The opinion of the court was delivered by: Hon. William J. Martini
In this action, Plaintiff Debbie Mendez seeks payment of benefits under Jorge Mendez's, that is, her late husband's, life insurance contract issued by Defendant American General Life Insurance Company ("American General"). Before the Court is American General's motion for summary judgment seeking a determination that the contract was void based on concealment and misrepresentations. American General has also brought a purported counter-claim for insurance fraud against Debbie Mendez and seeks summary judgment on that claim. Plaintiff has moved for summary judgment on its claim for benefits under the contract. Material facts are not in dispute; the case, therefore, is ripe for summary judgment. No oral argument was held. Fed. R. Civ. P. 78.
For the reasons elaborated below, Plaintiff's motion for summary judgment will be DENIED. Defendant's motion for summary judgment will be GRANTED in part, and DENIED in part. The Court finds that the contract for insurance is void ab initio, but will deny (and, indeed, dismiss) the purported counter-claim. Furthermore, given its finding that the contract is void ab initio, Defendant must pay (with interest) the estate of Jorge Mendez all premiums paid since the purported reinstatement.
On September 26, 2006, Jorge Mendez submitted an application for term life insurance to American General. On December 6, 2006, American General issued a policy (the "Policy") to Jorge Mendez. On April 15, 2007, American General contacted Jorge Mendez and indicated that the Policy was terminated for failure to pay premiums due. Although terminated, the policy provided for reinstatement.
On April 20, 2007, Jorge Mendez applied for, filled out, and signed his reinstatement application. Among other questions, the reinstatement application asked whether he had been diagnosed or treated for "cancer;" he answered "no." He gave similar answers in regard to "tumor" and diseases of the "brain." Plaintiff Debby Mendez was present when Jorge Mendez filled in this form. Jorge Mendez failed to answer a single question, that is, Question Number 4, which asked him to state the "[d]ate, reason, findings and treatment at [his] last visit" to his "personal physician."
On April 24, 2007, Jorge Mendez visited Dr. Dokko who recommended that Jorge Mendez undergo an MRI. He did so on April 27, 2007, and an MRI report dated April 27, 2007, revealed a mass within the left frontal lobe of Jorge Mendez's brain.
On April 26, 2007, Jorge Mendez's (incomplete) reinstatement application was submitted to American General by PGA Financial.
On April 29, 2007, Jorge Mendez learned of the results of the MRI. On April 30, 2007, Jorge Mendez was evaluated by Dr. Hubschmann, who indicated that Jorge Mendez had a large tumor, and recommended radical resection. On May 2, 2007, Mendez was seen by Dr. Gutin. He diagnosed Mendez as having glioblastoma, and recommended a biopsy of the mass.
On May 2, 2007, American General notified Jorge Mendez that his application was incomplete. On May 4, 2007, Mendez met with Dr. Hodaosh, who recommended surgery to remove the tumor. On May 7, 2007, Jorge Mendez dated and initialed his response to the unanswered question. Again, the question inquired as to the "Date, reason, findings and treatment at [his] last visit" to his "personal physician". He answered: "2/8/06 physical/no findings[.] all normal JM 5/7/07." Plaintiff was present when Jorge Mendez answered this question.
On May 8, 2007, Jorge Mendez forwarded his answer to Question Number 4 to American General. Also, on May 8, 2007, Plaintiff scheduled surgery for her husband. On May 14, 2007, Jorge Mendez met with Dr. Dokko to obtain clearance for an upcoming biopsy. Also, on May 14, 2007, Debbie Mendez signed the check to pay past due premiums. The check was mailed to Defendant on or about May 14, 2007.
On May 17, 2007, Mendez underwent surgery to remove the mass identified in the MRI. After the procedure, he was told that the mass was a brain tumor. On May 18, 2007, American General received the past due premiums.
Neither Jorge Mendez's April 26, 2007 initial application, nor his May 8, 2007 follow-up submission discussed his meetings with Dr. Dokko or the other doctors he visited after visiting Dr. Dokko, nor the results they told him. On May 24, 2007, American General reinstated the ...