Unionmutual Stock Life Ins. Co. of America v. Wilkerson

• Decision Date: 20 December 1978
• Citation: 367 So.2d 964
• Parties: UNIONMUTUAL STOCK LIFE INSURANCE COMPANY OF AMERICA v. Eugene L. WILKERSON, Jr. Civ. 1537.
• Court: Alabama Court of Civil Appeals

Page 964

367 So.2d 964

UNIONMUTUAL STOCK LIFE INSURANCE COMPANY OF AMERICA v. Eugene L. WILKERSON, Jr.

Civ. 1537.

Court of Civil Appeals of Alabama.

Dec. 20, 1978.

Rehearing Denied Jan. 24, 1979.

Coleman Yarbrough, Montgomery, for appellant.

James W. Cameron of Cameron & Cameron, Montgomery, for appellee.

BRADLEY, Judge.

Defendant, Unionmutual Stock Life Insurance Company of America, appeals from an adverse jury verdict and judgment rendered by the Circuit Court of Montgomery County. We affirm.

Plaintiff-insured, Eugene L. Wilkerson, Jr., filed an action against insurer claiming benefits due under a group long-term disability policy made available through plaintiff's employer, Mendel Distributing Company. Plaintiff died during the pendency of the suit, and his wife, Vickie S. Wilkerson, as executrix of his estate, filed a motion to revive the action. This motion was never ruled on, but defendant declined to raise this issue at trial or on appeal.

Defendant's motion for summary judgment in this cause was denied. Defendant's motions for directed verdict at the close of plaintiff's evidence, and all evidence, were also denied. The jury returned a verdict for plaintiff in the amount of $2,300.85 upon which judgment was entered. Defendant did not file a motion for new trial.

Defendant's principal contentions on appeal are (1) that the trial court erred in not granting defendant's motion for directed verdict because there was no evidence to support a verdict for plaintiff, and (2) that the judgment and verdict are contrary to the great weight and preponderance of the evidence. However, our case law makes it clear that our review in this case is limited to the former contention, and that defendant is precluded from raising on appeal the issue of the weight of the evidence.

It is settled in Alabama that in the absence of a motion for new trial the question of the weight or sufficiency of the evidence is not before this court for review where there has been a jury trial in the court below. State Farm Mut. Auto. Ins. Co. v. Key, 46 Ala.App. 303, 241 So.2d 332 (1970), and cases cited therein. The question to be considered is whether the evidence, or a reasonable inference therefrom, was sufficient to warrant the submission of the facts to the jury under the pleadings. Street v. Street, 246 Ala. 683, 22 So.2d 35 (1945).

In reviewing the refusal of affirmative instruction to defendant, the court must review the evidence in a light most favorable to plaintiff and affirm the trial court's action if there is a scintilla to support the complaint. Ramos v. Fell, 272 Ala. 53, 128 So.2d 481 (1961). See also Mixon v. Whitman, 279 Ala. 249, 184 So.2d 332 (1966). We review this case with the foregoing principles in mind.

The insured, Eugene Wilkerson, was employed by Mendel Distributing Company. He had disability insurance through his employer's group long-term disability insurer, Pilot Life Insurance Company. On October 21, 1976 Mendel Distributing Company sent out letters to its employees advising them of an anticipated change in coverage from Pilot Life to defendant Unionmutual. The letter stated in pertinent part:

The only potential problem is that under the new program an employee would not be covered during the first year if he has Received treatment for a medical condition during the three months prior to the effective date of the policy, which we presume would be November 1, 1976. . . .

(I)f you are being treated for a condition which could cause total disability, you can write me a Confidential memo about this. (Emphasis theirs.)

Wilkerson made application for coverage with defendant on November 15, 1976. Question Three in the application asked, "Are you now in good health and free from physical impairment, sickness or disease to the best of your knowledge and belief?" Plaintiff checked the "Yes" block in answer to this question. Question Four asked the applicant to list "the injuries, sicknesses, diseases, disorders and operations which you have had within the last 5 years, dates and names of physicians consulted." Wilkerson checked the "None" box in answer to this question. These questions are followed by the statement, "I agree that the statements contained herein are true and complete and shall form the basis for and constitute a part of the policy under which any certificate of insurance shall be issued." Wilkerson's signature appears at the bottom of the application.

About a month later, on December 16, 1976, Wilkerson saw a physician, Dr. Mracek, who referred him to a surgeon. Wilkerson's surgeon, Dr. Dorrough, examined him on December 20th and scheduled him for a biopsy to determine the nature of two knots which had appeared on Wilkerson's neck in March of 1975. The biopsy revealed that he had a form of thyroid cancer, for which he underwent surgery on January 6, 1977.

In March 1977 Wilkerson applied for disability benefits under the Unionmutual policy. In July 1977 defendant's letter informed Wilkerson that his claim was being disallowed and his coverage voided. Relevant portions of that letter read as follows:

Dear Mr. Wilkerson:

As you are probably aware, we recently completed our files with additional medical information which now clearly indicates you did not give us full and complete medical history at the time you completed the medical questionnaire on November 15, 1976.

I am enclosing a photostat of the medical questionnaire and as you will note, you did not include any medical history and, in fact, replied in the negative that you were never seen for any injuries, sicknesses, diseases or disorders in the last five years.

Our recent investigation reveals the fact that you saw Dr. Richard E. Brown on reference from Dr. Harvey Farrior on April 10, 1973. At that time, you were diagnosed as having early Posterior subcapsular cataracts, and you were advised of this condition. Dr. Brown followed you up six months later on October 8, 1973 to determine whether or not there were any changes in your eyesight and you were advised to return when your vision became worse.

In addition, you were seen by Dr. Walter H. Pugh on two occasions in 1975 for various complaints and these visits were not included on your application.

It is important for you to understand that our Underwriters must be provided with complete medical history in order to properly assess a risk at the time of application. In this case, they were not given the opportunity to review your medical history since you omitted this information, And had they known of your cataract disorder, they would not have issued this coverage to you in any form.

Under the circumstances, we have no choice but to refund the premiums paid for your coverage from the date of issue. This action places all parties concerned in the position as though the policy had never been applied for or issued and the Certificate to you is void. (Emphasis supplied.)

Wilkerson filed an action to recover the benefits denied him, but in November 1977, while the suit was pending, he died of thyroid cancer at the approximate age of thirty-nine years. His executrix prosecuted this action.

Defendant's answer to the complaint in this cause raised several affirmative defenses which, in essence, asserted that coverage under the disability insurance policy had been extended to Wilkerson on the basis of misrepresentations made in his insurance application. Specifically, defendant contended that contrary to the answers given by Wilkerson, he was not in good health nor free from physical impairment, sickness or disease to the best of his knowledge and belief, and that he had been treated by several physicians within the preceding five years; therefore defendant was entitled to rescind and void the policy.

Defendant argues that this case is controlled by Code of Alabama 1975, § 27-14-7, which reads in pertinent part:

(a) All statements and descriptions in any application for an insurance policy or annuity contract, or in negotiations therefor, by, or in behalf of, the insured or annuitant shall be deemed to be representations and not warranties. Misrepresentations, omissions, concealment of facts and incorrect statements shall not prevent a recovery under the policy or contract unless either:

(1) Fraudulent;

(2) Material either to the acceptance of the risk or to the hazard assumed by the insurer; or

(3) The insurer in good faith would either not have issued the policy or contract, or would not have issued a policy or contract at the premium rate as applied for, or would not have issued a policy or contract in as large an amount or would not have provided coverage with respect to the hazard resulting in the loss if the true facts had been made known to the insurer as required either by the application for the policy or contract or otherwise.

Defendant does not contend on appeal that the misrepresentations in the application for insurance were fraudulently made. It does contend, however, that Wilkerson's misrepresentations in the application were material and increased the risk accepted by the insurer, and that, had it known Wilkerson's true medical condition on the date of his application, it never would have issued a policy to him.

Unionmutual cites New York Life Insurance Co. v. Horton, 235 Ala. 626, 180 So. 277 (1938) for the proposition that the misrepresentation by the insured that he had not consulted a physician had the effect to increase the risk of loss. For reasons we shall discuss later in this opinion, we are not persuaded that this statement from Horton is controlling in this case. Rather, we think the general rule of law applicable to the case at bar is to be drawn by analogy to earlier cases decided by the Alabama Supreme Court involving life insurance policies. In those cases the court said that representations in applications for life insurance touching consultation with or treatment by a physician stand on the same footing as representations of good health. It must...