Dickens v. Conseco Medical Ins. Co.
| Decision Date | 18 November 2003 |
| Docket Number | No. 05-03-00002-CV.,05-03-00002-CV. |
| Citation | 119 S.W.3d 905 |
| Parties | Alma M. DICKENS, Appellant, v. CONSECO MEDICAL INSURANCE COMPANY and Fritz Aldrine, Appellees. |
| Court | Texas Court of Appeals |
John M. Gillis, Dallas, for Appellant.
Gregory Pitts, Fort Worth, Fritz Joseph Aldrine, II, Attorney At Law, Dallas, for Appellee.
Before Justices WHITTINGTON, WRIGHT, and BRIDGES.
Alma M. Dickens appeals the trial court's summary judgment in favor of appellees Conseco Medical Insurance Company and Fritz Aldrine. In two issues, Dickens complains the trial judge erred in granting appellees's motions for traditional and no evidence summary judgment. We affirm the judgment of the trial court.
Dickens sued Conseco and Aldrine for benefits under a group major medical insurance policy. Conseco and Aldrine moved for summary judgment, alleging the policy had been rescinded because of misrepresentations by Dickens. Dickens offered her affidavit as summary judgment evidence, and testified to the following facts: Dickens obtained health insurance through an agent who was succeeded by Aldrine. Aldrine suggested Conseco as a replacement for Dickens's previous health insurance carrier. While Aldrine brought papers to Dickens's workplace for Dickens to sign, she did not read them and Aldrine did not suggest that she do so. Aldrine did not ask her to review the papers for accuracy or advise her any medical history was required. He never asked her any questions about her medical history. When Dickens made a claim on the policy, Conseco denied it because Dickens allegedly failed to disclose material medical information on the application. Conseco continued to debit Dickens's checking account for monthly premiums.
Dickens sued, alleging Conseco breached its contract with her by wrongfully denying her claim. Dickens further alleged Aldrine committed fraud by entering information on the application without Dickens's knowledge or consent. Aldrine moved for summary judgment, alleging Dickens had ratified the policy application and therefore had waived any claim of fraud. Aldrine further alleged there was no evidence of essential elements of Dickens's fraud claim, because Dickens did not establish Aldrine made any representation to her, and Dickens did not suffer injury from any fraud on Aldrine's part. See Tex.R. Civ. P. 166a(i). Conseco also moved for summary judgment on its affirmative defense that the policy was rescinded based upon Dickens's misrepresentations. Dickens agrees several of the health questions on the application were answered incorrectly or incompletely.
The standard of review in summary judgment is well-established. See Tex.R. Civ. P. 166a(c); Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 23 (Tex.1990). In reviewing a summary judgment, evidence favorable to the nonmovant will be taken as true. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985). Every reasonable inference in favor of the nonmovant is allowed, and all doubts are resolved in her favor. Nixon, 690 S.W.2d at 548-49.
To prevail on summary judgment, a defendant as movant must either disprove at least one element of each of the plaintiff's theories of recovery or plead and conclusively establish each essential element of an affirmative defense, thereby rebutting the plaintiff's cause of action. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979); Hoover v. Gregory, 835 S.W.2d 668, 671 (Tex.App.-Dallas 1992, writ denied). A matter is conclusively established if ordinary minds could not differ as to the conclusion to be drawn from the evidence. See Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982).
Appellees also argued there was no evidence of one or more essential elements of Dickens's claims under rule 166a(i) of the Texas Rules of Civil Procedure. See Espalin v. Children's Med. Ctr. of Dallas, 27 S.W.3d 675, 682-83 (Tex.App.-Dallas 2000, no pet.) (no-evidence summary judgment motion may be urged on the ground that there is no evidence of one or more essential elements of a claim or defense on which the adverse party would have the burden of proof at trial). A no-evidence motion for summary judgment places the burden on the nonmovant to present summary judgment evidence raising a genuine fact issue. See Espalin, 27 S.W.3d at 683.
We review a no-evidence summary judgment under the same legal sufficiency standard used to review a directed verdict. Gen. Mills Rests., Inc. v. Tex. Wings, Inc., 12 S.W.3d 827, 832-33 (Tex.App.-Dallas 2000, no pet.). Thus, we must determine whether the nonmovant produced more than a scintilla of probative evidence to raise a fact issue on the material questions presented. Gen. Mills, 12 S.W.3d at 833. When analyzing both traditional and no-evidence summary judgments, we consider the evidence in the light most favorable to the nonmovant. See Nixon, 690 S.W.2d at 549 (traditional summary judgment); Gen. Mills, 12 S.W.3d at 833 (no-evidence summary judgment).
Dickens's cause of action against Conseco was for breach of contract. Dickens further pleaded Conseco was precluded from denying contractual liability by the doctrines of waiver, ratification, and promissory estoppel, because Conseco continued to draft Dickens's checking account for monthly premiums due on the policy after denying her claim on the basis of her alleged misrepresentations. In its summary judgment motion, Conseco maintained the policy was rescinded effective December 15, 1999, based on the misrepresentations contained in the application.
The policy provides it will be governed by the laws of the State of Illinios. Under Illinois law, a misrepresentation on an application for an insurance policy does not defeat coverage unless (1) the misrepresentation was made with the intent to deceive; or (2) the misrepresentation materially affected either the acceptance of risk or the hazard assumed by the insurance company. 215 ILL. Comp. Stat. Ann. 5/154 (West 2000); see also Nat'l Blvd. Bank v. Georgetown Life Ins. Co., 129 Ill.App.3d 73, 84 Ill.Dec. 330, 472 N.E.2d 80, 86, 88 (1984) (). An incomplete answer or a failure to disclose material information in response to a question on an application can constitute a misrepresentation for purposes of this statute. See New England Mut. Life Ins. Co. v. Bank of Illinois, 994 F.Supp. 970, 976-77 (N.D.Ill.1998) (). Conseco does not attempt to prove any intent to deceive on Dickens's part. Instead, Conseco maintains the incorrect information on the application materially affected its acceptance of the risk and the hazard it assumed in issuing the policy. Conseco urges it has established these factors as a matter of law.
Under Illinois law, whether an applicant's statements are "material" is determined by "whether a reasonably careful and intelligent person would have regarded the facts stated as substantially increasing the chances of the events insured against, so as to cause a rejection of the application or different conditions." Ratliff v. Safeway Ins. Co., 257 Ill.App.3d 281, 195 Ill.Dec. 473, 628 N.E.2d 937, 942 (1993). Ordinarily, materiality is a question of fact. See N. Life. Ins. Co. v. Ippolito Real Estate P'ship, 234 Ill.App.3d 792, 176 Ill.Dec. 75, 601 N.E.2d 773, 780 (1992). The question may be appropriate for summary judgment, however, "where the misrepresentation is of such a nature that all would agree that it is or is not material." N. Life Ins. Co., 176 Ill.Dec. 75, 601 N.E.2d at 780. The materiality of a misrepresentation in an insurance application may be established by the testimony of the insurer's underwriter. See Royal Maccabees Life Ins. Co. v. Malachinski, 161 F.Supp.2d 847, 854 (N.D.Ill.2001).
In support of its motion for summary judgment, Conseco offered the affidavit of Mindy L. Stadel, a Second Vice-President of the Benefits Department of Conseco, who testified in part:
Had the information on the application form been completed correctly, Conseco Medical Insurance...
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