Opinion
98 Civ. 0664 (TPG)
February 2, 2000
OPINION
Plaintiff Charlene Lavinger is suing to recover benefits under her deceased husband's life insurance policy. Defendant Principal Mutual Life Insurance Company moves for summary judgment dismissing the complaint. The motion is granted.
Facts
In June 1993 Dr. Paul A. Lavinger applied for the issuance of a policy of life insurance from Principal Life. Lavinger executed an application on June 24, 1993, and a medical questionnaire on June 27, 1993.
In executing the application, Lavinger answered a number of questions. Question 13 asked for the name of his personal doctor. The answer was "NONE." Lavinger was asked questions about whether he had experienced, or been treated for, certain physical problems within the last 10 years. He answered "no" to all of these questions, except for indicating a gall bladder disorder taken care of by surgery 31 years previously with no problem since. Certain of the questions and answers in the application, relevant in the present case, are now set forth. Lavinger was asked to check "Yes" or "No".
25. Within the last 10 years, have you been treated for or had any indication of:
a. Disease of the heart or circulatory system, including high blood pressure, chest pain or stroke .............................. X No
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d. Mental or emotional disorder, seizures, or disorder of the brain or nervous system? ................................... X No
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h. Disease or disorder of the skin, eyes, ears, spine, back or joints including arthritis? ........................................ X No
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27. Are you now under any medication, treatment, or therapy? ............................ X No
28. Other than noted above, have you in the last 5 years seen a doctor, counselor, therapist or had any illness, injury, surgery, diagnostic test or treatment other than a HIV test? .................................. X No
Lavinger signed the application, which included the following statement.
I represent that all statements in this application are true and complete to the best of my knowledge and belief. I understand they are the basis for any insurance issued and that material misrepresentations could mean denial during the contestable period of an otherwise valid claim.
The medical questionnaire contained a series of questions, including the following:
6. Within the last 10 years, have you been treated for or had any:
a. Heart disease or murmur, rapid heartbeat, high blood pressure, chest pain, shortness of breath, rheumatic fever, anemia or disorder of the blood or cardiovascular system? ............................ X No
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h. Arthritis, back or spinal disorder, deformity, loss of limb, or disorder of the muscles, bones, tendons, ligaments or joints? .......................................... X No
7. Are you now under observation or treatment? ........................................ X No
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8. Other than 1 thru 7 above, have you in the last 5 years:
a. Had a checkup, doctor visit, illness, injury or surgery? ................................ X No
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b. Been a patient in a hospital, clinic, or other medical facility? .......................... X No
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c. Had an EKG, X-ray or other test? ............ X No
Lavinger signed the medical questionnaire, which included the following statement:
I represent that these statements are true and complete to the best of my knowledge and belief. They are a part of my insurance application.
Principal Life issued a life insurance policy at the standard nonsmoker rate to Lavinger on July 6, 1993. Plaintiff was named beneficiary of the policy's $150,000 death benefit.
Lavinger died on April 13, 1995 of colon cancer. Plaintiff filed her claim for benefits May 4, 1995.
An interview with plaintiff led to an inquiry regarding Lavinger's medical condition. On July 18, 1995 Principal Life sent plaintiff a letter explaining that her husband had materially misrepresented his health in his application, and that it was rescinding the policy.
In support of its motion for summary judgment, Principal Life has submitted a number of medical records pertaining to Lavinger. These records show that within the five-year period prior to his insurance application in June 1993, Lavinger had consulted and had received treatment from at least four physicians. He had undergone a variety of diagnostic tests, including MRIs, EKGs, a chest X-ray and various blood chemistry reports. He had been diagnosed in 1990 as having chronic fatigue syndrome. This was so severe that he was receiving total disability benefits from UNUM Life Insurance Company, Paul Revere Life Insurance Company, and the Social Security Administration.
The record contains a lengthy letter from Dr. Carol Singer of the Long Island Jewish Medical Center dated October 31, 1990, written in connection with Lavinger's disability claims. The letter recites a history given to Dr. Singer by Lavinger. According to this history, Lavinger was in reasonably good health until about December 1989 when he began to feel ill, and shortly thereafter he manifested pain and weakness in his legs to the extent that he was unable to climb stairs and even had difficulty putting on his socks. A Dr. Orens had diagnosed him as having chronic fatigue syndrome in May 1990. After that Lavinger was out of work and bedridden approximately 90% of the time. The physical examination given by Dr. Singer in October 1990 did not apparently satisfy her as to the reason for Lavinger's illness. Nevertheless, there was no finding contradictory to the diagnosis of chronic fatigue syndrome.
The medical records also show that in 1990 Lavinger was diagnosed as having herniated discs and mild bulging of the discs in his back. In 1992 he was diagnosed as having a heart condition, which was referred to as mitral valve prolapse, with one test showing mitral regurgitation.
On April 1, 1993 Dr. Mitchell E. Lipton prepared an "Attending Physician's Program Statement" in connection with his disability claims. The statement reported that Lavinger's debilitating fatigue, memory loss and difficulty in concentrating were severe enough to limit his ability to perform his duties as a physician. The statement listed drugs being administered to Lavinger, including two drugs for mitral regurgitation and mitral valve prolapse of the heart.
Kathleen Kuehn, an employee of Principal Life and the underwriting analyst who first approved Lavinger's application, has submitted an affidavit reviewing in detail how these medical conditions would have affected Principal Life's decision to issue a life insurance policy. Pursuant to its June 1993 underwriting guidelines, the policy would have been denied based solely on Lavinger's chronic fatigue syndrome. Lavinger's heart condition, standing alone, would have meant offering a policy at a higher premium than the one actually charged to Lavinger. More important, Kuehn states that the cumulative medical conditions, had they been known, would have caused Principal Life to deny coverage to Lavinger. Dr. Mary Stuart, a doctor employed by Principal Life, submitted an affidavit supporting Kuehn's conclusions.
Plaintiff does not dispute the state of her husband's health when he applied for life insurance. Plaintiff only disputes how Principal Life's underwriting guidelines treated chronic fatigue syndrome in June 1993. She points to two pages of the underwriting manual which were more favorable to an applicant than the guidelines relied on by Kuehn and Stuart, and which bear a 1993 copyright. Those pages do not exclude a person with chronic fatigue syndrome from coverage; mild symptoms would not affect a rating at all, and more serious symptoms would require a doctor's review.
In a second affidavit, Kuehn explains that those two pages were not in use in June of 1993. Principal Life has submitted a fax transmittal sheet showing that updated chronic fatigue guidelines were not distributed to its underwriters until February of 1994. Kuehn states that even under the two pages of guidelines on which plaintiff relies, Principal Life would not have issued the policy to Lavinger because of the severity of his chronic fatigue syndrome and the existence of other physical problems.
Discussion
Principal Life is not liable on the policy if Lavinger made material misrepresentations in his application. The applicable New York statute states that a misrepresentation is "material" where "knowledge by the insurer of the facts misrepresented would have led to a refusal by the insurer to make such contract." N.Y. Insurance Law § 3105(b). Determining whether a misrepresentation is material is usually a jury question, but the court can decide it as a matter of law "where the evidence is clear and substantially uncontradicted." Aguilar v. United States Life Insurance Co., 556 N.Y.S.2d 584, 585 (1st Dept. 1990).
Defendant has submitted affidavits attesting that it would not have issued the life insurance policy at issue with full disclosure of Lavinger's true medical condition. Even under the guidelines Plaintiff believes would have been used to evaluate chronic fatigue syndrome, the policy would not have been issued under the same terms. Most importantly, however, Defendant has shown that it would not have issued a policy at all under the June 1993 guidelines. Plaintiff's arguments to the contrary fail to rebut these affidavits and ignore the cumulative effect of all the omissions.
In the present case the concealment of facts was so serious and extensive as to leave no doubt about the materiality of the misrepresentation. This is not a situation of a problem which, while capable of being medically recorded, is insignificant. Lavinger's chronic fatigue syndrome was of the most serious nature, causing him to be totally disabled. The fatigue was attended by memory loss and cognition problems, which were said by his physician in April 1993 to be "severe enough to limit his ability to perform his duties as a physician." In addition there was enough of a heart difficulty to require two kinds of medication. Contrary to Lavinger's total denial of any consultation or treatment involving a doctor in the five years before his insurance application, Lavinger obtained a variety of services from at least four doctors.
The record on the present motion shows conclusively that Lavinger failed to disclose material facts in connection with his application for life insurance. There is no doubt about the fact that Principal Life would have refused coverage had it known these facts.
Principal Life's motion for summary judgment is granted and the action is dismissed.
SO ORDERED.