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STUCKEY v. TIME INS. CO.

September 10, 1987

Marion T. Stuckey and Geraldine Stuckey, Plaintiff
v.
Time Insurance Company, Defendant



The opinion of the court was delivered by: ROY

 Elsijane T. Roy, Judge.

 The defendant Time Insurance Company issued a policy of medical pay insurance, which became effective February 19, 1986, insuring the plaintiffs, Marion T. Stuckey and Geraldine Stuckey. Subsequent to the issuance of the policy, plaintiff Marion Stuckey suffered a cerebral hemorrhage, and filed a claim with defendant insurance company. Defendant rescinded the policy, contending that Marion Stuckey had a pre-existing condition of which they were unaware, that plaintiff misrepresented his physical condition to the defendant, and that had defendant known all the facts, the policy would not have been issued. Defendant returned the premiums to the plaintiff. Plaintiffs have brought suit to recover under the policy.

 Byron V. Reeves, the individual responsible for obtaining the information from the plaintiffs when they applied for the insurance, went to the plaintiffs' home and filled out the application for insurance while Mrs. Stuckey provided the information. Mr. Stuckey was unable to be there, but his wife, Geraldine Stuckey, answered the questions on behalf of herself and her husband. The Stuckeys' adult son was also present while Mr. Reeves was questioning Mrs. Stuckey.

 As Mr. Reeves was questioning Mrs. Stuckey, he came to question 15(b) which asks:

 
To the best of your knowledge and belief has any person to be insured within the last 10 years:
 
15. Had any indication, diagnosis or treatment of:
 
(b) The heart or circulatory system including high blood pressure, murmur, or chest pain, irregular heartbeat or varicose veins or phlebitis?

 The testimony varies as to what was told Mr. Reeves at this point. Mrs. Stuckey testified that in response to 15(b) she told Mr. Reeves that her husband had developed high blood pressure in 1985 and saw a Dr. Martindale. Mr. Reeves then came to question 19, which asks:

 
To the best of your knowledge and belief has any person to be insured within the last ten years:
 
19. Currently taking medication or medical treatment of any type?

 Mrs. Stuckey then told Mr. Reeves her husband was taking medication for high blood pressure, and that he had not had any problem with blood pressure since he began taking his medication. When Mr. Reeves asked Mrs. Stuckey about the medication, Mrs. Stuckey showed Mr. Reeves the bottle of medicine. She stated that Mr. Reeves looked at it and said "This is not enough to affect anything." This testimony was corroborated by Jeffrey Stuckey, the plaintiffs' son, who was present in the room when the questioning took place. Mr. Reeves then marked "No" in response to questions 15(b) and 19. Toward the end of the application, Mr. Reeves did write on the application that Dr. Joe Martindale checked blood pressure in 1985 and there was no problem. After completing the application, Mrs. Stuckey gave Mr. Reeves a premium check and Mr. Reeves advised her that unless she heard from him in ten days, they would be covered. When Mrs. Stuckey subsequently received the policy, along with a copy of the application, her husband was in the hospital, after suffering from a cerebral hemorrhage on the morning of March 16, 1986. Mr. Stuckey was taken to the hospital, treated, and incurred bills for said treatment. Subsequent to the plaintiffs' filing of a claim with defendant insurance company, defendant began investigating the facts, and after obtaining the records from Dr. Martindale, defendant rescinded the policy as of the issuance date on February 19, 1986. Defendant contends that a cerebral hemorrhage is a condition related to high blood pressure, and had they known about plaintiff's medical history, which included problems with high blood pressure, the policy would not have been issued.

 Byron Reeves testified that he recorded the information given to him correctly, and that when answering 15(b), Mrs. Stuckey did not tell him about her husband's high blood pressure or about the medicine. Later when he asked her question number 21, which asks who their family doctor was, she stated Dr. Martindale. Mr. Reeves said that then Mrs. Stuckey said her husband had gone to Dr. Martindale in 1985 for high blood pressure, but that Mrs. Stuckey didn't tell him her husband was taking medication. He stated that Mrs. Stuckey told him to put "No" by each of the boxes. Mr. Reeves admitted that he uses defendant's stationery and envelopes.

 Defendant Time Insurance Company contends that there is a fact question as to whether plaintiffs disclosed to Byron Reeves the fact that Marion T. Stuckey was undergoing treatment for high blood pressure. Even if this fact question is resolved against them, it is contended by defendant that plaintiff should not recover for three reasons: (1) Notice to a soliciting agent is not notice to the insurance company and a soliciting agent has no authority to waive policy requirements and this knowledge cannot be imputed to the insurer; (2) Byron Reeves was a soliciting agent; and (3) the agency agreement between Time Insurance Company and Byron Reeves contractually provides that the actions or knowledge of Byron Reeves is not imputed to the company.

 The Court has done extensive research on the issues involved herein and finds that there is considerable, persuasive authority for ...


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