Do Misrepresentations In A Policy Application Make A Difference

Whether you are an attorney in a small town like Hamilton or Evant Texas or the Dallas Fort Worth metropolitan area, life insurance lawyers can tell you that the most common reason claims for life insurance benefits being denied is that there was a misrepresentation in the policy application.

A 1932, El Paso court of Appeals opinion is still good law.  The opinion is styled First Texas Prudential Insurance Co. v. John Pipes.

John Pipes brought suit against First Texas for their refusal to pay policy benefits of $132.00 on this life insurance policy that insured his wife Ludie.  John won at trial and this appeal by First Texas followed.

The application for the insurance policy contained the question:  “Has life proposed ever suffered from consumption?”  The question was answered: “No.”  First Texas submits that said answer was false; that the application was signed by John and without the knowledge of the insured; that the uncontroverted evidence shows that if the application for the policy had reflected that the assured had had incipient tuberculosis, though arrested, said application would have been rejected, and that under the evidence the court should have found that said representation was material to the risk as well as false, and, so finding, rendered judgment for John.

Ludie’s doctor, Dr. T. C. Liddell testified that he was Ludie’s doctor and that in 1929 Ludie had a very mild type of tuberculosis that was completely arrested and apparently cured.  That Ludie’s cause of death was coronary thrombosis.  The doctor stated that coronary thrombosis is not a condition either caused or aggravated by tuberculosis.

Other witnesses testified they had never known Ludie to have tuberculosis.

This court found that the evidence is sufficient to sustain the court’s findings that the disease of which Mrs. Pipes died was in no manner connected with tuberculosis, or resulted from or grew out of it, and that Mrs. Pipes nor her husband, John Stone Pipes, knew that Mrs. Pipes had, or ever had had, any symptom of tuberculosis.  The evidence shows affirmatively that Pipes did not know it.  The court found, and we think upon sufficient evidence, that Dr. Liddell did not inform either Mr. or Mrs. Pipes that Mrs. Pipes had an arrested case of tuberculosis.

The current day statute dealing with misrepresentations in life insurance policies is found in the Texas Insurance Code, Section 705.104.