422 F2d 396 Unsatisfied Claim and Judgment Fund Board v. Bar Harbor Insurance Agency Inc

422 F.2d 396

UNSATISFIED CLAIM AND JUDGMENT FUND BOARD, Johannes Leppik and Valdek Leppik, Appellants,
The BAR HARBOR INSURANCE AGENCY, INC., and Inland Mutual Insurance Company, Appellees.

No. 13412.

United States Court of Appeals, Fourth Circuit.

Argued February 5, 1970.

Decided February 19, 1970.

William E. Brannan, Asst. Atty. Gen. of Maryland (Francis B. Burch, Atty. Gen. of Maryland, and Howard J. Needle, Baltimore, Md., on the brief), for appellants.

James J. Doyle, Jr., Baltimore, Md. (Sherbow, Shea & Doyle, Baltimore, Md., on the brief), for appellees.

Before SOBELOFF, WINTER and BUTZNER, Circuit Judges.


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Inland Mutual Insurance Company issued automobile liability insurance to Valdek Leppik based upon an application which contained material misrepresentations concerning the insured's driving record and cancellation of prior insurance by another company. While the insured disclosed these matters to his insurance agent, the agent did not disclose insured's full record to Inland.


Inland was apprised of these misrepresentations on July 4, 1963 and asserted a reservation of rights on October 31, 1963. This reservation of rights informed the insured of the possibility that Inland might rescind the insurance policy due to the misrepresentations.


District Judge Harvey held that Inland could properly rescind the policy based upon the material misrepresentations, and that the 120 day delay from the date Inland learned of the misrepresentations till it asserted a reservation of rights was not an unreasonable delay on which the insured could base a waiver. Estoppel is likewise inapplicable because the appellants have shown no reliance to their detriment. The findings of the District Judge are clearly correct and the judgment is