Contracts—Insurance—Defenses—Misrepresentation, N.Y. Pattern Jury Instr.

--Civil 4:75

N.Y. Pattern Jury Instr.--Civil 4:75

New York Pattern Jury Instructions--Civil

Database Updated January 2011

Committee on Pattern Jury Instructions Association of Supreme Court Justices

Division 4. Contracts
B. Specific Contract Actions
3. Insurance Contracts
c. Defenses
(1) Misrepresentation

PJI 4:75 Contracts—Insurance—Defenses—Misrepresentation

An insurance company has the right to ask questions concerning the health of an applicant in order to decide whether it wishes to
accept the risk of insuring the applicant. If the answer to any question is not true, and if with knowledge of the truth the company
would have refused to issue the policy, the company is obligated only to return the premiums paid and is not liable under the
policy. This rule applies even though the insured person died from a cause that had no connection to the fact misrepresented.

Plaintiff sues as the beneficiary of a policy of insurance issued by defendant CD on the life of AB, who died on [state the
date]. Defendant CD has offered to return the premiums paid on the policy in the amount of [state the amount], but has refused
to pay the face amount of the policy on the ground that a question in AB's application for the policy asked ([state specific
question, such as:—] Have you ever been treated for coronary artery disease? and that AB answered by stating ([state claimed
misrepresentation, as:—] that (he, she) had never been treated for coronary artery disease). According to CD, AB had ([specify
treatment, as:—] been taking medication for coronary artery disease). The plaintiff denies that AB had (been treated for coronary
artery disease) and says that even if AB had been so treated and CD knew that, CD would not have refused to issue the policy.
The factual questions that you must decide are whether AB's statement that ((he, she) had not been treated for coronary artery
disease) was true, and, if you find that it was not, whether knowledge of the true facts would have led CD to refuse to issue
the policy. On both those questions, CD has the burden of proof.

If you find that on [state the date], AB had not been (treated for coronary artery disease) your finding will be that the statement
was true. In that event you will find for the plaintiff in the face amount of the policy, that is, [state the amount], and you need
proceed no further. If you find that on [state the date] AB had been (treated for coronary artery disease), your finding will be
that the statement was not true. If you find that the statement was not true, you will then consider whether knowledge of the
true facts would have led CD to refuse to issue the policy that it issued on AB's life. If you find that knowledge that AB had
(been treated for coronary artery disease) would have led CD to refuse to issue the policy, you will find for the plaintiff in the
amount of the premiums paid on the policy, that is, [state the amount]. If you find that knowledge that AB had (been treated for
coronary artery disease) would not have led CD to refuse to issue the policy, you will find for the plaintiff in the face amount
of the policy, that is [state the amount].

Comment

Based on Insurance Law § 3105 and Bronx Sav. Bank v Weigandt, 1 NY2d 545, 154 NYS2d 878, 136 NE2d 848; Langer v
Metropolitan Life Ins. Co., 290 NY 601, 48 NE2d 706; Sommer v Guardian Life Ins. Co. of America, 281 NY 508, 24 NE2d
308. The first three subdivisions of § 3105 are applicable to all types of insurance, see Designcraft Jewel Industries, Inc. v St.
Paul Fire & Marine Ins. Co., 59 AD2d 857, 399 NYS2d 225, aff'd, 46 NY2d 796, 413 NYS2d 921, 386 NE2d 832 (jeweler's
block policy), although subdivision (d) relates only to life, accident or health insurance. The pattern charge assumes that the life
insurance policy includes a provision for the return of the premiums paid if the policy is voided, since most life insurance policies
include such a provision. In a case involving a policy containing no return of premiums provision, or involving insurance of

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Contracts—Insurance—Defenses—Misrepresentation, N.Y. Pattern Jury Instr.--Civil 4:75

a type other than life insurance, the pattern charge must be amended accordingly. Where the insurance company maintains
that it would not have issued the policy at the premium charged, the pattern charge must be amended accordingly. Generally,
as to misrepresentation and concealment as a defense in an action on an insurance policy, see 1 Appleman, Insurance Law &
Practice, §§ 191–286; 12 Appleman, Insurance Law & Practice, §§ 7271–7312; 1 Holmes' Appleman on Insurance 2d, § 4.34;
3 Holmes' Appleman on Insurance 2d § 10.4; 12 Russ & Segalla, Couch on Insurance (3d Ed) Chaps 81, 82, 84; 1 Richards on
Insurance (6th Ed) Chaps 6, 7; Vance, Insurance (3d Ed) 386 ff, §§ 67–70; 69 NYJur2d, Insurance §§ 1130–1134; Patterson,
Misrepresentation by Insured under the New York Insurance Law, 44 Col L Rev 241.

Relevant Statutes

The defense of misrepresentation is the same with respect to insurance contracts as it is with respect to any other contract,
except as modified by statute. Significant statutory changes include the following: (1) where a compulsory insurance statute
makes the insurer's obligation absolute (e.g. VTL §§ 345, 370), fraud of the insured in procuring issuance of the policy is no
defense to the insurer, see Hartford Acc. & Indem. Co. v Breen, 2 AD2d 271, 153 NYS2d 732; PJI 4:66, and in view of the
language of VTL § 313, the same rule applies to a Financial Security Act policy, Aetna Casualty & Surety Co. v Garrett, 31
AD2d 710, 296 NYS2d 12, aff'd, 26 NY2d 729, 309 NYS2d 34, 257 NE2d 284; Teeter v Allstate Ins. Co., 9 AD2d 176, 192
NYS2d 610, aff'd, 9 NY2d 655, 212 NYS2d 71, 173 NE2d 47; (2) a misstatement of age, or as to an annuity, age or sex, no
longer voids the policy; it simply reduces the insurance to what the premium would have purchased had the correct age or
sex been stated, Insurance Law § 3203(a)(5) (life), § 3219(a)(5) (annuity), § 3216(d)(2)(B) (accident and sickness); (3) as to
some types of insurance a misrepresentation is no defense unless annexed to the policy, see infra this Comment; and (4) with
respect to all types of insurance, Insurance Law § 3105 defines, for the most part, the nature and effect of misrepresentation,
as distinguished from fraudulent concealment, see infra this Comment.

Incontestability Clause

Insurance Law § 3216(d)(1)(B) provides that no misstatements, except fraudulent misstatements, in a policy application shall
be used to void a health or accident policy after two years from the date of issue of the policy unless coverage for that condition
was specifically excluded under the terms of the policy. In New England Mutual Life Ins. Co. v Doe, 93 NY2d 122, 688 NYS2d
459, 710 NE2d 1060, the Court of Appeals adopted the view that, once the contestability period is over, a carrier may not
deny coverage by claiming that the applicant knew (by manifestation) of any symptom or condition related to the eventual
cause of the disability, see also Favata v Paul Revere Life Ins. Co., 254 AD2d 804, 678 NYS2d 197; Equitable Life Assurance
Society of U.S. v Madis, 240 AD2d 100, 669 NYS2d 599; Monarch Life Ins. Co. v Brown, 125 AD2d 75, 512 NYS2d 99. The
New England Mutual court rejected the claim of fraudulent misstatements because the incontestability clause did not explicitly
exclude fraudulent misstatements. Similarly, in cases where a policy provides that it shall not be contestable except for certain
matters and fails to list fraud among those matters, a claim of fraud is time barred, Security Mutual Life Insurance Co. of New
York v Herpaul, 36 AD3d 449, 827 NYS2d 141.

Insurance Law § 3203 requires a two year incontestability clause in all life insurance policies and there is no exception for
fraudulent misstatements. Under section 3203, the insurer has the burden of investigating, within the two-year contestability
period, the veracity of the representations made by the insured in the application for coverage, Ilyaich v Bankers Life Ins. Co.
of New York, 47 AD3d 614, 849 NYS2d 595; see Security Mutual Life Insurance Co. of New York v Rodriguez, 65 AD3d
1, 880 NYS2d 619 (General Construction Law § 25-a applies when determining whether insurer's challenge was made within
two-year incontestability period). The two year incontestability period begins on the effective date of the policy, not on the date
of the receipt of tender of the first month's premium, Malone v North Atlantic Life Insurance Co. of America, 256 AD2d 1077,
682 NYS2d 760. Where an original life insurance policy contains a contestability period, the period begins to run anew when
the policy is reinstated after lapsing, DiMaggio v Roslyn Savings Bank, 276 AD2d 584, 714 NYS2d 314; Insurance Law §
3210; see Teeter v United Life Insurance Ass'n, 159 NY 411, 54 NE 72. Although Insurance law § 3203 provides that a policy
cannot be contested after being in force during the life of the insured for two years from its date of issue, the parties are free to
set an earlier date, Security Mutual Life Insurance Co. of New York v Herpaul, 36 AD3d 449, 827 NYS2d 141.

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Contracts—Insurance—Defenses—Misrepresentation, N.Y. Pattern Jury Instr.--Civil 4:75

Elements of Misrepresentation

The defense of misrepresentation requires misrepresentation of a material fact, falsity and reliance, American Surety Co. of
New York v Patriotic Assurance Co., 242 NY 54, 150 NE 599; Kantor v Nationwide Life Ins. Co., 16 AD2d 701, 227 NYS2d
703; see Comment to PJI 3:20. Injury is not an element of the defense of misrepresentation; it is, therefore, of no consequence
that the fact misrepresented neither increased the risk nor contributed in any way to the loss for which claim is made, Di Filippi
v Equitable Life Assurance Society of the U.S., 45 NY2d 939, 411 NYS2d 562, 383 NE2d 1155, rev'g on dissent below, 61
AD2d 168, 401 NYS2d 532; Massachusetts Mutual Life Insurance Company v Tate, 42 NY2d 1046, 399 NYS2d 211, 369
NE2d 767, rev'g on dissent below, 56 AD2d 173, 391 NYS2d 667; Sebring v Fidelity-Phenix Fire Ins. Co. of New York, 255
NY 382, 174 NE 761; Greene v United Mut. Life Ins. Co., 38 Misc2d 728, 238 NYS2d 809, aff'd, 23 AD2d 720, 258 NYS2d
323; see Glickman v New York Life Ins. Co., 291 NY 45, 50 NE2d 538.

Representation

“A representation is a statement as to past or present fact, made to the insurer by, or by the authority of, the applicant for
insurance or the prospective insured, at or before the making of the insurance contract as an inducement to the making thereof”,
Insurance Law § 3105(a). Thus, a representation is collateral to the insurance contract and induces “the making thereof”, whereas
a warranty is a “provision of an insurance contract” itself, establishing a condition precedent to coverage or liability, Insurance
Law § 3106(a). As to breach of warranty, see PJI 4:76. As concerns life, accident or health or annuity contracts, however, all
statements made in connection with the issuance, renewal or reinstatement of the contract “shall be deemed representations and
not warranties”, Insurance Law § 3204(c). Moreover, with respect to individual life, accident or health or annuity contracts,
since the policy must contain the entire contract and the application is not admissible in evidence unless a true copy of such
application was attached to such policy when issued, Insurance Law § 3204(a)(1), there can be no oral representation and no
written representation outside the policy and the application if so attached, Lampke v Metropolitan Life Ins. Co., 279 NY 157,
18 NE2d 14; Archer v Equitable Life Assurance Soc. of United States, 218 NY 18, 112 NE 433; see Tannenbaum v Provident
Mut. Life Ins. Co. of Philadelphia, 53 AD2d 86, 386 NYS2d 409, aff'd, 41 NY2d 1087, 396 NYS2d 351, 364 NE2d 1122;
Annot: 26 ALR3d 6; and see the standard policy provisions set forth in §§ 3203(a)(3) (life), 3219(a)(3) (annuity) and 3216(d)
(1)(A) (accident and sickness).

Section 3204(a)(1) does not apply to an application for reinstatement or renewal, and a misrepresentation in such an application
may be proved although the application was not attached to the policy, Axelroad v Metropolitan Life Ins. Co., 267 NY 437,
196 NE 388; New York Life Ins. Co. v Rosen, 227 AD 79, 236 NYS 659, aff'd, 255 NY 567, 175 NE 316, unless the insurer
has failed to comply with Section 3204(e), which requires that a copy of the application be mailed or delivered to the insured
within fifteen days after receipt by the insurer of a written request therefor.

Section 3204(a)(1) does not apply to group life policies, but § 3220(a)(1) provides that “no statement made by any person
insured under the policy relating to his insurability shall be used …. unless it is in a written instrument signed by him, a copy
of which is or has been furnished to such person or to his beneficiary.” The person to whom a copy of the statement must be
furnished to make fraudulent statements in it usable by the insurer turns on who will reap the economic benefits of the policy. If
that person is not a true creditor-beneficiary of the insured, the statement may not be used unless a copy of it was furnished to the
insured within a reasonable time during the period of contestability under the policy. If the policy is a typical creditor insurance
contract, issued to protect the creditor and only incidentally of benefit to the insured or the insured's estate, the statement is,
apparently, usable if a copy was furnished either to the insured or the creditor-policyholder during the period of contestability,
Cutler v Hartford Life Ins. Co., 22 NY2d 245, 292 NYS2d 430, 239 NE2d 361; see Helfaer v John Hancock Mut. Life Ins.
Co., 26 NY2d 699, 308 NYS2d 865, 257 NE2d 46.

Section 3204(a)(1) has no application to liability or group accident and health policies, Vander Veer v Continental Casualty
Co., 30 AD2d 506, 294 NYS2d 353, aff'd in part, 24 NY2d 986, 302 NYS2d 817, 250 NE2d 226; Bacchi v Continental Casualty
Co., 53 Misc2d 796, 279 NYS2d 1008, aff'd, 28 AD2d 970, 283 NYS2d 278, to automobile liability insurance, Morse v Allstate
Ins. Co., 274 AD 965, 85 NYS2d 47, to burglary insurance, Satz v Massachusetts Bonding & Ins. Co., 243 NY 385, 153 NE

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844, or to fire insurance, see Insurance Law § 3404(f)(1), and therefore, except as limited by the parol evidence rule, an oral or
written representation outside the contract may be proved in defense of a claim on such a contract.

The copy of the application attached to the policy must be legible; whether the copy is legible is a jury question, Gozan v Mutual
Life Ins. Co. of New York, 40 NY2d 707, 389 NYS2d 816, 358 NE2d 499. In Gozan, the policy covered both husband and
wife. The fact that the application relating to the wife was illegible did not bar admission of the legible application relating to
the husband. A husband's material misrepresentations regarding his wife's health in an application for group insurance may be
used to rescind her insurance coverage even though the wife did not personally make or sign the health statement, New York
Life Ins. Co. v Palmer, 169 AD2d 823, 565 NYS2d 192.

Except as to marine insurance, there is, in the absence of actual fraud (considered at the end of this Comment), no obligation
on an applicant to disclose facts about which the insurer has not inquired, Stecker v American Home Fire Assurance Co., 299
NY 1, 84 NE2d 797; Jenkins v John Hancock Mut. Life Ins. Co., 257 NY 289, 178 NE 9; Boyd v Otsego Mutual Fire Ins.
Co., 125 AD2d 977, 510 NYS2d 371; see L. Smirlock Realty Corp. v Title Guarantee Co., 52 NY2d 179, 437 NYS2d 57, 418
NE2d 650 (non-disclosure of a material fact which is a matter of public record does not render title policy void absent fraud),
even when the fact not disclosed was material, DiDonna v State Farm Mutual Automobile Insurance Co., 259 AD2d 727, 687
NYS2d 175; H.B. Singer, Inc. v Mission National Insurance Co., 223 AD2d 372, 636 NYS2d 316. The “Marine Rule” requires
disclosure of every fact material to the risk within the knowledge of the insured, Gates v Madison County Mutual Ins. Co., 5
NY 469; Boyd v Otsego Mutual Fire Ins. Co., supra.

Only an affirmation of fact, past or present, constitutes a representation, Insurance Law § 3105(a). Where an insured stated
that he had an existing policy with another insurer, that he intended to cancel the policy in the event that the plaintiff insurer
issued him a policy, and subsequently sent a letter directing the other insurer to cancel the existing policy, the insured did not
misrepresent his intentions, First Unum Life Ins. Co. v Gravante, 43 AD3d 356, 841 NYS2d 81. Whether the response to an
inquiry constitutes a representation depends upon the question asked. Thus, the answer to a question whether applicant is in
“good health”, or “sound health,” or has been treated for “serious disease”, or whether there is any fact not stated in answer
to previous questions “with which the company ought to be made acquainted” is a statement of opinion rather than fact and
constitutes a defense to an action on the policy only if the insurer proves actual fraud, Bronx Sav. Bank v Weigandt, 1 NY2d
545, 154 NYS2d 878, 136 NE2d 848; Sommer v Guardian Life Ins. Co. of America, 281 NY 508, 24 NE2d 308; Lampke v
Metropolitan Life Ins. Co., 279 NY 157, 18 NE2d 14; Chase v William Penn Life Ins. Co. of New York, 159 AD2d 965, 552
NYS2d 772, aff'd, 76 NY2d 999, 564 NYS2d 714, 565 NE2d 1265; Tannenbaum v Provident Mut. Life Ins. Co. of Philadelphia,
53 AD2d 86, 386 NYS2d 409, aff'd, 41 NY2d 1087, 396 NYS2d 351, 364 NE2d 1122; Louis v Connecticut Mut. Life Ins. Co.,
58 AD 137, 68 NYS 683, aff'd, 172 NY 659, 65 NE 1119; Annot: 26 ALR3d 1061.

Partial disclosure may amount to a representation. Thus, an answer to a question about “any” prior medical treatment that lists
only a particular disease or doctor is a representation that there has not been other prior treatment for any other disease of a
serious nature or by any other doctor, Geer v Union Mut. Life Ins. Co., 273 NY 261, 7 NE2d 125; Anderson v Aetna Life Ins.
Co., 265 NY 376, 193 NE 181; Wageman v Metropolitan Life Ins. Co., 24 AD2d 67, 263 NYS2d 915, aff'd, 18 NY2d 777, 274
NYS2d 908, 221 NE2d 566; Cherkes v Postal Life Ins. Co., 285 AD 514, 138 NYS2d 788, aff'd, 309 NY 964, 132 NE2d 328.
Moreover, although the application does not expressly so provide, a representation made in an application continues until the
effective date of the policy, obligating the applicant, if he or she acquires knowledge of facts making the representation false,
to disclose those facts to the insurer, Goldstein v New York Life Ins. Co., 176 AD 813, 162 NYS 1088, aff'd, 227 NY 575, 124
NE 898; Angione v Rochester Sav. Bank, 41 AD2d 597, 340 NYS2d 247, unless the deviation from the original representation
is trivial in nature, Courtney v Dollar Savings Bank of City of New York, 54 AD2d 868, 388 NYS2d 593; Metropolitan Life
Ins. Co. v Goldberger, 3 Misc2d 878, 155 NYS2d 305. The burden is on the insurer to show that the deviation was of a serious
nature, Armand v Metropolitan Life Ins. Co., 134 Misc 357, 235 NYS 726, aff'd, 228 AD 625, 238 NYS 786, but it makes out
a prima facie case by showing treatment, Reidel v John Hancock Mut. Life Ins. Co., 271 AD 838, 65 NYS2d 687. The Court of
Appeals has, however, cast some doubt on whether it would follow the continuing representation rule, Glickman v New York
Life Ins. Co., 291 NY 45, 50 NE2d 538. In that case it held valid and a bar to recovery on the policy an application provision that
the insurance would go into effect only if the applicant had not consulted or been treated by a physician since his or her medical

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examination. In so holding, the Court stated “We need not go so far as did the Supreme Court in Stipcich v Metropolitan Life
Ins. Co., 277 US 311, 48 SCt 512 …. where it was held that, without any promise or covenant in the application blank, the
applicant was under a duty to inform the insurer fully of changes in his physical condition seriously affecting his health ….”

Materiality

Materiality turns, under Insurance Law § 3105(b), on whether “knowledge by the insurer of the facts misrepresented would
have led to a refusal by the insurer to make such contract” and § 3105(c) makes “evidence of the practice of the insurer which
made such contract with respect to the acceptance or rejection of similar risks …. admissible.” Therefore, the test of materiality
is whether the insurance company has been deprived of freedom of choice in determining whether to accept or reject the risk,
Leamy v Berkshire Life Ins. Co., 39 NY2d 271, 383 NYS2d 564, 347 NE2d 889; Schirmer v Penkert, 41 AD3d 688, 840 NYS2d
796; Myers v Equitable Life Assur. Soc. of U. S., 60 AD2d 942, 401 NYS2d 325. Accordingly, it is what the individual insurer
would have done, not what a prudent insurer would have done or, what the individual insurer might reasonably have done,
that governs, Massachusetts Mutual Life Insurance Company v Tate, 42 NY2d 1046, 399 NYS2d 211, 369 NE2d 767, rev'g
on dissent below, 56 AD2d 173, 391 NYS2d 667; Process Plants Corp. v Beneficial National Life Ins. Co., 53 AD2d 214, 385
NYS2d 308, aff'd on AD op, 42 NY2d 928, 397 NYS2d 1007, 366 NE2d 1361. Thus, “prudent insurer” evidence should not be
admissible since the question is not whether knowledge of the true facts would have influenced a prudent insurer in determining
whether or not to accept the risk, but rather whether the particular insurance company would have rejected the risk, see Geer
v Union Mut. Life Ins. Co., 273 NY 261, 265, 7 NE2d 125; Denler v Continental Casualty Co., 213 AD 30, 209 NYS 629;
Greene v United Mutual Life Insurance Co., 38 Misc2d 728, 238 NYS2d 809, aff'd, 23 AD2d 720, 258 NYS2d 323, or would
have made a further inquiry that would have led it to refuse, Insurance Law § 3105(b); Barrett v State Mut. Life Assur. Co., 49
AD2d 856, 373 NYS2d 1000; see In re Pioneer Insurance Company v Hallen, 298 AD2d 725, 749 NYS2d 295 (fact material if
insurer would either not have issued policy or would have only at higher premium); but compare Giuliani v Metropolitan Life
Ins. Co., 269 AD 376, 56 NYS2d 475; New York Life Ins. Co. v Miller, 17 Misc2d 532, 47 NYS2d 654.

Thus, it is error to refuse a request to charge that materiality depends on whether the insurer would have issued the policy it
did at the rate it did (e.g., the standard policy at the standard rate), Johnson v United States Life Ins. Co. in the City of New
York, 4 AD2d 825, 164 NYS2d 748. Likewise, in light of § 3105(c), it is error to refuse a request to charge that, if the jury
finds that defendant's practice was to reject applications in similar cases or to issue policies in such cases at a higher premium,
it should consider that practice in determining whether knowledge of the true facts would have led the insurer to refuse to issue
the policy, id.

Materiality also depends upon what the undisclosed information would have revealed, Massachusetts Mut. Life Ins. Co. v
Tate, 56 AD2d 173, 391 NYS2d 667, rev'd on other grounds, 42 NY2d 1046, 399 NYS2d 211, 369 NE2d 767; Giuliani v
Metropolitan Life Ins. Co., 269 AD 376, 56 NYS2d 475; Patterson, Misrepresentation by Insured under New York Insurance
Law, 44 Col L Rev 241.

An insurer is required to submit evidence concerning its underwriting practices with respect to applicants with similar
conditions, establishing that it would have rejected the application if the information had been truthful, in order to meet its
burden of establishing the materiality of the misrepresentation, pursuant to § 3105(c) of the Insurance Law, Rafi v Rutgers
Casualty Insurance Co., 59 AD3d 1057, 872 NYS2d 799; Precision Auto Accessories, Inc. v Utica First Insurance Co., 52 AD3d
1198, 859 NYS2d 799; Roudneva v Bankers Life Ins. Co. of New York, 35 AD3d 580, 827 NYS2d 213; Curanovic v New York
Central Mutual Fire Insurance Company, 307 AD2d 435, 762 NYS2d 148; Iacovangelo v Allstate Life Insurance Company of
New York, Inc., 300 AD2d 1132, 750 NYS2d 920; Carpinone v Mutual of Omaha Insurance Co., 265 AD2d 752, 697 NYS2d
381; see Lenhard v Genesee Patrons Co-op. Ins. Co., 31 AD3d 831, 818 NYS2d 644; Cutrone v American General Life Ins. Co.
of New York, 199 AD2d 1032, 606 NYS2d 491. Generally, a conclusory statement by an insurance company employee that
the company would not have insured the applicant if it had known his or her true medical history is, in and of itself, insufficient
to establish that a misrepresentation was material, Barkan v New York Schools Insurance Reciprocal, 65 AD3d 1061, 886
NYS2d 414; Lenhard v Genesee Patrons Co-op. Ins. Co., supra; Iacovangelo v Allstate Life Insurance Company of New York,
supra; Carpinone v Mutual of Omaha Insurance Co., supra; Feldman v Friedman, 241 AD2d 433, 661 NYS2d 9; Gibbons v
John Hancock Mutual Life Insurance Co., 227 AD2d 963, 643 NYS2d 847; McDaniels v American Bankers Insurance Co. of

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Contracts—Insurance—Defenses—Misrepresentation, N.Y. Pattern Jury Instr.--Civil 4:75

Florida, 227 AD2d 951, 643 NYS2d 846; see Curanovic v New York Central Mutual Fire Insurance Company, supra; Campese
v National Grange Mutual Insurance Co., 259 AD2d 957, 689 NYS2d 313. Likewise, general conclusory testimony of a medical
director, unsupported by evidence of company rules or experience, is insufficient to take the issue to the jury, unless it is clear
that no other evidence is available to the insurer, Orenstein v Metropolitan Life Ins. Co., 18 AD2d 1016, 239 NYS2d 42;
Lindenbaum v Equitable Life Assurance Soc. of the U.S., 5 AD2d 651, 174 NYS2d 421; see Myers v Equitable Life Assur.
Soc. of U. S., 60 AD2d 942, 401 NYS2d 325; Brown v Metropolitan Life Ins. Co., 41 AD2d 930, 343 NYS2d 443.

Materiality is presumed, in an action on a life, accident or health insurance policy, when after proof by the insurer of a
misrepresentation that insured had not had prior medical treatment, consultation or observation or prior hospital care, “the
insured or any other person having or claiming a right under such contract” prevents full disclosure and proof of the nature of
the medical impairment for which such treatment or care was given or which was discovered as a result of such consultation
or observation, Insurance Law § 3105(d). Objection to the evidence by the beneficiary raises the presumption of materiality,
notwithstanding that the beneficiary has no authority to waive the doctor/patient privilege, Siebern v Mutual Life Ins. Co. of
N.Y., 269 AD 846, 55 NYS2d 603; Roth v Equitable Life Assurance Soc. of U.S., 186 Misc 403, 59 NYS2d 707, aff'd, 270
AD 923, 62 NYS2d 612; Saunders v United Mut. Life Ins. Co., 9 Misc2d 285, 172 NYS2d 443; Metropolitan Life Ins. Co. v
Goldsmith, 201 Misc 569, 112 NYS2d 385; see Kamen v Metropolitan Life Ins. Co., 6 AD2d 406, 178 NYS2d 449, aff'd, 6 NY2d
737, 185 NYS2d 819, 158 NE2d 510. Under § 3105(d) “for the purpose of determining its materiality,” a misrepresentation
of no prior treatment, care, consultation or observation is deemed a misrepresentation that applicant has not had the medical
impairment for which the treatment or care was given or that was discovered by a licensed medical practitioner as a result of
the consultation or observation.

Evidence of the individual insurer's practice is made admissible on the issue of materiality by Insurance Law § 3105(c), and see
Crotty v State Mut. Life Assur. Co. of America, 80 AD2d 801, 437 NYS2d 103 (underwriting manual); Weber v Philadelphia
Fire & Marine Ins. Co., 267 AD 370, 45 NYS2d 729 (error to exclude evidence that insurer would not issue jewelry policy
without appraisal).

Materiality is generally a question for the jury, Sebring v Fidelity-Phenix Fire Ins. Co. of New York, 255 NY 382, 174 NE 761;
Eastern Dist. Piece Dye Works v Travelers' Ins. Co., 234 NY 441, 138 NE 401; Tannenbaum v Provident Mut. Life Ins. Co. of
Philadelphia, 53 AD2d 86, 386 NYS2d 409, aff'd, 41 NY2d 1087, 396 NYS2d 351, 364 NE2d 1122; Schirmer v Penkert, 41
AD3d 688, 840 NYS2d 796; Lenhard v Genesee Patrons Co-op. Ins. Co., 31 AD3d 831, 818 NYS2d 644; Feldman v Friedman,
241 AD2d 433, 661 NYS2d 9; Continental Ins. Co. v RLI Ins. Co., 161 AD2d 385, 555 NYS2d 325; Vebeliunas v American
Nat. Fire Ins. Co., 156 AD2d 555, 549 NYS2d 60. The determinative inquiry is whether the company has been induced to
accept an application that it might otherwise have refused, Vebeliunas v American National Fire Insurance Co., supra. The fact
that the application form contained a specific inquiry is relevant on the issue of materiality, Geer v Union Mut. Life Ins. Co.,
273 NY 261, 7 NE2d 125; Anderson v Aetna Life Ins. Co., 265 NY 376, 193 NE 181; Jenkins v John Hancock Mut. Life Ins.
Co., 257 NY 289, 178 NE 9, but does not by itself make a false answer material as a matter of law, Geer v Union Mutual Life
Ins. Co., supra; Insurance Law § 3105(b).

Materiality is a question of law, however, when the evidence concerning the materiality is clear and substantially uncontroverted,
Kiss Construction NY, Inc. v Rutgers Casualty Insurance Co., 61 AD3d 412, 877 NYS2d 253; Interested Underwriters at Lloyd's
v H.D.I. III Associates, 213 AD2d 246, 623 NYS2d 871; see Swinton v New York Life Insurance Co., 66 AD3d 875, 888
NYS2d 96 (failure to disclose prior diagnosis and multiple diagnostic tests); Hinderhofer v Daisy Manufacturing Company,
Inc., 286 AD2d 419, 729 NYS2d 512 (failure to advise homeowner insurer of potential claim relating to accidental shooting
with BB gun); Gorra v New York Life Insurance Co., 276 AD2d 469, 714 NYS2d 85 (prior hospitalization and hemoptysis);
Mullen v Independence Savings Bank, 267 AD2d 169, 700 NYS2d 447 (history of substance abuse); Philadelphia Indemnity
Insurance Co. v Mendon Ponds Tennis Club, Inc., 259 AD2d 957, 687 NYS2d 511; Feldman v Friedman, 241 AD2d 433, 661
NYS2d 9. To demonstrate materiality, the insurer need only show that the misrepresentation substantially thwarts the purpose
for which the information is demanded and induces action that the insurance company “might otherwise not have taken”, Geer
v Union Mut. Life Ins. Co., 273 NY 261, 7 NE2d 125; Kroski v Long Island Savings Bank FSB, 261 AD2d 136, 689 NYS2d
92; Gibbons v John Hancock Mutual Life Insurance Co., 227 AD2d 963, 643 NYS2d 847.

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When the testimony of the company's practice is undisputed and the medical impairment concerns a vital organ or a serious
disease, the misrepresentation has been held material as a matter of law, Di Filippi v Equitable Life Assurance Society of the
U.S., 45 NY2d 939, 411 NYS2d 562, 383 NE2d 1155, rev'g on dissent below, 61 AD2d 168, 401 NYS2d 532 (genital-urinary
problem); Leamy v Berkshire Life Ins. Co., 39 NY2d 271, 383 NYS2d 564, 347 NE2d 889 (dizzy spells); Tolar v Metropolitan
Life Ins. Co., 297 NY 441, 80 NE2d 53 (scarlet fever, endocarditis); Geer v Union Mutual Life Ins. Co. supra (para-typhoid);
Barrett v State Mut. Life Assur. Co., 58 AD2d 320, 396 NYS2d 848, aff'd, 44 NY2d 872, 407 NYS2d 478, 378 NE2d 1047
(heart condition); Process Plants Corp. v Beneficial National Life Ins. Co., 53 AD2d 214, 385 NYS2d 308, aff'd, 42 NY2d 928,
397 NYS2d 1007, 366 NE2d 1361 (hypertension); Tannenbaum v Provident Mut. Life Ins. Co. of Philadelphia, 53 AD2d 86,
386 NYS2d 409, aff'd, 41 NY2d 1087, 396 NYS2d 351, 364 NE2d 1122 (paranoid reaction); Wageman v Metropolitan Life
Ins. Co., 24 AD2d 67, 263 NYS2d 915, aff'd, 18 NY2d 777, 274 NYS2d 908, 221 NE2d 566 (hypertension); Metropolitan Life
Ins. Co. v Blum, 7 AD2d 488, 184 NYS2d 455, aff'd, 9 NY2d 954, 217 NYS2d 225, 176 NE2d 202 (heart condition); Reznikoff
v Equitable Life Assurance Soc. of U.S., 267 AD 785, 45 NYS2d 650, aff'd, 294 NY 935, 63 NE2d 121 (spinal meningitis);
Kroski v Long Island Savings Bank FSB, 261 AD2d 136, 689 NYS2d 92 (diabetes); Mendel v U.S. Life Insurance Co. in City
of New York, 248 AD2d 873, 670 NYS2d 920 (lung cancer); Gentile v Continental American Life Ins. Co., 215 AD2d 626, 628
NYS2d 138 (major mental illness); Meagher v Executive Life Ins. Co. of New York, 200 AD2d 720, 607 NYS2d 361 (intestinal
tumor); North Atlantic Life Ins. Co. of America v Katz, 163 AD2d 283, 557 NYS2d 150 (recurrence of lymphoma); Aguilar
v United States Life Ins. Co. in the City of New York, 162 AD2d 209, 556 NYS2d 584 (psychiatric disorder); Shabashev v
New York Life Ins. Co., 150 AD2d 673, 541 NYS2d 545 (heart condition and prior hospitalizations); Kulikowski v Roslyn
Sav. Bank, 121 AD2d 603, 503 NYS2d 863 (Ehlers-Danlos Syndrome); Courtney v Dollar Sav. Bank of City of New York, 54
AD2d 868, 388 NYS2d 593 (high blood pressure); Horton v Prudential Insurance Co. of America, 46 AD2d 456, 363 NYS2d
130 (prior hospitalization); Kuritzky v National Casualty Co., 261 AD 1083, 27 NYS2d 5 (thyroid gland operation); Greene
v United Mut. Life Ins. Co., 38 Misc2d 728, 238 NYS2d 809, aff'd, 23 AD2d 720, 258 NYS2d 323 (syphilis); see McGarr v
Guardian Life Insurance Co. of America, 19 AD3d 254, 799 NYS2d 19 (prior medical treatment).

Whether an ailment is trivial or serious is related to materiality and will generally be a question for the court, Equitable Life
Assurance Soc. of U.S. v Milman, 291 NY 90, 50 NE2d 553 (cold, constipation, trivial); Geer v Union Mutual Life Ins. Co., 273
NY 261, 7 NE2d 125 (para-typhoid, serious); Jenkins v John Hancock Mut. Life Ins. Co., 257 NY 289, 178 NE 9 (discharge from
ears, serious), although it may constitute a question for the jury, see Boos v World Mut. Life Ins. Co., 64 NY 236 (sunstroke);
see Annot: 28 ALR3d 1255.

With respect to fire insurance, representations that the buildings were of brick construction, Colin v Hamilton Fire Ins. Co. of
City of New York, 251 NY 312, 167 NE 454, and representations as to the amount of other insurance carried on the buildings,
Armour v Transatlantic Fire Ins. Co. of Hamburg, Germany, 90 NY 450, have been held material as a matter of law.

With respect to commercial property liability insurance, representations concerning the extent of prior insurance claims were
material as a matter of law, Philadelphia Indemnity Insurance Co. v Mendon Ponds Tennis Club, Inc., 259 AD2d 957, 687
NYS2d 511. With respect to disability insurance, misrepresentations as to earned income were material as a matter of law,
Naghavi v New York Life Insurance Co., 260 AD2d 252, 688 NYS2d 530. However, with respect to general liability insurance,
the conclusory statements by the insurer's underwriter, unsupported by documentary evidence, that it would not have issued the
policy if it knew that the premises included a basement apartment were insufficient to establish materiality as a matter of law,
Parmar v Hermitage Insurance Co., 21 AD3d 538, 800 NYS2d 726.

Falsity

Insurance Law § 3105(a) provides that “A misrepresentation is a false representation, and the facts misrepresented are those facts
which make the representation false.” In evaluating whether answers to questions on insurance applications are misstatements,
the questions posed must be so plain and intelligible that any applicant can readily comprehend them and any ambiguities will
be construed in favor of the insured, Fanger v Manhattan Life Insurance Co. of New York, N.Y., 273 AD2d 438, 709 NYS2d
622; Nadel v Manhattan Life Ins. Co., 211 AD2d 900, 621 NYS2d 180. An answer to an ambiguous question cannot be the basis
of a claim of misrepresentation where a reasonable person in the insured's position could have rationally interpreted the question

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as the insured did, Fanger v Manhattan Life Insurance Co., supra. Thus, there was no misrepresentation where, in response to
a question asking whether the applicant had ever been treated for any other disorder, injury or impairment, the insured failed to
disclose that he had been in psychiatric treatment for mild obsessive-compulsive disorder, where the question was contained in
a part dealing with physical disorders, id. The applicant does not guarantee the literal truth of his or her representation (as he
or she would were it a warranty), Sommer v Guardian Life Ins. Co. of America, 281 NY 508, 24 NE2d 308.

Although his or her answer is not strictly true, if the applicant answered the question as it was reasonably to be understood,
falsity has not been shown, Geer v Union Mut. Life Ins. Co., 273 NY 261, 7 NE2d 125; see Eastern Dist. Piece Dye Works v
Travelers' Ins. Co., 234 NY 441, 138 NE 401; Higbie v Guardian Mut. Life Ins. Co., 53 NY 603; Fratello v Savings Banks Life
Ins. Fund, 186 AD2d 1061, 588 NYS2d 488 (no material misrepresentation of fact where applicant did not report asymptomatic
left bundle branch blockage as “heart trouble”); Dave's Ice Cream Cakes, Inc. v William Penn Life Ins. Co. of New York,
170 AD2d 1026, 566 NYS2d 170 (plaintiff did not knowingly misrepresent material fact by answering negatively a question
regarding the use of “habit forming drugs,” which term was not defined); Botway v American International Assur. Co. of New
York, 151 AD2d 288, 543 NYS2d 651 (jury question whether insured should have understood the terms “impairment”, “illness”
and “other serious disorder” to include drug addiction); see also Garcia v American General Life Insurance Co. of New York,
264 AD2d 808, 695 NYS2d 420 (no misrepresentation where, in response to an ambiguous question, plaintiff did not include
sick days actually recorded as vacation days). Thus, a question concerning prior medical treatment will not be construed to call
for information that the applicant could not be expected to remember, and, therefore, an answer that excluded treatment for
trivial ailments such as constipation or a cold is not false, Geer v Union Mutual Life Ins. Co., supra; Jenkins v John Hancock
Mut. Life Ins. Co., 257 NY 289, 178 NE 9.

Knowledge of falsity (intent to deceive) on the part of the insured is not required by Insurance Law § 3105. A material
misrepresentation constitutes a defense although innocently made, Massachusetts Mutual Life Insurance Company v Tate, 42
NY2d 1046, 399 NYS2d 211, 369 NE2d 767, rev'g on dissent below, 56 AD2d 173, 391 NYS2d 667; Sommer v Guardian Life
Ins. Co. of America, 281 NY 508, 24 NE2d 308; Geer v Union Mut. Life Ins. Co., 273 NY 261, 7 NE2d 125; Eastern Dist. Piece
Dye Works v Travelers' Ins. Co., 234 NY 441, 138 NE 401; Armour v Transatlantic Fire Ins. Co. of Hamburg, Germany, 90
NY 450; Process Plants Corp. v Beneficial National Life Insurance. Co., 53 AD2d 214, 385 NYS2d 308, aff'd, 42 NY2d 928,
397 NYS2d 1007, 366 NE2d 1361; Precision Auto Accessories, Inc. v Utica First Insurance Co., 52 AD3d 1198, 859 NYS2d
799; Tannenbaum v Provident Mut. Life Ins. Co. of Philadelphia, 53 AD2d 86, 386 NYS2d 409, aff'd, 41 NY2d 1087, 396
NYS2d 351, 364 NE2d 1122; Curanovic v New York Central Mutual Fire Insurance Company, 307 AD2d 435, 762 NYS2d
148; Meagher v Executive Life Ins. Co. of New York, 200 AD2d 720, 607 NYS2d 361; Kulikowski v Roslyn Sav. Bank, 121
AD2d 603, 503 NYS2d 863; Barrett v State Mut. Life Assur. Co., 49 AD2d 856, 373 NYS2d 1000; Boyar v Travelers Ins. Co.,
368 F2d 784 (2d Cir); see Annot: 26 ALR3d 6. Thus, an insurance policy may be avoided for the insured's misrepresentation
even if the insured was incompetent when the representation was made, Prudential Ins. Co. of America v Drucker, 244 AD 41,
278 NYS 191; John Hancock Mut. Life Ins. Co. v Berg, 49 Misc2d 904, 268 NYS2d 638; see 69 NYJur2d Insurance § 1133.
Knowledge of falsity is, however, clearly an element when the defense is fraud rather than misrepresentation, see infra this
Comment and Boyar v Travelers Ins. Co., 368 F2d 784 (2d Cir).

Whether the insured had a specific ailment which in his or her application the insured denied having is generally a question for
the jury, Tolar v Metropolitan Life Ins. Co., 297 NY 441, 80 NE2d 53; Langer v Metropolitan Life Ins. Co., 290 NY 601, 48
NE2d 706; Eastern Dist. Piece Dye Works v Travelers' Ins. Co., 234 NY 441, 138 NE 401, but is for the court when the evidence
is undisputed, Geer v Union Mutual Life Ins. Co., 273 NY 261, 7 NE2d 125; Shabashev v New York Life Ins. Co., 150 AD2d
673, 541 NYS2d 545; Myers v Equitable Life Assur. Soc. of U. S., 60 AD2d 942, 401 NYS2d 325; Giuliani v Metropolitan Life
Ins. Co., 269 AD 376, 56 NYS2d 475. But when the misrepresentation concerns prior treatment, the insurer proves falsity when
it shows that treatment occurred, and nothing in Insurance Law § 3105(d), which concerns materiality only, alters that rule or
requires the insurer to show that the applicant in fact had the disease for which he or she was treated, Tolar v Metropolitan Life
Ins. Co., supra; Ketchum & Co. v State Mut. Life Assurance Co. of Worcester, Mass., 162 F2d 977 (2d Cir).

Reliance

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Reliance may in some cases be a question for the jury, Kantor v Nationwide Life Ins. Co., 16 AD2d 701, 227 NYS2d 703;
see American Surety Co. of New York v Patriotic Assurance Co., 242 NY 54, 150 NE 599, as where the insurer is chargeable
with notice of the true facts, see Cherkes v Postal Life Ins. Co., 285 AD 514, 138 NYS2d 788, aff'd, 309 NY 964, 132 NE2d
328. The cases will, however, be few in which the issue need be charged for the insurer is not chargeable with notice from the
application itself unless the statements in the application are “sufficiently indicative of something more to be tantamount to
notice of the unrevealed,” and negligence on the part of the insurer does not counteract the insured's fraud, Cherkes v Postal Life
Ins. Co. supra (insurer is not chargeable with knowledge of the examining doctor, not disclosed in the medical report, which the
doctor acquired in his or her capacity as insured's personal physician); see Kantor v Nationwide Life Ins. Co., supra. Where the
application is attached to the policy as required by Insurance Law § 3204 so that the insured has the opportunity to read it and
correct errors in it, the insurer is not chargeable with (or estopped by) knowledge of its own agent, Minsker v John Hancock
Mut. Life Ins. Co., 254 NY 333, 173 NE 4; Wageman v Metropolitan Life Ins. Co., 24 AD2d 67, 263 NYS2d 915, aff'd, 18
NY2d 777, 274 NYS2d 908, 221 NE2d 566; Reznikoff v Equitable Life Assurance Soc. of U.S., 267 AD 785, 45 NYS2d 650,
aff'd, 294 NY 935, 63 NE2d 121; Grubiak v John Hancock Mut. Life Ins. Co., 212 AD 126, 208 NYS 279; see Boyd v Allstate
Life Insurance Co. of New York, 267 AD2d 1038, 700 NYS2d 332.

Where the insurer's agent fills out the application but the applicant signs it, the agent is considered the agent of the insured, not
the agent of the insurer, Bloom v Mutual of Omaha Ins. Co., 161 AD2d 1047, 557 NYS2d 614. An insurance broker is generally
considered to be an agent of the insured, Precision Auto Accessories, Inc. v Utica First Insurance Co., 52 AD3d 1198, 859
NYS2d 799; Rendeiro v State-Wide Ins. Co., 8 AD3d 253, 777 NYS2d 323. However, a broker will be considered to be an agent
of the insurer where there is evidence of action on the insurer's part or evidence from which a general authority to represent the
insurer may be inferred, Precision Auto Accessories, Inc. v Utica First Insurance Co., supra; Rendeiro v State-Wide Ins. Co.,
supra. An insurance broker's failure to accurately disclose plaintiff's prior loss history is a material misrepresentation as a matter
of law, Soho Generation of New York, Inc. v Tri-City Insurance Brokers, Inc., 256 AD2d 229, 683 NYS2d 31. Furthermore,
the insurer is entitled to rely upon the insured's statements in the application, is under no duty to inquire further, and cannot
be charged with knowledge of what inquiry would have revealed unless the insured's statements are “sufficiently indicative of
something more” to require further inquiry by the insurer, Cherkes v Postal Life Ins. Co., 285 AD 514, 138 NYS2d 788, aff'd,
309 NY 964, 132 NE2d 328; see Colin v Hamilton Fire Ins. Co. of City of New York, 251 NY 312, 167 NE 454; American
Surety Co. of New York v Patriotic Assurance Co., 242 NY 54, 150 NE 599; Kantor v Nationwide Life Ins. Co., 16 AD2d 701,
227 NYS2d 703; Metropolitan Life Ins. Co. v Blum, 7 AD2d 488, 184 NYS2d 455, aff'd, 9 NY2d 954, 217 NYS2d 225, 176
NE2d 202; Kroski v Long Island Savings Bank, 261 AD2d 136, 689 NYS2d 92; Zeldman v Mutual Life Ins. Co. of N.Y., 269
AD 53, 53 NYS2d 792. The insurer does not lose its right to avoid the policy by reason of having made an investigation unless
the investigation uncovers the falsity of the representation or reveals facts that would reasonably place it under a duty to make
further inquiry, Greene v United Mut. Life Ins. Co., 38 Misc2d 728, 238 NYS2d 809, aff'd, 23 AD2d 720, 258 NYS2d 323.

Reliance will not be found where the policy itself negates any claim of reasonable reliance by the insurer, as where the policy
states that the insurer relied on the statements and declarations in the application for coverage and the allegedly false financial
statements were not contained in the application, National Union Fire Insurance Co. of Pittsburgh, PA v Xerox Corp., 25 AD3d
309, 807 NYS2d 344.

Miscellaneous Considerations

Where an insurer offered minimum coverage under a group accident and health policy regardless of past medical history,
the insured is entitled as a matter of law to partial judgment for minimum coverage benefits notwithstanding the fact that in
applying for broader coverage under the policy, the insured may have misrepresented his or her medical history, Vander Veer v
Continental Casualty Co., 30 AD2d 506, 294 NYS2d 353, aff'd in part and appeal dismissed in part, 24 NY2d 986, 302 NYS2d
817, 250 NE2d 226.

Rescission

A rescission by notice based on fraudulent inducement does not have retroactive effect, absent a judicial determination to
that effect, Kiss Construction NY, Inc. v Rutgers Casualty Insurance Co., 61 AD3d 412, 877 NYS2d 253; Federal Insurance

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Contracts—Insurance—Defenses—Misrepresentation, N.Y. Pattern Jury Instr.--Civil 4:75

Co. v Kozlowski, 18 AD3d 33, 792 NYS2d 397 (insurer cannot suspend obligations that have accrued under the policy by
rescission by notice, absent court order). As to any claim of obligation under the policy not yet incurred, a rescission by notice
is prospectively effective because the rescission occurs not when the judgment is obtained in the action for rescission but when
the election to rescind was made known, id; see McNaught v Equitable Life Assurance Society of United States, 136 AD 774,
121 NYS 447 (insurer's rescission of life insurance policy effective where there had been no change in parties' position since
contract entered into). Recission renders an insurance policy void ab initio while cancellation leaves the policy in full force
until the effective date of the cancellation, Stein v Security Mut. Ins. Co., 38 AD3d 977, 832 NYS2d 679.

Rescission claims based on material misrepresentation are equitable in nature and therefore are tried by the court, Mercantile &
General Reinsurance Co., v Colonial Assurance Co., 82 NY2d 248, 604 NYS2d 492, 624 NE2d 629 (counterclaim for rescission
based on material misrepresentation in breach of contract action is equitable, and therefore jury verdict is merely advisory on
that issue).

Fraud

As noted earlier, knowledge of falsity (intent to deceive) on the part of the insured is not required by Insurance Law § 3105.
Therefore, except as to marine insurance, an applicant for insurance is under no obligation to disclose facts about which the
insurer has not inquired. However, the “no duty to disclose” principle does not apply in cases of fraudulent concealment. Thus,
an insurance policy may be voided by the insurer where the insured deliberately and with intent to mislead withholds a fact
that the insured knows is material and knows should be revealed, Stecker v American Home Fire Assurance Co., 299 NY 1, 84
NE2d 797; Sebring v Fidelity-Phenix Fire Ins. Co. of New York, 255 NY 382, 174 NE 761; Gates v Madison County Mut. Ins.
Co., 5 NY 469; Sun Insurance Co. of New York v Hercules Securities Unlimited, Inc., 195 AD2d 24, 605 NYS2d 767; Boyd v
Otsego Mut. Fire Ins. Co., 125 AD2d 977, 510 NYS2d 371; Lighton v Madison-Onondaga Mut. Fire Ins. Co., 106 AD2d 892,
483 NYS2d 515; Orent v Equitable Life Assurance Soc. of U.S., 268 AD 299, 51 NYS2d 115. In order to constitute fraud, there
must be a willful intent to defraud and not a mere mistake or oversight, DiDonna v State Farm Mutual Automobile Insurance
Co., 259 AD2d 727, 687 NYS2d 175; Sun Insurance Co. of N.Y. v Hercules Securities Unlimited, supra. Deliberate intent to
deceive is likewise an element of the case when a false statement has been made in connection with the surrender of one policy
and the issuance of a new one. If the false statement was innocently made the new policy can be cancelled only if the old one
is reinstated; if the false statement was made with intent to deceive, the new policy can be cancelled without reinstatement of
the old upon repayment of premiums only, Boyar v Travelers Ins. Co., 368 F2d 784 (2d Cir).

Burden of Proof

The burden of proof as to misrepresentation is on the insurer, Sommer v Guardian Life Ins. Co. of America, 281 NY 508, 24
NE2d 308; Lampke v Metropolitan Life Ins. Co., 279 NY 157, 18 NE2d 14; Keck v Metropolitan Life Ins. Co., 238 AD 538,
264 NYS 892, aff'd, 264 NY 422, 191 NE 495; Van Nevius v Preferred Mutual Insurance Co., 280 AD2d 947, 721 NYS2d
210; Hirsch v New York Life Ins. Co., 267 AD 404, 45 NYS2d 892; Armand v Metropolitan Life Ins. Co., 134 Misc 357, 235
NYS 726, aff'd, 228 AD 625, 238 NYS 786. Unless misrepresentation is the only issue going to the jury, the burden of proof
may be on plaintiff on some issues and on defendant on others; in such a case the first paragraph of PJI 1:60 rather than PJI
1:23 should be used in charging burden of proof.

As to waiver, see PJI 4:79. For additional discussion of the rules of law governing misrepresentation generally, see PJI 3:20.

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