Life Insurance Claim Denial – Rescission

Here is a life insurance case wherein the insurance company attempts to have the Court agree to rescission of the policy.  It is a 2021, opinion from the Southern District of Texas, Houston Division.  The opinion is styled, Pruco Insurance Company v. Blanca Monica Villarreal – Transamerica Life Insurance Company v. Blanca Monica Villarreal.

This opinion regards both sides filing motion for summary judgement.  The case involves millions of dollars of life insurance.  The facts of the case are long and detailed and the opinion should be read to understand the facts.  The case also deals with many issues.  The issue discussed here has to do with rescission.

The insurer claim there are undisputed facts that show material, intentional misrepresentations made in the application for insurance, warranting rescission as a matter of law.  A material fact is one that might affect the outcome of the suit
under governing law,” and “a fact issue is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party.

When the moving party has met its Rule 56(c) burden, the nonmoving party cannot survive a summary judgment motion by resting on the mere allegations of its pleadings.  The nonmovant must identify specific evidence in the record and articulate how that evidence supports that party’s claim.  A party cannot defeat summary judgment with conclusory allegations, unsubstantiated assertions, or only a scintilla of evidence.  In deciding a summary judgment motion, the evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his or her favor.

Under Texas Insurance Code, Section 705.104, insurers may present a defense based on material and intentional misrepresentations made in the application for, or in obtaining, a life insurance policy on the life of a person in or residing in Texas.  If the insurers prove: “(1) the making of the representation; (2) the falsity of the representation; (3) reliance thereon by the insurer; (4) the intent to deceive on the part of the insured in making same; and (5) the materiality of the representation,”the insurer may avoid the policy, and it may be rescinded.

The record evidence shows the representations Rosendi made in writing when he applied for the policies.  He filled out a number of forms.  The statements he made in those forms, and the documents he submitted, are undisputed.  But there are genuine, factual disputes material to whether those statements and documents were true or not true, if they were material to the insurers’ decision to issue the policies, and if untrue and material, whether Rosendi’s deception was  intentional. The most significant disputes are as to Rosendi’s financial condition. These disputes include whether Rosendi reported the source and amount of his income, holdings, and wealth accurately or not, and how significant these statements were to the insurers’ decision to issue the policies.  Other disputes, including as to his family connections, his beneficiary, his connection to the United States, the purpose of his U.S. bank account and whether it was “fake,” and his residence, add to the need for a jury resolution and weigh against summary disposition.

The motion for summary judgement regarding rescission is denied.


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