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CARDEN v. FIRST UNUM LIFE INS. CO.

April 21, 1999

THOMAS J. CARDEN, PLAINTIFF,
v.
FIRST UNUM LIFE INSURANCE COMPANY, DEFENDANT.



The opinion of the court was delivered by: Griesa, Chief Judge.

Opinion

Plaintiff Carden brings this action to recover disability benefits under an insurance policy defendant First Unum issued to Carden on November 15, 1993. First Unum moves for summary judgment.

The motion is denied.

Carden applied to First Unum for disability insurance. The application contained answers to various standard questions concerning Carden's health and medical history. On November 11, 1993 First Unum issued a policy to Carden with an effective date of November 15, 1993. On December 1, 1993 Carden made his first premium payment on the policy.

As a condition precedent to the effectiveness of the insurance policy, all answers provided in the application for insurance completed in September and October 1993 were required to remain true and complete as of December 1, 1993 when Carden made his first premium payment on the policy.

In January 1997, more than three years after the policy was issued, Carden filed a claim for disability with First Unum. First Unum denied the claim.

First Unum makes two arguments in support of its present motion as to why it is not liable under the policy and is entitled to summary judgment. The first argument is that Carden made fraudulent misrepresentations concerning the condition of his health when he applied for the insurance and that First Unum therefore has a defense to payment of benefits under the terms of the policy. The second argument is that because Carden's misrepresentations in the application remained uncorrected as of the date of his first premium payment, he failed to comply with the condition precedent to the effectiveness of the policy, rendering it void ab initio.

The policy First Unum issued to Carden contains a provision allowing First Unum to disclaim benefits during the first two years after the effective date of the policy for a disability claim based on a preexisting condition that was undisclosed or misrepresented in the application. The applicable section provides:

Preexisting Condition Limitation.

  This policy does not pay benefits which are based on a preexisting
  condition if:
  1. the preexisting condition is not disclosed or is misrepresented in
     the application; and
  2. the preexisting condition causes a disability or other loss during
     the first two years after the effective date of the coverage.
  Benefits will not be paid if they are based on disability that began
  before the ...

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