Life Insurance Law

Grand Prairie life insurance lawyers and those in Fort Worth, Dallas, Irving, Arlington, Richardson, Mesquite, and other areas in the metroplex area need to be aware of the existence of this case.
The opinion was issued in 1981, by the El Paso Court of Appeals. The style of the case is Doris R. Young v. Members Life Insurance Company. This is an older case and presents a point of view that this writer has not seen in later cases. But one that needs to be noted, just in case.
This is an appeal from a take-nothing judgment in a suit brought by Doris R. Young, to collect the benefits of an insurance policy on the life of her deceased husband, Edwin Young. The judgement is based upon jury findings that the application for insurance contained false representations concerning the health of Edwin.
Mr. and Mrs. Young were married in February, 1977. On May 26, 1977, he was hospitalized for a period of nine days, and treated for “urinary symptoms.” Mrs. Young was a registered nurse employed at Medical Center Hospital in Odessa, and she was the “floor nurse” on the night shift while her husband was hospitalized. She testified she kept up with his medical progress. The hospital records for that occasion show a past medical history which reflects Edwin “has had numerous admissions to mental institutions” and “admissions to military hospitals, at least a total of seven times, on account of ‘nervous breakdowns.'” His condition on discharge was “improved” and the doctor’s final impression reflected: (1) history of mental disease, currently stable, (2) mild hyperglycemia, suggestive of latent or sub-clinical diabetes, and (3) mild exogenous obesity.
On June 14, 1977, ten days after his release from the hospital, the application was completed for an insurance policy with Members Life Insurance Company. It contained an inquiry in question number 9 as to whether the insured ever had or been treated for, among other things, diabetes or nervous disorder. In each instance, the answer given was “no.” The application also asked if “you know of any other impairment now existing in the health or physical condition of you, your spouse, or any of your children?” Again, the answer was “no.” The next question inquired “have you, your spouse, or any of your children been examined or treated by a doctor during the past three years for anything other than the diseases listed under question number 9.” The answer was “yes” and the explanation was that Mr. Young took medication for a kidney infection from 6/1 through 6/5. The policy was issued.
On March 3, 1979, Mr. Young took a nap after lunch, and shortly thereafter he died of mass aspiration of food into his bronchial tubes. The company rejected the claim on the policy and this suit resulted.
The jury found that Mrs. Young, who actually completed the policy application, “represented that she knew of no other impairment then existing in the health of Edwin D. Young,” and also found that she “represented that Edwin D. Young was treated only for a kidney infection in the three years prior to the completion of the application.” The jury further found that each of the representations were “false,” that Mrs. Young knew that they were false, that each was made to induce the company to issue a policy of insurance on the life of Edwin D. Young, and that the misrepresentations were relied upon by the company.
Young’s lawyers filed a “Motion for Judgment Non Obstante Veredicto” saying there was no evidence legally or factually to support the submission of certain “Special Issues” on the “Jury Charge.” Part of this dealt with expert testimony and will not be discussed in this writing.
Another part of the challenge dealt with the element of “intent to deceive.”
In discussing this “intent to deceive” the court talked about a 1958 Texas case that noted, “to the effect that the utterance of a known false statement, made with intent to induce action, is equivalent to an intent to deceive.” They went further to say they found nothing, “to suggest that a false statement made with intent to induce action is not equivalent to an intent to deceive.” In conclusion they stated:
We conclude that the finding of the jury in this case that false representations were knowingly made to induce issuance of the policy, and that they were relied on and were material to the risk, were sufficient to avoid liability on the policy.
This case took a different angle on the “intent to deceive” issue and is one that an experienced Insurance Law Attorney needs to be aware of in order to properly advise and represent clients.