No. 10 E.D. Appeal Docket 1982, Appeal from the Order of the Superior Court of Pennsylvania, No. 100 Philadelphia, 1980,
Roberts, C.j., and Nix, Larsen, Flaherty, McDermott, Hutchinson and Zappala, JJ.
The sole issue presented is whether an insurance company is barred from using false statements in an application for life insurance to defend against a claim under the insurance policy where the policy provides that such a statement may not be used to contest a claim "unless a copy of the instrument containing the statement has been furnished to the person making the claim" and the insurance company furnished a copy of the application to the claimant only after the named insured's death. The lower courts held the failure of the insurance company to furnish a copy of the application to the named beneficiary under the policy prior to the death of the insured barred the use by the insurance company of the false statements contained in the application in defense of the claim. For the reasons that follow, we reverse.
On or about March 21, 1975, John Charles D'Allessandro applied for group life insurance with appellant Durham Life Insurance Co. and signed an application, a copy of which was provided to him during his lifetime, stating that, in the
preceding five years, he had neither consulted a physician nor been hospitalized, and further representing that he never had heart trouble, high blood pressure, chest pains or any other health impairments. In fact, at that time, he had a history of medical problems with concurrent treatment for recurrent coronary insufficiency pain consistent with coronary disease and kidney problems, and had been hospitalized for these ailments. On July 1, 1975, the insurance company issued a group life insurance policy in the amount of $50,000 to Mr. D'Allessandro. His wife, Barbara D'Allessandro, appellee herein, was named beneficiary. After paying premiums in the amount of $400.65, Mr. D'Allessandro died on October 14, 1975, as a result of coronary artery disease. Mrs. D'Allessandro claims the proceeds, $50,000, under the insurance policy which the insurance company refuses to pay on the ground the application contained material misrepresentations of fact. Mrs. D'Allessandro commenced an action in assumpsit in the Court of Common Pleas of Bucks County. On stipulated facts, Common Pleas Court granted Mrs. D'Allessandro's motion for summary judgment and denied the insurance company's motion for summary judgment. On appeal, Superior Court, 291 Pa. Super. 613, 436 A.2d 669, affirmed.
The policy deals with contestability as follows:
INCONTESTABILITY -- STATEMENTS BY INSURED PERSONS
The insurance of any person shall be incontestable after it has been in force for two years. All statements made by any of the persons insured hereunder shall be deemed representations and not warranties and no such statement shall be used in defense of a claim hereunder unless it is contained in a written instrument signed by him and unless a copy of the instrument containing the statement has been furnished to the person making the claim.
(Emphasis supplied.) Mrs. D'Allessandro, the appellee, concedes that her husband's misstatements in his application for insurance were of such a nature that she would be
barred from claiming under the policy if the application could be used to contest the claim. However, she argues the result reached by the lower courts is mandated by existing case law.
The lower courts determined that an ambiguity existed as to the time when the application must be furnished to the claimant. They resolved this "ambiguity" in accordance with the longstanding rule that where the language of a policy prepared by an insurer is either ambiguous, obscure, uncertain or susceptible to more than one construction, courts will construe the language most strongly against the insurer and accept the construction most favorable to the insured. Ehrlich v. U.S. Fidelity & Guaranty Co., 356 Pa. 417, 423, 51 A.2d 794, 797 (1947). Both courts relied upon Layman v. Continental Assurance Co., 430 ...