Garcia v. John Hancock Variable Life Ins. Co.

• Citation: 859 S.W.2d 427
• Decision Date: 16 June 1993
• Docket Number: No. 04-92-00350-CV,04-92-00350-CV
• Parties: Carmen L. GARCIA, Appellant, v. JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY, Appellee.
• Court: Court of Appeals of Texas

Page 427

859 S.W.2d 427

Carmen L. GARCIA, Appellant, v. JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY, Appellee.

No. 04-92-00350-CV.

Court of Appeals of Texas,

San Antonio.

June 16, 1993.

Opinion Denying Rehearing Aug. 31, 1993.

Dayton G. Wiley, Dayton G. Wiley & Associates and Ralph J. Bernsen, Sr., Garwood & Associates, P.C., San Antonio, for appellant.

Edward R. Finck, Jr., Clemens & Spencer, San Antonio, for appellee.

Before PEEPLES, BIERY and GARCIA, JJ.

OPINION

BIERY, Justice.

This is an appeal of a summary judgment granted in favor of appellee John Hancock Variable Life Insurance Company (John Hancock). Appellant, Carmen Garcia, as beneficiary, brought suit to collect the proceeds of a life insurance policy issued to her husband, Alfredo Garcia. She brings one point of error alleging the trial court erred in granting John Hancock's motion for summary judgment because it failed to establish each element of its misrepresentation defense as a matter of law. We reverse and remand.

On appellate review, a summary judgment is not entitled to the same deference given to a judgment following a trial on the merits. When reviewing the granting of a summary judgment, this court cannot view the evidence in the light most favorable to the judgment of the trial court. At both the trial and appellate stages, the question is not merely whether the non-movant raised a material fact issue to defeat the motion. Rather, the movant must prove it was entitled to judgment as a matter of law. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970); TEX.R.CIV.P. 166a(c). If the movant fails to prove entitlement to judgment as a matter of law, this court must remand the case for a trial on the merits. See Gibbs, 450 S.W.2d at 828-29.

The standards for reviewing a summary judgment have been clearly set forth by the Texas Supreme Court:

(1) The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law.

(2) In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true.

(3) Every reasonable inference must be indulged in favor of the non-movant and any doubt resolved in its favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985); Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984).

A defendant pleading an affirmative defense may obtain summary judgment by (1) disproving at least one of the elements of each of the plaintiff's causes of action or (2) conclusively proving all elements of the affirmative defense. See American Medical Elecs., Inc. v. Korn, 819 S.W.2d 573, 576 (Tex.App.--Dallas 1991, writ denied); International Union v. Johnson Controls, Inc., 813 S.W.2d 558 563 (Tex.App.--Dallas 1991, writ denied); Lesbrookton, Inc. v. Jackson, 796 S.W.2d 276, 280 (Tex.App.--Amarillo 1990, writ denied). When a defendant moves for summary judgment on the basis of an affirmative defense, he must expressly present and conclusively prove each essential element of that defense. Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979); Deer Creek Ltd. v. North Am. Mortgage Co., 792 S.W.2d 198, 200 (Tex.App.--Dallas 1990, no writ). Unless the movant/defendant conclusively establishes its affirmative defense, the non-movant/plaintiff has no burden in response to a motion for summary judgment filed on the basis of an affirmative defense. Torres v. Western Casualty & Sur. Co., 457 S.W.2d 50, 52 (Tex.1970).

A defendant moves for summary judgment on the basis of an affirmative defense when he denies the plaintiff's right to judgment, even if the plaintiff established every allegation in its pleadings. Highway Contractors, Inc. v. West Tex. Equip. Co., 617 S.W.2d 791, 794 (Tex.Civ.App.--Amarillo 1981, no writ). Here, John Hancock does not dispute Mrs. Garcia's allegations that the benefits due under the policy are unpaid. Rather, instead of directly attacking one or more elements of Mrs. Garcia's cause of action, John Hancock asserts an affirmative defense. Specifically, John Hancock based its motion for summary judgment on the premise that it was relieved of its benefit payment obligations because Mr. Garcia intentionally misrepresented the state of his health.

In support of its motion for summary judgment, John Hancock submitted the following: in February and March of 1986, appellant's husband, Alfredo R. Garcia, applied for and was issued a life insurance policy with John Hancock. In two policy applications, Mr. Garcia was asked a series of questions regarding his health history. The first application, dated February 25, 1986, was signed by Mr. Garcia and an agent of the Insurance Company. On that application, Mr. Garcia represented that he had never been treated for or had any known indication of diabetes. He also represented that he (1) had not consulted a physician or been examined or treated at a hospital or other medical facility within the last five years; (2) was not being treated by a physician or taking any prescription drug; and (3) did not have a personal physician.

The second application, dated March 10, 1986, was signed by Mr. Garcia and a medical examiner pursuant to a physical examination initiated by John Hancock. On this second application, Mr. Garcia again represented that he had never been treated for or had any indication of diabetes. He also responded, once again, that he was not under treatment of a doctor or taking any prescription drug. Further, he stated that he had never been treated for or had any indication of dizziness and that he did not smoke cigarettes. Mr. Garcia executed the applications stating "the foregoing statements and answers" are "to the best of my knowledge and belief, complete, true and correctly recorded." ¹

In February of 1987, approximately a year after the life insurance policy was issued, Mr. Garcia died of myocardial infarction, commonly referred to as a "heart attack." During the course of this litigation, Mrs. Garcia candidly admitted that Mr. Garcia had been diagnosed as having diabetes in 1970 and had either injected insulin or taken pills daily until 1980, when the disease went into remission. Further, it is undisputed that Mr. Garcia was experiencing dizziness around the time he made representations to the contrary. In fact, he had visited a doctor on February 18, 1986 and was taking prescription medicine for diabetes at the time he executed the March 10, 1986 application. During the visit with the doctor, Mr. Garcia also reported that he smoked fourteen cigarettes a day.

Applying the summary judgment standards discussed above to the facts of this case, we must determine whether John Hancock proved each element of its misrepresentation defense as a matter of law. Under Texas law, there are five elements an insurance carrier must plead and prove in order to establish a misrepresentation defense:

(1) the making of a representation;

(2) the falsity of the representation;

(3) reliance on the misrepresentation by the insurer;

(4) the intent to deceive on the part of the insured in making the misrepresentation; and

(5) the materiality of the misrepresentation.

Mayes v. Massachusetts Mut. Life Ins. Co., 608 S.W.2d 612, 616 (Tex.1980) (emphasis added). Assuming, without deciding, elements one, two, three and five were established, John Hancock requests this court to determine, for the first time in Texas jurisprudence, that "intent to deceive" was proven as a matter of law for summary judgment purposes. We find the affirmative defense raised by John Hancock to be a form of fraud; for example, a fraud cause of action brought by a plaintiff also has an element of intent. Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185 (Tex.1977). Our research has found no reported Texas case in which a plaintiff suing for fraud has ever proven the element of intent to deceive as a matter of law in a summary judgment proceeding. Further, we see at least some analogy, albeit a different standard of proof (beyond a reasonable doubt) to the mens rea or guilty mind element in the criminal law. It is axiomatic, of course, that intent, or mens rea, is a fact question for the jury in a criminal case. We think it to be a rare instance where subjective intent could be established as a matter of law. See e.g., Harlow v. Fitzgerald, 457 U.S. 800, 816-17, 102 S.Ct. 2727, 2737-38, 73 L.Ed.2d 396 (1982).

To support its argument, John Hancock contends this case is similar to the cases of Estate of Diggs v. Enterprise Life Ins. Co., 646 S.W.2d 573 (Tex.App.--Houston [1st Dist.] 1982), rehearing denied, 657 S.W.2d 813 (1983, writ ref'd n.r.e.), and Flowers v. United Ins. Co. of Am., 807 S.W.2d 783 (Tex.App.--Houston [14th Dist.] 1991, no writ). In Diggs, the insured bought a credit life insurance policy simultaneous with his purchase of a new car on March 12, 1980. 646 S.W.2d at 574. In the application for insurance, Mr. Diggs stated that he was in good health and had "not suffered from any heart disease, or other cardiovascular diseases ... of any kind." On February 15, 1981, Mr. Diggs died of cardiac arrhythmia, a heart condition. After a claim for payment was denied, his widow brought suit. The insurance company moved for, and was granted, summary judgment based upon the defense of misrepresentation. The court of appeals held that the insurance company's proof conclusively showed the deceased knowingly made a false representation regarding his medical history:

Dr. Manus J. O'Donnell, a cardiologist, testified by deposition that he first met Harvey Diggs at Methodist Hospital in Houston in 1976; that Mr. Diggs complained of a shortness of breath, swelling of his legs, chronic cough, spitting blood; that Mr. Diggs had a history of heart disease dating back to 1972; that upon examination, Mr. Diggs was found to have...