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Woods v. National Life & Accident Ins. Co.

June 22, 1965


Author: Ganey

Before: McLAUGHLIN, FORMAN and GANEY, Circuit Judges.

GANEY, C. J.: On March 7, 1961, Emmet F. Woods, while a resident of Pittsburgh, Pennsylvania, made application to defendant insurance company for a policy of life insurance. Contained in the application are various questions which he answered concerning his past health history and medical consultations.*fn1 He designated his wife, Odessa Woods, as beneficiary and stated that his last previous occupation was the "U.S. Army". He paid the first premium installment and the policy was issued to him on or about March 21, 1961. Thereafter he made timely payment of premiums as they fell due. The policy provides that the application constitutes a part of the insurance contract and that it "will be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue, except for the non-payment of premiums." Within two years of the issuance of the policy, the insured, while he was still a resident of Pittsburgh, died on August 21, 1962, of infectious hepatitis. Plaintiff-beneficiary submitted proof of death of the insured to defendant. The latter refused to pay the face amount of the policy, and, instead, tendered a check of $253.21 representing the amount of premiums paid. Whereupon plaintiff brought an action on May 29, 1963, in the United States District Court for the Western District of Pennsylvania to recover the proceeds of the policy. Jurisdiction of that court was invoked on the basis of diversity and the jurisdictional amount.*fn2 She demanded a jury trial in her complaint.

The answer to the complaint avers that the insured secured the policy by giving false answers to questions numbered 51b, 51g, 54 and 55 of the application,*fn3 which answers were material and relied upon by the defendant and that the insured knew them to be false, thereby rendering the policy void. And defendant's pre-trial narrative statement states in part: "The insured answered that he had never had any disease of the heart or lungs; that he had never consulted a physician for any ailment or disease pertaining to any part of the human anatomy other than the brain, nervous system, heart, lungs, skin, middle ear, eyes, stomach or intestinal tract . . . . The insured also stated that there was nothing in his health history not mentioned elsewhere in the application. In answer to a question which called for the names and addresses of physicians that the insured had consulted, he answered 'None'."

At the jury trial plaintiff presented evidence of the facts previously adverted to, the truth of which defendant admitted. After completing its defense, in which it offered the testimony of two physicians and the records of their examinations, several chest x-ray films and records from the files of the Veterans' Administration ("VA") relating to the adjudication of applications for benefits by a person named Emmet F. Woods and the plaintiff as his widow, the defendant moved for a directed verdict. It also moved for a "dismissal with prejudice" on the grounds that the documentary evidence which had been submitted to the court for the benefit of the jury is proof that fraud was committed by the insured in applying for the policy. These motions were denied, and the case was submitted to the jury which returned a verdict in favor of the plaintiff for $24,500, the face amount of the policy. Without filing either a motion for judgment notwithstanding the verdict under Rule 50(b) of the Federal Rules of Civil Rpocedure or for a new trial pursuant to Rule 59, defendant appealed to this court from the judgment entered on the verdict.

The ground for its appeal is that the trial court committed reversible error when it excluded certain evidence offered by the defendant, and that if this evidence had been considered by the trial court, it (defendant) would have been then and is entitled now to a dismissal of the action with prejudice. In order to properly dispose of defendant's contentions it will be necessary to treat them in some detail.

The trial court in its charge removed all but question 51b from the jury's consideration. It is highly doubtful whether defendant's only relevant objection to the charge complied with Rule 51 of the Federal Rules of Civil Procedure. However this situation does not prevent this court from reviewing the questions raised by defendant on this appeal. Coca Cola Bottling Co. of Black Hills v. Hubbard, 203 F.2d 859, 862 (C.A. 8, 1953); 1A Moore's Fed. Pract. (2nd ed.) 3.404[9]. The fact that it did not file post-trial motions does not do so either. Garman v. Metropolitan Life Ins. Co., 175 F.2d 24 (C.A. 3, 1949); United States v. Mountain State Fabricating Co., 282 F.2d 263 (C.A. 4, 1960); United States v. Hayashi, 282 F.2d 599 (C.A. 9, 1960). Also see Trout v. Pennsylvania R.R. Co., 300 F.2d 826, 829-830 (C.A. 3, 1962); 6 Moore's Fed. Pract. (2nd ed.) 59.14, 59.15[3].

Defendant's first item of complaint is the trial court's admonition and instruction to the jury to disregard the testimony of one Dr. Charles Edwin Greenlee, a practicing physician.This witness, called by defendant for the purpose of proving that the insured answered questions 51b and 55 fraudulently, testified that a man came to his office in Pittsburgh, Pennsylvania, on August 6, 1960. He stated that according to his records he examined this man's chest with a stethoscope, heard high-pitched rales, concluded that there was some obstruction to his breathing, and gave him a preparation of potassium iodide as a treatment. He also stated that he kept a record of this examination and that it was his practice to keep such records in the normal course of pursuing his profession. This record had written on it the same name, address, telephone number, occupation and age as that of the insured. Out of hearing of the jury, he told the trial judge that although the man's condition was not normal, it was not a severe case but an ordinary one, that it was "no big deal" and "you see it every day", and that high-pitched rales could easily be detected "by just listening with your stethoscope." The doctor was unable to say that the man he examined that day was the insured. The basis for the trial court's action was that part of the doctor's testimony was a privileged communication barred from being disclosed in a civil action by the Act of June 7, 1909, P.L. 462, 28 P.S. § 328, and that the remainder was irrelevant once it had been established that the doctor could not identify the patient as having been the insured.

Assuming that the person examined by Dr. Greenlee on August 6, 1960, was the insured, the Act of 1907 did not prevent him from disclosing the purpose of his examination, his diagnosis and treatment. The Act applies only to communications made by a patient to a physician in a civil action: Phillips's Estate, 295 Pa. 349, 145 A. 437 (1929), and then only if they tend to blacken the character of the patient. Soltaniuk v. Metropolitan Life Ins. Co., 133 Pa. Super. 139, 143-144, 2 A.2d 501 (1938). With the exception of the name, address and so forth, and a few items concerning the patient's health history entered in his records, Dr. Greenlee's testimony did not and would not have revealed any information obtained by communications from the patient. The revealing of a name, address and other identifying data given by a patient is not a communication which tends to blacken the character of the patient. Sweeney v. Green, 116 Pa. Super. 190, 176 A. 849 (1935). The Act of 1907 presented no obstacle to Dr. Greenlee's testimony. His records, to the extent that the contents were relevant and material, were admissible. Ettelson v. Metropolitan Life Ins. Co., 164 F.2d 660, 667 (3 Cir. 1947). The fact that the doctor was unable to say that the patient he examined was the insured is immaterial. The identity of the patient was for the jury to determine.

Since defendant asserted that the answer to question 55, which was removed from the jury's consideration, was fraudulent, and Dr. Greenlee's testimony had some bearing on the issue raised by that assertion, the defendant is entitled to a new trial alone on the trial court's rulings regarding that witness's testimony.

Defendant also complains of the court's ruling that Dr. Harold T. Brown, who was chief of the pulmonary disease unit of the VA regional office in Pittsburgh and examined service veterans in the routine course of his employment as a VA physician, was not a physician "consulted" by the insured within the meaning of question 55 of the application for insurance. The effect of this ruling, along with that on Dr. Greenlee's testimony, was to remove question 55 from the jury's consideration. With the aid of documents from the VA file, Dr. Brown testified that on December 29, 1960, he examined from head to toe a medium sized, very good-looking, well dressed, personable colored man who appeared to be well educated and spoke good English. He explained to the man that the probable cause of his trouble was sarcoidosis*fn4 and possibly pulmonary mycosis (a fungus disease of the lungs) or a bronchiolitis (inflammation of the bronchioles). An x-ray picture of this man's chest taken the same day under Dr. Brown's direction showed shadows of a very finely dotted nature indicating, according to the doctor, a fine nodular type infiltration of both lungs. The doctor advised the man to go to a VA hospital for further observation and examination. He admitted that he did not know that the man he examined on December 29, 1960, was the insured and that the latter gave him no identifying data. Nevertheless, the trial court left it to the jury to determine, in conjunction with other testimony given by the plaintiff and the identification data read to them by defendant's counsel from VA documents, whether the person described by Dr. Brown was in fact the insured. He also instructed them that if they found that such person was not the insured, then their verdict must be for the plaintiff, "because there would then be no evidence to the effect that plaintiff's husband had any knowledge concerning any lung condition."

Plaintiff argues that the examination by a VA physician at the request of the VA - though no evidence of such request is in the record - was no more a personal consultation as a result of choice by the insured than were his earlier examinations by physicians when he was inducted into the Army. If the facts included in her argument were established by the evidence, we think - lacking definite authority thereon - a Pennsylvania Court of statewide jurisdiction would be inclined to agree with the trial court that Dr. Brown's testimony was not relevant to question 55. She has never conceded that the man examined by Dr. Brown was the insured, and there was no showing that the examination was not the result of personal choice by the man examined. True, the burden of going forward with the evidence is on the defendant to prove the insured committed fraud. However, defendant's attempt to show the circumstances under which the man examined got to see Dr. Brown was successfully frustrated by plaintiff's objection on the ground that question 41, which sought to ascertain whether the insured had ever applied for disability compensation from any source, was not at issue.*fn5 Had the application for disability benefits filed on November 18, 1960, been admitted into evidence, and the usual routine of processing such an application been explained, as defendant tried to have done, the jury would have no other choice but to conclude that the applicant was directed by the VA to see Dr. Brown and that the report of the results of the latter's examination was for the eyes of the VA adjudication section. In view of the state of proof, we think the testimony of Dr. Brown was admissible for the purpose of proving that answer 55, as well as 51b, was answered falsely.

The next item of complaint is the trial court's refusal to permit the defendant to introduce into evidence two chest x-ray films of a person by the name of Emmet F. Woods for the purpose of proving that the answer to question 54 was false. This question, answered in the negative, reads: "Are you deformed, lame, maimed or ruptured, or is there anything in your health history not mentioned elsewhere in this application?" One of the x-rays was taken at an Allegheny County health center and the other at the C. Howard Mercy State Hospital in Pittsburgh, in the fall of 1960. We think the trial court correctly construed question 54 as not seeking information about chest x-rays and that a Pennsylvania appellate court would agree with this construction. Moreover, an ailment or disease of the lungs is covered elsewhere in the application by question 51b, which reads: "Have you ever had any ailment or disease: b. heart or lungs?" The trial court committed no error in refusing defendant's proffer of the films for the purpose stated by defendant. Defendant also maintains that it was prejudiced by the court's rejection of his offer as evidence certain documents from a VA file. This file revealed, among other things, that an ex-service man by the name of Emmet F. Woods applied for disability benefits on November 18, 1960, based on his lung condition, that he was examined by VA physicians in connection with the application, that the benefits were denied on June 7, 1961, and that this decision was not changed after additional evidence in the form of x-ray films and reports gathered from several health centers were taken into consideration. The file contained about a dozen reports of x-rays taken between June, 1960, and January, 1962, at two hospitals, several public health clinics and the VA. Also in the file were numerous letters and memoranda, rating reports, an application for dependency and indemnity compensation or death pension by widow or child, dated October 19, 1962, and signed by Odessa J. Woods, which was denied, and the Army medical service record of Emmet F. Woods.

The file was properly shown to have been a part of the VA records. Such records are business records within the meaning of 28 U.S.C.A. § 1732. Brooks v. Texas General Indem. Co., 251 F.2d 15 (C.A. 5, 1958); Kendall v. Gore Properties, Inc., 98 U.S. App. D.C. 378, 236 F.2d 673, 684 (C.A.D.C. 1956). Of course the mere fact that the documents were part of the VA file did not make them admissible per se; they must be relevant and material to the issue at the trial. Continental Baking Co. v. United States, 281 F.2d 137, 148-149 (C.A. 6, 1960). And even if they meet those tests, the trial court, in its sound discretion, may exclude them if they are merely cumulative.

Getting down to specific documents, defendant is discontent with the exclusion of its proposed Exhibits A, B, G, K, M and one that was not marked for identification. Exhibit G is a "Report of Medical Examination for Disability Evaluation" prepared by Dr. Brown on December 29, 1960. This report contained the results of examinations made of a person by the name of Emmet F. Woods. It also included a diagnosis of sarcoidosis, with "pulmonary mycosis and bronchiolitis to be ruled out", and some brief remarks to the effect that the x-ray indicated a finely nodular involvement of the upper two-thirds, including the apices, of both lungs, and that his timed vital capacity was 59 per cent of predicated - indicative of a marked restrictive breathing defect consistent with the diagnosis. The report bore the signature "Emmet F. Woods" as being the person examined. The document was probative of the fact that someone had been examined by Dr. Brown on December 29, 1960, that his disability was diagnosed as sarcoidosis and that it bore the signature in question. The signature on the report, when compared with that on the insurance application, was almost an exact duplicate of the latter, and the testimony of a handwriting expert would not have been a condition precedent to the jury's concluding that the signatures were written by the same person. Since plaintiff would not admit the identity of that ...

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