Hyman v. Life Insurance Company of North America, 72-3576 Summary Calendar.

Decision Date23 August 1973
Docket NumberNo. 72-3576 Summary Calendar.,72-3576 Summary Calendar.
Citation481 F.2d 441
PartiesHarriet HYMAN, Plaintiff-Appellee, v. LIFE INSURANCE COMPANY OF NORTH AMERICA, Defendant-Appellant.
CourtU.S. Court of Appeals — Fifth Circuit

Adolfo Del Castillo, Coral Gables, Fla., for defendant-appellant.

Philip Freidin, Arthur W. Tifford, Ronald B. Gilbert, Strauss & McCormick, P. A., Miami, Fla., for plaintiff-appellee.

Before THORNBERRY, GOLDBERG and RONEY, Circuit Judges.

THORNBERRY, Circuit Judge:

Mrs. Hyman sued appellant in the court below on a life insurance policy covering the life of her deceased husband. Over appellant's contention that Mr. Hyman had made material misrepresentations and omissions in the mailorder application for the policy, the jury awarded recovery to Mrs. Hyman, and this appeal followed.

The allegation of material misrepresentations and omissions was based on Mr. Hyman's answers to questions three and four on the application. The first question was "Have you in the last 5 years, consulted a physician for any illness?" Mr. Hyman answered "Yes" and, in accordance with an instruction to explain any affirmative answers, wrote "inflamed nerve in spine. Dr. Sherif Shafey". His explanation failed to state that he had been treated by several other physicians, and had recently been hospitalized, for a condition diagnosed as "cervical root compression," which was causing him pain in his back and weakness in his extremities. The second question on the application was as follows: "Are you presently retired or restricted in your full-time employment?". Mr. Hyman answered this question "No". On the day he completed the application, however, Dr. Shafey had certified that he "continued to be severely incapacitated" by the painful nerve. Furthermore, several months before applying for the policy, Mr. Hyman had claimed and received total disability benefits; and less than one month before making application he had claimed benefits for two-thirds disability (this claim had been rejected because his disability insurer could not verify it). At trial, however, Mrs. Hyman and another witness testified that during September, 1970, when he applied for the life insurance policy, he resumed his normal work activities as a general contractor.

The policy became effective on November 1, 1970. Less than two weeks later, Mr. Hyman died of lung cancer metastasized throughout the entire body. According to the deposition of Dr. Robert Clark, M.D., Chief of the Laboratory of the Veteran's Administration Hospital to which Mr. Hyman was admitted before he died, a tumor of such size, which not uncommonly manifests itself as a nerve impingement, had probably been present for at least a year. None of the doctors whom Mr. Hyman had consulted concerning the "inflamed nerve," however, had diagnosed his condition as cancer.

Appellant's first contention is that the trial court erroneously denied its motions for summary judgment, directed verdict, and judgment notwithstanding the verdict. A Florida statute provides that misrepresentations or omissions in applications for insurance shall not defeat recovery on the policy unless they are either fraudulent, material to the acceptance of the risk or hazard assumed by the insurer, or are such that the insurer would not have issued the policy, or would have issued it at a different premium, if it had known the facts. Fla.Stat.Ann. § 627.409. Florida courts interpret this statute to mean that even an innocent misrepresentation by the insured can bar recovery if it is material to the acceptance of the risk or if the insurer in good faith would not have issued the policy under the same terms had it known the truth. Life Ins. Co. of Virginia v. Shifflet, 201 So.2d 715 (Fla. 1967).1 We believe that the evidence made the truth of the insured's answers and the materiality if any omissions a question for the jury. The treatment by doctors other than Dr. Shafey, and the periods of hospitalization, related either to nonrecurring symptoms or to the same "inflamed nerve" referred to in the application. In addition, evidence that Dr. Shafey had certified that the insured "continued to be severely incapacitated" and that he had recently received disability benefits was countered by testimony that Mr. Hyman had resumed normal work activities during September 1970. Accordingly, we decline to disturb the trial court's denial of appellant's motions for summary judgment, directed verdict, and judgment notwithstanding the verdict.

Secondly, appellant argues that the trial court erroneously instructed the jury that the words "any illness" in the third question on the application2 meant "any appreciable disorder." Relying on the holding of Shifflet, supra, that even innocent misstatements can preclude recovery under an insurance policy, appellant argues that "illness" should be defined objectively to include conditions unknown to an insured, and that by defining the term as he did, the trial judge improperly gave it a subjective meaning. At the time Mr. Hyman completed the application, he apparently had cancer, although evidently neither he nor his doctors had discovered the condition. If "illness" means only those disorders "appreciated" by an insured, then Mr. Hyman's failure to say that he suffered from cancer did not result in an incorrect statement on the application. But if, under the rigorous rule of Shifflet, "illness" must be defined to include all conditions whether known to an insured or not, then Mr. Hyman's "nondisclosure" of so plainly a material condition would defeat recovery under...

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