408 F. App'x 452
2d Cir.2011Background
- Dormer obtained disability insurance from Northwestern Mutual Life Insurance Co.; district court later rescinded the policies and dismissed her complaint.
- New York law allows rescission after two years when there is a material misrepresentation intended to defraud, per NY Ins. Law § 3216(d)(1)(B)(i).
- The district court found that Dormer intentionally misrepresented medical history (e.g., chronic fatigue syndrome, Bell’s palsy, back pain) on applications and had a pattern of minimizing adverse medical history.
- Northwestern’s underwriting guidelines and trial testimony indicated that full disclosure would have led to denial of Dormer’s applications.
- Dormer challenged the district court’s factual findings on intent; the district court’s credibility determinations were deemed to support a finding of fraud.
- The Second Circuit affirmed, holding that the evidence supports intentional misrepresentation and materiality, justifying policy rescission.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether misrepresentations were material and intended to defraud | Dormer contends misrepresentations were not intended to defraud. | Northwestern asserts representations were material and intended to defraud. | Material and intentional misrepresentations shown. |
| Whether Dormer’s intent to defraud was clearly established | Dormer argues lack of clear intent to defraud. | Northwestern relies on a pattern of false disclosures and credibility lapses. | Record supports district court’s finding of fraudulent intent. |
| Whether district court credibility findings were properly reviewed | Dormer contends credibility determinations should be revisited. | Northwestern relies on deferential review of credibility. | Credibility findings affirmed; no clear error. |
| Whether New York law supports rescission based on the record | Dormer challenges the legal sufficiency. | Northwestern argues law and record support materiality and intent. | District court’s rescission ruling affirmed under NY law. |
Key Cases Cited
- Ostano Commerzanstalt v. Telewide Sys., Inc., 880 F.2d 642 (2d Cir. 1989) (credibility and intent in fraud findings may be reviewed for clear error)
- Wade v. Orange County Sheriff’s Office, 844 F.2d 951 (2d Cir. 1988) (deference to district court credibility determinations)
- JP Morgan Chase Bank v. Altos Hornos de Mex., S.A. de C.V., 412 F.3d 418 (2d Cir. 2005) (reliance on underlying factual record for fraud determinations)