400 S.W.3d 670
Tex. App.2013Background
- Medicus, a physician malpractice insurer, issued a one-year policy to Dr. Todd in 2006 after a favorable underwriting despite a serious prior claims history.
- Dr. Todd provided a partially completed two-page Medicus application and a credentialing form; he falsely denied prior investigations and misrepresented claims history on the credentialing form.
- Medicus later discovered undisclosed lawsuits and Texas Medical Board investigations; it canceled the policy and sought declaratory relief that Medicus was not bound and had no defense/indemnity obligation.
- The trial court instructed the jury on the general law and later, after excluded exhibits were revealed to have been in the jury room, Medicus moved for mistrial and new trial; the jury found no material misrepresentation intentional deception and awarded Todd attorney’s fees.
- The court denied a mistrial; Medicus appeals on misrepresentation, jury instructions, admission of exhibits, and mistrial impact, ultimately affirming the judgment for Todd.
- The court expressly discusses the applicability of the Texas Insurance Code section 705.004 and the longstanding requirement that an insured’s intent to deceive be proven to void a policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether intent to deceive is required under 705.004 | Medicus argues intent is not required under 705.004 | Todd argues intent is required by law | Intent required; insurer must prove intent to deceive. |
| Whether the trial court erred by not submitting Medicus’s 705.004 jury question | Medicus seeks a question incorporating intent to deceive | Todd opposes due to lack of substantially correct wording | No reversible error; question not in substantially correct wording. |
| Whether exclusion of Exhibits 11A, 51, and 52 was an abuse of discretion | Exhibits would prove Todd’s false history and intent to deceive | Documents were unreliable (signatures contested) or prejudicial | No abuse; exhibits properly excluded. |
| Whether denial of mistrial after jurors reviewed excluded exhibits was error | Mistrial warranted due to jury misconduct | No probable injury from misconduct; review showed no prejudice | No reversible error; denial of mistrial affirmed. |
Key Cases Cited
- Mayes v. Massachusetts Mut. Life Ins. Co., 608 S.W.2d 612 (Tex. 1980) (five Mayes elements required to void a policy for misrepresentation)
- Union Bankers Ins. Co. v. Shelton, 889 S.W.2d 278 (Tex. 1994) (insured’s intent to deceive required for misrepresentation defense)
- Clark v. Nat’l Life & Accident Ins. Co., 200 S.W.2d 820 (Tex. 1947) (early articulation of misrepresentation principles (intent to deceive))
- Shelton (cited as Union Bankers Ins. Co. v. Shelton), 889 S.W.2d 278 (Tex. 1994) (clarified intent-to-deceive requirement across insurance types)
- Mayes v. Massachusetts Mut. Life Ins. Co. (Mayes elements), 608 S.W.2d 612 (Tex. 1980) (five elements including intent to deceive)