Certain Underwriters at Lloyd's, London v. Cohen
2015 U.S. App. LEXIS 7423
| 4th Cir. | 2015Background
- MD underwriters sue Dr. Cohen seeking declaratory relief that policies were properly rescinded for misrepresentations on insurance applications.
- Dr. Cohen submitted initial disability insurance applications April 1, 2011; final applications signed August 8, 2011.
- Three application questions at issue: actively at work; any fact that could change occupation/financial stability; party to any legal proceeding.
- Maryland Board of Physicians issued a consent order suspending Cohen’s license on August 12, 2011; suspension effective August 2, 2011 for three months.
- Underwriters learned of the Consent Order during investigation and proceeded to rescind; district court granted summary judgment to Underwriters; Cohen appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Ambiguity of policy questions and materiality | Cohen misrepresented facts; questions unambiguous | Questions ambiguous; interpretations support Cohen | Ambiguity exists; summary judgment improper; remand for extrinsic evidence |
| Admissibility of Maryland Board Consent Order | Consent Order admissible under Maryland law | Order inadmissible absent express consent | Order inadmissible absent express consent; remand instructed on evidentiary handling |
Key Cases Cited
- Stumpf v. State Farm Mut. Auto. Ins. Co., 251 A.2d 362 (Md. 1969) (misrepresentation elements in Maryland insurance applications)
- Monumental Life Ins. Co. v. Taylor, 129 A.2d 103 (Md. 1957) (determine falsity and materiality of misrepresentations)
- Pac. Indem. Co. v. Interstate Fire & Cas. Co., 488 A.2d 486 (Md. 1985) (ambiguity analysis and contract interpretation)
- Cheney v. Bell Nat'l Life Ins. Co., 556 A.2d 1135 (Md. 1989) (extrinsic evidence may cure ambiguity in insurance applications)
- Roe v. Doe, 28 F.3d 404 (4th Cir. 1994) (state-law interpretation in diversity context)
- Unnamed Physician v. Commission on Medical Discipline, 400 A.2d 396 (Md. 1979) (statutory admissibility of board orders; public nature not controlling)
- Jones v. State, 647 A.2d 1204 (Md. 1994) (statutory construction principles; harmonization of related provisions)