Volume 325 — North Carolina Reports

1. Physicians, Surgeons, and Allied Professions 19 — physician's negligent failure to attend, diagnose and treat — sufficiency of evidence Plaintiff's evidence raised a question of fact for the jury as to whether a hospital patient's death from a perforated colon was proximately caused by defendant attending physician's negligent failure to attend, diagnose and treat the patient's dangerous state of constipation after the patient had been admitted to a medical center for evaluation for a neurosurgical procedure. Am Jur 2d, Physicians, Surgeons, and Other Healers 228. 2. Rules of Civil Procedure 11 — Rule 11(a) sanctions — objective reasonableness standard A subjective showing of bad faith is unnecessary for the imposition of sanctions under N.C.G.S. <cross_reference>1A-1</cross_reference>, Rule 11 (a). Rather, the standard under Rule 11 (a) is one of objective reasonableness under the circumstances. Am Jur 2d, Depositions and Discovery 376.<page_number>Page 153</page_number> 3. Rules of Civil Procedure 11 — Rule 11(a) sanctions — standard for appellate review The trial court's decision to impose or not to impose mandatory sanctions under Rule 11 (a) is reviewable de novo as a legal issue. In the de novo review, the appellate court will determine (1) whether the trial court's conclusions of law support its judgment or determination, (2) whether the trial court's conclusions of law are supported by its findings of fact, and (3) whether the findings of fact are supported by a sufficiency of the evidence. If the appellate court makes these three determinations in the affirmative, it must uphold the trial court's decision to impose or deny the imposition of mandatory sanctions under Rule 11 (a). Am Jur 2d, Appeal and Error 79, 703. 4. Rules of Civil Procedure 11 — Rule 11(a) sanctions — appropriateness of particular sanction — abuse of discretion standard An "abuse of discretion" standard will be used in reviewing the appropriateness of a particular sanction imposed under Rule 11 (a). Am Jur 2d, Appeal and Error 18. 5. Rules of Civil Procedure 26 — physician not expert witness — deposition after certain date — court order not violated A physician deposed by defendant medical center in Florida was not an expert witness, and the trial court's order requiring the identification and deposition of expert witnesses prior to a certain date was not violated by defendant's deposition of the physician after that date, where the focus of the deposition was the physician's previous treatment of the patient for lung cancer, the physician was not questioned about the standard of the patient's care at defendant medical center, and the physician was not retained by defendant for the purpose of litigation. Am Jur 2d, Depositions and Discovery 131, 140.<page_number>Page 154</page_number> 6. Attorneys at Law 7.7; Rules of Civil Procedure 11 — noticing and taking of depositions close to trial — increasing litigation costs and unnecessary delay — harassment of counsel — Rule 11(a) sanctions In an action to recover for the wrongful death of a hospital patient based on medical malpractice, defendant medical center's noticing and taking of the depositions of two physicians, one in California six days before trial and one in Florida four days before trial, subsequent to its failure to reveal the existence of the California physician in response to discovery requests, as well as the duplicative and cumulative nature of the Florida physician's testimony, threatened to increase plaintiff's litigation costs and cause unnecessary delay in the trial in violation of Rule 11 (a). Also, the noticing and taking of the depositions so close to trial represented an attempt to harass plaintiff's counsel in violation of Rule 11 (a). Therefore, the trial court should have imposed sanctions on defendant medical center and/or its counsel pursuant to Rule 11 (a). Am Jur 2d, Depositions and Discovery 131, 140.

1. Insurance 18; Rules of Civil Procedure 56.3 — summary judgment hearing — plaintiff's affidavit — striking of legal conclusions — other statements not hearsay The trial court properly struck portions of plaintiff's affidavit stating that defendant insurer had notice of insured's medical treatment for high blood pressure and his conviction for driving under the influence of alcohol and the reason that insured signed the application since those portions are conclusions rather than statements of fact. However, the trial court erred in striking as hearsay portions of the affidavit relating statements made by plaintiff and the insured to defendant's agent since they were offered to prove that defendant's agent had notice of the matters contained in the statements and not to prove the truth of those matters. Am Jur 2d, Summary Judgment 18, 35.<page_number>Page 203</page_number> 2. Insurance 18.1 — life insurance application — high blood pressure treatment — misrepresentation material A misrepresentation in an application for a life insurance policy that the applicant had never been treated for high blood pressure was material as a matter of law. Am Jur 2d, Insurance 1055. 3. Insurance 19 — life insurance application — material misrepresentation — knowledge of facts by insurer Even material misrepresentations in applications for insurance do not void the policy if the insurer knew the facts surrounding the misrepresentations at the time it accepted the application and issued its policy based thereon. Am Jur 2d, Insurance 1581. 4. Insurance 19.1 — life insurance application — agent's knowledge of misrepresentations — apparent authority An insurance agent had apparent authority to act for the insurer in receiving insurance applications and assisting applicants in properly completing them, and she acted within the scope of this apparent authority if she accepted an application with knowledge of misrepresentations therein. Am Jur 2d, Insurance 1592. 5. Insurance 19.1 — life insurance application — agent's knowledge of material misrepresentations — imputation to insurer An insurer's authorized agent's knowledge of false material answers on a life insurance application is imputed to the insurer unless both the agent and the applicant intend to perpetrate a fraud on the insurer by submitting the false answers. Am Jur 2d, Insurance 1582-1587. 6. Insurance 19.1 — life insurance application — applicant's signing of application — material misrepresentations — knowledge by agent — imputation to insurer The mere signing of a life insurance application with false material answers by an applicant who can read and write is not enough to avoid imputation of the agent's knowledge of the false answers to the insurer. Whether the knowledge is imputed depends ultimately on whether the applicant participated with the agent in committing a fraud on the insurer. Am Jur 2d, Insurance 1582-1587.<page_number>Page 204</page_number> 7. Insurance 19.1 — life insurance application — misrepresentations — insured's collusion with agent Where an insured understandingly executes an application he knows contains false material answers or executes it under circumstances that would put a reasonable person on notice that the application contains such answers, he ipso facto colludes with the agent in misleading the company. Am Jur 2d, Insurance 1620. 8. Insurance 19.1 — life insurance application — false material answers — agent's knowledge imputable to insurer — material issue of fact Plaintiff's forecast of evidence presented a material issue of fact as to whether knowledge by defendant insurer's agent of false material misrepresentations in an application for life insurance should be imputed to defendant insurer where it tended to show that negative answers to questions as to whether insured had ever been arrested for the use of alcohol and treated for high blood pressure were false; insured signed the application only after defendant's agent assured him that, since the events in question occurred more than two years earlier, they would not affect his insurability; and insured could have reasonably believed that the questions were truthfully answered in the negative because none of the events to which they referred occurred within this two-year period. Am Jur 2d, Summary Judgment 27.

1. Insurance 81 (NCI3d) — assigned risk insurance — Commissioner's waiver of notice requirement — exceeded authority The Court of Appeals correctly determined that the Commissioner of Motor Vehicles exceeded his authority by promulgating a rule that insurers were not required to notify DMV of the termination of automobile insurance policies in effect for six months or longer, effectively administering the statutory requirement out of existence since most, if not all, automobile insurance policies are written for six months or longer. N.C.G.S. <cross_reference>20-309</cross_reference> (e) and (f). Am Jur 2d, Automobile Insurance 21, 39. 2. Insurance 81 (NCI3d) — assigned risk insurance — no notice of termination to DMV — termination effective The failure of Allstate to notify DMV of a lapse in Ellerbe's coverage did not result in continued coverage of Ellerbe's vehicle under the Allstate policy. Only defective notice to the insured renders cancellation of the policy ineffective and extends the liability of the insurer. Allstate is obligated to notify DMV of Ellerbe's lapsed coverage, but there is a civil penalty for noncompliance. N.C.G.S. <cross_reference>20-309</cross_reference> (e). Am Jur 2d, Automobile Insurance 21, 39.

Abatement and Revival 8.1 (NCI3d) — domestic action — sale of property by attorney — subsequent claim against attorney The trial court properly dismissed plaintiff's claims against defendant attorney and his law firm arising from a court-ordered sale of property by defendant attorney where, at the time the complaint in this case was filed, there was pending in Guilford County District Court a civil action in which the<page_number>Page 536</page_number> court had ordered defendant Early to dispose of certain property and use the proceeds in a certain way, defendant Early was accountable to the District Court of Guilford County for his actions in selling the property, and plaintiff may enforce all of the rights he has in regard to the sale of this property by a motion in the cause in the District Court. Am Jur 2d, Abatement, Survival, and Revival 5-7, 35, 40.