Amex Life Assurance Co. v. Superior Court
| Decision Date | 27 March 1996 |
| Docket Number | No. B096500,B096500 |
| Citation | 51 Cal.Rptr.2d 354,43 Cal.App.4th 1588 |
| Court | California Court of Appeals Court of Appeals |
| Parties | Previously published at 43 Cal.App.4th 1588, 48 Cal.App.4th 810 43 Cal.App.4th 1588, 48 Cal.App.4th 810, 96 Cal. Daily Op. Serv. 2183, 96 Daily Journal D.A.R. 3585 AMEX LIFE ASSURANCE COMPANY, a corporation; Life Investors Insurance Company of America, a corporation, Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent. SLOME CAPITAL CORP., dba Independence Life, Real Party in Interest. |
Adams, Duque & Hazeltine, Margaret Levy and Nancy Garelick, Los Angeles, for Petitioners.
No appearance for Respondent.
Hogan, Baynes & Haworth, Timothy J. Hogan and Jack M. Zakariaie, Los Angeles, for Real Party in Interest.
Amex Life Assurance Company and Life Investors Insurance Company of America, defendants in an insurance "bad faith" action, seek a writ of mandate directing respondent court to grant their motion for summary judgment. We grant the petition as to plaintiff's bad faith cause of action but deny it in all other respects.
This matter is before us on a writ petition seeking to overturn the trial court order denying the summary judgment motion brought by defendant and petitioner Amex Life Assurance Company ("Amex"). 1 Amex issued a life insurance policy to Jose Morales ("Morales") effective May 1, 1991. Morales learned he was HIV positive in late 1990 and applied for the insurance in January 1991. He lied on the application form and denied having the AIDS virus.
On March 20, 1991, a paramedic engaged by Amex met a man claiming to be Morales and took blood and urine samples. Morales's application showed that he was 5-feet, 6-inches tall and weighed 142 pounds. The man who gave these samples was listed by the examiner as standing 5-feet, 10-inches and weighing 172 pounds. He produced no identification, a fact which the examiner noted. While Morales claimed he was a non-smoker, the urine sample tested positive for traces of nicotine. For purposes of these proceedings, it is undisputed that an impostor appeared for the medical exam and provided the urine and blood samples. The blood sample taken tested HIV negative and the policy was issued.
Morales died June 11, 1993. In the weeks before his death, Morales sold his policy to plaintiff and real party in interest Slome Capital Corp. ("Slome"), a viatical company engaged in the business of buying life insurance policies at a discount rate from insureds before their deaths. After Slome entered the agreement with Morales, but before paying Morales any money, Slome contacted Amex and was told that the statutorily-mandated, two-year incontestability period (Ins.Code, § 10113.5) had passed. 2
After Slome filed its claim for the policy proceeds, Amex was tipped off that an impostor had taken the medical exam for Morales. Amex conducted an investigation, including a handwriting analysis. Based on the handwriting analysis, the height and weight discrepancies and the presence of nicotine in the urine sample, Amex concluded that the tip was correct and denied Slome's claim on that basis. Slome sued Amex for breach of contract, bad faith and equitable estoppel. At issue is whether section 10113.5 bars Amex's policy challenge, or whether that statute is obviated based on the so-called "impostor defense" which several other states, but not California, have adopted.
A party whose summary judgment motion was denied may petition this court for a writ of mandate seeking to reverse the lower court's order. (Code Civ.Proc., § 437c, subd. (l ).) Summary judgment is granted when a moving party establishes the right to the entry of judgment as a matter of law. (Code Civ.Proc., § 437c, subd. (c).) In reviewing an order granting summary judgment While the appellate court must review a summary judgment motion by the same standards as the trial court, it must independently determine as a matter of law the construction and effect of the facts presented. (Saldana v. Globe-Weis Systems Co. (1991) 233 Cal.App.3d 1505, 1510-1511, 1513-1515, 285 Cal.Rptr. 385.)
we must assume the role of the trial court and redetermine the merits of the motion. In doing so, we must strictly scrutinize the moving party's papers. (Chevron U.S.A., Inc. v. Superior Court (1992) 4 Cal.App.4th 544, 549, 5 Cal.Rptr.2d 674.) The declarations of the party opposing summary judgment, however, are liberally construed to determine the existence of triable issues of fact. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1556, 8 Cal.Rptr.2d 552.) All doubts as to whether any material, triable, issues of fact exist are to be resolved in favor of the party opposing summary judgment. (Ibid.)
Recent amendments to the summary judgment statute have changed the burden of proof. A defendant moving for summary judgment meets his burden of proof of showing that a cause of action has no merit if that party shows that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the action. (Code Civ.Proc., § 437c, subd. (o)(2).) Once the defendant does so, the burden shifts back to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or defense. In doing so, the plaintiff cannot rely on the mere allegations or denial of his pleadings, "but, instead, shall set forth the specific facts showing that a triable issue of material fact exists...." (Ibid.; see Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590, 37 Cal.Rptr.2d 653.)
Morales's policy included the following provision: "We will not contest coverage under the Certificate [of insurance] after it has been in force during the life of the Covered Person for two years from the Certificate Effective Date, if all premiums have been paid." This was in accord with section 10113.5, which requires that every individual life insurance policy delivered or issued for delivery in this state contain a provision that it shall be incontestable after it has been in force for a period not more than two years from its date of issue. 3
No reported decisions have construed section 10113.5. While the legislative history of the provision is also scant, it does provide a compass for our search into its meaning. Section 10113.5 was enacted in 1972 as Senate Bill 844. Before its enactment, only group life insurance policies were required to include an incontestability provision. (§ 10206.) Both an author's statement and a legislative analysis provided by the Legislative Intent Service show that section 10113.5 was patterned after section 10206 in order to fill that gap. 4
Section 10206 contains wording similar to that of section 10113.5: "The policy shall provide that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue; and that no statement made by any employee insured under the policy relating to his insurability shall be used in contesting the validity of the insurance with respect to which such statement was made after such insurance has been in force prior to the contest for a period of two years during such employee's lifetime nor unless it is contained in a written application signed by him." (§ 10206.) Since these two provisions use similar wording to achieve similar goals relating to the same subject matter, and since section 10113.5 was patterned after section 10206, cases construing the latter are properly considered in construing the former. (People v. Caudillo (1978) 21 Cal.3d 562, 585, 146 Cal.Rptr. 859, 580 P.2d 274; Dubins v. Regents of University of California (1994) 25 Cal.App.4th 77, 86-87, 30 Cal.Rptr.2d 336; Pacific Bell v. California State & Consumer Services Agency (1990) 225 Cal.App.3d 107, 115-116, 275 Cal.Rptr. 62; Estate of Hoertkorn (1979) 88 Cal.App.3d 461, 465-466, 151 Cal.Rptr. 806.)
As with section 10113.5, however, few cases directly interpret section 10206. Those that do looked to case law which considered the effect of incontestability clauses which were included in policies before they were statutorily required. (See, e.g., Metzinger v. Manhattan Life Ins. Co. (1969) 71 Cal.2d 423, 428-429, 78 Cal.Rptr. 463, 455 P.2d 391, citing Dibble v. Reliance Life Ins. Co. (1915) 170 Cal. 199, 149 P. 171, hereafter "Dibble.")
Dibble is the first reported California decision to examine the effect of an insured's fraud during the application process when the policy contained an incontestability clause. The named insured had lied about the state of his health on his life insurance application. The policy contained a one-year incontestability provision, which the insurer argued did not apply to such fraud. The Supreme Court rejected this argument. (Dibble, supra, 170 Cal. at pp. 208-209, 149 P. 171.)
Numerous decisions since Dibble have held that even gross fraud by an insured who lied about his health in applying for life insurance falls within the terms of an incontestability provision. (Metzinger v. Manhattan Life Ins. Co., supra, 71 Cal.2d at pp. 428-429, 78 Cal.Rptr. 463, 455 P.2d 391 []; New York Life Ins. Co. v. Hollender (1951) 38 Cal.2d 73, 77-79, 237 P.2d 510 []; Coodley v. New York Life Ins. Co. (1937) 9 Cal.2d 269, 272, 274, 70 P.2d 602 []; Schaefer v....
To continue reading
Request your trial
-
Protective Life Ins. Co. v. Sullivan
... ... No. 96-1080 ... United States Court of Appeals, ... First Circuit ... Argued June 5, 1996 ... Decided July ... exceptions to incontestability statutes have been mixed, compare Amex Life Assurance Co. v. Slome Capital Corp., 43 Cal.App.4th 1588, 1605-07, ... ...
-
Amex Life Assur. Co. v. Superior Court (Slome Capital Corp.)
...SLOME CAPITAL CORPORATION, Real Party in Interest. No. S053421. Supreme Court of California. July 10, 1996. Prior report: Cal.App., 51 Cal.Rptr.2d 354. Petition for review GEORGE, C.J., and BAXTER, CHIN and BROWN, JJ., concur. ...
-
Insurer's ability to contest claims after the contestability cutoff.
...about the contestability deadline permitted a belated rescission. The author of this article represented Massachusetts General. [8.] 43 Cal.App.4th 1588, 51 Cal.Rptr.2d 354 (Cal.App. 1996), certified for partial publication, review granted, 918 P.2d 998 (Cal. 1996). [9.] See Jewish Ctr. of ......