Ney v. Farm Bureau Life Ins. Co.

1

No. 111,016

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

MICHAEL NEY,
Appellant,

v.

FARM BUREAU LIFE INSURANCE COMPANY,
Appellee.


SYLLABUS BY THE COURT
1.
Where a policy of insurance is issued to an insured in compliance with the
requirement of a statute, the pertinent provisions of the statute must be read into the
policy, and no provisions of the policy in contravention of the statute can be given effect.

2.
K.S.A. 40-420(2) requires that a life insurance policy contain a contestability
clause limiting the time frame in which the insurer can challenge the insured's
representations in securing coverage to 2 years from the date when the policy was issued.

3.
If certain conditions are met, K.S.A. 40-420(9) requires reinstatement of a life
insurance policy which has lapsed for nonpayment of premiums.

4.
K.S.A. 40-420, which requires a life insurance policy to contain a contestability
clause limiting the time frame in which the insurer can challenge the insured's
representations in securing initial coverage, also applies to limit the time frame in which
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an insurer can challenge the insured's representations in securing reinstatement of a life
insurance policy which has lapsed for nonpayment of premiums.

5.
Under K.S.A. 40-420(9), the grounds for contesting a life insurance policy that has
been reinstated after lapse for nonpayment of premiums are limited to fraud or
misrepresentation of material facts pertaining to the reinstatement. After policy
reinstatement, the time frame in which an insurer can challenge the insured's
representations in securing reinstatement is the same as the 2-year time frame in which
the insurer was permitted to challenge the insured's representations in securing the
original life insurance policy under K.S.A. 40-420(2).

6.
The statutory definition of materiality set forth in K.S.A. 40-418 applies only to
representations made by the insured in securing the original life insurance policy and
does not apply to representations made by the insured in securing reinstatement of that
life insurance policy.

7.
In order to establish that an insured made a fraudulent statement or a
misrepresentation of material fact in seeking reinstatement of a life insurance policy, the
insurer must demonstrate that (1) there was an untrue statement of a material fact made
by the insured or an omission of a material fact, (2) the insured knew the statement was
untrue, (3) the insured made the statement with the intent to deceive or recklessly with
disregard for the truth, and (4) the insurer justifiably relied on the statement and acted to
its injury or damage.



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8.
Although the materiality of a misrepresentation generally is a question of fact and
should be resolved by the trier of fact, materiality becomes a question of law when there
is no dispute as to any fact necessary to establish each of the elements required to prove
fraudulent misrepresentation.

Appeal from Barton District Court; STEVEN E. JOHNSON, judge. Opinion filed May 29, 2015.
Affirmed.

Michael J. Wyatt, of Mann Law Offices, of Hutchinson, for appellant.

Arthur S. Chalmers, of Hite, Fanning & Honeyman L.L.P., of Wichita, for appellee.

Before STANDRIDGE, P.J., GREEN, J., and JOHNSON, S.J.

STANDRIDGE, J.: After the death of Shawn Ney (Shawn), his father, Michael Ney
(Michael), filed a claim under a life insurance contract naming Shawn as the insured and
Michael as the sole beneficiary. Farm Bureau Life Insurance Company (FBL) denied
payment of the death benefit under the policy. Michael then filed a lawsuit seeking the
policy value of the death benefit. The district court granted summary judgment in favor
of FBL. On appeal from the court's judgment, Michael argues the district court
erroneously relied on K.S.A. 40-420(9) to find that FBL could contest payment of the
death benefit under a life insurance policy despite the fact that the policy did not
affirmatively authorize FBL to do so. Michael also argues on appeal that the
misrepresentations made by his son in the application for reinstatement of the lapsed
policy were not material under K.S.A. 40-418.




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FACTS

Shawn was the insured under a $250,000 life insurance policy issued by FBL on
June 25, 2009 (the Policy). On July 10, 2010, Shawn shot his wife and another man,
killing the man. Shawn and his wife divorced in September 2010. After the divorce,
Shawn removed his wife as a beneficiary under the Policy and instead made Michael the
primary beneficiary.

In August 2010, the Policy lapsed due to nonpayment of premiums. FBL sent a
lapse notice informing Shawn that the Policy was no longer in force. The notice stated
that Shawn could apply to reinstate the Policy by answering certain questions contained
in the notice and returning it to FBL along with payment of the unpaid premiums, plus
interest. Michael received the notice and took it and other documents to Shawn at the jail
where Shawn was being held prior to his trial.

Michael did not deliver the documents to Shawn directly but rather gave them to a
staff person at the jail who, in turn, brought them to Shawn. Michael waited 15 or 20
minutes for Shawn to complete the paperwork. Shawn was required to complete a portion
of the notice that read:

"I (we) represent that neither the INSURED NOR ANY OTHER PERSON INSURED
UNDER THIS POLICY has:
"***
"c) consulted or been examined or treated by any physician or practitioner . . .
"***
"Any exceptions to these representations are explained below:
"Name of Person(s) Details of Exception (include names
"With Exceptions(s) of Doctors, Hospitals & Dates):
"___________________ _______________________"

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Shawn signed the lapse notice on September 16, 2010. He did not list any exceptions to
his representations. FBL received Shawn's application to reinstate the Policy, i.e., the
completed lapse notice, on September 24, 2010. On the basis of Shawn's representations
in the application, FBL reinstated the Policy on September 25, 2010. Shawn died on
December 10, 2011.

As the sole beneficiary of the Policy, Michael filed a claim with FBL in late
December 2011. FBL performed an investigation after it received the claim. As a result
of this investigation, FBL discovered that, contrary to Shawn's representations in his
application to reinstate the Policy, Shawn had been examined and treated by several
doctors after June 25, 2009. For example, FBL learned that Shawn visited several doctors
between June 2010 and September 2010 and received diagnoses or treatment for a
number of medical issues, including anxiety, depression, bipolar disorder, diabetes,
migraine headaches, chest pain, and suicidal ideation. FBL also learned that Shawn was
evaluated by a licensed psychologist on August 23, 2010, and September 13, 2010, in
order to determine his competency to stand trial.

In May 2012, FBL denied Michael's claim and rescinded the Policy. Michael filed
a petition naming Farm Bureau Financial Services and Arthur Neil Cordre, the local
insurance agent who accepted Shawn's reinstatement application, as defendants. After
discovering that he had sued the wrong entity, the court permitted Michael to substitute
FBL as a defendant in place of Farm Bureau Financial Services. Thereafter, Michael,
FBL, and Cordre filed cross-motions for summary judgment.

In support of his motion for summary judgment, Michael argued the following
language in the Policy effectively prohibited FBL from denying Michael's claim and
rescinding the Policy: "[FBL] will not contest payment of the death benefit for any
reason after this policy has been in force during your lifetime for two years from the date
of issue . . . ." Although the Policy specifically allowed an insured to reinstate the Policy
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within 5 years of the due date for an unpaid premium under certain conditions, Michael
noted that the Policy did not contain any specific language allowing FBL to contest a
claim for any period after the Policy was reinstated.

In response to Michael's motion for summary judgment, FBL acknowledged that
the Policy did not include specific language allowing it to contest a claim or rescind the
Policy after reinstatement but asserted that the absence of such language was irrelevant
because it had a right to rescind the policy ab initio under the common law. FBL also
argued that K.S.A. 40-420(9) provided a statutory right to rescind the policy on the basis
of fraud or misrepresentation of material facts pertaining to the reinstatement.

The district court granted FBL's motion for summary judgment and denied
Michael's motion. Relying on K.S.A. 40-420(9), the court held the reinstated policy was
contestable on account of fraud or misrepresentation of material facts pertaining to the
reinstatement for 2 years, which was the same contestability period stated in the Policy
when it was originally issued. Finding no reasonable juror could conclude that Shawn
intended anything other than suicide when he overdosed on medication he was taking to
treat his depression, the court held that the omissions in Shawn's application for
reinstatement were material under K.S.A. 40-418 and that, as a result, the Policy was
rendered void.

Michael filed a notice of appeal on December 2, 2013. In March 2014, at the
request of Michael and Cordre, Michael's case against Cordre individually was dismissed
with prejudice by the district court.

ANALYSIS

When the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, show that there is no genuine issue as to any material
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fact and that the moving party is entitled to judgment as a matter of law, summary
judgment is appropriate. The district court must resolve all facts and inferences which
may reasonably be drawn from the evidence in favor of the nonmoving party. When
opposing a motion for summary judgment, an adverse party must come forward with
evidence to establish a dispute as to a material fact. In order to preclude summary
judgment, the facts subject to the dispute must be material to the conclusive issues in the
case. On appeal, the same rules apply; summary judgment must be denied if reasonable
minds could differ as to the conclusions drawn from the evidence. Waste Connections of
Kansas, Inc. v. Ritchie Corp., 296 Kan. 943, 962, 298 P.3d 250 (2013).

Michael argues that it is he, and not FBL, that was entitled to summary judgment.
He argues that because the Policy did not specifically authorize FBL to contest payment
of the death benefit at any time after the initial 2-year contestability period, FBL may not
deny his claim or rescind the Policy.

The parties do not dispute that the contract is silent as to any right of FBL to
contest payment of the death benefit or rescind the policy after the initial 2-year
contestability period. At first glance, the contractual clause establishing that initial
contestability period appears to be absolute, stating that FBL "will not contest payment of
the death benefit for any reason after this policy has been in force during Your lifetime
for two years from the date of issue . . . ." (Emphasis added.) But in addition to the
language of the Policy itself, the Kansas insurance statutes provide important guidance.

K.S.A. 40-420 lists several provisions that must be included in all life insurance
policies issued in Kansas except for industrial insurance, annuities, and pure
endowments. The Policy did not fit into any of these exceptions, so the requirements
listed in K.S.A. 40-420 must be read into the Policy. See Missouri Medical Ins. Co. v.
Wong, 234 Kan. 811, 819, 676 P.2d 113 (1984) ("[W]here a policy of insurance is issued
to an insured in compliance with the requirement of a statute, the pertinent provisions of
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the statute must be read into the policy, and no provisions of the policy in contravention
of the statute can be given effect."). For instance, K.S.A. 40-420(2) requires that all
policies contain:

"(2) A provision that, except as otherwise expressly provided by law, the policy
together with the application, if a copy thereof be endorsed upon or attached to the
policy, shall constitute the entire contract between the parties and shall be incontestable
after it has been in force during the lifetime of the insured for a period of not more than
two years from its date, except for nonpayment of premiums . . . ." (Emphasis added.)

The Policy, in apparent compliance with this subsection, contains a clause limiting FBL's
right to contest payment of the death benefit to a 2-year period following issuance of the
policy.

More relevant to the issue presented on appeal is K.S.A. 40-420(9), which requires
insurance policies contain the following:

"A provision that if in event of default in premium payments the value of the
policy shall have been applied to the purchase of other insurance as provided in this
section, and if such insurance shall be in force and the original policy shall not have been
surrendered to the company and canceled, the policy may be reinstated within three years
from such default, upon evidence of insurability satisfactory to the company and payment
of arrears of premiums and the payment or reinstatement of any other indebtedness to the
company upon its policy, with interest, . . . and that such reinstated policy shall be
contestable only on account of fraud or misrepresentation of material facts pertaining to
the reinstatement; for the same period of time after reinstatement as provided in the
policy with respect to original issue."

Here, the Policy contained contractual language allowing it to be reinstated within
5 years, which was more generous than the law required. Although the contract differed
from the statutory requirement, K.S.A. 40-420 provides that a policy "may be issued or
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delivered in this state which in the opinion of the insurance commissioner contains
provisions on any one or more of the several foregoing requirements more favorable to
the policyholder than hereinbefore required." As noted above, however, the Policy did
not contain any language at all relating to FBL's right to contest payment of the death
benefit for any reason following reinstatement. Michael argues that due to the missing
language, K.S.A. 40-420(2) prohibits FBL from contesting the claim or rescinding the
Policy because Shawn passed away outside of the 2-year time limit established by the
only operative contestability clause actually written in the contract. But the language
included in K.S.A. 40-420(9) lacks any meaning if the K.S.A. 40-420(2) limitation on
contestability/rescission applies to a reinstated policy. If subsection (2) applied, the full 2-
year period "after reinstatement" would never come into play because the Policy had to
first be in place for some period of time in order to lapse and then be reinstated.
Interpreted this way, there would never be a right to contest a reinstated policy once the
original policy had been in force for 2 years. In addition, K.S.A. 40-420(2) contains an
exception that states it does not apply when there has been a nonpayment of premium;
instead, it is K.S.A. 40-420(9) that specifically applies when a policy was lapsed due to
nonpayment. As the district court held, K.S.A. 40-420(9) regarding fraud and
misrepresentation must be incorporated into the Policy.

The provision of K.S.A. 40-420 allowing insurance policies to contain provisions
more favorable to the policyholder arguably allows parties great latitude in fashioning
insurance contracts. However, the Kansas Supreme Court ruled long ago that insurance
contracts are not ordinary contracts where parties may bind themselves as they wish. See
Logan v. Victory Life Ins. Co., 175 Kan. 88, 93, 259 P.2d 165 (1953) (every insurance
policy must contain mandatory statutory provisions no matter what the parties may wish).
"'In Kansas, "where a policy of insurance is issued to an insured in compliance with the
requirement of a statute, the pertinent provisions of the statute must be read into the
policy, and no provisions of the policy in contravention of the statute can be given
effect."'" (Emphasis added.) National Inspection & Repair, Inc. v. Valley Forge Life Ins.
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Co., 274 Kan. 825, 838, 56 P.3d 807 (2002); accord Bank Savings Life Ins. Co. v. Baker,
120 Kan. 756, 758-59, 244 P. 862 (1926) (citing "the general rule that a statute pertaining
to the rights, liabilities or obligations of parties under an insurance contract are construed
as a part of a policy issued when the statute is in force"). Michael acknowledges this
point of law but maintains that the caselaw supporting this well-established rule is
inapplicable here.

Effect of K.S.A. 40-420(9)

First, Michael argues that K.S.A. 40-420(9) does not actually require a life
insurance policy to contain a contestability clause for periods following reinstatement. He
concedes the statute requires insurance contracts to contain clauses allowing for
reinstatement but argues that portion of K.S.A. 40-420 addressing contestability was not
intended by the legislature to be a mandatory insurance contract provision. Instead,
Michael asserts the statute merely limits the scope of such a contestability clause if it is
actually included in a policy. Michael cites no authority or support for this argument
other than the language of K.S.A. 40-420.

The most fundamental rule of statutory interpretation is that the intent of the
legislature governs if that intent can be ascertained. This court must first attempt to
ascertain legislative intent by reading the language of the statute and giving common
words their ordinary meanings. When a statute is plain and unambiguous, this court does
not speculate as to the legislative intent behind it and will not read into the statute
something not readily found in it. Cady v. Schroll, 298 Kan. 731, 738-39, 317 P.3d 90
(2014).

We are not persuaded by Michael's attempt to construe the contestability portion
of K.S.A. 40-420(9) as optional. The subsection contains a single sentence that describes
a provision that must be included in all insurance contracts. The statute first outlines the
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parameters of a reinstatement clause, which Michael concedes is a necessary part of all
life insurance contracts. See K.S.A. 40-420(9). The language then immediately shifts to
the subject of contestability, stating that "such reinstated policy shall be contestable only
on account of fraud or misrepresentation of material facts pertaining to the reinstatement;
for the same period of time after reinstatement as provided in the policy with respect to
original issue." K.S.A. 40-420(9). This portion can only reasonably be read as an
indispensable part of the required provision described in K.S.A. 40-420(9) as a whole.
There is no language in the subsection indicating that parties to an insurance contract may
choose to leave out a clause allowing for contestability of a reinstated policy. If such
action were permitted, none of the requirements laid out in K.S.A. 40-420(9) would have
any real meaning or effect.

Contrary to Michael's position, we conclude the plain and unambiguous language
of K.S.A. 40-420(9) must be incorporated into the Policy. See National Inspection &
Repair, Inc., 274 Kan. at 838. This language requires insurance contracts delivered in
Kansas to allow for contestability after reinstatement with some limitations. The first
limitation is that the only grounds for contesting a policy are fraud or material
misrepresentation of facts pertaining to the reinstatement. Second, the time limit for
contesting payment is the same as the time limit for contesting payment after the policy is
originally issued. K.S.A. 40-420(9). Here, that time limit was 2 years.

Ambiguity

Michael also argues that the Policy is unclear or incomplete and therefore should
be construed liberally as written and without regard to the provisions of K.S.A. 40-
420(9). The Kansas Supreme Court has determined:

"Where the terms of a policy of insurance are ambiguous or uncertain, conflicting, or
susceptible of more than one construction, the construction most favorable to the insured
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must prevail. Since the insurer prepares its own contracts, it has a duty to make the
meaning clear. . . . When an insurance contract is not ambiguous, the court may not make
another contract for the parties. Its function is to enforce the contract as made. [Citation
omitted.]" Farm Bureau Mut. Ins. Co. v. Old Hickory Cas. Ins. Co., 248 Kan. 657, 659-
60, 810 P.2d 283 (1991).

But, "[t]o be ambiguous, a contract must contain provisions or language of doubtful or
conflicting meaning, as gleaned from a natural and reasonable interpretation of its
language." 248 Kan. at 659.

After the provisions of K.S.A. 40-420(9) are incorporated into the Policy, the
contract is not unclear or incomplete. The Policy contained a clause prohibiting FBL to
contest the payment of the death benefit for any reason after 2 years have elapsed from
the date of issue. At first glance, this clause appears to be in conflict with K.S.A. 40-
420(9), which requires a different, additional 2-year period of contestability following an
insurance policy's reinstatement. But the contestability language in K.S.A. 40-420(9)
does not relate to the original application process or the initial contestability clause that is
measured from the policy issue date. Under K.S.A. 40-420(9), the Policy could only be
contested on the basis of fraud or misrepresentations of material facts pertaining to the
reinstatement. The exercise of this right to contest is contingent on a policy lapsing for
default of payments in the first place. So, the contestability language in K.S.A. 40-420(9)
only allows an insurance company to contest a policy based on statements a person made
in order to regain coverage under a policy that had already been terminated and was, at
the time of the statements, not in force. K.S.A. 40-420(9) only governs the reinstatement
process and provides a limited remedy in the event of fraud or material misrepresentation
of facts in an application for reinstatement. As such, incorporating the contestability
language of K.S.A. 40-420(9) into the Policy does not contradict or obfuscate the
contestability language already in the contract. Without such a contradiction, there was
no ambiguity in the Policy to be resolved in favor of the insured.

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For all the reasons stated above, we find FBL was within its authority to contest
payment under the Policy based on allegations of fraud and misrepresentation of material
fact pertaining to reinstatement because Shawn died within 2 years of the date the Policy
was reinstated. But this does not end the inquiry. We now must decide whether FBL
properly denied payment under the policy based on a misrepresentation of a material fact
made by Shawn pertaining to the reinstatement. See K.S.A. 40-420(9).

Materiality

Michael does not dispute that Shawn misstated several facts in the application for
reinstatement; instead, Michael claims only that the factual misstatements were not
material for purposes of seeking to reinstate the policy. In support of this claim, Michael
asserts the test we must apply to determine whether the misstatements were material is set
forth in K.S.A. 40-418, which states:

"No misrepresentation made in obtaining or securing a policy of insurance on the
life or lives of any person or persons, citizens of this state, shall be deemed material or
render the policy void unless the matter misrepresented shall have actually contributed to
the contingency or event on which the policy is to become due and payable."

Under this statute, a false statement or omission made to "obtain or secure" a life
insurance policy is only material if it concerned a cause contributing to the insured's
death. See Andreas, Misrepresentation in Insurance Applications: Kansas Law, 62
J.K.B.A. 22, 24 (May 1993) ("Under Kansas law, an insured may lie or conceal material
information in an application for life . . . insurance and still recover benefits, as long as
the matter misrepresented did not contribute to the loss." [quoted with approval in Chism
v. Protective Life Ins. Co., 290 Kan. 645, 664, 234 P.3d 780 (2010)]).

But our Supreme Court specifically has held that the prior version of K.S.A. 40-
418 (enacted in 1927) does not apply to reinstatement applications. See Brown v.
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Metropolitan Life Ins. Co., 146 Kan. 300, 305, 69 P.2d 1110 (1937). Although a prior
version, the relevant language of the statute was not changed since the original statute
was enacted. Like our case, the issue in Brown was whether a life insurance policy could
be rescinded because of untruthful answers to questions in a written application for
reinstatement of a lapsed policy:

"'4. Are you now in sound health? Yes.
"'6. Have you since date of issue of the above policy—
(a) Had an illness or injury? If yes, give date and particulars. No.
(b) Consulted any physician or physicians? If yes, give date, and name and
address of physician or physicians, and state for what illness or ailment. No.'"
146 Kan. at 302.

After trial, the jury rendered a verdict in favor of Brown's widow. In an attempt to
defend the verdict rendered in her favor, Brown's widow argued on appeal that the
insurance company failed to introduce sufficient evidence at trial to establish that the
misstatements of fact in the reinstatement application were material, i.e., actually
contributed to the death of her husband, as required by the same statutory language in a
prior version of K.S.A. 40-418. The Supreme Court disagreed, finding the questions
posed and the answers provided were material for purposes of rendering the insurance
contract void:

"'Some of the answers were not matters of the belief or opinion of the applicant, but were
matters of fact which he well knew and which he answered falsely. The subject of the
questions must be conceded to be material. It was incumbent upon the applicant to
answer them fairly and truthfully. There should have been absolute good faith in the
answers given, and misrepresentations, evasion or conscious concealment necessarily
operate to defeat the contract of insurance. [Citations omitted.]'" 146 Kan. at 306.

In its findings, the district court expressly declined to apply the same statutory
definition of materiality set forth in the prior version of K.S.A. 40-418. The Brown court
15

explained that 40-418 "refers to original issue of the policy; here we are limiting the
inquiry to the application for reinstatement." 146 Kan. at 305. Instead of 40-418, the
court held that 40-420(9) governed issues related to reinstatement of an insurance
contract, including the one before the court:

"G.S. 1935, 40-420, provides that policies must contain certain provisions, and
subdivision (9) requires provision for reinstatement inter alia 'upon evidence of
insurability satisfactory to the company,' and the policy sued on contained such
provision. In making his application for reinstatement, and in furnishing evidence of
insurability, Brown concealed facts which we think were material to the risk." 146 Kan.
at 305.

Given K.S.A. 40-418 does not apply to reinstatement applications, we apply the
common-law doctrine of fraudulent misrepresentation to determine whether Shawn
misstated or omitted facts material to FBL's risk of reinstating the Policy. See Scott v.
National Reserve Life Ins. Co., 143 Kan. 678, 680, 56 P.2d 76, modified by 144 Kan. 224,
226, 58 P.2d 1131 (1936) (recognizing fraud to be a known misrepresentation or a
nondisclosure). To establish fraudulent misrepresentation in this context, FBL must
show: (1) There was an untrue statement of a material fact made by the insured or an
omission of a material fact, (2) the insured knew the statement was untrue, (3) the insured
made the statement with the intent to deceive or recklessly with disregard for the truth,
and (4) the insurer justifiably relied on the statement and acted to its injury or damage.
See Waxse v. Reserve Life Ins. Co., 248 Kan. 582, 586, 809 P.2d 533 (1991); American
States Ins. Co. v. Ehrlich, 237 Kan. 449, 452, 701 P.2d 676 (1985). "The test generally
applied as to whether a misrepresentation is material, so as to permit the insurer to avoid
its obligation under an insurance contract, is whether the knowledge of the truth would
have reasonably influenced the insurer in accepting the risk or fixing the premium." 237
Kan. at 453.

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In Scott, the Kansas Supreme Court specifically rejected the theory that an insurer
may rescind a policy based on a negligent misrepresentation or omission. It stated:

"Before considering the facts and testimony in the case we may briefly refer to
the legal distinctions that are discussed in the briefs as between fraud and
misrepresentations. A mere misstatement of the actual truth unintentionally made and in
good faith may not amount to fraud. It was said in Mutual Life Ins. Co. v. Wiswell, 56
Kan. 765, 44 P. 996 [(1896)], that a mere misstatement, unless willful and fraudulent,
will not avoid the policy in the absence of a warranty of the truth of the statement. The
following statement from 14 R.C.L. 1021 is helpful in making a proper discrimination:
"'A misrepresentation in insurance is a statement of something as a fact which is
untrue, and which the assured states, knowing it to be untrue, with an intent to deceive, or
which he [or she] states positively as true, without knowing it to be true, and which has a
tendency to mislead, such fact in either case being material to the risk.'" Scott, 143 Kan.
at 679-80.

Typically, the materiality of a misrepresentation is a question of fact and should be
resolved by the trier of fact. Ehrlich, 237 Kan. at 453. But in this case, there is no dispute
as to any fact necessary to establish all the elements of common-law fraudulent
misrepresentation. There is no dispute that Shawn made untrue statements of fact by
representing in his application for reinstatement that he had not been examined or treated
by any physician since the Policy was originally issued. He also knew they were untrue,
as he had experienced several visits to doctors since the Policy was originally issued.
These representations were made for the purpose of providing evidence of his insurability
and with the knowledge that FBL may rely on them. This establishes, at the very least, a
reckless disregard for the truth.

Finally, it is uncontroverted that FBL relied on the statements to its detriment
because, had it known the truth about Shawn's suicidal ideations, it would not have
reinstated the Policy. In its proposed list of uncontroverted facts in its motion for
summary judgment, FBL asserted: "FBL would never have agreed to reinstate the Policy
17

had it known either or both (1) Shawn Ney had, at any time had, suicidal ideations or (2)
was in jail facing criminal charges." In his response, Michael agreed that this fact was
uncontroverted. In other words, the parties did not dispute that Shawn's omissions in his
application for reinstatement relating to his treatment for suicidal ideations affected
FBL's decision to reinstate the insurance contract. And this reliance was justified because
FBL had alerted Shawn in the lapse notice that it may rely on his representations.

Because there is no dispute as to any fact necessary to establish the elements of
common-law fraudulent misrepresentation, FBL was entitled to judgment as a matter of
law.

Affirmed.