Holtzclaw v. Bankers Mut. Ins. Co.

Citation448 N.E.2d 55
Decision Date27 April 1983
Docket NumberNo. 3-1282A339,3-1282A339
PartiesLourane HOLTZCLAW, Plaintiff-Appellant, v. BANKERS MUTUAL INSURANCE COMPANY, Defendant-Appellee.
CourtIndiana Appellate Court

Lloyd M. Allen, David M. McTigue, Voor, Allen, Fedder, Herendeen & Kowals, South Bend, for plaintiff-appellant.

E. Spencer Walton, Jr., Robert J. Palmer, May, Oberfell, Helling, Lorber & Campiti, South Bend, for defendant-appellee.

HOFFMAN, Presiding Judge.

Appellant Lourane Holtzclaw brought suit against Bankers Mutual Insurance Company (Bankers). The purpose of the suit was to compel Bankers to honor its insurance contract and reimburse appellant for certain medical and hospital expenses she had incurred. Bankers counterclaimed alleging it had no duty to cover these expenses since appellant had misrepresented certain facts in her application for insurance. Bankers made a motion for summary judgment which was granted by the trial court and Holtzclaw appeals.

Three issues are raised on appeal: 1

(1) whether the trial court erred in concluding that there was no genuine issue of fact as to the truth or falsity of appellant's representations on the application for insurance and granting the summary judgment for Bankers;

(2) whether the trial court erred in failing to conclude that the time limitation clause barred Bankers' counterclaim and motion for summary judgment; and

(3) whether the trial court erred in granting summary judgment as appellant's representations on her application for insurance were sufficient to put Bankers on inquiry notice.

When reviewing the grant of a motion for summary judgment this Court must determine that no genuine issue of material fact existed and whether the trial court correctly applied the law. Flynn v. Klineman (1980), Ind.App., 403 N.E.2d 1117; Lee v. Weston (1980), Ind.App., 402 N.E.2d 23. When determining whether a genuine issue of material fact exists, all facts presented by the opponent of the motion will be taken as true and all doubts resolved in his favor. Crase v. Highland Village Value Plus Pharmacy (1978), Ind.App., 374 N.E.2d 58; St. Joseph Bk. & Tr. Co. v. Wackenhut Corp. (1976), 170 Ind.App. 288, 352 N.E.2d 842.

The facts viewed in this light are as follows:

In November of 1976 appellant filled out an application for medical insurance with Bankers. The application was accepted and appellant began paying premiums. In October 1978, appellant incurred medical expenses which Bankers refused to cover. Coverage was denied because, according to Bankers, appellant had failed to make timely payment of her premiums. Again in November 1978, appellant incurred further hospital expenses which Bankers refused to cover. This time coverage was denied due to the litigation between appellant and Bankers which arose from its prior denial of coverage. At trial in the instant case Bankers contended in a counterclaim that it had no duty to insure appellant because of misrepresentations made by her on her insurance application.

The specific questions, along with appellant's alleged false answers, are set out below:

"7. To the best of your knowledge and belief do you ... have or during the past 10 years have you ...:

* * *

* * *

(c) Ever had venereal disease, paralysis, diabetes, heart disease, high blood pressure, hernia, epilepsy, or nervous or mental disorders?

[Answer] No

* * *

* * *

(f) Ever had any disease of the kidneys, urinary tract, prostate or pelvic organs?

[Answer] No

(g) Now have, or at any time have, any physical defect or deformity?

[Answer] No"

Record at 102.

Three months prior to filling out this application appellant had been hospitalized. While in the hospital appellant was treated for coronary insufficiency and a narrow ureter among other conditions. At this same point in time and for many years prior appellant was taking medication for a recurrent urinary tract infection. In March 1976, eight months prior to applying for insurance, appellant was hospitalized and diagnosed as having chronic pyelonephritis, a kidney ailment. She was also hospitalized for surgical treatment of "dysfunctional uterine bleeding" at that time. Appellant does not deny that she was hospitalized on these occasions but rather contends that the affidavits submitted on her behalf by Dr. Guild establish that these medical records incorrectly state her condition.

Bankers raises several procedural challenges to the affidavits of Dr. Guild and appellant. Central to these challenges is the contention that the sections of the affidavits relied upon by appellant are inadmissible and should not be considered by the court. A discussion of these issues raised by Bankers is unnecessary for purposes of this decision.

Assuming arguendo that the affidavits of appellant and Dr. Guild are admissible, there still remains no doubt that appellant made misrepresentations on her application for insurance. Appellant does not deny that she was hospitalized on two occasions less than one year prior to her application for insurance. On these two occasions appellant was treated or examined by Drs. Guild, France, Rimel, Tirmin, and Wind. Yet when she answered question eight on the insurance application regarding physicians who had been consulted within the past five years, all the above-named doctors are conspicuously absent from her answer, save Dr. Guild.

The answers given by an insured on an application for insurance are treated as representations and need only be substantially true so far as they relate to a material risk. Federal Life Ins. Co. v. Relias (1933), 99 Ind.App. 115, 185 N.E. 319; Mutual Life Ins. Co. v. Hoffman (1921), 77 Ind.App. 209, 133 N.E. 405. The representations of the insured are material to the risk if a truthful answer would lead the insurer to decline issuing insurance or charge a higher premium. New York Life Ins. Co. v. Kuhlenschmidt (1937), 213 Ind. 212, 11 N.E.2d 673; American Family Mut. Ins. Co. v. Kivela (1980), Ind.App., 408 N.E.2d 805. Generally, the issue of whether an insured made material misrepresentations on an application for insurance is a matter for the trier of fact unless reasonable minds could reach only one conclusion. Prudential Ins. Co. v. Winans (1975) 263 Ind. 111, 325 N.E.2d 204; Prudential Life Ins. Co. v. Sellers (1913), 54 Ind.App. 326, 102 N.E. 894.

Even in resolving all doubts in appellant's favor, it is abundantly clear that she concealed the names of treating physicians from the insurer. This concealment amounted to a misrepresentation. On this issue no reasonable mind could reach a contrary conclusion.

This conclusion makes it imperative that this Court discuss the second issue raised by appellant. According to appellant the terms of the policy, specifically the "time limit on certain defenses" clause, bar Bankers' counterclaim. The clause at issue states:

"TIME LIMIT ON CERTAIN DEFENSES: (a) After two years from the date the coverage under this Policy commences with...

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  • Jones v. National Union Fire Ins. Co.
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    ...fraud. One alleging fraud must allege the making of a false, material representation of past or existing facts, Holtzclaw v. Bankers Mut. Ins. Co., 448 N.E.2d 55 (Ind.App.1983); Baker v. American States Ins. Co., supra, and Mrs. Jones has alleged no representations by National Union. She ha......
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    ...in the absence of any ambiguity, words will be given their ordinary meaning when interpreting contracts. See Holtzclaw v. Bankers Mut. Ins. Co. (1983), Ind.App., 448 N.E.2d 55, 59, transfer denied. If one considers the insurance industry's own interpretation of the contractual language, it ......
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2 books & journal articles
  • CHAPTER 5
    • United States
    • Full Court Press Zalma on Property and Casualty Insurance
    • Invalid date
    ...own worst enemy—they lied, were caught, admitted the lie, and deserved to lose the $1.9 million. In Holtzclaw v. Bankers Mut. Ins. Co., 448 N.E 2d 55, 58 (Ind. Ct. App. 1983), the applicant concealed the names of the treating physicians. In most states, not including California, if the appl......
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    • Full Court Press Insurance Law Deskbook
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    ...is properly effected, the putative insured can only collect as damages the premium paid.7 In Holtzclaw v. Bankers Mut. Ins. Co., 448 N.E 2d 55, 58 (Ind. App. 1983), the applicant concealed the names of the treating physicians. In most states, not including California, if the applicant's fai......

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