ILA R. JESSE, Appellant-Plaintiff, vs. AMERICAN COMMUNITY MUTUAL INSURANCE COMPANY, DAVENPORT INSURANCE AGENCY, INC., and LARRY D. SMITH, Appellees-Defendants., 725 N.E.2d 420

Summary

Defendant insurance company rescinded plaintiff's health insurance policy after plaintiff underwent heart surgery. The lower court granted summary judgment to defendant in the ensuing action, and plaintiff appealed. The court reversed the grant of summary judgment. The court held a genuine issue of fact existed on whether plaintiff made a misrepresentation when she completed the insurance application. Plaintiff told the insurance agent she had a "functional murmur." The agent told her because no treatment or medication had ever been recommended, plaintiff was not required to note the heart condition on the application. The court held it was plausible the question in the application could be interpreted to require disclosure of only condition for which the applicant had received medical treatment. The court also held the alleged misrepresentation may not have been evident on the face of the application, as the failure to disclose was not necessarily a false statement.