Gozan v. Mutual Life Ins. Co. of New York
| Decision Date | 27 February 1974 |
| Citation | 353 N.Y.S.2d 137,77 Misc.2d 249 |
| Parties | Nana R. GOZAN, formerly known as Nana R. Krakower, Plaintiff, v. The MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, Defendant. |
| Court | New York Supreme Court |
Leon Wasserman, New York City, for plaintiff.
Samuel C. Cantor, New York City, John F. X. Lovett, Jerry A. Marr, New York City, of counsel, for defendant.
Arnold R. Krakower, an attorney and member of the New York County Lawyer's Association, had previously been covered by a term policy with defendant under the association's life insurance program. On May 9, 1968 he made application to defendant company to increase the coverage on his life by an additional $40,000, naming his wife as beneficiary, and at the same time applying for $5,000.00 insurance on the life of his wife, with himself as beneficiary.
In the application, Mr. Krakower declared that he was in good health, regularly performing the duties of his occupation, without any health impairment, had not been hospitalized in the five years, and had seen a physician in that period only for colds, virus, and annual checkups. He said the same for his wife. The defendant insurance company duly issued the additional insurance policy on June 27, 1968, which would have become incontestable after one year. Arnold Krakower, having paid all premiums due, died nine months thereafter, on April 4, 1969.
Upon investigating the claim for the insurance benefits duly filed by the widow, the insurance company learned that the facts as stated in Krakower's application had been untrue, and it disclaimed, tendering back the premiums paid. Far from being in good health at the time, as represented, Krakower, the undisputed facts show, had been suffering for over twenty years from polycythemia an insidious disease resulting in marked proliferation of the red blood cells and internal bleeding, ultimately resulting in complications and death. Although on his medical examination on June 27, 1968, he had reported a tonsillectomy in childhood, an appendectomy in 1925, and a cholecystectomy in 1952, he failed to disclose a series of eight hospitalizations from 1952 to 1968 for treatment of the polycythemia and internal bleeding. The most recent hospitalization had been in New York Hospital from June 7 to June 14, 1968, only two weeks before the medical examination and questionnaire, for a worsening of his condition. There can be little doubt that the insured was fully aware of his condition, and that that was the motivation for his attempting to procure additional insurance without disclosing his true state of health. If he survived for one year, the policy would become incontestable and his misrepresentations could not be called into question. He didn't make it.
Despite the clear case of fraud and misrepresentation by the insured, as part of a calculated gamble by him, the widow, in this action for the proceeds of the policy, contends that the insurance company is precluded from raising the defense of fraud and misrepresentation because of alleged non-compliance by the company with Section 142 of the Insurance Law. That section provides
It is the plaintiff's position that if any part of the copy of the application is illegible or difficult to read, it is not a true copy, and is inadmissible.
The application for the policy in suit was in three parts, photocopies of each of which were attached to the policy issued to the insured. The first part was the application by Krakower for $40,000.00 in additional insurance, naming his wife as beneficiary, and answering four questions as to the state of his health. The second part, on the reverse side of the first, is an application by Krakower for a dependent's rider on the life of his wife, in the sum of $5000.00, designating himself as beneficiary, and answering four questions as to the state of her health. The third part is the medical history and questionnaire, filled out by the insurance physician, the truth of the answers and statements being represented as true by the insured. It was conceded that copies of all parts of the application were annexed to the policy issued to the insured, and that the first and third parts dealing with the application for insurance on Krakower's life were clear, true and legible copies, but the photocopy of the second part, dealing with the application for $5,000.00 insurance on the life of the wife was light and underexposed, raising a dispute as to its legibility.
Defendant moved for summary judgment on the ground that the misrepresentations were undisputed. Plaintiff opposed, urging that since the photocopy of one part of the application was underexposed, it had to be considered illegible, and hence not a true copy as required by Section 142 of the Insurance Law, so that defendant would be precluded on the trial from raising the issue of misrepresentation in the application. Spiegel, J. held that a true copy of the application...
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