United States District Court, D. Connecticut
MEMORANDUM OF DECISION
BOND ARTERTON, U.S.D.J.
14 through 17, 2016, the Court held a bench trial on
Plaintiff Principal National Life Insurance Company
("Principal")'s action against Defendants Emily
C. Coassin and Thomas Gibney in their capacities as
Co-Trustees of the Lawrence P. Coassin Irrevocable Trust
dated 6/23/1999 ("the Trustees"), for rescission of
the life insurance policy ("the Policy") Principal
issued to Larry Coassin and for a declaratory judgment that
the Policy is void ab initio and Principal is not
liable to pay benefits under it, as well as Defendants'
cross-claim for breach of contract and a declaratory judgment
of the Trustee's and Trust's rights under the policy.
For the following reasons, the Court concludes that Mr.
Coassin's knowing misrepresentations on his life
insurance application were not material, and as such, the
Policy was not void ab initio and Principal did not have a
right to rescind it. Judgment is entered in Defendants'
favor on its cross-claim.
following background facts were established at the summary
judgment stage. On April 9, 2012, Larry Coassin submitted an
application to Principal for a $10, 000, 000 life insurance
policy at a preferred rate to replace a MetLife life
insurance policy for $10, 000, 000 which Mr. Coassin had been
issued in 2011. (See Ruling Mot. Summ. J. [Doc. #
90] at 1-2; Policy, Pl.'s Trial Ex. 1.) Among the
questions in the application were: No. 18(j) "In the
last ten years, have you had, been treated for or diagnosed
as having . . . any disease or disorder of the eyes, ears,
nose, throat or skin?, " to which Mr. Coassin answered
"no"; and No. 21 "Date last seen" by
primary physician and reason, to which Mr. Coassin responded,
"Nov 2011 - sinus infection - all fine
now." (Ruling Mot. Summ. J. at 2; Policy at
28-29). On April 17, 2012, Principal issued Policy No.
4701113 ("the Policy") to the Lawrence P. Coassin
Revocable Trust dated 6/23/99, effective February 22, 2012
(the Policy was backdated Mr. Coassin's request), subject
to the requirements that Mr. Coassin complete an Amendment
form ("the Amendment"), Supplemental Statement of
Health ("the Supplement"), and Acknowledgment and
Delivery of Receipt, and pay the first annual premium.
(Ruling Mot. Summ. J. at 2.)
Amendment, signed by Mr. Coassin and then-Trustee David
Hadden on April 25, 2012, stated: "With application
amended to show response to question 18J, Part B; yes,
earache with dizziness, lightheadedness and vertigo 12/11.
Resolved completely without recurrence. No further MD visits
needed." (Id. at 2; see Policy at 21.)
The Supplement, also signed by Mr. Coassin on April 25, 2012,
asked "Have you had any illness or injury or consulted a
member of the medical profession since the date of the
application?" to which Mr. Coassin responded
"no." (Ruling Mot. Summ ). at 2; see
Policy at 22.) The Policy was issued the same day. (Ruling
Mot. Summ.). at 2; see Policy Issuance, Pl's Trial Ex.
fact, the Court found at summary judgment, Mr. Coassin
continued to experience three of the four symptoms listed in
the Amendment after his December 2011 appointment, and he saw
Dr. Hirokawa on April 17, 2012 (after the date of his April
9, 2012 application and before he signed the April 25, 2012
Amendment). (Ruling Mot. Summ. J. at 10, 11.) His medical
records reveal that he saw Dr. Hirokawa for weakness/fatigue,
off balance/dizziness, and lightheadedness, and that because
of these symptoms, on April 17, 2012, Dr. Hirokawa referred
him for further testing to be conducted on May 8, 2012.
(Id.; see Hirokawa Record Apr. 17, 2012, Pl.'s
Trial Ex. 4; Auditory Test Results, Pl.'s Trial Ex. 5.)
The Court thus concluded that Mr. Coassin had made knowing
misrepresentations in his application. (Ruling Mot. Summ. J.
at 10-11.) However, the Court found genuine issues of
material fact with respect to the question of whether Mr.
Coassin's knowing misrepresentations were material, thus
necessitating a trial, which addressed only the narrow issue
Findings of Fact and Conclusions of Law
making its findings of fact and conclusions of law, the Court
applies the following standard of materiality, which it
adopted in its summary judgment ruling:
Under Connecticut law, "a fact is material if 'it
would so increase the degree or character of the risk of the
insurance as to substantially influence its issuance, or
substantially affect the rate of premium.'"
F.D.I.C. v. Great Am. Ins. Co., 607 F.3d 288, 295
(2d Cir. 2010) (quoting Pinette v. Assurance Co. of
Am., 52 F.3d 407, 411 (2d Cir. 1995)). "'The
test of materiality is in the effect which the knowledge of
the fact in question would have on the making of the
contract.'" Quinn v. Fed. Kemper Life Assur.
Co., 99 F.3d 402, at *2 (2d Cir. 1995) (unpublished
opinion) (quoting State Bank & Trust Co. v.
Connecticut General Life Ins. Co., 145 A. 565, 566
(Conn. 1929)).... [A]n answer to a question on an insurance
application is presumptively material, "
Pinette, 52 F.3d at 411 (emphasis added); see
also Great Am. Ins. Co., 607 F.3d at 295 ("[Because
the insured's] prior losses were the subject of specific
inquiry, [the insured's] response is presumptively
material"), and an inquiry into whether the insurer
would have issued the policy had the applicant been truthful
on the application is therefore appropriate, see
Quinn, 99 F.3d at *2 ("As Kemper would not have
issued the preferred policy to Albert Quinn had he answered
the questions truthfully, the misrepresentations were
material as a matter of law.").
the Court already held in its summary judgment ruling that
Mr. Coassin had made knowing misrepresentations in response
to questions on his application, a presumption of materiality
applies. The burden is thus on Defendants to prove, by a
preponderance of the evidence, that Mr. Coassin's
misrepresentations were not material.
that legal standard in mind, the Court makes the following
findings of fact and conclusions of law, based on the
evidence presented at trial, with respect to: (1) Mr.
Coassin's medical history up to June 2012; (2)
Principal's contestability review; (3) the relevant
guidelines; (4) whether Principal would have issued the
Policy had it known the true facts; and (4) Defendants'
cross-claim for breach of contract.
Coassin's Medical History
December 15, 2011, Mr. Coassin saw Dr. Lorenzo Galante, who
was his primary care physician at the time, for
lightheadedness. (Galante Record Dec. 15, 2011, Defs.'
Trial Ex. 504. at 1.) His records note under "History of
Present Illness" that Mr. Coassin was complaining of
vertigo which he claimed he had experienced "in the past
on and off' and which he had previously been told was
benign positional vertigo ("BPV"). (Id.)
Under "Examination, " Dr. Galante noted that he had
been "able to reproduce vertigo in the office" when
he asked Mr. Coassin "to sit up from [a] laying down
position." (Id.) Under "Assessments,
" he wrote, as relevant here, "Dizziness" and
"Vertigo." (Id.) Finally, under
"Treatment, " he noted: "This is recurrent
BPV, the Differential diagnosis was described/discussed to
the [patient] and he declines necessity to eval[uate] with
other tests recommended: labs ecg etc... he states [he] had a
life insurance exam [with] labs ecg 1 week ago and everything
is normal." (Id. at 2.)
months later, on April 17, 2012, Mr. Coassin saw Dr. Ronald
Hirokawa, a head and neck surgery specialist and an ear,
nose, and throat ("ENT") specialist, at his office
in Ansonia for dizziness and lightheadedness, which he said
he had been experiencing for the past six months.
(See Hirokawa Record Apr. 17, 2012.) Mr. Coassin
reported (as memorialized in Dr. Hirokawa's notes) that
his symptoms occurred when he stood up, and that they were
worse in the mornings. (Id.) He also reported neck
pain on his left side which radiated to his left ear.
(Id.) Dr. Hirokawa's examination of Mr. Coassin
revealed nothing remarkable, but he nonetheless ordered a
basic audiometric test, a videonystagmography
("VNG") test, and an auditory brainstem response
("ABR") test to be performed in his office on May
8, 2012. (Id.) He explained at trial that he ordered
the testing to determine the cause of Mr. Coassin's
dizziness because it was atypical for someone to experience
dizziness for such a long period of time.
results of the tests, conducted by audiologist P. DeWitt,
were as follows. The basic audiogram, which Dr. Hirokawa
testified is essentially a hearing test, revealed normal
tympanograms on both ears, indicating normal middle ear
functioning. (See Auditory Test Results at 7.) The
ABR test, which measures how quickly a sound signal goes from
the ear to the brain, revealed normal left and right ears,
but when both ears were tested, there was some delay in III-V
interpeak latency. (See Id. at 2.) Dr. Hirokawa
testified that the difference in the ranges was 0.24 (see
Id. at 3), which is very slightly above where it should
have been. Neurologist Dr. Samuel Potolicchio added that the
results were "so border-line" they "were
almost normal." However, the audiologist determined that
based on the results, retrocochlear (meaning between the
inner ear and brain) pathology could not be ruled out.
(Id. at 2.) In other words, according to Dr.
Hirokawa, the audiologist could not determine based only on
the testing whether there was a problem in the nerve that
carries the signal from the ear to the brain or in the brain
itself. The audiologist recommended that Mr. Coassin follow
up with Dr. Hirowkawa. (Id.)
test, the final test the audiologist conducted, was actually
a series of tests used to determine if there is a normal
response between the inner ear and brain. Of the VNG tests
the audiologist performed, two returned abnormal results: the
Dix-Hallpike Right and the Positional Head tests. (See
Id. at 1.) The Dix-Hallpike Right test entailed suddenly
thrusting Mr. Coassin in a backwards position while he was
lying on his back, on the right side. When this was
performed, Mr. Coassin's eyes flickered to the left, then
came back to the right, and then went back left. When the
test was repeated, however, this did not occur. (See
id.) The audiologist reported that this was a
"non-localizing sign, " meaning (as Dr. Hirokawa
testified) that the testing did not reveal whether Mr.
Coassin had only an inner-ear problem or something else.
(See id) The positional head test showed a
"down-beating nystagmus" in the supine position
(id.), a result Dr. Hirokawa testified was not
commonly associated with BPV, but which, Dr. Potolicchio
asserted was sometimes seen in people with BPV. Additionally,
Mr. Coassin reported significant dizziness when he lay down
during the test. (Id.) The audiologist noted:
"This is a sign of [a central nervous system
('CNS')] lesion" (id.), though Dr.
Hirokawa was somewhat more equivocal in his testimony,
stating that it could be sign of a CNS lesion.
Hirokawa spoke with Mr. Coassin on the phone on May 10, 2012,
at which time he told him that the VNG test results were
abnormal, there was a question about whether he had a central
nervous system abnormality or lesion, and that based on the
ABR test results, a retrocochlear lesion could not be ruled
out. (See Hirokawa Notes May 10, 2012, Defs.'
Trial Ex. 513 & PL's Trial Ex. 6.) As a result, he
ordered an MRI, which was conducted by radiologist Richard
Becker on May 31, 2012. (See Radiology Report,
PL's Trial Ex. 7.) Dr. Becker's report notes a
diagnosis of vertigo, and states that an MRI without contrast
was performed and revealed "[s]light patchy long TR
hyperintensity in the frontal lobe." (Id.)
Although this "white matter" was "nonspecific,
" Dr. Becker stated that it "likely represent[ed]
mild age-related ischemic change." (Id.) He
added that "[d]emyelinating disease and other
possibilities are considered less likely although not
excluded." (Id.) Finally, he noted, "[n]o
abnormal mass is seen." (Id.)
Hirokawa testified that he had ordered the MRI because he
wanted to look at the posterior aspect of the brain, which is
where one would generally expect to see something causing
vertigo or dizziness. While the scan revealed nothing in the
posterior part of the brain and no indication of a tumor or
lesion, the MRI was "not exactly normal, " and so
when Dr. Hirokawa spoke to Mr. Coassin on June 2, 2012, he
recommended that he seek a consult with a neurologist.
(See Hirokawa Notes June 2, 2012, PL's Trial Ex.
8.) Mr. Coassin responded that he had a brother-in-law who
was a neurologist, and Dr. Hirokawa thus recorded in his
records "Rec: Neurology consult (Brother-in-Law)."
weekend of June 2, 2012, Mr. Coassin's wife, Emily
Coassin, fedexed Mr. Coassin's MRI results to his
brother-in-law, Dr. Samuel Potolicchio, who spoke with Mr.
Coassin on the phone a day or two later (Dr. Potolicchio did
not examine Mr. Coassin). He testified that during that
conversation, he told Mr. Coassin that his MRI was for the
most part normal. There was no structural lesion in the brain
to suggest a tumor. The only reported finding, tiny white
spots, were, he said, very common and non-specific (in other
words, one could see such spots in people who are ageing,
people with migraines, etc.). Although Dr. Potolicchio
admitted that he did not know about Mr. Coassin's
abnormal VNG and ABR tests at the time, he also testified
that had he seen the testing results, it would not have
changed his evaluation of the MRI. After reviewing the MRI
and talking to Mr. Coassin, he testified, he believed Mr.
Coassin most likely had BPV because his symptoms were
episodic and not progressive. He told Mr. Coassin he was
fine, and he did not recommend any further testing or
evaluation. He took no notes on his conversation with Mr.
Coassin. Mr. Coassin's wife, Emily Coassin, testified
that when Mr. Coassin got off the phone with Dr. Potolicchio,
he started dancing around the room, pointing at his daughter
and saying "my brain's better than your brain."
She added, he was relieved; everything was fine.
Potolicchio never communicated his analysis to Dr. Hirokawa.
However, Dr. Hirokawa testified that had Dr. Potolicchio done
so, he would not have referred him to any other doctors or
given him any additional treatment.
months later, in November 2012, Mr. Coassin was diagnosed
with a brain tumor, which appeared on a second MRI taken at