Gaunt v. John Hancock Mutual Life Insurance Co.

Gaunt completed an application for an insurance policy with John Hancock Mutual Life Insurance Company (John Hancock) (defendant) through one of its solicitors, Kelman. A clause in the application stated that “if the Company is satisfied that on the date of the completion of Part B of this application I was insurable . . . and if this application . . . is, prior to my death, approved by the Company at its Home Office, the insurance applied for shall be in force as of the date of completion of said Part B.” The application included language directing Gaunt to select either “Date of Part B” or “Date of issue of Policy” as the effective policy date. Gaunt signed the application and paid the first premium. Kelman gave Gaunt a receipt. Kelman took Gaunt to John Hancock’s examining doctor. The doctor found Gaunt to be insurable and recommended that Gaunt be accepted for coverage. The application, premium, and physician report were delivered to Wholey, John Hancock’s agent. Wholey forwarded these documents, along with his recommendation that John Hancock insure Gaunt, to John Hancock’s home office. A doctor at John Hancock’s medical department approved Gaunt’s application from a medical standpoint. Gaunt was later killed by a gunshot. John Hancock learned of Gaunt’s medical approval on the same day that Gaunt died and never approved his application. Gaunt’s mother, Ms. Gaunt (plaintiff), sued John Hancock, seeking to recover the proceeds of Gaunt’s life-insurance policy. The trial court determined that Gaunt intended his policy to become effective on the date Part B was completed and that, had he lived, John Hancock would have approved Gaunt’s application. But the trial court concluded that under the policy's terms, retroactive coverage only applied if the insurer approved the application before the applicant's death. It therefore dismissed Ms. Gaunt's complaint. Ms. Gaunt appealed.