Fidelity & Casualty Co. of New York v. Middlemiss

• Decision Date: 30 March 1943
• Docket Number: 6501
• Citation: 103 Utah 429,135 P.2d 275
• Parties: FIDELITY & CASUALTY CO. OF NEW YORK v. MIDDLEMISS
• Court: Utah Supreme Court

135 P.2d 275

103 Utah 429

FIDELITY & CASUALTY CO. OF NEW YORK v. MIDDLEMISS

No. 6501

Supreme Court of Utah

March 30, 1943

Rehearing denied June 28, 1943.

Appeal from District Court, Third District, Salt Lake County; A. H Ellett, Judge.

Action by the Fidelity and Casualty Company of New York against William R. Middlemiss to cancel a policy of health and accident insurance, wherein the defendants filed a counterclaim seeking to recover on the policy. From a judgment of nonsuit as to counterclaim, the defendant appeals.

Affirmed.

D. N Straup, Willard Hanson, and Stewart M. Hanson, all of Salt Lake City, for appellant.

Hurd & Hurd and E. B. Cannon, all of Salt Lake City, for respondent.

McDONOUGH, Justice. WOLFE, C. J., and MOFFAT, J., and GEORGE A. FAUST, Dist. Judge, LARSON, J., concurs.in the result. PRATT, J., on leave at absence.

OPINION

McDONOUGH, Justice.

Defendant and appellant, who was the counterclaimant in the court below, appeals from a judgment of nonsuit and dismissal entered against him. Plaintiff insurance company instituted the action to rescind and cancel a policy of health and accident insurance issued January 8, 1940, to Dr. William R. Middlemiss. Defendant counterclaimed for $ 20,000 for loss of the sight of his right eye alleged to have been caused by an accident sustained after the policy was issued.

The only question for our determination is whether the trial court erred in granting the motion for dismissal against defendant on his counterclaim. Both by its complaint and by its reply to the answer and counterclaim, plaintiff claimed misrepresentations and false statements material to the risk were made by defendant in procuring the policy. Plaintiff particularly claimed misrepresentation of material facts in answers to questions 17, 18 and 19 of the application:

"17. Are you in sound condition mentally and physically? Yes

"18. Have you any mental or physical defects not specified above? No

"19. Have you received medical or surgical advice or treatment at any time during the last five years or have you been disabled at any time during that period? No"

The policy was issued without any medical examination. The only information obtained by the insurance company as to the physical condition of the applicant which might enable the company to make any determination as to the soundness of the risk for which insurance was sought, consisted of the answers to questions made by appellant in his application. The policy contains a copy of such application, and under "General Provisions" appears the following:

"7. This policy is issued in consideration of the premium charged therefor and of the statements made in the application, a copy of which is endorsed upon and is hereby made a part of this contract. The falsity of any statement in the application for this policy materially affecting either the acceptance of the risk or the hazard assumed hereunder, or made with actual intent to deceive shall bar all right to recovery under this policy. * * *"

By the terms of the policy appellant was insured against

"Bodily injury sustained during the term herein specified, through accidental means, and resulting directly, independently and exclusively of all other causes, in --* * * (c) Dismemberment and Loss of Eyesight (as specified in Article 1) sustained within twenty-six weeks from the date of the accident. * * *"

For the loss of the "sight of one eye" a sum equal to the weekly indemnity of 200 weeks is payable, which at the rate of $ 100 per week would amount to $ 20,000. "Loss shall mean: * * * with regard to eyes, the irrecoverable total loss of sight."

In determining the propriety of granting a motion for involuntary nonsuit the evidence must be considered from a view most favorable to the party against whom the dismissal is sought.

By his pleadings and testimony, appellant denied that the answers to questions 17, 18 or 19 were false, and he claimed proper answers were made to the questions. The respondent company contends the answers were not only false, but that the doctor knew the information sought by the questions was material to the risk; and that had he given correct information, an investigation would have been invited which would have resulted either in rejection of the application or exclusion of the defective eye from coverage under the policy.

When 5 or 6 years of age an open safety-pin pierced the right eye of the insured, and a cataract developed which was removed by a needling operation. As a result, the lens was destroyed, and he had an uncorrected vision in the right eye of 20 per cent or less. In 1918 he had an operation performed to shorten the internal rectus muscle because the eye had started to turn. He wore glasses, but the lens for the right eye was a blank. A strong magnifying lens could substantially restore or correct the vision lost by destruction of the lens of the right eye, but corrected vision in that eye could not be coordinated with that of the left eye. With a correction lens for the right eye he would likely see double.

He wore glasses since childhood, and got along all right in high school, university, and medical college, as well as in the practice of medicine and surgery for more than 18 years, notwithstanding the impaired vision of the right eye for the reason he relied on the left eye for acute vision. In 1938 Dr. Callahan, an eye specialist, tested his left eye for a correction in the lens for the left eye, but he did nothing to correct the right eye for the reason above stated. It appears from the evidence that prior to the accident in 1940, if the sight of the left eye had been accidentally destroyed, a lens could have been fitted for the right eye to give Dr. Middlemiss acute vision and substantially normal sight in the right eye.

On January 8, 1940, when defendant applied for the health and accident policy he was not only a physician and surgeon, but he was representing various insurance companies in conducting medical examinations of applicants for both life insurance and health and accident policies. He was conscious of the greatly reduced vision of his right eye, and he was interested in the proper care of his eyes. At the time he answered the questions he recognized the fact he had suffered a serious injury to his right eye; and he admitted that he realized insurance companies are interested in obtaining information affecting longevity and disability. He claimed, however, that he was able to do his work without difficulty or handicap, and he was then enjoying good "general health," and since the questions were general he considered the answers he gave were true in a general way. He testified that no question was specifically directed to his eyes, and that he had no intent to deceive. The defective condition of his right eye could not be detected by the ordinary layman. He made no disclosure of the defect to his right eye which was one of the particular parts of his body to be covered by insurance. He admitted that the risks assumed in accident policies are in some respects greater than in life insurance, and that such companies are interested in knowing about defects which tend to affect the risks. He testified that he did not consider the condition of his right eye affected the risk, as he was chiefly concerned with protection against loss of time from illness.

When he received the policy he read it over and returned it because he believed it did not afford him all the protection he wanted. After discussing the provisions with a representative of the local agents he decided to keep the policy and he issued another check for the premium to replace the original check on which he had stopped payment. He then placed the policy in his safety-deposit box and did not read it again until a few weeks before this controversy arose.

On July 24, 1940, he drove his car south on Ninth East street in Salt Lake City. While stopped behind a line of vehicles waiting for a green light at Eighth South street, a car crashed into the rear of his car, and the impact caused his head to be thrown forward, and the right side of his face at the angle of the eye struck the knob on the steering wheel. He claimed he felt a sharp flash of pain for an instant, his glasses moved upward from the blow, but were not broken. Resulting swelling on the right side of his face receded upon the application of cold packs.

While the eye appeared to respond to the treatment for a time, it gradually became worse and hardened and the tension increased until it became so painful he had to go to the hospital for treatment. An operation was performed shortly after he was treated at the hospital to relieve the tension and save the eyeball. The eyeball was saved, but the balance of the sight in the right eye was entirely gone when he was examined after the bandages were removed.

Over two months after the alleged injury on July 24th and just prior to the time he went to the hospital, Dr. Middlemiss informed Mr. Peck, a representative of the general agency through which the policy had been procured, that he was having trouble with his right eye, which he believed resulted from an accident sometime before, and that he would make a report when he got out of the hospital. He claimed he did not know he had entirely lost the sight of the right eye until he returned from the hospital. The claim was made on October 23, 1940, under the policy for loss of sight. The insurance adjuster made an investigation. and...