Prudential Ins. Co. of America v. Cusick, 7

• Decision Date: 07 February 1963
• Docket Number: No. 7,7
• Citation: 369 Mich. 269,120 N.W.2d 1
• Parties: The PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation, Plaintiff, Cross-Defendant and Appellant, v. Dorothy A. CUSICK, a/k/a Dorothy Cusick, Defendant, Cross-Plaintiff and Appellee.
• Court: Michigan Supreme Court

Page 1

120 N.W.2d 1

369 Mich. 269

The PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation, Plaintiff, Cross-Defendant and Appellant, v. Dorothy A. CUSICK, a/k/a Dorothy Cusick, Defendant Cross-Plaintiff and Appellee.

No. 7.

Supreme Court of Michigan.

Feb. 7, 1963.

Dickinson, Wright, McKean & Cudlip, Detroit, for plaintiff, cross-defendant and appellant; Wellington M. Watters, Detroit, of counsel.

Jerry P. D'Avanzo, Southgate, for defendant, cross-plaintiff and appellee.

Before the Entire Bench.

KELLY, Justice (dissenting).

May 14, 1956, Jeannine M. Cusick, a 20-year-old single woman, submitted an application to plaintiff for $1,000 of insurance, naming her mother, defendant herein, as beneficiary. May 21, 1956, plaintiff issued the policy of insurance. Defendant suggested to her daughter that she submit the application as an earlier endowment policy with plaintiff had recently matured.

Five months later (October 21, 1956) Miss Cusick died of cancer of the brain.

The following questions and answers were contained in the application:

'19. Has person proposed consulted or been treated by a doctor or other practictioner or at a dispensary or clinic within past 5 years?

'No.

'20. Has person proposed had any injury, illness or operation within past 10 years?

'Yes.

* * *

* * *

'22. Has person proposed ever had: * * * tumor * * * cancer * * * (The list includes a number of other ailments not pertinent here).

'No.

* * *

* * *

'24. Give full details for questions 14-23 if answered 'yes.' Include dates of commencement and recovery from illnesses and number of attacks.

'(Answer) Tonsilectomy Dec. 27th, 1948-Hospitalized 2 days--full recovery--no complication.'

The application also contained the following statement:

'I HEREBY DECLARE that all statements and all the answers to the above questions are complete and true, and I agree that the foregoing, together with this declaration, shall constitute an application for insurance.'

Claim for payment of proceeds on the policy was denied and plaintiff filed its bill of complaint, with tender of premiums, seeking cancellation of the policy, claiming that constructive and/or actual fraud practiced upon it by 'various misrepresentations' were made in the application 'with intent to deceive the plaintiff and/or which materially affect the risk and hazard assumed by the plaintiff.'

Appellant appeals claiming the court erred in finding that plaintiff did not make out a case of constructive or actual fraud entitling it to a decree cancelling its policy.

When the policy was issued (May 21, 1956) C.L.1948, § 522.17 provided:

'The falsity of any statement in the application for any policy covered by this chapter shall not bar the right to recovery thereunder unless such false statement was made with actual intent to deceive or unless it materially affected either the acceptance of the risk or the hazard asssumed by the insurer.'

In early 1954, after having graduated from high school, Miss Cusick was employed as a medical assistant by Dr. Wikiera, a practicing dermatologist, of Dearborn, Michigan, and assisted him in preparing patients for examination and also surgical procedures.

Dr. Wikiera testified that Miss Cusick worked for him approximately 2 years and was a very intelligent girl who acquired knowledge of the language of his profession; that she asked him to examine a lesion she had noticed was changing color, becoming redder and darker, and upon examination, he thought it best to remove it immediately; that what he would describe as an operation was performed in his office the same day (June 8, 1955) and required about 15 minutes, and resulted in a cavity 2 to 3 inches long and 3/4 of an inch deep; that the operation required application of fresh dressings for a period of approximately 3 weeks, which was done either by Miss Cusick or her girl friends in the office; that she was able to leave the office after the operation and returned to work the next day; that he sent a tissue sample to the laboratory for analysis and on June 15, 1955, the laboratory sent him a written report ¹; that he was 'unhappy' when he received the laboratory report; that he showed the report to Miss Cusick the same day he received it and she read it and not only discussed it with him but with the office girls; that 'she was told, like all patients are told, that malignant melanoma can occur any time, I mean can metastasize at any time; and then we did hope that this excision was early enough that such complications would not arise'; that there was no treatment to prescribe as there was nothing to do but wait and see; that he didn't remember whether he told her she had cancer but 'I discussed the condition with her, the diagnosis with her as a malignant melanoma. Now, we are using the word 'cancer' loosely here, and that denotes--I was speaking to her not as a layman. She knew something about medicine. She worked with me. She knew the word 'melanoma' much better than a person off the street'; that he called her father the same day he received the report and informed him that his daughter had cancer; 'I discussed the problem with him; told him exactly what the biopsy read; the lesion, the melanoma was excised completely; but as far as the future was concerned, that was a matter of time; we would have to wait and see what happened.'

Elizabeth Murphy, employed in May, 1956, by Dr. Wikiera, as the doctor's assistant and still so employed at time of trial testified that shortly after she went to work for the doctor, Miss Cusick showed her the biopsy or laboratory report and told her about the operation Dr. Wikiera had performed; that when she told Miss Cusick that 'the words were out of my vocabulary' she (Miss Cusick) 'explained certain things to me * * * well, she told me that it meant that she had cancer'; that she 'showed it (the report) to me on several occasions.'

To establish its contention that the false statement materially affected the risk and hazard assumed by it, plaintiff offered uncontroverted proof from its underwriters that had they known of the operation for the removal of the cancerous tumor 11 months prior to the signing of the application they would have rejected it and they also expressed their opinion that similar action would have been taken by other life insurers.

Defendant called 3 witnesses, namely, the father and mother of deceased, and Dr. Sage.

Dr. Sage testified that Miss Cusick had been his patient since March, 1947; that when she showed him the mole he said, "Jeannine, you work for a dermatologist. He can advise you what to do about it.' I understand that she had had surgery and had the mole removed, and she told me that she was informed it had been removed in toto, and that it had been a melanoma. I did not see a report on the tissue'; that he began treating her at her home in August, 1956, for Bell's palsy because of paralysis of the face; that she was admitted to the hospital in September and, after hospitalization, she was in a semicomatose condition and couldn't carry on a conversation; that he called in Dr. Maguire, a neurosurgeon; that he did not know whether he informed Dr. Maguire that she had a melanoma removed, 'but I had made the addition--made the notation on her charts, on her hospital records. * * * I think a day after she had been admitted I made that notation on her chart, that she had had a melanoma removed.'

Dorothy Cusick, mother of deceased, testified that before her daughter had the mole removed she asked her permission or opinion, and 'I advised her to call Doctor Sage and get his opinion on it, and he advised her to do so'; that she never discussed the matter with Dr. Wikiera until after her daughter's death; that her daughter never advised her that the mole was malignant and she did not discuss the operation with her.

Joseph Cusick, deceased's father, testified that Dr. Wikiera called him about 2:00 o'clock in the afternoon somewhere around the 14th or 15th of June, on the telephone, and 'he said Jeannine thought her mother might be worried about this mole being removed, and he wanted to inform me that there was nothing to worry about; that he did a very good job of removing it; that was all'; that they never talked further with the doctor until after Jeannine's death, and that his daughter at no time ever informed him that the mole was malignant.

The trial court denied plaintiff relief solely on the ground that plaintiff had failed to establish an intention to deceive on the part of Miss Cusick.

We disagree with that conclusion.

Appellee states: 'All of the testimony abundantly established the fact that the deceased treated the excision of the mole as no more than a temporary ailment and attached no subsequent significance or importance to it.'

No such conclusion can be reached unless we disregard the testimony of Dr. Wikiera and Elizabeth Murphy. A reading of the record convinces us that Dr. Wikiera had nothing but the most friendly feeling toward Miss Cusick. The only dispute in regard to his testimony was the testimony of Miss Cusick's father, who contradicted the doctor's testimony that he called the day he read the report to inform the father that his daughter had cancer. The father's version that the doctor called only to say that his daughter thought her mother would be worried does not square with the mother's version that she did not ask about the operation and her daughter did not talk to her about it. In addition to this, the doctor did not call Mr. Cusick until the laboratory report had been received, which was a week after the operation was performed.

There is not the slightest intimation in the record or brief that Elizabeth Murphy did not tell the truth when she testified that Miss Cusick told her she had cancer. If we believe Miss Murphy and also the testimony of the mother that her daughter did not advise her of the malignancy, what other conclusion can be drawn except that...