Intent To Deceive

Life insurance attorneys in the Dallas and Fort Worth area need to know this 1991 case. It deals with how an insurance company must prove “intent to deceive” when asserting that an applicant for insurance has misrepresented their health in a life insurance policy. The case, from the Houston Court of Appeals [14th Dist.] is styled, Betty Flowers v. United Insurance Company of America.
This is an appeal from a summary judgment granted in favor of United.
The basic facts of the case are not in dispute. Betty and her husband, Edward Flowers, applied for and were issued a joint life insurance policy with United. In the application for the policy Mr. Flowers was asked a series of questions regarding his health history. In pertinent part, the question asked:
10. Has any Proposed Insured or Payor to be covered ever had:
a. High blood pressure?
b. Disease or disorder of heart or circulatory system?
* * * * * *
11. Answer for any Proposed Insured(s) or Payor a. Have you ever had a physical examination, consulted a physician, or been in a clinic, hospital or institution for surgery, diagnosis or treatment within the past 5 years?

Mr. Flowers answered “no” to each health question. He did not give any explanations of health problems in the space provided. Mr. Flowers executed the application stating “I certify that I have read (or have had read to me) all the questions and answers on this application.” As it turns out, three years before applying for the life insurance, Mr. Flowers was incarcerated in the Texas Department of Correction (TDC). On the TDC medical intake form Mr. Flowers stated that he had high blood pressure. While in prison Mr. Flowers took medication for the condition for approximately two years . Further, while he was in prison, he was admitted to the hospital for an injured wrist; and during his hospitalization he was diagnosed with borderline cardiomegaly, enlargement of the heart.
Mr. Flowers was killed in a motor vehicle accident. Betty sued for policy benefits.
Under Texas law, there are five elements an insurance carrier must plead and prove in order to establish a misrepresentation defense:
(1) the making of a misrepresentation;
(2) the falsity of the misrepresentation;
(3) reliance on the misrepresentation by the insurer;
(4) the intent to deceive on the part of the insured in making the misrepresentation; and (5) the materiality of the misrepresentation.

This Court said it was of the opinion that it may not presume an intent to deceive from the fact that Mr. Diggs, with a long history of heart ailments, made false statements on his application for insurance. Since there is no evidence regarding Mr. Diggs’ intent to deceive, the summary judgment was improper.
The fact that Mr. Flowers admitted a health problem when he was incarcerated at TDC simply shows that he knew of his health conditions. Texas courts have held that the fact that one misrepresents one’s health condition is insufficient to establish intent to deceive as a matter of law. The mere knowledge of one’s health condition is insufficient to prove intent to deceive as a matter of law. The circumstances in this case would raise a fact question as to Mr. Flowers’ intent. A jury might well believe that his knowledge shows that he intended to deceive United. But a Court cannot say as a matter of law that this is true.