## Facts

- David V. Berger was diagnosed with mild diabetes mellitus in 1974, prescribed medication, and advised on dietary restrictions.
- From 1975 to 1979, Berger had multiple medical contacts regarding diabetes and related treatment; in a 1976 employment physical he disclosed diabetes on a medical history form.
- In April 1979, Berger applied for group credit life insurance intended to pay his home mortgage upon death.
- On the application, Berger stated that within the prior three years he had consulted a physician only for an earache and sore throat and that he had never been treated for or advised that he had diabetes.
- In February 1981, Berger was hospitalized to bring diabetes under control and died shortly thereafter; evidence indicated death from a codeine overdose.
- Berger’s widow and representatives submitted a claim; the insurer denied coverage after learning of the undisclosed diabetes, asserting material misrepresentation.
- At trial, the jury found: (1) the application statements were false but not fraudulent; (2) diabetes did not cause Berger’s death; (3) the nondisclosure was material to underwriting; and (4) the insurer would have denied coverage had it known of the diabetes.
- The trial court entered judgment for the insurer under the Utah insurance-misrepresentation statute as amended in 1963.

## Issues

1. Whether the governing Utah statute allowed avoidance of a life policy for material misrepresentation or nondisclosure that would have caused denial of coverage, even absent intent to deceive.
2. Whether rescission was proper where the misrepresented condition did not cause or contribute to the insured’s death.
3. Whether the evidence and instructions supported the jury’s findings on materiality and the insurer’s underwriting decision.

## Decision

- The Utah Supreme Court affirmed the judgment for the insurer.
- The court applied the post-1963 statute in effect at the time of the 1979 application.
- The jury’s findings that the misstatements were false, material, and would have led to denial of coverage were sufficient to avoid the policy.
- Neither fraudulent intent nor a causal connection between the misrepresented condition and the death was required under the statute.

## Legal Principles

- Under Utah’s post-1963 insurance-misrepresentation statute, a life insurance policy may be avoided for fraud, material misrepresentation, or misrepresentation/withholding of facts that would have caused the insurer to deny coverage.
- Intent to deceive is not a required element when rescission rests on material misrepresentation or nondisclosure that would have altered the insurer’s underwriting decision.
- Causation between the misrepresented fact and the insured’s death is not required; the relevant inquiry is materiality to the risk and the insurer’s decision to accept or refuse coverage.
- When supported by substantial evidence, jury findings on materiality and underwriting impact will sustain judgment for the insurer.

## Conclusion

The court upheld rescission of group credit life coverage because the insured materially misrepresented and withheld his diabetic condition, and the insurer proved it would have denied the application if properly informed, regardless of intent to deceive or any link between diabetes and the cause of death.


Berger v. Minn. Mut. Life Ins. Co., 723 P.2d 388 (Utah 1986)