Ware v. Nationwide Mut. Ins. Co., s. 52957

• Decision Date: 03 December 1976
• Docket Number: 52958,Nos. 52957,No. 2,s. 52957,2
• Parties: J. B. WARE v. NATIONWIDE MUTUAL INSURANCE COMPANY. NATIONWIDE MUTUAL INSURANCE COMPANY v. J. B. WARE
• Court: Georgia Court of Appeals

Page 556

231 S.E.2d 556

140 Ga.App. 660

J. B. WARE v. NATIONWIDE MUTUAL INSURANCE COMPANY.

NATIONWIDE MUTUAL INSURANCE COMPANY v. J. B. WARE.

Nos. 52957, 52958.

Court of Appeals of Georgia, Division No. 2.

Dec. 3, 1976.

Smith, Cohen, Ringel, Kohler & Martin, Harold A. Horne, Jr., Atlanta, for appellant.

Long, Weinberg, Ansley & Wheeler, George H. Connell, Jr., Atlanta, for appellee.

QUILLIAN, Presiding Judge.

These appeals involve a suit by Ware on a policy of accident indemnity and a policy of hospital and major medical insurance issued by Nationwide Mutual Insurance Company to Ware. The trial court granted Ware's motion for directed verdict as to liability. Nationwide appeals. The trial court also directed a verdict for Nationwide on Ware's complaint for damages and attorney's fees as a result of alleged bad faith on the part of the insurer under Code Ann. § 56-1206 (Ga.L.1960, pp. 289, 502; 1962, p. 712). Ware appeals. Held:

1. Plaintiff, Ware, testified that on May 10, 1974, he was approached by Nationwide's agent, Aldridge, who solicited him to apply for life, health, and accident insurance. He signed an 'Application for Insurance' on that date which contained a clause that stated: 'No agent or other person except the President, Secretary or Treasurer has the power to make or modify any contract, or waive any of the Company's rights or requirements, and then only in writing.' The application shows that 'No' answers were recorded to the following questions: 'Within the past five years has Proposed Insured: a. Had any disease, disorder, injury or operation which has not been previously mentioned? b. Consulted or been treated by a doctor . . .? d. Ever had X-rays . . .? (and) . . . has the proposed insured within the past 10 years been advised or medically treated by a doctor for . . .. Any form of . . . bone, joint or back disorder . . .?' The insurer's agent certified that the 'truly and accurately recorded the applicant's answers' on the application and witnessed the applicant's signature.

The plaintiff had, during October, 1972, dislocated his shoulder while playing with his nephew. He did visit a doctor. X-rays were taken. The arm was placed in a sling and he missed 'a couple of weeks' work. Plaintiff considered the previous injury to be 'pretty serious.'

When the application for insurance was made out, the agent asked the questions and entered the answers on the application. Plaintiff stated he had been asked if he had 'seen an attending physician in the last five years,' and he said 'yes.' In response to the question from counsel regarding whether the agent had asked 'any other questions about any injuries, or anything like that,' Ware testified 'only . . . had I seen an attemding physician.'

Ware paid the agent with a $38.00 check for the prmiums. He testified that the agent told him 'coverage (would) be effective . . . (t)he moment I sign the policy and the moment I pay him the money.'

One page of the application for disability insurance had a section stating: 'I request that the Disability Income policy, if issued, be dated (check one): Date of this application. Date the application is approved by Company. All policies be issued on same date the (sic) become effective (illegible) issued, 19_ _.' This latter phrase was written in longhand and one word is illegible. Also, we cannot be certain that the one word marked (sic) above is the word, 'the.'

In the application for health insurance, the section for applicable date of coverage reads as follows: 'I request that the policy, if issued, be dated (check one): Date of this application. Date application is approved by Company. Date all applications (illegible) issue same effective on same date for single premium billing.' As in the former application, the last phrase is written in longhand. The one illegible word could be the symbol, '&.'

The issued policy had an effective date of 'June 1, 1974.' All applications are dated May 10, 1974. On May 27, 1974, Ware dislocated his shoulder while playing basketball. It was 'the same kind of injury (he) received' in October, 1972. This latter injury required an operation. He was out of work for approximately 13 weeks. Two claims were presented to Nationwide. On the disability claim, signed by Ware, he described his injury as 'dislocated right shoulder.' In the second question thereafter: 'Have you ever had same or similar conditions?' No response was recorded in the 'yes' or 'no' blocks. In the accompanying attending physician's statement, the doctor marked 'no' to the question of whether 'patient ever had same or similar condition . . .' In the second claim form Ware had answered 'yes' to the question of a 'similar condition,' but in the accompanying doctor's statement there was a negative answer to the prior 'similar condition' question.

a. Ware alleges the trial court erred in directing a verdict for Nationwide on his claim for damages and attorney's fees because of alleged ban faith of the insurer. We disagree. Code Ann. § 110-104, as amended (Ga.L.1961,[140 Ga.App. 663] p. 216), authorizes '(w)here there is no conflict in the evidence, and that introduced, with all reasonable deductions or inferences therefrom, shall demand a particular verdict, the court may direct the jury to find for the party entitled thereto.' Admittedly, we have a conflict in the evidence as to whether the insured made false representations and when the coverage started. However, it is because of this conflict that the insurance compnay was legally authorized to contest the claimed liability of the insured. Dependable Ins. Co. v. Gibbs, 218 Ga. 305, 316(8), 127 S.E.2d 454; Belch v. Gulf Life Ins. Co., 219 Ga. 823, 828(2), 136 S.E.2d 351. Our Supreme Court has held that where the insurer is 'justified in litigating the issue (it) cannot, as a matter of law, be liable for the statutory penalty for bad faith under Code Ann. § 56-1206.' State Farm Mutual Auto Ins. Co. v. Bass, 231 Ga. 269, 201 S.E.2d 444. We find that where the evidence adduced presents a justiciable controversy, the trial judge is authorized to conclude that there is a reasonable ground for contesting the claim so as to remove the issue from the jury (Allstate Ins. Co. v. Anderson,121 Ga.App. 582, 587(3), 174 S.E.2d 591, (cert. den.)) and direct a verdict for the insurer. Still v. Metropolitan Life Ins. Co., 118 Ga.App. 832, 834(4), 165 S.E.2d 896. cert. den. Accord, Independent Life & Accident Ins. Co. v. Thornton, 102 Ga.App. 285(6), 115 S.E.2d 835.

b. Nationwide contends that the trial court erred in refusing to admit in evidence its records regarding Ware's application for insurance, its processing, and issuance of the insurance policy. We agree.

Code Ann. § 38-711 (Ga.L.1952, p. 177) provides that '(a)ny writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act (or), transaction . . . shall be admissible in evidence in proof of said act (or), transaction . . . if the trial judge shall find that it was made in the regular course of any business, and that it was the regular course of such business to make such memorandum or record at the time of such act, transaction, occurrence or event or within a reasonable time thereafter.' The statute itself and a legislative resolution of 1958 (Ga.L.1958, pp. 542, 543) evince the intent that this section 'shall be liberally interpreted and applied.'

The assistant chief underwriter for Nationwide testified that the excluded defendant's exhibits were 'kept in the regular course of business with Nationwide . . . These are the company records with regard to the initial application and its processing.' And in response to the question of whether the records were 'kept contemporaneously,' the witness testified as to the procedure followed upon receipt of the application until approval or rejection. These answers satisfied the bases set forth in the statute for admissibility. Zanac, Inc. v. Frazier Neon Signs, 134 Ga.App. 501, 502(1), 215 S.E.2d 265. Exclusion of competent evidence tending to establish the effective date of an insurance policy requires the grant of a new trial. Life & Casualty Ins. Co. of Tennessee v. Monday, 85 Ga.App. 659(2), 69 S.E.2d 910.

c. Defendant insurer enumerates as error the directed verdict for the insured plaintiff as to liability. Pretermitting the issues of whether the insurer was estopped from asserting a defense of material misrepresentation-because knowledge of the agent is imputed to the principal (Allstate Ins. Co. v. Anderson, 121 Ga.App. 582(2), 174 S.E.2d 591 supra), and the additional issue of effective date of the policy, we must first decide the threshold issue of whether plaintiff made such material misrepresentations to the agent as would void the policy. Then we can turn to the successive issues of whether truthful answers were given to the agent and he recorded false answers,...