Berger v. Minnesota Mutual Life Insurance Co. of St. Paul, Minnesota

Although David Berger had been treated for diabetes several times, he failed to list the disease on his medical history when, in 1979, he applied to Minnesota Mutual Life Insurance Company (Minnesota Mutual) (defendant) for life insurance. Three years later, a codeine overdose killed David, who might have survived but for possible diabetes-related complications. David’s widow, Anna Marie Berger (plaintiff), filed a claim on her husband’s life insurance. Minnesota Mutual learned of David’s previously undisclosed diabetes and refused to pay the claim. Anna Marie sued to enforce David’s policy, basing her claim on an old Utah statute that made life-insurance policies avoidable only for material misrepresentation made with an intent to deceive. That statute was amended in 1963. The new law, which was still in force in 1979, made a life-insurance policy avoidable for fraud, material misrepresentation, or a misrepresentation or withholding of facts that would have caused the insurer to deny coverage. Based on unrebutted trial evidence, a jury found that although David’s failure to disclose his diabetes was not fraudulent and diabetes did not cause David’s death, nondisclosure was material to Minnesota Mutual’s decision to insure David’s life. The jury also found that had Minnesota Mutual known of David’s diabetes, the company would have denied David’s application for insurance. The trial court entered judgment for Minnesota Mutual, and Anna Marie appealed to the Utah Supreme Court.