Argued December 2, 1971. —
Decided January 4, 1972.
APPEAL from a judgment and an order of the circuit court for Milwaukee county: ELMER W. ROLLER, Circuit Judge. Affirmed.
For the appellant there was a brief by Schober Radtke of New Berlin, attorneys, and Maroney Schiro of Milwaukee, of counsel, and oral argument by Thomas P. Maroney and Jack A. Radtke.
For the respondent there was a brief by Foley Lardner, attorneys, and Gilbert W. Church of counsel, all of Milwaukee, and oral argument by Mr. Church.
This is an appeal from a judgment of the circuit court which dismissed the plaintiff's complaint on the merits and granted judgment on the defendant's counterclaim. Plaintiff also appeals from an order denying her motion to revise the judgment.
In the original proceedings the trial judge found that the insured, Stanley Powalka, made false representations to the agents of the insurance company, which increased the risk and contributed to the loss. On the basis of that finding, the trial court entered judgment for the defendant. On appeal the record showed that the insurance company's examiner had submitted a report to the company stating there was no "doubt of health or vigor in the applicant's appearance." We concluded this statement was a "certificate of health."
Under such circumstances the claim of the beneficiaries under the policy could be defeated only by a showing that the certificate of health was obtained by the fraud or deceit of the applicant.
" Insurance; application; effect. (1) No oral or written statement, representation or warranty made by the insured or in his behalf in the negotiation of a contract of insurance shall be deemed material or defeat or avoid the policy, unless such statement, representation or warranty was false and made with intent to deceive, or unless the matter misrepresented or made a warranty increased the risk or contributed to the loss.
"(2) No breach of a warranty in a policy shall defeat or avoid such policy unless the breach of such warranty increased the risk at the time of the loss, or contributed to the loss, or existed at the time of the loss."
" Estoppel by report of medical examiner, effect of fraud. If the medical examiner of any life or disability insurance company shall issue a certificate of health, or declare the applicant a fit subject for insurance, or so report to the company or its agent under the rules and regulations of such company, it shall thereby be estopped from setting up in defense of an action on a policy issued thereon that the insured was not in the condition of health required by the policy at the time of the issue or delivery thereof, unless the same was procured by or through the fraud or deceit the insured. This section shall apply to fraternal benefit societies."
We held that under sec. 209.07, Stats., the insurance company was estopped by the issuance of the certificate of health from asserting a defense based on the false representations in regard to the insured's condition of health unless it was proved that the certificate was obtained by fraud.
We concluded from the examination of the original record that the trial judge in those proceedings had not dealt with the fraud question and had made no specific finding in that respect. Accordingly, the judgment was reversed and the case was returned to the trial court with the statement, Powalka, supra, 158a:
". . . Having here found that sec. 209.07 applies, we feel that this case must be remanded for further proceedings in the trial court, at its option, either to make findings on the record already made, or in a new trial. In these proceedings the insurance company must establish actual fraud or deceit required by sec. 209.07, as the only basis on which recovery on this policy can be defeated."
Upon remand to the trial court, the plaintiff filed an affidavit of prejudice against Judge RASKIN, the original trier of the fact, and asked that the case be placed on the jury calendar. Although the affidavit of prejudice was filed too late to be granted as a matter of course, it was nevertheless honored, and the case was transferred to the jury trial calendar of Judge ROLLER.
After the transfer, the plaintiff moved that summary judgment be granted to the plaintiff on the basis of the record without further testimony or affidavits. Thereafter the defendant filed a motion for summary judgment. Each motion indicated a willingness to rely on the record previously made.,
Judge ROLLER granted defendant's motion for summary judgment after concluding that the facts of record were sufficient to show as a matter of law that the certification of health and the issuance of the policy were induced by the fraudulent representations of the insured, Stanley Powalka. In the order for judgment, which we deem additionally to constitute a finding of fact, Judge ROLLER stated, ". . . Stanley Powalka, procured the medical report and the insurance policy involved in this case through fraud and deceit . . . ."
The only significant fact appearing in the record considered by Judge ROLLER and not referred to in the first opinion of this court is the summary of Powalka's medical history taken at the time he was hospitalized on January 24, 1966, three days before he died of what was diagnosed as:
"Cardiac standstill — interval between onset and death, minutes; myocardial infarct — interval between onset and death, minutes; arteriosclerotic heart disease — interval between onset and death, years."The medical history shows the following entry: "This 50 year old white male states that for about 2 or 3 years he has been short of breath on exertion, when climbing stairs, or walking and develops with the shortness of breath a tightness in the throat and tightness in the chest which subsides within minutes of sitting down to rest following exercise. He works as an automobile mechanic, has very little difficulty with his present work but cannot climb one flight of stairs without experiencing the tight feeling and shortness of breath."
On this appeal the plaintiff contends that, under the mandate of this court following the original appeal, she was entitled to judgment on the complaint, or that she was entitled to a new trial and a trial by jury, and that the court erred in granting summary judgment for the defendant.
Upon remand, the plaintiff moved for a trial by jury. That request was granted. On the next day, an affidavit of prejudice was filed, which was honored by Judge RASKIN, and the case was transferred to the branch of the circuit court presided over by Judge ROLLER, to be placed on the jury calendar. The mandate of this court gave the option to the trial judge on remand to determine whether a new trial was to be had, and we are satisfied that it was within the discretion granted to the trial judge to make the election in respect to the necessity or mode of further trial. Despite plaintiff's request for a jury trial, the reciprocal motions for summary judgment by the defendant and by the plaintiff constituted a waiver of any right to jury trial that might have theretofore existed. A motion for summary judgment carries with it the explicit assertion that the movant is satisfied that the facts are undisputed and that on those facts he is entitled to judgment as a matter of law. We pointed out in Wiegand v. Gissal (1965), 28 Wis.2d 488, 495a, 495b, 137 N.W.2d 412, 138 N.W.2d 740 (per curiam opinion on rehearing), ". . . the practical effect of the bilateral summary judgment motions was the equivalent of a stipulation as to the facts."
Accordingly, the plaintiff's motion for summary judgment, coupled with the defendant's motion, constituted a waiver of her previous request for a jury trial.
Plaintiff chose to rely on the legal conclusions to be reached by the trial judge on what were, in effect, stipulated and undisputed facts. Plaintiff's later demand for a jury trial made after Judge ROLLER'S decision to grant summary judgment for the defendant was a nullity.
The trial judge reached his legal conclusions on the undisputed facts of record. In his decision he pointed out that there was no dispute that Stanley Powalka represented:
"(1) That the last doctor he had consulted before making the application was Dr. Schmidt, deceased, five to seven years prior thereto, for hay fever;
"(2) That he had never had pain or pressure in the chest and shortness of breath;
"(3) That he had never had any special examinations such as X ray and electrocardiogram;
"(4) That he has never consulted or sought advice or treatment of a physician for any reason not already mentioned."
Judge ROLLER further stated:
". . . the record in this case admits of no conclusion other than that the insured's representations were false and made with intent to deceive. It is established in the record, and not otherwise contended, that the insured was an intelligent, successful and meticulous businessman and there is no issue with respect to his fully understanding and comprehending the questions in his application for insurance."
On the basis of these facts, which Judge ROLLER found to be undisputed, he concluded:
". . . as a matter of law that the untrue statements of the applicant for the policy of insurance were not `innocent misrepresentations,' that they were material, made by the applicant with the actual intent to defraud or deceive, to induce a favorable report of the medical examiner and that the applicant procured the certificate of health and the policy of insurance through such fraud."
"`Fraud, if an element in this case, must arise out of a false representation. We have held that for a misrepresentation to be fraudulent, it must consist "first, of a statement of fact which is untrue; second, that it was made with intent to defraud and for the purpose of inducing the other party to act upon it; third, that he did in fact rely on it and was induced thereby to act, to his injury or damage." International Milling Co. v. Priem (1923), 179 Wis. 622, 624, 192 N.W. 68.' [quoting from McCluskey v. Thranow (1966), 31 Wis.2d 245, 252, 142 N.W.2d 787]." Volk v. McCormick (1969), 41 Wis.2d 654, 165 N.W.2d 185.
To arrive at this conclusion, the trial judge needed to look only to the uncontested facts, and from those facts he could only arrive at the inference that the conduct of the insured arose out of an actual intent to defraud the insurance company. The inference thus reached was sufficient as a matter of law to prove that Stanley Powalka intended to defraud the insurer. We passed on a similar problem in Monahan v. Mutual Life Ins. Co. (1927), 192 Wis. 102, 109, 212 N.W. 269, wherein we said:
"We can conceive of no inference consistent with an innocent purpose on the part of the insured that can be drawn from these facts and circumstances. It is impossible to indulge the thought that her suppression of the damaging facts was due to a lack of memory or mere inadvertence. Her illness was so recent, and the advice which she received from Dr. Pember concerning her health was of so grave a nature, that it must have given her more than passing concern and left an impression upon her mind and memory that could not have faded within a period of three weeks. We hold that the evidence discloses as a matter of law an actual intent on her part to deceive the defendant company."
The Monahan Case, together with this court's opinion in Powalka, supra, is dispositive of the plaintiff's contentions. Under the undisputed evidence, the insurance company was not estopped by sec. 209.07, Stats., to assert a defense, for the certificate of health "was procured by . . . the fraud or deceit of the insured."
The plaintiff also relies on a portion of Judge RASKIN'S decision in the first trial. Therein he said:
". . . we do not find any intent to deceive defendant's insurance company but we do find that the misrepresentations referred to increased the risk and contributed to the loss."
On the appeal ( Powalka, supra, p. 158), commenting on that statement by the trial judge, we said, "This comes close to a conclusive finding negativing an essential element of a defense based upon fraud or deceit." We went on to say, however, that Judge RASKIN had not purported to reach the issue of fraud or deceit. Since he did not, in fact, address himself to that issue, his statement did not constitute a finding binding on the subsequent proceedings. On the remand, the trial court addressed itself specifically to the issue of fraud and deceit, and it ruled as a matter of law that the defendant's conduct was fraudulent. That conclusion was based on the application of proper legal standards to the undisputed facts.
By the Court. — Judgment and order affirmed.