Legel v. American Community Mutual Insurance

Per Curiam. Plaintiffs appeal as of right from a February 27, 1991, order granting defendant summary disposition pursuant to MCR 2.116(0(10) and dismissing plaintiffs’ case. Plaintiffs filed a declaratory judgment action after defendant denied their claim for payment arising out of plaintiff Jack Legel’s hospitalization and canceled their policy for making false statements on their application for insurance. We affirm. Plaintiffs argue that the court erred in granting defendant summary disposition because a question of fact existed concerning whether the statement at issue in the application was made in good faith and without fraudulent intent. However, it is unnecessary for an insurer to show fraudulent intent in order to cancel an insurance policy where an applicant makes a material misstatement concerning prior medical history. Wiedmayer v Midland Mutual Life Ins Co, 108 Mich App 96, 100; 310 NW2d 285 (1981), rev’d on other grounds 414 Mich 369; 324 NW2d 752 (1982). The insurance application in the present case contained a question that asked whether the applicant(s) had "ever been advised to have or had treatment for, or been arrested for, the use of alcohol, narcotics, or hallucinogenic drugs.” The response was no. The record reveals that before filling out the application, Jack Legel had been convicted of operating a vehicle while under the influence of alcohol and of possession of drug paraphernalia. Further, he had under *619 gone substance abuse counseling as a condition of his sentence. Therefore, plaintiffs clearly made a material misrepresentation on their application. Marianne Legel argues that she believed that she was the primary insured and that the questions principally applied to her. However, the application listed Jack Legel as the proposed insured and listed Marianne as his spouse. Moreover, the insurance application stated that the questions applied to each person proposed for insurance. Therefore, we find that reversal is not warranted on this basis. Plaintiffs further argue that the court erred in granting defendant summary disposition where the policy provided that it could not be canceled for misstatements after two years from the effective date of the policy. We again disagree. If the language of an insurance policy is clear, the construction is a question of law for the court. Hafner v DAIIE, 176 Mich App 151, 156; 438 NW2d 891 (1989). The policy in the instant case provided: Time Limit on Certain Defenses. (a) After two years from the Policy Date of this policy no misstatements, except fraudulent misstatements, made by the applicant in the original application for this policy shall be used to void the policy or deny a claim for loss incurred by or on behalf of any Family Member insured on the Policy Date commencing after the expiration of such two year period. No misstatements, except fraudulent misstatements, made by the applicant in any application required for the addition of one or more persons to the Family Members shall be used to void the policy or to deny a claim for loss incurred by or on behalf of such Family Member after this policy has been in force for two years following the effective date of coverage for such Family Member. (b) No claim for loss incurred by or on behalf of *620 a Family Member after two years from the effective date of coverage for such Family Member shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of coverage of this policy with respect to such Family Member. In the present case, the effective date of the policy was June 4, 1984. Jack Legel was hospitalized in April and May 1986 for alcohol abuse problems. At that time it was discovered that he had a thirty-year history of alcohol abuse. Because the claim occurred within two years of the effective date of the policy, defendant could properly cancel plaintiffs’ policy pursuant to either section cited above. Having found no genuine issue of fact, we find that the trial court properly granted defendant summary disposition. Kreager v State Farm Mutual Automobile Ins Co, 197 Mich App 577; 496 NW2d 346 (1992). Affirmed.