Man cannot sue American Community Mutual Insurance or his agent where health benefits denied

Thomas R. Tibble, the bankruptcy trustee for the Estate of Jeffrey Ernsberger, sued American Community and Nicholas Caldwell, an independent agent, after American Community refused to cover Ernsberger's (bankruptcy inducing) medical expenses from a motorcycle incident.  American Community denied the claim citing several exclusions.  It claimed that the Application his mother had completed with Caldwell under-stated his weight; it claimed that he failed to disclose a history of dirt-bike racing; and it claimed that the policy had not yet gone into effect after the passage of six days.

Ernsberger's mother claimed that she gave the proper information to Caldwell who entered it into a computer where it was allegedly "electronically signed" by Jeffrey. She said that Ernsberger no longer rode in road bike races.  The trial judge granted American Community summary disposition, holding that Caldwell owed Ernsberger and his mother no duty and that because it was lied to, American Community was within its rights to void the policy.  Tibble appealed.

The Court of Appeals that the trial judge made multiple errors, including understating the duty owed by an independent insurance agent, and wrongly interpreting the evidence to suggest that Ernsberger's mother had lied.  Nevertheless, it upheld the summary disposition of both claims.  It ruled that under the policy's written language, it was not effective within a week of paying the premium, letting American Community off the hook, regardless of the responsibility for errors in the application.

Te higher court also ruled that even in the face of an affidavit from another licensed insurange agent expressing the opinion that Caldwell was guilty of malpractice, the lower court had properly dismissed the case summarily (without a jury trial).  The agent alleged that Caldwell should have purchased a more appropriate policy from Blue Cross Blue Shield.  The Court held that the insurance agent's affidavit did not adequately explain that a more appropriate policy was available through Blue Cross or what terms it should have contained.