Consumers Insurance vs. Virgie Smith

Consumer Insurance USA ("the insurance company") brought a declaratory judgment action against one of its policyholders, Virgie Smith ("the policyholder"), age 80 at the time of trial, and others, seeking a declaration regarding its liability under an automobile insurance policy ("the policy") issued by it to Ms. Smith. The suit was prompted by a two-vehicle accident involving an automobile being driven by the policyholder's great-grandson, Thomas G. Tuten ("the great-grandson"), in which Tuten and another were killed and two other individuals in his vehicle were injured. The trial court held that the vehicle being driven by the great-grandson, a 1989 Chevrolet Camaro ("the Camaro"), was a "newly acquired auto" under the terms of the policy, was reported to the insurance company within 14 days of its purchase, and was, consequently, a covered vehicle under the policy as of the date of its purchase, i.e., June 29, 1999, some 12 days before the accident on July 10, 1999. Because we hold that the evidence preponderates that the policyholder made material misrepresentations to the insurance company that void the policy, we reverse the judgment of the trial court.