The opinion of the court was delivered by: INFANTE
I. Introduction and Background
Plaintiffs Kathleen Q. Trinh and Duane Xuan Trinh ("plaintiffs"), who are brother and sister, filed this breach of contract action in state court as third-party beneficiaries of their mother's life insurance policy with defendant Metropolitan Life Insurance Company ("Met Life"). Met Life noticed removal of the action to federal court in San Jose and now moves for summary judgment contending that the insurance policy was void due to material misrepresentations made by the insured in her application.
For the reasons set forth below, Met Life's motion is DENIED.
A. The Life Insurance Application
On or about June 19, 1991, Mrs. Minh Ngoc Thi Luu ("Ngoc Luu"), a 55-year-old, Vietnamese-born San Jose resident, applied for a $ 150,000 life insurance policy with Met Life. Listed as beneficiaries on the application were the two plaintiffs. Ngoc Luu was asked whether or not she:
"Ever received treatment, attention, or advice from any physician, practitioner, or health facility for, or been told by any physician, practitioner, or health facility that such person had heart trouble, chest pain, high blood pressure, diabetes, lung disease, tumor, or cancer?
"Ever had any surgical operation not revealed in previous questions or gone to a hospital, clinic, dispensary, or sanitarium for observation, examination or treatment no revealed in previous questions?"
In response to both questions, Ngoc Luu checked "no."
Also as part of the application process Ngoc Luu's attending physician was required to submit a statement about her health. That statement does not mention any health problems which Ngoc Luu suffered, nor does it indicate that she had been recently hospitalized.
Finally, Ngoc Luu underwent an independent medical examination. During the examination Ngoc Luu was again asked whether or not she had ever received treatment, attention, or advice about a tumor or polyp and whether or not she had been to a hospital or had surgery for any reason not previously listed. Again, she answered "no" to both questions.
On or about July 12, 1991, Met Life issued to Ngoc Luu a one-year life insurance policy in the amount of $ 150,000.
The policy was renewable and had monthly premiums of $ 43.00. Benefits were to be paid to the insured's beneficiaries if she were to die during the initial term or a renewal term of the policy. In addition, the policy contained a clause providing that Met Life would "not contest the validity of [the insured's] policy after it has been in force during the insured's lifetime for 2 years from the date of policy, except for nonpayment of premiums."
B. Ngoc Luu's Medical History
Following Ngoc Luu's death in January 1993, within 2 years of the date the policy was first issued,
Met Life investigated her medical history. Records obtained from various medical providers showed that, on March 19, 1991, contrary to the information given on the application, Ngoc Luu had had a CT scan performed at the San Jose Medical Center. The results of the scan indicated that she had a meningioma on her brain.
It is not clear whether she was informed of the results of the test or her long-term prognosis.
Less than three months later, on June 4, again contrary to the information provided on the insurance application, Ngoc Luu was admitted to the Santa Clara Valley Medical Center "with a severe progressive headache, memory loss, difficulty walking, right upper and lower extremity weakness, and right-sided numbness and paresthesias."
After undergoing a CT scan and a MRI, she was diagnosed with a "large left-sided convexity meningioma."
She was discharged on June 12, but was readmitted on June 23 in order to undergo neurosurgery to remove the brain tumor.