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  • Barbara Phyliss Redler v. New York Life Insurance Company and Harriet S. Kandler, 437 F.2d 41, 3rd Cir. (1971)

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    This document is a court case regarding the rescission of a life insurance policy due to fraudulent statements made by the insured on his application. The key points are: 1) The insured made false statements on his medical exam, failing to disclose a recent x-ray and swelling that was diagnosed as cancer after his death. 2) The court found this constituted legal fraud and the insurance company was entitled to rescind the policy since it relied on his misrepresentations. 3) The judgment in favor of the insurance company rescinding the policy was affirmed on appeal, as the lower court's finding of fraud was not clearly erroneous.

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    Filed: 1971-01-14 Precedential Status: Precedential Citations: 437 F.2d 41 Docket: 18521

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    This document is a court case regarding the rescission of a life insurance policy due to fraudulent statements made by the insured on his application. The key points are: 1) The insured made false statements on his medical exam, failing to disclose a recent x-ray and swelling that was diagnosed as cancer after his death. 2) The court found this constituted legal fraud and the insurance company was entitled to rescind the policy since it relied on his misrepresentations. 3) The judgment in favor of the insurance company rescinding the policy was affirmed on appeal, as the lower court's finding of fraud was not clearly erroneous.

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    36 views3 pages

    Barbara Phyliss Redler v. New York Life Insurance Company and Harriet S. Kandler, 437 F.2d 41, 3rd Cir. (1971)

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    This document is a court case regarding the rescission of a life insurance policy due to fraudulent statements made by the insured on his application. The key points are: 1) The insured made false statements on his medical exam, failing to disclose a recent x-ray and swelling that was diagnosed as cancer after his death. 2) The court found this constituted legal fraud and the insurance company was entitled to rescind the policy since it relied on his misrepresentations. 3) The judgment in favor of the insurance company rescinding the policy was affirmed on appeal, as the lower court's finding of fraud was not clearly erroneous.

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    of 3

    437 F.

    2d 41

    Barbara Phyliss REDLER, Appellant,


    v.
    NEW YORK LIFE INSURANCE COMPANY and Harriet S.
    Kandler.
    No. 18521.

    United States Court of Appeals, Third Circuit.


    Argued Oct. 20, 1970.
    Decided Jan. 14, 1971.

    Matthew T. Rinaldo, Rinaldo & Rinaldo, Elizabeth, N.J., for appellant.


    Mark F. Hughes, Jr., Crummy & O'Neill, Newark, N.J., for appellees.
    Before MURRAH,* FREEDMAN and VAN DUSEN, Circuit Judges.
    OPINION OF THE COURT
    PER CURIAM:

    Plaintiff, widow of the insured and beneficiary of the life insurance policy in
    suit, challenges an October 14, 1969, final district court judgment rescinding
    such policy delivered by the defendant corporation (shortly after January 20,
    1965), entering judgment for the defendant and specifically finding and
    concluding that the insured, on January 14, 1965, knowingly made false
    answers to questions 3(c), 4(a), (b) and (c)1 of the Medical Examiner, thereby
    committing an equitable and legal fraud upon the defendant, which relied upon
    such fraudulent answers. 2

    After careful consideration of the record, we have determined that the trial
    judge's finding of legal fraud was not clearly erroneous and we reject the
    plaintiff's contention on this issue.3 For this reason, the district court judgment
    will be affirmed. See Urback v. Metropolitan Life Ins. Co., 130 N.J.L. 210, 32
    A.2d 337 (E. & A. 1943); Gallagher v. New England Mutual Life Ins. Co., 19
    N.J. 14, 114 A.2d 857 (1955); Parker Precision Products Co. v. Metropolitan
    Life Ins. Co., 407 F.2d 1070, 1073 (3d Cir. 1969), and cases there cited.

    Furthermore, we agree with defendant that Johnson v. Metropolitan Life


    Insurance Company, 53 N.J. 423, 251 A.2d 257, 263 (1969), concerned the
    right to rescind for false statements in an application for a health and accident
    policy after the incontestable clause became effective in view of the terms of
    N.J.S.A. 17:38-13.2 (A) and is inapplicable to this case, where the one-year
    incontestable clause had not become operative. See Russ v. Metropolitan Life
    Insurance Company, 112 N.J.Super. 265, 270 A.2d 759, Opinion of Nov. 9,
    1970 (Law Division-Essex County); Nardiello v. North American Life Ins. Co.
    of Chicago, Letter Opinion of 10/2/69 (Docket No. C1664-68, Superior Court
    of New Jersey).
    3

    Affirmed.

    Senior Circuit Judge of the Court of Appeals for the Tenth Circuit, sitting by
    designation

    These questions and answers in Part II of the Application for Life Insurance
    signed January 14, 1965, were as follows:
    '3': Have you (c) within the last 5 years had any x-ray, electrocardiogram or
    other diagnostic procedure ordered by a physician or practitioner? Yes, 1964-general check up and x-ray after auto accident '4' Other than is stated in your
    answers to the preceding questions, have you in the last 5 years, so far as you
    know, a) had any sickness, disease or injury? No b) been admitted to, or advised
    to be admitted to a hospital or sanitorium or other similar institution? No c)
    consulted any physician or practitioner for any reason, including routine checkup examination? Yes, 1964 general check-up and x-ray after auto accident.
    The application contained this statement immediately before the insured's
    signature on Part II:
    I HEREBY DECLARE that, to the best of my knowledge and belief, the
    information given in these 'Answers to the Medical Examiner' is correctly
    recorded, complete and true, and I agree that the Company, believing it to be
    true, shall rely and act upon it accordingly.

    The order also stated that the 'fraudulent answers * * * were material
    misrepresentations.' This diversity case was tried to the court, which found, on
    the basis of competent evidence, that on January 11, 1965, the insured's doctor
    examined a swelling under the insured's arm and had an x-ray taken of the area
    of the swelling on that date. He informed Redler that the swelling was probably
    a papiloma, or an excess breast, but that a further battery of tests would have to

    be made, requiring hospitalization. On or about January 11, 1965, the doctor


    arranged for Redler to enter the hospital for further tests. On January 13, 1965,
    Redler made application for the life insurance policy in question with New
    York Life and gave the insurance agent the first semi-annual premium due
    under the policy. On January 18, Redler had a further examination by Dr.
    Thaler and the hospital appointment was confirmed. The insurance policy in
    question was delivered to Redler sometime after January 20 by his insurance
    agent. At no time did Redler indicate to the agent or to the insurance medical
    examiner that he had been x-rayed on January 11, 1965, or was about to
    undergo any further tests. On January 28, the insured entered the hospital and,
    during his stay, the swelling was diagnosed as a variety of cancer, which
    caused his death on July 12, 1965. The testimony at trial showed that the policy
    was issued solely in reliance on these statements. The witnesses revealed that,
    had the company been advised that an x-ray had been taken on January 11, the
    company would have waited until after the results of the x-ray were received
    before issuance of the policy, and that, had the company been advised of the
    existence of the undiagnosed swelling, the policy would not have been issued
    until a diagnosis was made. These findings were not clearly erroneous. See
    F.R.Civ.P. 52(a)
    Also, one of three paragraphs on the application for the policy immediately
    preceding the signature of the insured provided that the policy 'shall (not) * * *
    take effect' until delivery 'and then only if the written representations made in
    the entire application for insurance would be, without material change, at time
    of delivery of the policy, true and complete representations of the state, at that
    time, of those matters inquired about in such application.'
    3

    In view of defendant's answer to interrogatory 39(h) stating 'we submit that the
    evidence would permit the inference of intentional misstatement,' and the
    discussion of the elements of legal fraud during the trial (N.T. 132-33), we
    reject plaintiff's contention that the 'issue of 'legal fraud' was never pleaded, nor
    * * * tried at the trial court level.' See F.R.Civ.P. 15(b), providing that 'issues *
    * * tried * * * shall be treated in all respects as if they had been raised in the
    pleadings.'

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