National Life Ins. Co. v. Solomon
| Decision Date | 09 December 1975 |
| Docket Number | No. 321,D,321 |
| Parties | NATIONAL LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. Irene SOLOMON and Louis Schuster as Trustee of the S & L Pension Trust-R.T.B. Industries, Inc., Defendants-Appellants. ocket 75--7294. |
| Court | U.S. Court of Appeals — Second Circuit |
Harvey Weinig, Hempstead, N.Y. (Rivkin, Leff & Sherman, Freeport, N.Y., Leonard L. Rivkin, Freeport, N.Y., of counsel), for defendants-appellants.
Charles P. Sifton, New York City (Le-Boeuf, Lamb, Leiby & MacRae, New York City, James A. Fitzpatrick, Jr., New York City, of counsel), for plaintiff-appellee.
Before KAUFMAN, Chief Judge, and SMITH and FEINBERG, Circuit Judges.
In 1973, Herbert Solomon applied for a life insurance policy issued by National Life Insurance Company (hereinafter National). After submitting to the physical examination required by National and after filling out the appropriate application forms, including a statement of medical history, Solomon was insured by National in the amount of $240,792. Named as beneficiary of the policy was Irene Solomon, wife of the insured. Appellant Louis Schuster was named trustee and legal owner of the policy on Herbert Solomon's life.
Subsequent to the issuance of this policy, Herbert Solomon died, a victim of homicide. It is undisputed that Herbert Solomon's death was unrelated to any medical condition which he might have had prior to his demise.
When Irene Solomon attempted to collect the proceeds of the policy issued on her husband's life, she was informed that National considered the policy null and void because of alleged medical misrepresentations made by Solomon when he applied for the policy. In particular, National maintained that Herbert Solomon had been treated for chronic arteriosclerotic heart disease with angina pectoris prior to his application to National. Since this information had not been disclosed by Solomon when he applied for the policy on his life, National claims, the policy was obtained by material misrepresentation and is therefore null and void under New York law.
In response to Irene Solomon's claim to the policy proceeds, National brought an action in the United States District Court for the Eastern District of New York seeking formal rescission of the policy on Herbert Solomon's life. Jurisdiction was founded upon diversity of citizenship. It is agreed that New York law is controlling.
Section 149(2) of the New York Insurance Law establishes that a material misrepresentation made by an applicant seeking insurance coverage serves to void any insurance policy issued in reliance upon such misrepresentation. New York law establishes a particularly stringent test for materiality in the context of insurance law. Misrepresentations are material only if the company would have refused coverage to the applicant had the truth been disclosed at the time of application. New York Insurance Law § 149(2).
In the proceeding below, National moved for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C. In response to this motion, the court, Walter Bruchhausen, Judge, granted summary judgment for National, holding that Herbert Solomon's alleged misrepresentations were 'of...
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