The opinion of the court was delivered by: RAMBO
On October 28, 1991, Frank Matinchek completed an enrollment form for a group health insurance policy with John Alden Life Insurance Company ("John Alden"), which issued a policy to Matinchek on November 1, 1991. On March 10, 1992, John Alden received a claim form for benefits from Matinchek relating to hospitalization and medical treatment received between January and March 1992. (Garvey affidavit at P 5.) Some of the information referenced in Matinchek's claim contained a diagnosis code for diabetes mellitus, which is inconsistent with information provided by Matinchek on the enrollment form. The diabetes code caused John Alden's computer system to automatically suspend processing of the claim and generate a report. Id. The report was reviewed by a Claims Examiner and she undertook an investigation of Matinchek's policy. Id. On March 29, 1992, John Alden deposited a check from Matinchek for his monthly insurance premium. (Frank Matinchek affidavit, exhibit A.)
On or about April 10, 1992, John Alden received medical records clearly indicating that Matinchek was diagnosed with diabetes mellitus prior to applying for the John Alden policy in October of 1991. On April 14, 1992, having concluded that Matinchek's application contained misrepresentations regrading a preexisting medical condition, the Claims Examiner referred his file to Underwriting Supervisor Kathy Garvey. (Garvey affidavit at PP 6-7.)
After reviewing Matinchek's medical records, his enrollment form, and John Alden's underwriting guidelines for diabetes, Garvey determined that Matinchek would not have been offered coverage by John Alden if he had fully disclosed his medical history in the enrollment form. (Id. at P 8.) Garvey reported this determination to the Claims Department on or before May 1, 1992. (Id. at P 16.) On May 1, 1992, John Alden deposited a check from Matinchek for his monthly insurance premium. (Frank Matinchek affidavit, exhibit A.)
On May 6, 1992, Tammy Boldman in the Claims Department completed a "Recession Referral Form" and transmitted it with Matinchek's file to the two directors of the Claims Department, Denise DiCapio-Doon and Laurie Stellmaker. (Boldman affidavit at PP 3-5 and exhibit B.) DiCapio-Doon approved recession of Matinchek's policy on May 8, 1992, and Stellmaker did the same on May 13, 1992. (Id. at PP 4-5.)
After this approval of recession by both directors, the file was returned to Tammy Boldman in the Claims Department. Boldman sent a letter to Matinchek dated May 14, 1992, which stated:
Your charges for expenses have been received.
When we agreed to issue insurance coverage to you, our decision was based on information you supplied us on your Evidence of Insurability card.
If no changes are necessary, indicate that at the bottom of this letter. Please return this letter and the photocopy in the enclosed postage paid return envelope. If we do not receive your response within 14 days, we will assume you have no changes.
(Boldman affidavit, exhibit C.) While this letter was in the mail, Boldman sent a letter dated May 15, 1992, to Lynn Cooper Black, Matinchek's insurance agent, notifying Ms. Black that Matinchek's insurance policy was rescinded back to the effective date of November 1, 1991. (Id. at exhibit D.) A copy of this letter was not sent to Matinchek. On May 19, 1992, John Alden sent Matinchek a bill dated May 15, 1992, for his regular insurance premium. (Matinchek affidavit at P 19 and exhibit B.) On May 20, 1992, Matinchek was involved in an automobile accident which resulted in his hospitalization. On the same day, Margaret Matinchek notified Ms. Black, the agent through whom Mr. Matinchek obtained the John Alden policy, of the occurrence of the accident. (Margaret Matinchek affidavit at P 3.) At approximately 10:30 a.m. on May 20, 1992, Ms. Black notified John Alden of Matinchek's accident and claim for health benefits. (Black affidavit at PP 8-9.) Boldman sent Matinchek a letter dated May 21, 1992, notifying him for the first time that the John Alden policy had been rescinded back to the effective date of November 1, 1992. (Boldman affidavit, exhibit I.)
Matinchek filed the instant action seeking to enforce the policy with respect to both the March 1992 and May 1992 claims. John Alden moved for summary judgment on the ground that Matinchek's misrepresentations on the enrollment form permit recession of the policy as a matter of law. In his response to John Alden's motion for summary judgment, Matinchek claimed that there is a genuine issue of material fact as to whether John Alden waived its rights to rescind his policy. In an order dated March 13, 1995, the court denied John Alden's ...