Fioretti v. Massachusetts General Life Ins. Co.

Citation53 F.3d 1228
Decision Date07 June 1995
Docket NumberNo. 93-5187,93-5187
PartiesVincent FIORETTI, Plaintiff-Counter-Defendant-Appellant-Cross-Appellee, v. MASSACHUSETTS GENERAL LIFE INSURANCE COMPANY, Defendant-Counter-Claimant-Appellee-Cross-Appellant.
CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)

Gerald Lesher, West Palm Beach, FL, for appellant.

John W. Thornton, Miami, FL, Mark F. Hughes, Jr., Newark, NJ, for appellee.

Appeals from the United States District Court for the Southern District of Florida.

Before KRAVITCH and EDMONDSON, Circuit Judges, and EISELE *, Senior District Judge.

EISELE, Senior District Judge:

This is an appeal from a final judgment entered in this diversity action, 1 the subject of which is an insurance coverage dispute. We have jurisdiction pursuant to 28 U.S.C.A. Sec. 1291 (West 1993). Following a bench trial, the district court entered judgment in favor of Massachusetts General Life Insurance Company (MassGen) on all counts of Vincent Fioretti's amended complaint. The court also entered judgment for MassGen on its counterclaims for recision of the disputed life insurance contract. Although we have problems with the legal analysis adopted by the district court, we nevertheless conclude that judgment was, as a matter of law, properly

                entered in favor of MassGen. 2  As we are permitted to affirm the district court where the judgment entered is correct on any available legal ground, see Parks v. City of Warner Robins, 43 F.3d 609, 613 (11th Cir.1995);  SEC v. Southwest Coal & Energy Co., 624 F.2d 1312, 1317 (5th Cir.1980), 3 we AFFIRM

With one crucial exception (which will be discussed later in this opinion), the basic facts underlying this dispute are largely undisputed. 4

On November 10, 1986, Anthony Fioretti applied for $100,000 of life insurance with the Columbian Mutual Life Insurance Company (Columbian Mutual). This application, which was taken in New York City, indicated that Anthony Fioretti had not, within five years of the application date, experienced any serious medical problems. Nevertheless, he was required to submit to a blood test as a condition of his application. In January, 1987, Columbian Mutual was informed that Anthony Fioretti had tested positive for the Human Immunodeficiency Virus (HIV). Not surprisingly, Columbian Mutual rejected his application. Later in January, 1987, the results of the Columbian Mutual blood test were sent, at Anthony Fioretti's request, to Dr. Howard Siegel, a New York physician (and, presumably, one of Anthony Fioretti's treating doctors).

Undaunted by his experience with Columbian Mutual, Anthony Fioretti, on February 10, 1987, applied for $1,947,111 of life insurance with MassGen. However, on his MassGen application Anthony Fioretti represented his name as "C. Tony Fioretti" (his real name was Anthony C. Fioretti) and his date of birth as "3-6-47" (his real date of birth was September 6, 1948). He appears, however, to have correctly listed his Social Security Number as 115-26-0761 5 (the Social Security Number listed on his Columbian Mutual application was "156-42-4187"). 6 Additionally Anthony Fioretti's MassGen application indicated that it was taken by Stuart Kirsner, a broker associated with the New York-based insurance agency Kirsner, Stern & Slavutin, Inc. 8 Although Mr. Kirsner was not licensed to sell insurance in Florida, 9 the application indicated that it was completed in Tamarac, Florida. As a pre-condition for its approval of this application, MassGen required Anthony Fioretti to undergo a blood test for the HIV virus. Anthony Fioretti agreed, but because he knew that he was HIV-positive, in June, 1987 he arranged for an imposter's blood to be tested under his name at the Spring Medical Group in New York City. 10 This test indicated that the blood submitted for testing, namely that of the imposter, had reacted negatively for the HIV virus. Despite this favorable result, MassGen ultimately refused to approve Anthony Fioretti's application, because Mr. Kirsner was not licensed to do business in Florida and the application indicated that it had been completed in that state.

                Anthony Fioretti indicated that he had not "within the past 3 years consulted a physician for an examination, blood or other medical tests, [or] treatment of any disease, condition, or other physical disorder."   Anthony Fioretti's MassGen application stated that it would be effective as of August 30, 1986, and that the Shields & Warendorff Florist, Inc. Pension Plan would be the owner of this policy. 7  The application stated that Vincent Fioretti (Anthony Fioretti's brother) would be the beneficiary of this policy, and listed Anthony Fioretti's place of residence as both New York City and Tamarac, Florida

Following this rejection, Anthony Fioretti submitted a second life insurance application to MassGen on September 8, 1987. This application indicated that it was taken by Ina Stern, 11 another broker associated with Kirsner, Stern & Slavutin. The terms of this second MassGen application (e.g., the amount of insurance, the policy's effective date, the beneficiary, etc.) were substantially similar to the original application, as were the misrepresentations concerning Anthony Fioretti's identifying information and medical history. However, in contrast to the former MassGen application, the latter indicated that it was completed in Newark, New Jersey, 12 a state in which Ms. Stern was licensed to sell insurance. 13

Because this second application was submitted shortly after the results of the above-described blood test were made available, MassGen did not require Anthony Fioretti to undergo a separate HIV test in connection with this application. Instead, after a review by its Colorado office, MassGen advised that After completing the Statement of Good Health (and thereby securing insurance coverage), Anthony Fioretti timely paid all of the premiums required under the policy. Shortly thereafter, on December 14, 1987 Anthony Fioretti applied to MassGen for a "Waiver of Premium," which would have relieved him from having to pay any premiums during any period of total disability. Although Anthony Fioretti stated on this application that, "[t]o the best of [his] knowledge and belief," he did not "have any physical disease or disorder," he was nevertheless required to undergo a second HIV test in connection with this application. In April, 1988, he again managed to have an imposter's blood submitted for testing, and once again this blood tested negative for the HIV virus. On the strength of this test result and Anthony Fioretti's execution of a second Statement of Good Health, MassGen approved Anthony Fioretti's Waiver of Premium. This waiver never went into effect, however, because Anthony Fioretti declined to pay the necessary premium.

it would approve this application, provided that, in lieu of a second HIV test, Anthony Fioretti would be required to execute a Statement of Good Health and Insurability (Statement of Good Health), which he did. This Statement of Good Health, which was executed in New Jersey on September 25, 1987, 14 represented that Anthony Fioretti was "in good health," that he had "not made an application for insurance which ha[d] been declined, postponed, or modified," and that he had "not consulted or been examined by a physician or practitioner" prior to executing the Statement of Good Health. However, at the time he completed this Statement of Good Health, Anthony Fioretti knew: (1) that he was HIV-positive; (2) that he had previously been declined life insurance by another carrier (Columbian Mutual); and (3) that he had previously consulted with at least two doctors concerning his HIV status. In short, every representation made by Anthony Fioretti in the Statement of Good Health was false. 15

On February 28, 1989, Anthony Fioretti died while domiciled in Florida. The cause of death listed on his death certificate was Acquired Immune Deficiency Syndrome (AIDS). 16 In April, 1989, Vincent Fioretti In support of its claims for rescission, MassGen argued that since Anthony Fioretti had committed fraud in securing his life insurance policy, viz, by misrepresenting his HIV-positive status and by using an imposter's blood to avoid detection, it should be relieved of its obligations under the policy. Vincent Fioretti, however, argued that under the policy's incontestability clause, MassGen was precluded from disclaiming coverage for any reason--including fraud--other than non-payment of premiums. The relevant clause provides as follows:

filed a claim with MassGen as the beneficiary of the death benefits under Anthony Fioretti's life insurance policy. In December, 1989, MassGen denied Vincent Fioretti's claim and tendered the premiums paid under the policy, but this tender was rejected by Vincent Fioretti's counsel. Later that month, MassGen commenced an action in the Superior Court of New Jersey seeking rescission of this policy, but this action was dismissed on June 1, 1990 for lack of personal jurisdiction over Vincent Fioretti. Soon thereafter, Vincent Fioretti commenced an action in the Circuit Court of Florida seeking to recover the death benefits under the policy. On July 5, 1990, MassGen removed this action to the district court and filed its counterclaims seeking rescission.


This policy will be incontestable after it has been in force during the lifetime of the insured for 2 years from the date of issue except for non-payment of premiums.

Vincent Fioretti further argued that since the policy stated that its effective date was August 30, 1986, the two-year period of contestability had lapsed prior to Anthony Fioretti's death on February 28, 1989, 17 and that accordingly he was entitled to the policy's death benefits. The district court agreed with MassGen and concluded that an "imposter defense" exists which removes the bar on coverage disputes otherwise imposed by an incontestability clause. Accordingly, the...

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