Krakower v. Mutual Life Insurance Company of New York, 39 N.Y.2d 705 (1976)
When an insurance policy includes multiple applications for coverage on different individuals, the inadmissibility of one application due to illegibility does not automatically render the other, legible applications inadmissible under New York Insurance Law § 142.
Summary
Arnold Krakower applied for a life insurance policy, making declarations about his health. The policy also included an application for his wife’s coverage. After Krakower died, the insurance company sought to rescind the policy, alleging misrepresentations in Krakower’s application regarding his medical history. The copy of the wife’s application attached to the policy was found to be illegible. The New York Court of Appeals held that the illegibility of the wife’s application did not bar the admissibility of Krakower’s legible application in evidence to prove his misrepresentations. The court reasoned that the applications pertained to separate lives, coverage, and risks and should be treated distinctly for admissibility purposes under Insurance Law § 142.
Facts
Arnold Krakower applied for a $40,000 term life insurance policy with MONY, declaring himself in good health. He disclosed annual checkups, colds, and viruses in the past five years. During a physical examination, he admitted to past surgeries and a routine EKG, denying any other medical conditions or medication. He also applied for a $5,000 term life insurance on his wife, indicating she had no health impairments except for colds and viruses. The policy was issued, with both applications attached. Krakower died within a year from complications of polycythemia vera, a blood disease he had suffered from for 20 years. Investigations revealed that Krakower had been hospitalized on several occasions for this condition, contrary to his application statements.
Procedural History
MONY denied the claim and sought to rescind the policy due to misrepresentation. The trial court initially denied summary judgment, questioning the legibility of the application copies attached to the policy. At trial, the plaintiff stipulated to the legibility of Krakower’s applications, leaving only the legibility of his wife’s application as the issue. The jury found the wife’s application illegible. The trial court then ruled that the illegibility of the wife’s application did not prevent the insurer from proving the falsity of Mr. Krakower’s application and dismissed the complaint. The Appellate Division reversed, holding that section 142 rendered decedent’s application inadmissible. The Court of Appeals reversed the Appellate Division and reinstated the trial court’s order.
Issue(s)
Whether the illegibility of a copy of an insurance application for one insured (the wife) attached to a policy, also containing a legible application for another insured (the husband), prevents the insurer from introducing the husband’s application into evidence to demonstrate misrepresentation, under New York Insurance Law § 142.
Holding
No, because under these circumstances and for this particular purpose, the applications which relate to different lives, separate coverage and distinct risks, must be viewed as separate and distinct; thus, Insurance Law § 142 should not be applied to render the husband’s applications for insurance inadmissible.
Court’s Reasoning
The Court of Appeals focused on the purpose of Insurance Law § 142, which is to protect the insured by providing them with the opportunity to examine the application and correct any errors. The court emphasized that the second sentence of § 142, regarding admissibility, was added to prevent insurers from using applications not attached to the policy as evidence, overriding the holding in Abbott v. Prudential Ins. Co. The court reasoned that although attached to the same policy, the applications related to different lives, coverage, and risks. Therefore, the illegibility of the wife’s application should not bar the admissibility of the husband’s legible application. To hold otherwise would be a misapplication of the statute. The court stated, “[N]o application for the issuance of any such policy * * * shall be admissible in evidence unless a true copy of such application was attached to such policy when issued.” The court emphasized that the applications pertained to separate risks and coverages, and therefore should be treated as distinct for the purpose of admissibility under § 142.