Melick & Porter attorneys Jim Scamby and Natasha Winter recently obtained summary judgment for their client, Farm Family Life Insurance Company, in the U.S. District Court for the District of Massachusetts. Farm Family brought an action for declaratory judgment, seeking to rescind a policy of term life insurance on the grounds that the insured had made material misrepresentations about his health during the application process. The insured applied for coverage with his agent and later completed a statement to a medical examiner. In his statement, he omitted the fact he had been treated for chest pains on two separate occasions in the preceding six weeks, and that he had a follow-up appointment with his cardiologist scheduled for the following day. The insured passed away on a business trip just weeks after the policy issued. The insurer introduced unrebutted evidence that if it had been made aware of the decedent’s recent treatment, it would have declined to issue a policy to him.
Jim and Natasha argued that the insured made material misrepresentations, which increased the insurer’s risk of loss and thus permitted the insurer to void the policy in accordance with M.G.L. c. 175, § 186. The defendant beneficiary argued that the decedent had relied upon his agent’s advice, specifically that he was not required to disclose this treatment because he did not receive a diagnosis and believed that he had the flu. The Court found that even if the agent gave such advice, the insured made separate misrepresentations to the medical examiner, in response to different questions, and outside of the presence of the agent and the beneficiary. The Court also granted summary judgment to the agent, holding that because the agent was not present during the medical examination, the insured could not have reasonably relied on the agent’s earlier advice about answering questions on the application.