Womack v. Blue Cross and Blue Shield of Tenn.

• Decision Date: 04 February 1980
• Citation: 593 S.W.2d 294
• Parties: Josephine C. WOMACK, Petitioner, v. BLUE CROSS AND BLUE SHIELD OF TENNESSEE and Sumner County Farm Bureau, Respondents.
• Court: Tennessee Supreme Court

Page 294

593 S.W.2d 294

Josephine C. WOMACK, Petitioner, v. BLUE CROSS AND BLUE SHIELD OF TENNESSEE and Sumner County Farm Bureau, Respondents.

Supreme Court of Tennessee.

Feb. 4, 1980.

Fred A. Kelly, Kelly, Harsh & Kelly, Gallatin, for petitioner.

Arthur E. McClellan, Gallatin, for respondents.

OPINION

FONES, Justice.

Plaintiff, Josephine Womack, sued to recover benefits under a health and accident policy. Defendant, Blue Cross and Blue Shield, defended on the ground that several questions on its application had not been answered truthfully by plaintiff. The trial judge submitted the case to the jury for a general verdict. The jury found for the plaintiff and awarded a twenty-five percent bad faith penalty. The trial judge eliminated the bad faith penalty but approved the verdict for the plaintiff for the sum due under the policy. The Court of Appeals reversed and dismissed, finding that plaintiff's answers to questions (j) and (n) were "indisputably incorrect" and that as a matter of law the misrepresented facts materially increased the risk of loss and that the trial judge should have granted defendant's motion for a directed verdict.

We do not agree that a directed verdict was appropriate, but the case must be remanded for a new trial because the issue of the truthfulness of plaintiff's answers should have been submitted to the jury on interrogatories for a special verdict and because of an erroneous jury instruction.

I.

The law applicable to the issue of misrepresentation in an application for insurance is well settled in Tennessee. T.C.A. § 56-1103 provides:

"Misrepresentation or warranty will not avoid policy Exceptions. No written or oral misrepresentation or warranty therein made in the negotiations of a contract or policy of insurance, or in the application therefor, by the assured or in his behalf, shall be deemed material or defeat or void the policy or prevent its attaching, unless such misrepresentation or warranty is made with actual intent to deceive, or unless the matter represented increases the risk of loss."

Under this statute, to avoid coverage the insuror must first prove that the answers in the application were false; then it must prove either that the false answers were given with intent to deceive the insuror or that the false answers materially increased the risk of loss.

Whether the insured's answers to the questions on the application are true or untrue is to be determined by the trier of fact and when a jury is demanded, cannot be taken from them and decided by the trial judge unless the minds of reasonable men could reach only one conclusion as to whether the answers were true or false. The same is true if the insuror claims that false answers were made with intent to deceive. When only these two issues are raised the jury may properly return a general verdict. However, if the insuror claims that the false answers materially increased the risk of loss a question of law arises. Mutual Life Ins. Co. v. Dibrell, 137 Tenn. 528, 194 S.W. 581 (1917); Nicholson v. Time Ins. Co., 496 S.W.2d 516 (Tenn.App.1973); Tegethoff v. Metropolitan Life Ins. Co., 57 Tenn.App. 695, 424 S.W.2d 565 (1966); Sloop v. Mutual of Omaha Ins. Co., 55 Tenn.App. 656, 404 S.W.2d 265 (1965). In this instance, use of a general verdict is inappropriate. The jury may determine whether the answers were false and, if so, whether there was intent to deceive, but only the trial judge may determine whether false answers materially increased the risk of loss. The use of a special verdict is appropriate in this situation. See T.R.C.P. 49.01. See, e. g., Mutual Life Ins. Co. v. Dibrell, supra; Bauer v. Mutual of Omaha Ins. Co., 62 Tenn.App. 189, 460 S.W.2d 366 (1970).

II.

In the case before us, the two questions the Court of Appeals found were answered incorrectly were:

"Has any person for whom you are applying ever had or now have, any of the following:

(j) Irregular or excessive menstrual bleeding, 'female disorder'

(n) Any other medical or surgical advice or treatment or departure from good health within the last five years?"

Mrs. Womack went to Dr. Ellis, a gynecologist, in July, 1975, for a check-up and a Pap smear. Doctor Ellis' records show that she came for a "check-up" and he testified that her only specific complaint was that "her periods were somewhat heavier at times than they had been in the past." Mrs. Womack testified she told him that the first day or so of her period was heavier than the remainder of the time; that on occasions she passed blood clots; that she had light cramps and her legs and arms hurt; and that she had a fuzziness in her head but she had always had that with the menstrual cycle the first day or so. Mrs. Womack testified her check-up in 1975 resulted in Dr. Ellis telling her that everything was within "normal range." Some question exists whether Dr. Ellis' testimony can be said to contradict that of Mrs. Womack on that conclusion, but if so, it merely presents a jury issue. When Mrs. Womack was admitted to the hospital in November, 1976, according to Dr. Beck, her gynecological history revealed that she had "onset of menstrual periods at thirteen years of age, regular twenty-eight day cycle with a three to five day flow. She now had a six day flow which (sic) with some heavy menstrual flow." After giving that history Dr. Beck was asked and answered as follows:

"Q You described a six-day period and I think you are quoting that she had some dizziness and aching; and in your experience as a physician, do you find that particularly uncommon in women?

A No, sir. It is very common. They have many symptomatic complaints surrounding their menstrual periods."

We are unable to conclude, as did the Court of Appeals, that the minds of reasonable men cannot differ as to whether the answer "no" to question (j) was false.

As recently as Cecil v. Hardin, 575 S.W.2d 268 (Tenn.1978), we stated the requirements for sustaining a directed verdict.

"On review of the grant of a directed verdict on motion of a defendant, it is not the office of an appellate court to weigh the evidence. Rather, it must take the strongest legitimate view of the evidence in favor of the plaintiff, indulging in all reasonable inferences in his favor, and disregarding any evidence to the contrary. The trial judge's action may be sustained only if there is no material evidence in the record that would support a verdict for the plaintiff, under any of the theories that he has advanced." Id. at 270.

On the issue of whether Mrs. Womack's answer to...