Sweatman

The state Department of Veterans Affairs (the Department) made a home mortgage loan to Bruce Sweatman III (Sweatman), a veteran. For an additional payment, it also provided Sweatman with life and disability coverage. This meant that, if Sweatman died or became disabled, he would not have to make payments on the loan; an insurance company, which the Department had hired to administer its life and disability coverage program, would take the amount of the payments out of a bank account funded by the Department and would repay that amount to the Department.

When Sweatman in fact became disabled, however, the Department purported to rescind his disability coverage, claiming he had made material misrepresentations regarding his health history. A jury, finding no breach of contract, returned a verdict for the Department.

Sweatman appeals. He contends the disability coverage was insurance which, under the Insurance Code, the Department was not entitled to rescind. We disagree, and we will affirm.

Pursuant to the Veterans' Farm and Home Purchase Act of 1974 (Mil. & Vet. Code, § 987.50 et seq.), the Department makes home and farm mortgage loans to veterans. [1] As part of the…