White v. Medico Life Ins. Co.

• Decision Date: 03 December 1982
• Docket Number: No. 81-569,81-569
• Citation: 212 Neb. 901,327 N.W.2d 606
• Parties: Celester C. WHITE, Appellant, v. MEDICO LIFE INSURANCE COMPANY, a corporation, Appellee.
• Court: Nebraska Supreme Court

Page 606

327 N.W.2d 606

212 Neb. 901

Celester C. WHITE, Appellant, v. MEDICO LIFE INSURANCE COMPANY, a corporation, Appellee.

No. 81-569.

Supreme Court of Nebraska.

Dec. 3, 1982.

Syllabus by the Court

1. Actions: Pleadings. Whether the nature of an action is legal or equitable is to be determined from its main object, as disclosed by the averments of the pleadings and relief sought.

2. Actions: Pleadings. Although a defendant may present any defense, legal or equitable, interposing an equitable defense does not convert an action otherwise at law into one in equity.

3. Judgments: Appeal and Error. The findings of the trial court in an action at law tried without a jury have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong; the evidence must be considered in the light most favorable to the successful party, conflicts must be resolved in its favor, and it is entitled to the benefit of every inference which can reasonably be deduced from the evidence.

4. Insurance: Statutes. Neb.Rev.Stat. § 44-710.14 (Reissue 1978) must be read in pari materia with Neb.Rev.Stat. § 44-358 (Reissue 1978).

5. Insurance: Pleadings: Proof. In order for misrepresentations in an application for insurance to constitute a defense to an action on the contract, the insurer must plead and prove, among other things, that the misrepresentations were made knowingly with intent to deceive, that the insurer relied and acted upon such statements, and that the insurer was deceived to its injury.

6. Insurance. Where the question in the application calls for an answer peculiarly within the knowledge of the applicant, an untrue answer relating to a matter material to the risk and relied upon by the insurer will void the policy.

7. Insurance. When an applicant makes an untrue statement with respect to a material fact peculiarly within his knowledge, the finder of fact may, from the mere occurrence of the false statement, conclude it was made knowingly with intent to deceive.

8. Evidence. An ultimate fact fairly and reasonably inferable from the facts and circumstances proved is to be taken as established.

9. Judgments. In the absence of a request for specific findings, the trial court need only make its findings generally for the prevailing party.

Daniel W. Ryberg, Omaha, for appellant.

Lyle E. Strom of Fitzgerald, Brown, Leahy, Strom, Schorr & Barmettler, Omaha, for appellee.

Heard before KRIVOSHA, C.J., and BOSLAUGH, McCOWN, CLINTON, WHITE, HASTINGS, and CAPORALE, JJ.

CAPORALE, Justice.

This appeal results from the dismissal by the trial court of appellant's petition and the overruling of his motion for new trial. We affirm.

Plaintiff-appellant, Celester C. White, sought recovery from defendant-appellee, Medico Life Insurance Company (Medico). His first two causes were based on two insurance policies issued to White by Medico; the third purported cause alleged a concerted effort by Medico and its parent company, Mutual Protective Insurance Company (Mutual), to influence White to settle an allegedly undisputed claim in alleged violation of Neb.Rev.Stat. § 44-1525(9)(m) (Reissue 1978). Medico answered the first two causes by asserting White's failure to disclose fully his prior relevant medical history and by alleging that upon learning of the misrepresentations it had rescinded the policies. Medico answered the third cause by alleging it failed to state a cause of action and by incorporating the failure to disclose and rescission contained in its answer to the other causes.

White pled a breach of contract action, together with a statutory action, and sought money damages. Medico's answers asserted, in part, an equitable defense, i.e., that it had rescinded the policies in question. Whether the nature of an action is legal or equitable is to be determined from its main object, as disclosed by the averments of the pleadings and relief sought. Hein v. M & N Feed Yards, Inc., 205 Neb. 691, 289 N.W.2d 756 (1980); Roy v. Bladen School Dist. No. R-31, 165 Neb. 170, 84 N.W.2d 119 (1957). Although a defendant may present any defense, legal or equitable, Wischmann v. Raikes, 168 Neb. 728, 97 N.W.2d 551 (1959), Kelly v. Kannarr, 118 Neb. 472, 225 N.W. 230 (1929), interposing an equitable defense does not convert an action otherwise at law into one in equity. 1 Am.Jur.2d Actions § 7 (1962). This case, therefore, although the parties have briefed it as one in equity, presents actions at law tried without a jury. As such, the findings of the trial court have the effect of a jury verdict and will not be disturbed on appeal unless clearly wrong; the evidence must be considered in the light most favorable to the successful party, conflicts must be resolved in its favor, and it is entitled to the benefit of every inference which can reasonably be deduced from the evidence. England v. Leithoff, ante 212 Neb. p. 462, 323 N.W.2d 98 (1982); Hemenway v. MFA Ins. Co., 211 Neb. 193, 318 N.W.2d 70 (1982).

White's operative assignments of error are the trial court's findings that he misrepresented his past medical history to Medico, with the intent that Medico rely thereon that those misrepresentations were material; that Medico did in fact rely upon them; that Medico was not in fact aware of past medical history to an extent that it would be estopped from relying upon them; that he, White, did not have a private cause of action under § 44-1525(9)(m); that there was no evidence Medico had conducted itself contrary to § 44-1525(9)(m) with such "frequency" as to constitute a violation thereof; the failure to find that any misrepresentation White may have made was knowingly false; and that the burden of proof was improperly shifted to White.

The record supports findings that Mutual, the related company of Medico, sold insurance to White in 1975 through its agent, Gerald Yeck. Yeck had previously sold White insurance while he was an agent with certain other insurance companies. The completed Mutual application which Yeck received in 1975 failed to disclose various relevant prior medical history, including hospitalizations for heart and vascular disease and for back and lung problems. In truth and fact, the only prior medical history disclosed on the application for the policy was a truck accident which occurred in Ogallala, Nebraska. This was contrary to the information requested by the application form, which asked for various information regarding treatment which might have occurred during the preceding 5 years. The record also indicates that White failed to modify any of this submitted information, although he had the opportunity to do so when the insurer sent him a routine follow-up letter which requested the transmittal of such additional or modified information.

White obtained a disability benefit policy which Medico issued on September 26, 1976. The application for this policy also failed to reveal any of the prior relevant medical history other than the Ogallala truck accident.

White purchased a hospital confinement policy issued by Medico on January 8, 1977. The application for this policy again failed to reveal all of the relevant and material prior medical history, other than the Ogallala truck accident.

In 1977 and 1978 White received various hospital treatments for which he made claims under the September 1976 and January 1977 policies. Medico denied these claims after discovering White's prior medical history and elected to rescind both policies and to refund appellant the premiums he had paid.

There was conflicting testimony regarding the conversations between White and Medico's agents, and the contents thereof. In substance, White's evidence suggests that Medico knew about some or all of White's prior relevant medical history beyond the already disclosed Ogallala truck accident, while Medico's evidence suggests that it knew about nothing of significance other than the Ogallala truck accident.

Neb.Rev.Stat. § 44-710.14 (Reissue 1978) provides that the falsity of any statement in an application for insurance, such as those here in question, may not bar the right to recovery thereunder unless such false statement materially affected either the acceptance of the risk or the hazard assumed by the insurer. In Zimmerman v. Continental Cas. Co., 181 Neb. 654, 150 N.W.2d 268 (1967), we held that that provision must be read in pari materia with Neb.Rev.Stat. § 44-358 (Reissue 1978), which provides: "No oral or written misrepresentation or warranty made in the negotiation for a contract or policy of insurance by the insured, or in his...