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Rubes v. Mega Life And Health Ins. Co., Inc.2/27/2002
027, 1034-35, 125 N.W.2d 219, 223 (1963) (insured's affirmative answer regarding good health and freedom from disease not a warranty but a representation that may, in good faith, be truthful); Serv. Life Ins. Co. v. McCullough, 234 Iowa 817, 828, 13 N.W.2d 440, 444-45 (1944) (same). Instead MEGA's application sought straightforward answers to known past information. MEGA was justified in relying on the answers given by Rubes and plainly relied on them to its detriment in extending health insurance coverage to him.
In summary, we are convinced that application of the correct legal standard to the record before us justifies equitable rescission of the insurance contract based on Rubes' material misrepresentation of his health and criminal history. We therefore turn to the remaining question: Is MEGA equitably estopped from avoiding the contract on a theory of rescission because of its delay or waiver?
B. Equitable Estoppel. The district court, reciting verbatim from Rubes' proposed findings, ruled on his claim of estoppel this way:
Defendant is estopped from denying coverage because it has retained premiums until after Plaintiff had already been placed on a transplant list and continued to take the premiums until after the Plaintiff had finally obtained a transplant. It also processed other claims of Plaintiff despite the knowledge of the allegedly false statements made by him ... and, most importantly, informed the organ transplant unit at the University of Nebraska Medical Center on continuing occasions and through the transplant procedure itself, that Plaintiff's procedure was covered under the policy.
MEGA argues on appeal that these conclusions have neither factual nor legal support in this record. We agree.
A party relying on equitable estoppel must prove four things: (1) the opposing party misrepresented or concealed material facts, (2) the party relying on estoppel lacked knowledge of the true facts, (3) the party misrepresenting or concealing the true facts intended the deceived party to act on those representations, and (4) detrimental reliance by the party to whom the representations were made. Folkers v. Britt, 457 N.W.2d 578, 582 (Iowa 1990). Absence of any one of the elements prevents the doctrine's application. Id. The essence of the doctrine is that "one who has made certain representations should not thereafter be permitted to change his position to the prejudice of one who has relied thereon." Ahrendsen ex rel. Ahrendsen v. Iowa Dep't of Human Servs., 613 N.W.2d 674, 678 (Iowa 2000) (citation omitted).
Here the court's estoppel ruling rested heavily on representations allegedly made by MEGA to the transplant unit. This is a legally unsound application of the doctrine, given the fact that it is Rubes who is asserting estoppel based on MEGA's representations, not the transplant unit. See Wendt v. White Pigeon Mut. Ins. Ass'n, 418 N.W.2d 374, 376 (Iowa Ct.App.1987) (representation made by insurer to insured sufficient to equitably estop insurer from asserting statute of *272 limitation defense). If it were the transplant unit seeking payment under the policy MEGA seeks to rescind, MEGA's representations to it might be relevant. But that is not the case before us.
The fact is that MEGA never altered its course with regard to Rubes. It refused to pay the claim for Rubes' November 1998 hospitalization and advised that his policy would be rescinded if the misrepresentations it suspected were founded. This was not a false representation on MEGA's part. The company fully intended for Rubes to rely on this representation and respond accordingly. At no time was Rubes without the true facts. In short, Rubes' claim of equitable estoppel based on misrepresentation rests on inadequate proof to defeat MEGA's right
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