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Rubes v. Mega Life And Health Ins. Co., Inc.2/27/2002
losure of a pertinent fact. Utica, 892 F.Supp. at 1194.
The alleged falsity of Rubes' representations was hotly contested at trial. Given Rubes' long history of alcohol and drug abuse, including two arrests for drunk driving, it is inconceivable to us that he could be found to have truthfully answered "no" to a question asking whether he had "EVER had symptoms or been treated for ... alcoholism or drug addiction." A reasonable fact finder might find that Rubes was ignorant of, or in denial over, the extent of his liver disease. After all, his sister minimized the symptoms and she testified that she did not carefully examine the hepatitis test results until two weeks after the policy was issued. But having just been diagnosed and treated for pneumonia two weeks before applying for coverage, it strains credulity that Rubes would answer "no" to an inquiry concerning "EVER" having symptoms of a respiratory disorder. Rubes' bald allegation that the agent filled out the form and edited his answers cannot save him. Having been given an opportunity to review the document before signing it, but failing to do so, Rubes is now in no position to question the answers he certified. See Bryant v. Am. Express Fin. Advisors, Inc., 595 N.W.2d 482, 486-87 (Iowa 1999); Gouge v. McNamara, 586 N.W.2d 710, 713 (Iowa Ct.App.1998); Advance Elevator Co. v. Four State Supply Co., 572 N.W.2d 186, 188 (Iowa Ct.App.1997).
The district court's decision, relying heavily on findings prepared by Rubes' counsel, drew the credibility line in Rubes' favor. We believe compelling proof in the record points in the opposite direction. Applications submitted contemporaneously by Rubes to other potential insurers revealed similar departures from the truth, even including a denial that other applications were pending. And a psychologist's evaluation submitted in connection with Rubes' transplant surgery described Rubes as "somewhat manipulative and untruthful at times," a telling observation.
There is no dispute that each of Rubes' representations was material to MEGA's determination regarding his eligibility for coverage. Factors bearing on materiality include whether a representation "influences a person to enter into a transaction, ... induces that person to act, or where the transaction would not have occurred without it." Utica, 892 F.Supp. at 1194. MEGA's underwriter, Doug Kornegay, testified that had the company been made aware of Rubes ever having received treatment for alcoholism, the answer would have raised a "red flag" prompting MEGA to examine Rubes' driving records and health history further. For a conviction for driving while intoxicated or treatment of alcoholism within the prior ten years, coverage would have been declined. Similarly, had the application listed "elevated liver enzymes" or "enlarged liver"--as reported on Rubes' hospital discharge--instead of "bacterial infection" as Rubes reported, further inquiry would have been triggered and coverage declined.
The fourth element--intent to induce the other to act--goes to the purpose for which the representations are made. Id. at 1205 n. 17. Clearly the application for insurance, including the answers it contained, was submitted by Rubes for the sole purpose of securing *271 health insurance from MEGA. As already noted, proof of this element does not require proof of intent to deceive. See Hyler, 548 N.W.2d at 871-72. The questions asked by MEGA called for objectively factual answers, a matter bringing us to the fifth and final element, justifiable reliance. Unlike the factual scenarios underlying the older insurance cases upon which Rubes relies, MEGA's application did not ask Rubes to speculate about the general state of his health. Cf. Dezsi v. Mut. Ben. Health & Accident Ass'n, 255 Iowa 1
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