dispute centers on his adoption of the statement, "I represent that I . . . am in good health to the best of my knowledge and belief."
It is well established in New York law that such statements, as distinguished from answers to purely factual questions such as the one Owen answered, call for statements of opinion. In consequence, they do no provide a basis for rescission of a policy absent proof of actual fraud by the applicant. Berger v. Manhattan Life Insurance Co., 805 F. Supp. 1097, 1101 (S.D.N.Y. 1992); Bronx Savings Bank v. Weigandt, 1 N.Y.2d 545, 549, 154 N.Y.S.2d 878, 881, 136 N.E.2d 848 (1956); Sommer v. Guardian Life Insurance Co. of America, 281 N.Y. 508, 514, 24 N.E.2d 308 (1939). There is no fraud if an applicant who affirmed his or her good health "in good faith believed and was justified in believing that his health was not impaired by any condition which would ordinarily be regarded as a 'disease.' The representation cannot reasonably be understood as intended to do more than convey to the company such information as the applicant might be expected to have and to give to the company assurance that the applicant has had no symptom of disease which would, ordinarily, act as a warning or notice, even to a layman, that his health might be impaired in substantial degree, and assurance that the applicant, in good faith, believes that he is in fact a well person." Weigandt, 1 N.Y.2d at 550, 154 N.Y.S.2d at 881 (quoting Sommer, 281 N.Y. at 514).
Here there manifestly is a genuine issue of fact as to Owens' subjective belief, so Berkshire devotes its main effort to demonstrating that no one who has tested HIV positive is justified in believing that he or she is in good health. It has offered an affidavit by a professor of medicine that characterizes HIV as a disease without a cure that relentlessly destroys the immune system and describes AIDS as "severe HIV" disease. (Landesman Aff. PP 16, 12) Owens, however, has submitted an affidavit by another professor of medicine in which the expert gives the opinion that it would not be unreasonable for a lay person who had tested HIV positive, but who was asymptomatic, nevertheless to believe that he or she was in general good health and did not have a deficiency of the immune system. (Laurence Aff. P 11) Another doctor stated in his deposition that a person who is HIV positive and believes he or she can stay healthy is hopeful but not naive. (Smith Aff. Ex. 6, Wallach Dep. 135-37)
The Court recognizes that the affidavit submitted by defendant's expert is drawn with care. Cross-examination of the expert may prove revealing, as indeed might the cross-examination of Owens concerning the state of his knowledge concerning the implications of the HIV test result notwithstanding his alleged lack of symptoms. Nevertheless, there is a genuine issue of material fact as to the justifiability of Owens' professed belief.
Owens too seeks summary judgment. Insofar as he does so on the ground that he made no misrepresentation, there is an issue of fact in light of Berkshire's circumstantial evidence that Owens knew full well when he signed the reinstatement application that he was suffering from an incurable, inevitably fatal, disease or that Owens' beliefs, even if sincerely held, were unjustified. The motion is equally without merit insofar as it rests on the assertion that the policy had become incontestable, as the incontestability clause permits the carrier to deny coverage on the ground of fraud without regard to time. Hence, if Berkshire establishes that Owens made a material fraudulent misrepresentation, the incontestability clause will be of no help to Owens.
The Court assumes that Berkshire would have denied reinstatement had it known that Owens was HIV positive. It therefore may seem harsh to deny its motion for summary judgment in light of the fact that Owens did not disclose that fact to it. Berkshire, however, could have protected against the situation in which it now finds itself simply by asking whether the applicant ever had tested positive for HIV. By failing to do so, and by depending instead on the vague and subjective representation that it put in its application form, it created for itself precisely the risk that has matured in this case. As the Berkshire form quite plainly makes Berkshire's ability to avoid the policy depend upon the subjective beliefs of the applicant and the justifiability of these beliefs, and as there are genuine and material issues of fact on both those points, Berkshire is not entitled to summary judgment.
The cross-motions for summary judgment are denied.
Dated: January 10, 1996
Lewis A. Kaplan
United States District Judge