Nadel v. Manhattan Life Ins. Co.

• Decision Date: 05 January 1995
• Citation: 211 A.D.2d 900,621 N.Y.S.2d 180
• Parties: Seth NADEL, Respondent, v. MANHATTAN LIFE INSURANCE COMPANY, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 180

621 N.Y.S.2d 180

211 A.D.2d 900

Seth NADEL, Respondent, v. MANHATTAN LIFE INSURANCE COMPANY, Appellant.

Supreme Court, Appellate Division Third Department.

Jan. 5, 1995.

Werner & Kennedy (Michael A. Knoerzer, of counsel), New York City, for appellant.

Michael S. Federoff, Kingston, for respondent.

Before MIKOLL, J.P., and MERCURE, CREW, CASEY and YESAWICH, JJ.

MIKOLL, Justice Presiding.

Appeal from an order of the Supreme Court (Peters, J.), entered January 31, 1994 in Ulster County, which denied defendant's motion for summary judgment dismissing the complaint.

Fay Nadel (hereinafter Nadel) submitted her application for $450,000 of life insurance coverage with defendant on April 19, 1988. The named beneficiaries under the policy were her children, plaintiff and Barbara Nadel. On June 15, 1989 Nadel died as a result of a heart condition. As her death occurred within two years of the effective date of the policy, defendant caused a routine contestability investigation to determine whether the conditions of the policy were met.

David Popplewell, senior vice-president and director of underwriting research for defendant, opined that had Nadel disclosed her medical history in her application, defendant's guidelines would have ruled out issuance of the policy. Defendant then sent a letter to the named beneficiaries advising that defendant was denying the claim and rescinding the policy based on material misrepresentations in the application. At the same time defendant issued checks totaling $20,569.74 as payment of the refund of premiums paid plus interest. Plaintiff commenced the instant action to recover death benefits allegedly due under the terms of the policy. Defendant's subsequent motion for summary judgment was denied and this appeal ensued.

Supreme Court properly concluded from the testimony and documentary evidence that a question of fact exists as to whether Nadel made material misrepresentations on her application for insurance entitling defendant to rescind the policy. Accordingly, the order of Supreme Court denying defendant's motion for summary judgment should be affirmed.

The question of whether there are material misrepresentations is ordinarily a question of fact for the jury (see, Myers v. Equitable Life Assur. Socy. of U.S., 60 A.D.2d 942, 401 N.Y.S.2d 325). At issue in this case is whether Nadel misrepresented and concealed a suicide attempt and psychiatric treatment inducing defendant to issue the policy in violation of its underwriting guidelines. In evaluating whether answers to questions on insurance applications are misstatements, the questions posed must be so plain and intelligible that any applicant can readily comprehend them and any ambiguities will be construed in favor of the insured (see, Vella v. Equitable Life Assur. Socy. of U.S., 887 F.2d 388, 392).

Nadel responded positively to medical questions stating that she had a check-up within the past five years, and that she had experienced chest pains, a hernia, a heart condition and arthritis. No questions were asked specifically referring to psychiatric problems. Construing the language of the questions in a manner most favorable to the insured (se...