Lettieri v. Equitable Life Assurance Society of United States

Alfredo Lettieri (plaintiff) was a New Jersey resident who purchased a life insurance policy from an agent he met in a bar in New York City. Lettieri’s son and wife were ultimately named beneficiaries under the $400,000 policy Equitable Life Assurance Society of United States (Equitable) (defendant) issued. Lettieri underwent a medical examination in New York City from a Dr. Martin, but neither Dr. Martin’s submitted medical history nor his examination reports mentioned several significant issues, such as Lettieri’s prior addiction to heroin, hospitalization for alcohol-related problems, or Lettieri’s liver disease or alcoholism. Within four months of inception of the policy, Lettieri passed away due to a bleeding ulcer partially caused by excessive alcohol consumption. At that point, Equitable denied liability under the policy. Equitable’s defense was a right to rescind the policy based on the insured’s misrepresentation or concealment of material facts about medical history or health. Lettieri’s son and wife then filed suit against Equitable in California, where the son lived. The choice-of-law question—whether California or New York law would apply to the suit—arose and was relevant because although both states allowed insurers to avoid liability based on material misrepresentation, the law was more proinsurer in New York. New York law provided an absolute right to rescind if the policy application contained false statements or omissions. Meanwhile, California’s law allowed an opportunity to offer a plausible explanation for the misstatements or omissions. In this case, the explanation was that Lettieri was honest about his history but did not want his family to know, so Lettieri and Dr. Martin tendered one medical history to be supplemented by a confidential and accurate report. In this matter, the court would apply California’s choice-of-law rule, which posited a governmental-interest test. However, each party took a different opinion of whose interests would be most hampered by application of which state law.