Facts
- A $1,000 life insurance policy was issued on Dennis Pignoni’s life, naming his mother, Georgianna Mercier, as beneficiary.
- The policy was procured in Maine through the insurer’s duly licensed Maine agent based on an application containing health-history answers and a “good health” statement by a relative.
- After Pignoni’s death, Mercier sued in Maine to recover policy proceeds.
- The insurer defended on material misrepresentation, asserting the application falsely denied diabetes and diabetes treatment and falsely stated the insured was in “good health,” despite evidence he was in a tuberculosis sanitarium.
- Mercier presented evidence that the agent knew of the diabetes and medication, minimized its importance, and either failed to ask or inaccurately recorded health questions, including facts about tuberculosis confinement.
- The case turned on disputed facts about what the agent asked, what was disclosed, what the agent knew, and whether misstatements were attributable to the insured/beneficiary or the agent.
Issues
- Whether the trial court committed reversible error by refusing to instruct the jury that the insurer could not rely on application misstatements if its Maine agent, acting within authority, knew the true facts or induced/recorded the misstatements.
- Whether the verdict for the insurer was “manifestly wrong” given the conflicting evidence about the alleged misrepresentations and the agent’s knowledge and conduct.
Decision
- The Supreme Judicial Court of Maine affirmed judgment for the insurer.
- The court held the verdict was not “manifestly wrong” because the record contained evidence supporting the insurer’s position and credibility determinations were for the jury.
- The court found no reversible instructional error warranting a new trial in light of how the case was tried and the jury’s resolution of the factual disputes.
Legal Principles
- An insurer doing business through authorized agents in Maine is generally charged with its agent’s knowledge and conduct within the scope of the agency; the insurer may be barred from avoiding a policy based on misstatements the agent knew were false or that the agent inserted or condoned.
- A jury verdict will not be set aside as “manifestly wrong” unless it clearly appears the jury misunderstood the law or perversely disregarded the evidence; conflicting evidence on material issues is for the jury to resolve.
- Material misrepresentations in a life insurance application concerning serious illnesses and confinement (e.g., diabetes and tuberculosis institutionalization) can render the policy voidable, unless the insurer is estopped by its agent’s knowledge or participation in the misstatements.
Conclusion
The court affirmed a defense verdict in a life-insurance misrepresentation case, deferring to the jury on disputed facts about the insured’s health disclosures and the agent’s involvement, and applying a highly limited “manifestly wrong” standard to challenges to the verdict and the charge.