MEMORANDUM DECISION AND ORDER
Plaintiff, AXA Equitable Life Insurance Company ("AXA"), seeks to rescind a disability income insurance policy issued to defendant, Sylvia Deiana, and to recover all benefits paid to defendant under the contract. Plaintiff claims that the defendant made several material and thus fraudulent misrepresentations about her health history on her insurance application. Presently before this Court is plaintiff's motion for partial summary judgment on the First Count of its Amended Complaint and on defendant's Fourth Affirmative Defense, pursuant to Rule 56 of the Federal Rules of Civil Procedure ("FRCP"). Also before the Court is defendant's cross-motion that plaintiff's First Count-its fraud claim-is time-barred.*fn1 For the reasons that follow, plaintiff's motion is GRANTED in part and DENIED in part, and defendant's motion is GRANTED in full.
The following facts are gathered from the parties' statements pursuant to Local Civil Rule 56.1 of the United States District Courts for the Southern and Eastern Districts of New York, from the pleadings and from affidavits, affirmations and exhibits submitted by the parties in support of their contentions. Any disputes of material fact are noted.
On July 14, 1992, Deiana completed and executed an application for a disability income insurance policy with AXA. See Pl. Ex. 1, Verdi Aff., Ex. A, Application For Non-Cancellable [sic] Disability Insurance [hereinafter "Application"]. The Application required defendant to answer if she had "ever been treated for or had any known indication of" particular diseases. Application at Part II, ¶ 3. Defendant answered "no" to the following*fn2
-- [Having] "[e]motional, psychological, mental or nervous system disease or disorder; convulsions or epilepsy," id. ¶ 3(b); -- [Being] "a patient in a hospital, clinic, sanatorium, or other medical facility," id. ¶ 5(b); and -- [Having] "within the past 5 years... [h]ad any illness, injury, or surgery," id. ¶ 5(d).
Defendant left unanswered ¶ 5(a), which asked whether defendant had, within the past five years, "[c]onsulted or been examined or treated by any physician or practitioner, or visited a psychiatrist, psychologist, psychiatric social worker, psychotherapist or counselor for any reason." Id. ¶ 5(a).
Above Deiana's signature, the Application contained the following provision: The undersigned certify [sic] that (1) the Proposed Insured has read, or had read to him or her, the completed application and (2) the Proposed Insured realizes that any false statement or misrepresentation in the completed application may result in loss of coverage under the policy.... The statements and answers in all parts of this application are true and complete to the best of my knowledge and belief and are made to induce The Equitable*fn3 to enter into this Agreement and to issue any policy which may be issued upon this application.
Application at 4. Subsequently, AXA approved and issued to defendant a Disability Income Insurance Policy, numbered 92711188 ("Policy"), effective July 14, 1992. See Def. Ex. 1. The Policy states that:
After this policy has been in force during your lifetime for two years from the Effective Date, misstatements (except for fraudulent misstatements) made by you in the application cannot be used to void this policy or to deny a claim for Loss incurred or Disability that starts after the end of such two year period.
Id. at 8. More than seven years elapsed thereafter without incident or claim.
In February 2000, defendant made a disability claim under the Policy resulting from pregnancy-related asthma. Amended Complaint ¶ 14. Plaintiff paid $46,240 in connection with this claim, and defendant returned to work on June 11, 2001. Id.; Pl. Ex. 1, Verdi Aff. ¶ 27; Def.'s Opp. at 4. In November 2002, defendant was diagnosed with a brain tumor and underwent surgery to remove the tumor, leaving defendant disabled. See Def. Exs. 3-4 (collection of medical records). Defendant timely notified plaintiff, through its third-party claims administrator, Disability Management Services, Inc. ("DMS"), that she intended to make a second claim for benefits under the Policy.
Pl. Ex. 1, Verdi Aff. ¶ 11; Def. Ex. 2 (Letter from Amy M. Champigny, DMS, to Sylvia Deiana (Nov. 19, 2002)). Plaintiff paid defendant $224,400 in connection with this second claim. Pl.'s Statement of Undisputed Mat. Facts in Support of its Mot. for Partial Sum. Judgment ¶ 30 [hereinafter "Pl. Rule 56.1 Facts"]; Def. Rule 56.1 Resp. ¶ 30.
During its investigation of the second claim, plaintiff learned that defendant misrepresented certain information about her health and medical history on the Application. See Pl. Ex. 1, Verdi Aff. ¶ 12; Def. Rule 56.1 Resp. ¶ 14 (acknowledging the misrepresentations but denying they were fraudulent or material). Specifically, plaintiff learned that defendant had been admitted as an inpatient at White Plains Hospital Center just sixteen months before the date of the Application, at which time defendant was allegedly diagnosed with Major Affective Disorder and Bipolar Disorder. Pl. Ex. 1, Verdi Aff. ¶ 13.*fn4 Plaintiff contends that in the discharge notes from White Plains Hospital, a hospital official states that defendant's eight-day hospitalization was preceded by a period of "manic behavior" followed by "depressive ideation," including defendant's desire to kill herself. Id.
During its investigation, plaintiff also discovered from White Plains Hospital that defendant received outpatient psychiatric care prior to her hospitalization, and was treated with Valium, sleeping pills, and anti-depressants. Pl. Ex. 1, Verdi Aff. ¶ 14. The information further described that in 1985, shortly after said outpatient care, defendant was treated by Dr. Kutallipin, who prescribed anti-depressive medication. Id. The hospital also noted that defendant made two suicide attempts in the mid-1980s.*fn5 Id. ¶ 15. Plaintiff also learned that Dr. Blumenfeld, a psychiatrist, treated defendant from March 16, 1991 through May 13, 1992-just two months before defendant signed the disability income insurance Application. Id. ¶ 16. See also Pl. Ex. ...