Aetna Life & Cas. Co. v. Thorn, 74--695

• Decision Date: 11 March 1975
• Docket Number: No. 74--695,74--695
• Citation: 315 So.2d 219
• Court: Florida District Court of Appeals
• Parties: AETNA LIFE & CASUALTY COMPANY, Appellant, v. Margaret M. THORN et al., Appellees.

Page 219

315 So.2d 219

AETNA LIFE & CASUALTY COMPANY, Appellant, v. Margaret M. THORN et al., Appellees.

No. 74--695.

District Court of Appeal of Florida, Third District.

March 11, 1975.

Rehearing Denied July 11, 1975.

Stephens, Magill, Thornton & Sevier, and Victor Womack, Miami, for appellant.

Sepler & Sussman and Irma V. Herenandez, Hialeah, for appellees.

Before PEARSON, HAVERFIELD and NATHAN, JJ.

HAVERFIELD, Judge.

Plaintiff-appellant seeks review of an adverse final judgment on its action for rescission of an insurance policy.

In 1971 defendant-appellee, Margaret M. Thorn, applied for a health insurance policy with plaintiff-appellee, Aetna Life & Casualty Company, for herself and her children. On June 7, 1971 an agent of Aetna, William O'Neil, visited Mrs. Thorn at her residence and asked Mrs. Thorn the questions on the application. He wrote down Mrs. Thorn's responses, had Mrs. Thorn sign the application and submitted it to Aetna, the appellant. Appellant insurer issued two policies of insurance effective June 7, 1971. In 1972 Mrs. Thorn's son was hospitalized for an adjustment reaction of adolescence. Appellee, Mrs. Thorn, submitted a claim therefor which appellant insurer paid as there was no prior psychiatric history indicated on the policy application and the claim reflected that the psychiatric chiatric problems had commenced in January 1972.

Thereafter, in July 1972 Mrs. Thorn's son was admitted to Jackson Memorial Hospital and was diagnosed as schizophrenic. Defendant-appellee, Mrs. Thorn, made a claim under the policy therefor and plaintiff-appellant, Aetna, proceeded to investigate and as a result thereof discovered a long prior psychiatric history of Mrs. Thorn's son. Thereupon, Aetna denied the claim and on June 7, 1973 filed the instant action for rescission of the policy against Mrs. Thorn based upon the incontestability clause contained in the policies. Mrs. Thorn answered and counterclaimed seeking to recover the expenses of the medical 'ORDERED AND ADJUDGED, as follows:

care and treatment of her son. The cause proceeded to a nonjury trial at the commencement of which counsel for the respective parties entered into a stipulation to the effect that should plaintiff insurer fail to prevail on its complaint for rescission then defendant, Mrs. Thorn, would be entitled to recover on her counterclaim. At the trial there was conflicting testimony presented as to whether Mrs. Thorn had informed Aetna's agent, Mr. O'Neil, that her family had psychiatric problems, including her son. After the conclusion of the trial, the judge entered final judgment against plaintiff insurer on its complaint for rescission and in favor of defendant, Mrs. Thorn, on her counterclaim. The judgment read in part as follows:

'2. That at the close of the Plaintiff's case the Defendants moved for directed verdict and the Court reserved ruling on same. It is hereby the Finding of this Court that Defendants' Motion for Directed Verdict be and the same is hereby granted. The court finding that the only cause of action available to the Plaintiff is for fraudulent mis-statements pursuant to the provisions of the subject insurance policies, and that the instant law suit was filed more than two years from the date coverage under the subject policies commenced; and that the Plaintiff failed to prove that the Defendant, MARGART THORN, was guilty of uttering any fraudulent mis-statements to the Plaintiff, or any of its agents, servants or representatives with respect to the subject applications of insurance nor in the obtainment by her of the insurance policies aforementioned and, therefore, Plaintiff's prayer for relief is hereby denied and Plaintiff shall go hence without day.

'3. That Final Judgment be and the same is hereby entered in favor of the Defendants/Counter-Plaintiffs and against Plaintiff/Counter-Defendant with respect to the Defendants' Counterclaim. The Plaintiff is indebted to the Defendants in the amount of $6,754.09 together with interest from December 1, 1972 for which let execution issue according to law.'

Plaintiff, Aetna Life & Casualty Company, appeals therefrom.

Plaintiff-appellant first contends that the trial court erred in applying the limitation of the 'incontestability clause' as regards both the direct action and the counterclaim because the loss...