Powalka v. State Mut. Life Assur. Co. of America

• Decision Date: 20 December 1968
• Citation: 163 N.W.2d 162,41 Wis.2d 151
• Parties: Bernice R. POWALKA, Appellant, v. STATE MUTUAL LIFE ASSURANCE CO., OF AMERICA, Respondent.
• Court: Wisconsin Supreme Court

Page 162

163 N.W.2d 162

41 Wis.2d 151

Bernice R. POWALKA, Appellant, v. STATE MUTUAL LIFE ASSURANCE CO., OF AMERICA, Respondent.

Supreme Court of Wisconsin.

Dec. 20, 1968.

As Modified on Denial of Rehearing March 4, 1969.

Schober & Radtke, New Berlin, Maroney & Schiro, Milwaukee, for appellant.

Foley, Sammond & Lardner, Milwaukee, for respondent.

ROBERT W. HANSEN, Justice.

If the medical examiner did not make a statement of fitness for insurance, statements by the insured which were false and increased the risk destroy the right of the widow to recover on the policy. ¹

If, however, the medical examiner made a statement of fitness for insurance, or issued a certification as to the health of the insured, then the insurance company can defeat recovery on the policy only if it can establish actual fraud or deceit on the part of the insured. ²

If sec. 209.06, Stats. applies in this case, material misrepresentations defeat recovery. If sec. 209.07, Stats. applies, fraud must be established to block recovery. Which yardstick is to be used depends entirely upon whether or not the insurance company received a certification of health or fitness for insurance from its medical examiner.

The question of whether the report of a medical examiner in this case constituted as a matter of law a 'certificate of health' or a declaring 'the applicant a fit subject for insurance' has been before this court on more than a few occasions. It is not necessary to analyze these cases because that was done in the recent case of Kelly v. Madison National Life Ins. Co. ³

Of course, not every report of a medical examiner to an insurance company is to be considered a certification of general health or specific insurability. There is a distinction between an examining physician's statement which reflects his findings on the medical examination and the statement which constitute an evaluation based on such findings. ⁴ Sec. 209.07, Stats. applies only where the evaluations are broad enough in scope and content to constitute a certificate of health or a declaration of fitness for insurance. ⁵

It is clear from the Kelly case that there must be a something extra that moves an ordinary or usual examiner's report into a certification of health or insurability. In the Kelly case, this something more was found in the fact that the medical examiner not only answered the questions asked of him on the company's form but made the following statement in the place for 'Remarks' at the end of the report: 'Applicant appears to be healthy state at present time.'

In the case before us, we deal not with a single medical examination, but with two. In the first examination, the company's examining physician reported to the company that the applicant had an intermittent pulse, an objective finding that he may have had an abnormal heart condition. That this finding was so regarded by the company is established by its home office requesting its examiner either to qualify his finding of irregularity of pulse or to fill out its Heart Chart. As to the reason for a second examination in this case, the company's medical examiner was asked: 'In other words, actually what happened is that the State Mutual, because of your answer on Exhibit 3 to Question 29(b) was alerted to the fact that he might have a heart condition and they wanted you to make an examination to eliminate that?' The company examiner answered: 'That's right. They wanted to clarify the answer given on the original form.'

Based on the second examination, the company's doctor reported that the applicant had cardiac hypertrophy, an increased heart size over what would be normal. The Heart Chart by its form and the second examination by its nature were alike directed to inquiring into whether or not the applicant had a heart condition. It is against this backdrop of a second examination and the purpose of it, that the doctor's statement that there was no 'doubt of health or vigor in the applicant's appearance' must be evaluated. (The statement was made at the first examination and was not qualified or changed at the second one.)

In Kelly, the examiner said, 'Applicant appears to be healthy state at present time.' In this case, the examiner answered 'No' to the question: 'Is there any doubt of health or vigor in the applicant's appearance?' The trial court found this negative answer to be 'not the same' as the remark in the Kelly case, finding it to be 'nothing more than a physical observation of the defendant.' We disagree. There was no need for a second physical examination if all that the company wanted was a description of Powalka's physical measurements. These would not, in fact could not, change much in the brief time interval between the two examinations. Height, age, weight, etc. were reported fully in the first report. The only reason for the company's insisting upon a qualifying of the answer as to pulse or filling out the heart chart was to secure its examiner's opinion as to whether or not it should issue the policy. When the examining physician did not alter his earlier statement as to health and vigor, despite his adding the fact of an enlarged heart to his earlier report of an intermittent pulse, he was informing the company that in his opinion the applicant was insurable and acceptable. The second examination and second report are more persuasive that a certification of health and fitness was requested and received than the remark added to his report by the examining physician in the Kelly case. We find this case to be well within the outer boundaries of this court's ruling in the Kelly case.

It follows that, given a certificate of health or declaration of fitness for insurance, the company in this case can defeat recovery on the...