisions in point.
For the reasons above indicated I am of the opinion that the result reached by the court might more properly rest upon the rule announced in the Richardson case.