Engl v. Aetna Life Ins. Co.

Decision Date03 December 1943
Docket NumberNo. 137.,137.
Citation139 F.2d 469
PartiesENGL v. ?TNA LIFE INS. CO.
CourtU.S. Court of Appeals — Second Circuit

Harry G. Herman, of New York City (Jacob A. Bernstein, of Mt. Vernon, N. Y., on the brief), for plaintiff-appellant.

Daniel Miner, of New York City (Allen M. Taylor, of New York City, on the brief), for defendant-appellee.

Before AUGUSTUS N. HAND, CHASE, and CLARK, Circuit Judges.

CLARK, Circuit Judge.

Defendant's defense to plaintiff's claim as beneficiary of three insurance policies totalling $8,000 upon the life of her deceased husband is based upon the contention that in applying for the insurance the insured had misrepresented the facts as to consultations he had had with physicians. After defendant had filed its answer herein wherein it raised this defense by detailed allegations and showed a tender of premiums paid, it then proceeded to take the depositions of two physicians, who testified that deceased had in fact consulted them, but not as to the reasons for or nature of such consultations, since plaintiff claimed her statutory privilege (New York Civil Practice Act, ? 352, applying also in the federal court below, Connecticut Mut. Life Ins. Co. v. Union Trust Co., 112 U.S. 250, 5 S.Ct. 119, 28 L.Ed. 708) that these were confidential communications. Thereafter defendant moved for summary judgment, which the district court granted. Plaintiff's appeal contends that she was not compelled to disclose her case in advance of trial, and specifically that she was not required, before that time, to waive her privilege as to permitting the doctors to testify, and thus could rely until then upon the possibility that the doctors might show the consultations to have been on inconsequential ailments.

The deceased took out the policies, which became incontestable after two years, in November, 1941. He died on April 8, 1942. By their terms the policies made the written statements of the deceased in his application "representations" and within the provisions of New York Insurance Law, Consol. Laws, c. 28, ? 149, as amended in 1939, dealing with "Representations by the insured." See Patterson, The Insurance Law Revision of 1939, 11 N.Y.St. Bar Bull. 135. The question and answer here particularly involved are as follows: "10.l. When and for what reason did you last consult a physician?" "Pleurisy (dry) 1921. Brief. Due to exposure only. 1921. Dr. ___? Berlin." Other questions and answers involved are the question whether he had ever consulted a physician for or suffered from any disease of "Stomach, Intestines, Liver, Kidneys or Bladder," with the answer "No," the question, "Have you had regular or occasional health examinations?" with a like answer, and the further questions immediately following, "Date of last?___" and "By Dr.___" with lines. drawn after them to show negative answers to them.

The depositions of Drs. Schur and Bernstein brought out that the deceased had in fact consulted Dr. Schur on March 26, May 28, and June 20, 1940 (in addition to other visits particularly for his wife), that the doctor had prescribed for him and had referred him to Dr. Bernstein, a radiologist, for X-rays, and that Dr. Bernstein in May, 1940, had taken six X-rays of the insured's gall bladder over a period of three days after he had followed a certain preparatory diet. (That the part of the insured's body X-rayed was in fact the gall bladder was received only under motion to strike, but it would seem admissible under the rule that the statutory privilege does not extend to matters observable by any third person if present. Klein v. Prudential Ins. Co., 221 N.Y. 449, 453, 117 N.E. 942.) All other questions as to the object of the consultation or details thereof, as well as questions as to gall bladder pathology, were left unanswered because of plaintiff's insistence on her privilege, plaintiff's counsel stating that he reserved the right of cross-examination of these witnesses until the trial. Defendant's affidavit on its motion for summary judgment brought these depositions to the attention of the court, and a further affidavit of its associate medical director showed that he had approved the deceased's application for life insurance and that he would not have done so had he known of the fact of these consultations and the taking of the X-ray photographs. Plaintiff, in opposition to the motion, submitted only her own affidavit to the effect that it had been the custom of herself and her husband to submit to annual physical examinations while living in Germany, that after coming to this country in 1938 she had suggested such a check-up here, and that the examinations in question, as well as the taking of the X-rays, were only routine medical check-ups such as she and her husband had had before in Germany.

New York Insurance Law, ? 149 provides in its sub. 2 that misrepresentations shall not defeat recovery on the policy unless material and shall be deemed material only if the insurer would not have made the contract except for reliance upon the misrepresentations, and in sub. 4 that a misrepresentation that an applicant has not had previous medical treatment shall be deemed a misrepresentation that the applicant has not had the disease for which such treatment was given, concluding with this pertinent sentence: "If in any action to rescind any such contract or to recover thereon, any such misrepresentation is proved by the insurer, and the insured or any other person having or claiming a right under such contract shall prevent full disclosure and proof of the nature of such medical impairment, such misrepresentation shall be presumed to have been material." The district court, in granting judgment, held that plaintiff had prevented full disclosure, that the presumption therefore operated, and that plaintiff's own affidavit was not enough to explain the visits to and the X-rays of the physicians, citing particularly Anderson v. Aetna Life Ins. Co., 265 N.Y. 376, 380, 193 N.E. 181, 182, where the court had said that cases calling for an X-ray examination "can scarcely be presumed to be mere temporary disorders, having no bearing upon general health." It therefore held the misrepresentations to be material as a matter of law and to avoid the policies.

In view of this pertinent New York law there can be no doubt that if the state of the evidence at a trial should be as is above disclosed a judgment for defendant must necessarily follow; and if a jury were present, there would be error in failing to direct a verdict. This in effect plaintiff concedes by basing her argument upon the claim that her case is not to be viewed as it would be at trial. For this she cites and relies on Federal Rule 26(b), 28 U.S. C.A. following section 723c, which provides as to the "scope" of examination before trial that it shall be only as to relevant matter "not privileged." And the steps in her argument are that, since examination before trial of the physicians on these matters could not be compelled, she might therefore wait until trial to determine whether to make use of their testimony. Of course, she, or at least the deceased's "personal representatives," had the undoubted right to waive the privilege. New York Civil Practice Act, ? 354, permitting waiver "upon the trial or examination"; Capron v. Douglass, 193 N.Y. 11, 85 N.E. 827, 20 L.R.A.,N.S., 1003; Lorde v. Guardian Life Ins. Co., 252 App.Div. 646, 300 N.Y.S. 721. But it is a complete non sequitur to say that this federal rule has such an extensive application as to control, and, as we believe, largely to nullify, another federal rule more directly involved, namely, Rule 56, concerning summary judgments....

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