by the statute. See Employers' Liability Assur. Corp. v. Lebanon Auto Bus Co., 360 Pa. 42, 59 A.2d 880 (1948); Davidson v. John Hancock Mut. Life Insur. Co., 152 Pa.Super.Ct. 63, 31 A.2d 585 (1943). Cf. Moore v. Bestline, 23 Pa.Super.Ct. 6 (1903) (allocatur refused) (same result under Act of 1881). Thus, despite plaintiff's argument, section 441 does not preclude the Underwriters from introducing otherwise admissible documents and testimony into evidence concerning possible material misrepresentations and omissions made by plaintiff when he applied for the policies at issue.
Next plaintiff contends that the Underwriters as a matter of law cannot prove that plaintiff made any such misrepresentations and omissions. In Pennsylvania, an insurer must show three elements to void a policy based on misrepresentation: (1) that the declaration by the insured was false; (2) that the false declaration was material to the risk insured; and (3) that the insured knew it to be false or made the statement in bad faith. Lotman v. Security Mutual Life Insur. Co. of New York, 478 F.2d 868, 870-71 (3d Cir.1973), quoting Bremmer v. Protected Home Mutual Life Insur. Co., 218 Pa.Super.Ct. 364, 280 A.2d 664 (1971) (allocatur refused); McCloskey v. New York Life Insur. Co., 292 Pa.Super.Ct. 1, 436 A.2d 690 (1981); Transit Cas. Insur. Co. v. Nationwide Mut. Insur. Co., 537 F. Supp. 65 (E.D.Pa.1982). These three factors are in most instances questions for the jury. See Evans v. Mutual Life Insur. Co., 322 Pa. 547, 186 A. 133 (1936); Watson v. Metropolitan Life Insur. Co., 145 Pa.Super.Ct. 369, 21 A.2d 503 (1941); Wolfson v. Mutual Life Insur. Co. of New York, 455 F. Supp. 82 (M.D.Pa.) aff'd mem., 588 F.2d 825 (3d Cir.1978); Bird v. Penn Central Co., 334 F. Supp. 255 (E.D.Pa.1971). Thus plaintiff will be entitled to summary judgment only if the Underwriters cannot put forth sufficient facts to raise a genuine issue as to any one of the three elements necessary to establish a case of misrepresentation.
It is the Underwriters' position that plaintiff misrepresented the extent and nature of his ownership interest in Sonsam. The Underwriters state they were under the belief that plaintiff had a non-contingent 25% interest. In fact, plaintiff's interest was conditioned upon Sonsam's passing a fertility test.
Moreover, as of the effective date of the first policy, plaintiff owned only a 12-1/2% interest as he had sold five of his ten shares of Sonsam.
In my opinion there is evidence in the record to raise questions of fact as to all three of the elements necessary to establish a case of misrepresentation. First there is evidence that the Underwriters did not know the nature and extent of Guida's interest in Sonsam when the policies were written. See Hall Affidavit In Opposition to Motion. The Underwriters state they assumed that plaintiff had an unconditional interest. Plaintiff contends that Hall, one of the underwriters, contradicts his affidavit in his deposition testimony. Whether this is so and to what end is for a jury to decide.
Plaintiff and Rhulen, which supports plaintiff's motion, also claim that a telex sent to Stickland prior to the writing of plaintiff's policies which concerned insurance for Barry Epstein's interest in Sonsam alerted the Underwriters to the contingent nature of plaintiff's interest.
Whether this telex which does not mention plaintiff and which did not concern any insurance on Sonsam for him was ever shown to the Underwriters
directly or whether it was sufficient to apprise them of the nature of plaintiff's interest are questions for the jury. Thus there is a genuine dispute as to whether they were under a false impression as to plaintiff's interest.
Similarly, there is evidence to show that the knowledge of the true nature of plaintiff's interest was material to the Underwriters. The Underwriters, through Hall, state they would not have written the policies had they been aware of the contingent nature of Guida's interest. See Hall Affidavit, supra. Plaintiff again counters by saying Hall contradicts his affidavit in his deposition. A jury should resolve the credibility of Hall's testimony.
The facts concerning the last element are fuzzy at best. Plaintiff asserts that he disclosed the nature and quantity of his interest in Sonsam to Rhulen. See Guida Deposition at 91 & 146. Indeed the "Epstein" telex referred to earlier from Rhulen to Stickland quotes the contingency part of the August 17, 1978 agreement. It is not clear exactly what Rhulen told Stickland about plaintiff's interest. A representative of Stickland testified that they were unaware of the nature of plaintiff's interest. Willson Deposition at 24-25 & 35. Sorting out the facts and assessing the credibility of the witnesses can best be done by a jury. In particular, it is for the jury to decide whether Rhulen was acting as plaintiff's agent in these transactions. The Underwriters contend this was so. Plaintiff, however, asserts Rhulen had advertised in trade publications as being a Lloyd's agent.
Whether the Underwriters' assumption that plaintiff was an unconditional owner of an interest in Sonsam was the result of negligence or from behavior rising to the level of intentional material misrepresentations and omissions can best be determined by a jury at trial where the credibility of the witnesses can be assessed first hand. Information and correspondence went through several persons. Thus the jury is the appropriate entity to unravel the facts and judge just what occurred.
One more issue needs to be addressed. Rhulen asserts that the Underwriters have waived any right they may have had to avoid the policies because it had prior notice of the nature of plaintiff's interest in Sonsam and that with reasonable diligence they could have ascertained the nature of plaintiff's interest. Rhulen primarily relies on the case of Annett v. Nationwide Life Insur. Co., 410 F. Supp. 1265 (E.D.Pa.1976). For a waiver to occur, the insurer must first have notice at the time the policy is issued of facts which would put a reasonable person on notice to make further inquiry. First Pennsylvania v. United States Life Insur. Co., 421 F.2d 959 (3d Cir.1969). See generally, 19 P.L.E., Insurance § 265 (1959 & Supp.1982). Rhulen asserts that the "Epstein" telex put the Underwriters on notice of plaintiff's contingent interest. As stated above, the evidence in the record is not convincing as a matter of law that this telex provided the requisite notice. In addition, until the insurer has such notice, there is no duty to make further inquiries in order to avoid a waiver. See Franklin Life Insur. Co. v. Bieniek, 312 F.2d 365 (3d Cir.1962).
Similarly, I cannot say at this juncture that the Underwriters are estopped from refusing plaintiff's claims. Again, an essential element of equitable estoppel is that Lloyd's had actual or constructive knowledge of the real facts. In Re Watt's Estate, 409 Pa. 44, 185 A.2d 781 (1962). A jury must determine what knowledge they had.
The record does not permit me to accord plaintiff the pre-trial judgment he seeks. Accordingly, his motion for summary judgment will be denied.