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Garde v. Country Life Insurance Co.

OPINION FILED SEPTEMBER 19, 1986.

MARY B. GARDE, A MINOR, BY HER GUARDIAN, VIRGINIA GARDE, ET AL., PLAINTIFFS-APPELLANTS,

v.

COUNTRY LIFE INSURANCE COMPANY, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of Morgan County; the Hon. Gordon D. Seator, Judge, presiding.

PRESIDING JUSTICE MCCULLOUGH DELIVERED THE OPINION OF THE COURT:

Decedent, Joseph Garde, applied for life insurance with defendant, Country Life Insurance Company (Country), was issued a binding receipt, and died while his policy application was pending. Plaintiffs, the beneficiaries, filed suit to compel payment of the proceeds. Country alleged decedent made material misrepresentations concerning his health and the existence of other insurance which voided any coverage under the binding receipt. The circuit court granted Country's motion for summary judgment and dismissed the cause. Plaintiffs appeal. We affirm.

The salient facts are undisputed. In late January 1983, decedent met with James L. Bettis. Bettis, in an affidavit, stated that they initially completed an application for life insurance for a face amount of $100,000 with $100,000 accidental-death benefits. Bettis accurately recorded decedent's answers to the application questions which Bettis read to decedent. After completing the application through question 23, decedent decided to apply dividends from another policy with Country to the first premium on the new policy. Subsequently, Bettis prepared the necessary letter, and on February 1, 1983, at his office, decedent completed and signed the application. Bettis then gave him a receipt.

Decedent answered no to the following application questions:

"12b. Had any electro cardiogram for chest pain or other physical complaint * * *?

17. Have you ever been treated for or ever had any known indication of * * * d. chest pain, irregular or rapid heart rate, high blood pressure, rheumatic fever or other severe infection, heart murmur, heart attack or other disorder of the heart or blood vessels?

20. OTHER THAN ABOVE, have you within the past 5 years * * * (c) Had electrocardiogram, X ray, or other diagnostic test?"

Question 8 of the application stated:

"What is the amount of insurance now in force on Proposed Insured's life?"

Question 10 of the application stated:

"Has the Proposed Insured any applications for other life or health insurance or a request for reinstatement now pending?"

Decedent responded that he had a $10,000 ordinary life policy with Country and that he did not have any pending applications for insurance. The application also stated:

"IT IS UNDERSTOOD AND AGREED THAT:

(a) If binding receipt has been given and is in effect, its terms will apply. Otherwise, no insurance will take effect before the policy for such insurance is delivered and the first premium paid. Upon such delivery and payment, insurance will take effect if the answers and statements in this application are then true without material change."

The receipt stated:

"Subject to the terms and conditions of this receipt as printed on this and the reverse side hereof, life insurance and any additional benefits in the amount applied for shall be deemed to take effect as of the date of the application for benefits due as a result of accidental or natural causes originating after the date of the application to the same extent as if the policy applied for had been issued and delivered.

Any insurance coverage which could otherwise be provided shall be void if the application contains any material misrepresentation." (Emphasis added.)

On August 5, 1985, Country filed a motion for summary judgment with attached affidavits and decedent's medical records. The affidavits revealed that decedent had the following life insurance when he applied for the instant life insurance policy:

ISSUE/APPLICATION AFFIANT COMPANY DATE

Wesley D. Oglesby Country Life 12/11/61 Insurance Co.

Rebecca Wingate United Benefit 11/9/73 Life

AFFIANT FACE ACCIDENTAL AMOUNT DEATH BENEFITS Wesley D. Oglesby $10,000.00 $10,000.00

Rebecca Wingate $10,000.00 $10,000.00 United of Omaha 5/20/82 United of Omaha 11/20/82 ...


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