Opinion
No. 75-112
Decided October 9, 1975. Petition for rehearing granted. Prior opinion announced August 6, 1975 withdrawn. Certiorari granted January 26, 1976.
Action to recover on insurance policy. Insurer defended on grounds that adult daughter of insured and beneficiary under the policy made misrepresentations on application. From ruling that plaintiff was entitled to benefits in the absence of proof of her intent to deceive, insurer appealed.
Reversed
1. INSURANCE — Payment on Policy — Grounds for Avoiding — Application — Misrepresentations — Intent to Deceive. Where, in response to agent's questions concerning her mother's medical history, adult daughter of prospective insured failed to ensure that requested information concerning prospective insured's periods of hospitalization was stated on application, the insurer, under the specific circumstances presented, could avoid payment on the policy without the insurer being required to prove that the applicant intended to deceive the insurer.
2. Insurance Agent — Statements By — Reliance On — Applicant — Not Binding — Insurer — Intent — Not Determinative. Prospective beneficiary of life insurance policy, who filed for and signed the application for the policy, was not entitled to rely on statements made by the insurance agent as to what information was required on the application, those statements being contrary to the express instructions on the application form; hence, the insurer would not be bound thereby, and the issue of beneficiary's intent in supplying the application information was not determinative of her right to recover on the policy.
Appeal from the District Court of the City and County of Denver, Honorable James C. Flanigan, Judge.
Shelley B. Don, for plaintiff-appellee.
Gorsuch, Kirgis, Campbell, Walker Grover, Robert E. Warren, Jr., Michael J. Wadle, for defendant-appellant.
Division II.
The opinion announced on August 6, 1975, is withdrawn, and the following opinion is issued in its stead.
As the beneficiary, plaintiff brought this action to recover the proceeds of a life insurance policy insuring the life of the decedent, her mother. Defendant Olinger Life Insurance Company contended that it was not obligated to pay because plaintiff supplied false answers to questions concerning the decedent's medical history on the application for the policy. In a trial to the court, plaintiff was awarded judgment and Olinger appeals. We reverse.
Viewing the evidence in a light most favorable to the successful party in the trial court, as we must, Feit v. Zoller, 155 Colo. 64, 392 P.2d 593, the record reflects the following facts.
Plaintiff, who had only a ninth grade education, was 28 years of age at the time she applied for the policy on her mother's life. Pursuant to the information on a business card left on the door of plaintiff's residence by an agent of Olinger, and at the request of decedent who was then living with plaintiff, a meeting was arranged at plaintiff's residence with the agent to complete an application for the policy. The agent read the questions from the application form to plaintiff and based on the information supplied by her, wrote the answers on the form. Negative answers were placed on the application to the following questions:
"3. Does . . . [the insured] now have or did he or she ever have any of the following: Heart trouble, high blood pressure, tuberculosis, paralysis, cancer, epilepsy, tumor, venereal disease, kidney trouble, ulcer, diabetes, alcoholism, asthma, emphysema, dropsy, swelling or edema, circulatory ailment, rheumatism, arthritis, rheumatic fever, muscular disease, physical injury, physical or mental defect, other disease or ailment or surgical operation? If yes, give details. . . .
"4. Has . . . [the insured] been attended by a physician or practitioner for treatment or been admitted to a hospital or sanitarium in the past five years? If yes, give details. . . ."
Olinger introduced evidence to show that decedent had been treated and in some instances hospitalized within the preceding five years for injuries received in an automobile accident, for alcoholism, for high blood pressure, and for arthritis, and that plaintiff had twice signed a general treatment authorization and had visited her mother at the hospital. However, plaintiff testified that she was only aware that decedent had been treated for colds, for a miscarriage, for the leg injury received in the accident, and had received "check-ups." In conjunction with the hospital admissions, the record reflects that decedent was examined for a short time and then promptly discharged. Moreover, plaintiff stated that she was advised by the agent that in asking the questions on the application, he was seeking information only as to "anything serious." She testified that to the best of her knowledge at the time the application for insurance was made, decedent had not been treated by a doctor or at any hospital for any serious ailments. She advised the agent concerning the miscarriage and the check-ups, but he responded that these incidents were not important.
After the application form had been completed, at the agent's request plaintiff initialed the answers to the questions quoted above and signed the application form. The form provides that by signing the application, plaintiff verified that she had read the questions and answers, and that the answers were true.
On the basis of the foregoing, the court found that plaintiff answered the questions truthfully to the best of her knowledge and without any intent to deceive Olinger. Olinger contends that the trial court's ruling is erroneous. It asserts that where, as here, the applicant knows that the insured has been treated by a doctor and in a hospital, plaintiff's failure to ensure that such information is stated on the application constitutes grounds for it to avoid payment on the policy without the need for proof that the applicant intended to deceive the insurer. Under the circumstances of this case, we must agree.
[1] In evaluating the plaintiff's answers to the questions on the application form, the trial court obviously considered those answers in light of the agent's advice to plaintiff that Olinger was only interested in information concerning injuries or diseases that were "serious." In this context, the trial court found that plaintiff answered the questions truthfully to the best of her knowledge. However, if the agent's statements are in conflict with the instructions on the application, plaintiff may not rely on the instructions of Olinger's agent relative to how the questions on the application must be answered. Section 10-2-204, C.R.S. 1973, provides:
"But no statement or declaration made to or by an agent . . . not contained in the application, shall be taken or considered as having been made to or brought to the notice or knowledge of the company, or as charging it with any liability by reason thereof."
[2] In Benson v. Bankers Life Casualty Co., 147 Colo. 175, 362 P.2d 1039, the issue before the Court was whether "a misstatement of an insurance company agent that the company is interested only in illness which occurred within the previous five year period, which statement is contrary to the express terms of the insurance contract, is binding upon the company. . . ." After citing the above statute and discussing the prior Colorado cases on the subject, the Supreme Court held that those representations by the agent which contradicted the express terms of the insurance application were not binding upon the company. Benson is dispositive here, and thus the issue of plaintiff's intent in supplying the answers is not determinative.
The judgment must, therefore, be reversed, and the cause is remanded with directions to the trial court to enter judgment dismissing plaintiff's complaint and for such further proceedings relative to refund of premiums paid and court costs as the court deems proper.
JUDGE SMITH and JUDGE KELLY concur.