Mitchell v. United National Insurance

We hold that an insurer may, under Insurance Code sections 331 and 359, rescind a fire insurance policy based on an insured’s negligent or unintentional misrepresentation of a material fact in an insurance application, notwithstanding the willful misrepresentation clause included in the required standard form fire insurance policy (Ins. Code §§ 2070 and 2071). Because there was undisputed evidence that the insurer relied upon the misstatements of material facts in the insured’s application for insurance, we affirm the summary judgment.

BACKGROUND

Plaintiff and appellant James E. Mitchell, individually and as trustee of the Mitchell Family Trust (Mitchell), appeals the trial court’s entry of summary judgment in favor of defendant and respondent United National Insurance Company (United National) in Mitchell’s action for breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief. Mitchell individually was the named insured under an insurance policy issued by United National that provided coverage for a commercial building owned by the Mitchell Family Trust (the building).

During the policy period, the building was destroyed…