PACIFIC INSURANCE COMPANY,
Plaintiff,
v.
AMERICAN MEDICAL ASSOCIATION, et al.,
Defendants.
This case is before us on the parties' cross-motions
for summary judgment. For the reasons stated below, the motion
of plaintiff Pacific Insurance Company is denied; the motion of
defendant American Medical Association is granted in part and
denied in part; and we allow the parties additional time for discovery
on the remaining issue of whether plaintiff was substantially
prejudiced by defendant's delay in giving notice of its insurance
claim.
FACTS AND PROCEDURAL BACKGROUND
Plaintiff/counter-defendant Pacific Insurance Company (hereafter "Pacific") agreed to provide defendant/counter-plaintiff American Medical Association (hereafter "the AMA") with "Association Professional Liability Insurance." The policy was to be in effect for three years beginning June 7, 1983, and included a provision whereby coverage was excluded for damages assessed against the AMA in antitrust cases. However, that exclusion also provided that "notwithstanding the foregoing, [Pacific] will reimburse the insured for reasonable defense expenses up to the limit of liability." Amended Complaint for Declaratory Judgment, Exhibit A at ¶ 5(I). That limit was $10 million, with a $100,000 "retention," or deductible. Id. at ¶ 6 and Endorsement 4.
The parties altered the standard form contract with the following endorsement:
In consideration of the premium charged, it is understood and agreed that the policy excludes from coverage the anti trust litigation mentioned in the attachment to the Chubb Group application dated May 3, 1983 as well as all future claims or suits based upon, arising out of or attributable to said litigation.
Id. at Endorsement 3. The policy is signed by Eugene L. Allen as a representative of Pacific and dated June 28, 1983, at Los Angeles, California.
On July 7, 1983, a Michigan chiropractors' organization filed an antitrust suit against the AMA and other defendants, styled Chiropractive Cooperative Association of Michigan v. American Medical Association, No. 83 C 2701 DT (E.D. Mich.) ("CCAM"). The AMA proceeded to defend this suit but did not inform Pacific of the litigation until May 23, 1985. AMA's Answers to First Set of Interrogatories at 2-3. In a letter to the AMA dated June 12, 1985, Pacific reserved its rights to deny coverage pending investigation of several issues, including whether AMA had breached the requirement of Paragraph 7(B) of the policy that the insured give notice of any claim to Pacific "as soon as practicable." Pacific also "observed" that Endorsement 2 of the policy excluded coverage for any claim "specifically covered" under the AMA's Directors' and Officers' (D&O) liability policy with National Union Fire Insurance of Pittsburgh ("National Union"). AMA's Statement of Material Facts, Exhibit R (Letter of Warren B. Lee).
On October 15, 1985, Pacific filed a complaint in the United States District Court for the Eastern District of Michiaan, seeking a declaratory judgment that Pacific owed no obligation to reimburse the AMA for its defense expenses in CCAM. After transfer to this court under 28 U.S.C. § 1404, the AMA filed an Answer, Afirmative Defense, and Counterclaim, asking for a declaratory judgment that Pacific was obligated to reimburse defense expenses in CCAM. Pacific filed an Amended Complaint on May 13, 1986. Both parties filed crossmotions for summary judgment on June 28, 1986, and subsequently have filed cross-replies and memoranda in opposition.
Pacific's motion for summary judgment is based on two grounds. The first is that the AMA's notice to Pacific of the existence of the CCAM litigation was untimely as a matter of law and relieves Pacific of its obligation to reimburse the AMA's defense expenses. The second is that the language of Endorsement 3 effectively excludes coverage in the case of CCAM, as Pacific claims it is a "future claim or suit" arising out of the litigation iin, the Chubb Group application (hereafter "the Chubb Group cases").
The AMA contests these two issues, asserting
that the 22month delay in notice did not substantially prejudice
the interests of Pacific, and that California law must control
that determination. The AMA states that Endorsement 3 excludes
only the specific litigation nentioned in the Chubb application
and that CCAM does not "arise out of" that previous
litigation. The AMA also asserts two additional grounds for summary
judgment: the first is that the allegations in Pacific's Amended
Complaint of misrepresentations by the AMA in applying for the
insurance are unfounded and that Illinois insurance law prevents
courts from entertaining misrepresentation claims if the application
in question is not attached to the policy. The second is that
the AMA's D&O policy with National Union, contrary to the
allegations in Paragraphs 30-32 of Pacific's Amended Complaint,
was not triggered by CCAM. Because the National Union
Policy does not cover CCAM defense expenses, the AMA argues that
Pacific cannot avoid its policy by shifting liability to National
Union. We shall consider these issues in turn.
DISCUSSION
Late Notice
A. Excuse for AMA's Late Notice
Pacific's argument that the notice given by the AMA was untimely and voids the obligation to reimburse defense expenses has produced a disagreement between the parties as to which state's substantive law applies to the contract. However, no choice of law problem exists on the issue of whether the AMA's delay may be excused. The law in both Illinois and California is that insured parties may be excused for delays in notice to the insurer if the insured can show reasonable diligence in discovering the basis for the claim. City of Chicago v. U.S. Fire Ins. Co., 124 Ill. App. 2d 340, 260 N.E.2d 276 (1st Dist. 1970); Abrams v. American Fidelity and Casualty Co., 32 Cal. 2d 233, 195 P.2d 797 (1948). The AMA contends that its delay can be excused in this instance because of the "unusual policy feature" of antitrust defense reimbursement coverage and submits affidavit testimony that no AMA personnel with knowledge of that policy feature had knowledge of the existence of the CCAM suit.
We disagree; the 22-month delay in this case is objectively unreasonable. The filing of the CCAM complaint, which sought treble damaoes and sweeping injunctive relief against the AMA and its officials, should have caused AMA personnel to investigate all of its insurance policies to determine what coverage might apply. The affidavit here indicates that the AMA normally reviews its insurance coverage on an annual basis, with attorneys from AMA's general counsel and representatives from its insurance broker in attendance. Affidavit of John M. Cantalupo at 3. However, no AMA attorney attended the 1984 review and information about the CCAM suit was never passed on to those with knowledge of the Pacific policy's antitrust feature. Id. We think this conduct is inexcusable for any reasonable policy holder; if a meeting to review litigation insurance is held without information on pending litigation, those conducting the review should actively seek out thq,t information. The AMA did not exercise reasonable diligence in discovering its' claim and therefore cannot justify its delay in giving notice.
B. Prejudice to Pacific
A choice of law problem does arise in that Illinois and California law are in conflict as to the insurer's need to show prejudice from late notice in order to avoid the policy. Pacific states that Illinois law applies, and that as a result, Pacific need show no prejudice resulting from the 22month delay by the AMA. In Fidelity & Deposit Co. of Maryland v. Reliance Federal Savings & Loan Ass'n, No. 82 C 3426, Memorandum Op. (N.D. Ill. Feb. 22, 1985) (Grady, J.), this court considered the state of Illinois on law on this question. We found that prejudice, although not in itself dispositive, is a factor to be considered in determining whether delay in giving notice to the insurer was unreasonable. Memorandum Op. at 3-4 (citing Casualty Indemnity Exchange v. Village of Crete, 731 F.2d 457, 459 (7th Cir. 1984)). This standard still differs considerably from the California rule, which the AMA asserts controls this case. [N.1] California courts place the burden on the insurer to show "substantial prejudice" to the insurer as a result of the insurers late notice before the insurer may avoid its obligations under the policy. See Fidelity Savings & Loan Ass'n v. Aetna Life & Casualty Co., 647 F.2d 933 (9th Cir. 198 1); National Semiconductor Corp. v. Allendale Mutual Ins. Co., 549 F. Supp. 1195, 1198 (D. Conn. 1982); Healy Tibbits Construction Co. v. Foremost Ins. Co., 482 F. Supp. 830, 835 (N.D. CaL 1979); Clemmer v. Hartford Ins. Co., 22 CaL 3d 8659 567 P.2d 1098, 151 Cal. Rptr. 285 (1978). Because of this conflict between Illinois and California law, we must determine which state's law applies before ruling on the late notice issue.
1. Choice of Law
In diversity cases such as this, the court invokes the forum state's choice of law principles. Klaxon Co. v. Stentor Electrical Mfg. Co., 313 U.S. 481 (1941). Illinois' choice of law principles are, to say the least, in a state of flux, and federal courts sitting in Illinois have reached a variety of results in attempting to apply them. Some federal courts have determined that an Illinois court would look solely at the place of execution to determine what law governs a contract dispute when performance occurs in more than one state (the "traditional" test). See Jacobs/Kahan & Co. v. Marsh, 740 F.2d 587, 591 (7th Cir. 1984); State Sec. Ins. Co. v. Frank B. Hall & Co., Inc., 109 F.R.D. 95, 96 n.4 (N.D. Ill. 1985); Courts of the Phoenix v. Charter Oak Fire Ins. Co., 560 F. Supp. 858, 859 (N.D. Ill. 1983); DP Service, Inc. v. AM International, 508 F. Supp. 162, 164-5 (N.D. Ill. 1981); Adams Laboratories, Inc. v. Jacobs Engineering Co., 486 F. Supp. 383, 389 (N.D. Ill. 1980). Others have invoked the "most significant contacts" test of the Restatement (Second) of Conflicts (the "Restatement" test) as reflecting Illinois' choice of law rule in this situation. See Baltimore Orioles, Inc. v. Major League Baseball Players Assn, No. 85-2020, slip op. at 34 (7th Cir. Oct. 29, 1986); Florida Risk Planning Consultants Inc. v. Transport Life Ins. Co., 732 F.2d 593, 595 (7th Cir. 1984); Wonderlic Agency, Inc. v. Acceleration Corp., 624 F. Supp. 801, 803-04 (N.D. Ill. 1985). Still others have reacted to the uncertainty of Illinois law by using both tests, invoking the Restatement test when the traditional test yields no clear result. See Dr. Franklin Perkins School v. Freeman, 741 F.2d 1503, 1515 & n.19 (7th Cir. 1984); Zlotnick v. MacArthur, 550 F. Supp. 371, 373-74 (N.D. Ill. 1982).
Although we realize that the recent trend in Illinois courts is to adopt the Restatement test for choice of law governing contract as well as tort (see Illinois Tool Works v. Sierracin Corp., 134 Ill. App. 3d 63, 479 N.E.2d 1046, 1050-51 (1st Dist. 1985); Boise Cascade Home & Land Corp. v. Utilities, Inc., 127 Ill. App. 3d 4, 468 N.E.2d 442, 449 (1st Dist. 1984) (dictum); Champagnie v. W.E. O'Neil Construction Co., 77 Ill. App. 3d 136, 395 N.E.2d 990, 996-97 (1st Dist. 1979)), we hesitate to predict in what manner the Supreme Court of Illinois might resolve this issue. Accordingly, we analyze the choice of law issue under both the traditional and Restatement test. See The Binswanger Co. v. Rentar Industries Realty Co., No. 83 C 7770, Memorandum Op. at 3 (N.D. Ill. April 23, 1985) (Grady, J.).
We think the facts in this case require us to apply the substantive law of California to the question of whether an insurer must show some level of prejudice in order to avoid obligation to the insured on the basis of late notice. Applying the traditional test, we note that the place of execution of a contract is the jurisdiction in which the last act necessary to give validity to the contract was performed. Youngstown Sheet and Tube Co. v. Industrial Comm'n, 79 IIl. 2d 425, 404 N.E.2d 253 (1980); Illinois Tool, supra, at 1051. In this case, the title page of the policy states that the policy becomes valid upon the signed declaration of Pacific agreeing to provide insurance and the countersignature of a Pacific representative. The countersignature at the bottom of that page is dated June 28, 1983, at Los Angeles, California. AMA's Statement of Material Facts, Exhibit A. "If it is required that a policy be countersigned before going into effect, the place of countersignature is generally Considered the place of the last effective act, and determines the controlling law." 12 Appleman, Insurance Law and Practice § 7088 at 403 (rev. ed. 1981); see also Hartliep Transit Co. for use of Snow v. Central Mutual Ins. Co. of Chicago, 288 Ill. App. 1409 5 N.E.2d 879 (1937).
Pacific asserts that Illinois law must apply because the last effective act was delivery of the policy to the AMA offices, which are located in Chicago, Illinois. We disagree. Nothing in the policy states that its effectiveness depends on delivery to the insured; rather, the policy states that validity is achieved upon Pacific's countersignature. "The majority rule is . . . that a binding contract of insurance may be effected without manual delivery of the policy to the insured, if such was the intention of the parties . . . . The delivery of a policy has been held not essential to the validity or enforceability of the contract, unless a stipulation of the contract expressly provides for suchdelivery before the contract shall take effect." 12 Appleman, Insurance Law and Practice § 7156 at 563-64. We find that under the traditional "place of execution" test, California law controls.
The Restatement's "most significant contacts" analysis involves an evaluation of five factors: (1) place of contracting; (2) place of negotiation; (3) place of performance; (4) location of the subject matter of the contracts; and (5) the domicile, nationality, residence, place of incorporation and place of business of the parties. Restatement (Second) of Conflicts, § 188(2). [N.2] These factors are weighed according to their relative importance with respect to the particular issue involved in the case. Id., Comment on Subsection 2(e) at 579; Binswanger, Memorandum Op. at 4. In this case, the most significant factor is performancethe notice required to be given to Pacific by AMA.
As noted above, the place of contracting in this case is California; however, that factor alone "is a relatively insignificant contact." Comment on Subsection 2(e) at 579. The contract was negotiated among the AMA's insurance brokers in Illinois, Pacific's insurance producer in Illinois, and Pacific representatives in California. See Pacific's Memorandumn in Response to AMA's Motion for Summary Judgment, Exhibit A (affidavit of Stuart H. Rubinstein); AMA's Statement of Material Facts, Exhibits F and G (telexes and telecopies discussing policy terms between Pacific representatives in California and the AMA's broker in Illinois). Like place of contracting, this contact "is of less importance when there is no one single place of negotiation and agreement, as, for example, when the parties do not meet but rather conduct their negotiations from separate states by mail or telephone." Comment on Subsection 2(e) at 580. The location of the subject matter under (4) of the checklist is primarily Illinoissite of the AMA's headquarters-but the site of the "risk" insured L)y Pacific extends beyond the Illinois border, as the policy covers lawsuits brought against the AMA in any venue. See id. at 581. The domicile factor is a toss-up; one party resides in California, the other in Illinois.
The central issue in dispute in this case is one of performancewhether the AMA gave Pacific adequate notice under the policy's "as soon as practicable" standard. We agree with the AMA that although Pacific is liable to pay claims on the policy on a nationwide scale, California is the state of primary contact on the performance of the notice provision of the contract, because it is there, at Pacific's place of business, that the notice must be received. While the AMA might send the notice from Illinois, it is not notice until Pacific receives it in California. With the "place of performance" factor weighing most heavily, we think that the "most significant contacts" in relation to the contract are California's and that its law should apply.
2. Adequacy of Notice Under California Law
Pacific asserts that it suffered "substantial prejudice" as a result of the AMA's delay in giving notice, because even though its obligation under the policy is only to reimburse the AMA's legal expenses, it was unable to monitor the accumulation of costs incurred in defending CCAM and to provide input into the defense of the action. Pacific also cites its inability to set aside adequate reserves to pay its future obligations as further prejudice that results from the late notice.
The AMA responds that Pacific's only right under the policy is to insist that the defense expenses be reasonable--there is no right to control the litigation, select defense counsel, or even recommend a settlement. Indeed, the language of Paragraph 5(I) of the policy states only that Pacific will reimburse the AMA for expenses without liability for any damages or judgments against the AMA. In cases where Pacific has the duty to defend the AMA, paragraph 2(A) of the policy speaks in terms of Pacific's "right and duty" to defend the suit. No express term in the policy gives Pacific a "right" to monitor the AMA's expenses in defending antitrust suits.
We are unable to determine, on the facts before us, whether Pacific suffered any prejudice because of its inability to monitor the AMA's expenses in CCAM as they were being incurred. As a result, we cannot grant summary judgment on this issue for either party until we receive more evidence as to how Pacific might or might not be harmed by assessing the reasonableness of defense expenses in retrospect rather than as they were incurred. Pacific has supplied the affidavit of its auditor, who states that Pacific's normal procedure upon notice of a claim is to hire a law firm to keep tabs on the fees run up by the insured's counsel. Affidavit of Warren B. Lee at 1. Yet we have no evidence as to how postponement of this review until the litigation is near completion would adversely affect Pacific's ability to judge the reasonableness of a policyholder's expenses. We take judicial notice that after-the-fact review of the reasonableness of litigation expenses is not an impossible task; it is one that this court must often undertake when federal statutes provide that legal fees and expenses be awarded to the prevailing party. See, e.g., 42 U.S.C. § 1988 (allowing the court to award a "reasonable attorney's feel" to prevailing party in specified civil rights actions).
We reach the same result with regard to Pacific's
"reserve" claim. Obviously, the reserves of an insurance
company will be depleted any time a substantial claim must be
paid. Pacific's argument is that prejudice stems from inadequate
lead time to set aside reserves to pay the AMA's claim. Again,
the averments of Pacific's auditor that a delay of notice "thwarts
the ability of the company to establish an adequate reserve"
begs the question of what Pacific does when faced with a claim
that is timely noticed and payable immediately. Because we need
more information on the quantitative effect of the late notice
on Pacific's reserves and its "adverse effect" on the
functioning of the company, we deny both parties motions for summary
judgment on the notice issue, and permit discovery on the question
of whether Pacific has ",:)een "substantially prejudiced"
by AMA's late notice. [N.3]
Endorsement No. 3: The Antitrust Exclusion
Pacific argues that the antitrust exclusion in Endorsement No. 3 relieves it of any liability to the AMA for legal fees incurred in the CCAM litigation. However, the plain language of the policy does not support this conclusion. Defense expense coverage is excluded under this section of the policy for "the antitrust litigation mentioned in the attachment to the Chubb Group application . . . as well as all future claims or suits based upon, arising out of or attributable to said litigation." [N.4] Although the AMA admits that some of the alleged underlying facts--efforts by the AMA to restrain trade in violation of the Sherman Act though a concerted refusal to deal with chiropractorsare the same in CCAM as in the Chubb Group cases, it maintains that CCAM cannot be said to flarise out of" those cases. We agree. CCAM is a wholly independent action, brought by a separate plaintiff. Endorsement No. 3 does not exclude coverage for litigation based on the same "transaction or occurrence" or "underlying facts" as the Chubb Group cases, but only for those future claims or suits arising out of those cases. The CCAM case does not depend on the existence of the Chubb Group cases for its existence; it does not fall within the exclusion.
Pacific argues that we must interpret cases that are factually similar to those in the Chubb Group application as within the scope of Endorsement No. 3's exclusion, as to do otherwise would render superfluous the reference to "future claims or suits." This is not so. Separate "future claims and suits" can and do arise out of pending litigation. Joinder of additional claims and parties, attorney fee claims, and suits to enforce a judgment are only a few examples of future claims or suits that would be excluded from coverage under this Endorsement. We grant summary judgment for the AMA on this issue, [N.5] finding as a matter of law that a claim for expenses in the CCAM litigation is not excluded by Endorsement No. 3. [N.6]
Misrepresentations in the Policy Application
Pacific's Amended Complaint alleges that the AMA was guilty of misrepresentations and omissions in its policy application as to its knowledge of potential and pending antitrust litigation involving the AMA. Amended Complaint at 4-6. AMA's cross-motion for summary judgment denies these allegations and includes the affidavit of John M. Cantalupo, who prepared the application for the AMA. He states that the application question concerning pending claims was left blank "pursuant to instructions received from Pacific and the AMA's broker, Marsh and McLennan." Affidavit of John M. Caiitalupo at 2. He adds that he answered "no" to a question askina if any professional liability claims had been filed against the AMA "because I construed it to mean claims such as medical or legal malpractice and management negligence." Id.; see also Amended Complaint, Exhibit D at 2 (AMA's application).
Pacific has failed to respond to the averments of Mr. Cantalupo in the two reply memoranda filed subsequently to the AMA's cross-motion for summary judgment. Federal Rule of Civil Procedure 56(e) requires an opponent of a summary judgment motion to raise a defense:
When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or otherwise as provided for in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entertained against him.
Pacific was obligated under Rule 56(e) to plead facts and provide supporting material contradicting the reasons given by the AMA for the alleged omissions in the application, and failed to do so either in its Memorandum in Response to Defendants' Motion for Summary Judgment or its Reply in Opposition to that motion. We think that partial summary judgment for AMA is thus appropriate on the issue of misrepresentation. [N.7] See Jones v. City of Chicago, 787 F.2d 200, 205-06 (7th Cir. 1986); McGowan v. City of Chicago, No. 84 C 10476, Memorandum Op. at 3-7 (N.D. Ill. June 11, 1986) (Grady, J.).
Endorsement No. 2: Effect of National Union D&O Policy
The Amended Complaint alleges that Endorsement 2 of the policy relieves Pacific of any obligation to pay any claim specifically covered by the AMA's D&O liability policy with National Union, except that Pacific must pay any excess beyond the amount of payment for loss under the National Union policy. The AMA has moved for summary judgment on the question, contending that the National Union policy covers only the liabilities of officers of the association and that only one current AMA officer is named in CCAM and he is not liable for any of the defense expenses incurred to date. AMA's Memorandum in Support of ,Motion for Summary Judgment at 10-11; AMA's Statement of Material Facts, Exhibits B-1 and P (copy of National Union policy; Affidavit of William J. Tabor).
Rule 56(e) applies to this issue as well. Pacific has failed to set forth any specific facts, other than the allegations in the Amended Complaint, that show a genuine issue for trial on the effect of the National Union policy. It has not even addressed the question in its memoranda. Accordingly, we grant partial summary judgment for the AMA on this issue.
CONCLUSION
Pacific's motion for summary judgment is denied. The AMA's motion for summary judgment is granted on the issues of misrepresentation in the policy application and coverage exclusions under Endorsements 2 and 3; it is denied on the late notice issue, which this court will decide under the law of California. The parties have until February 27, 1987, to conduct further discovery as to whether Pacific suffered substantial prejudice as @t result of the AMA's inexcusable delay in giving notice of the CCAM claim. The case is set for a status conference on March 24, 1987.
DATED: DEC 1 1986
ENTER:___[John Grady]____________________
United States District Judge
N.2 The AMA argues for the application of § 206 of the Restatement, which states, "Issues relating to the details of performance of a contract are determined by the local law of the place of performance." However, Comment (b) to § 206 states that "matters which involve the substantial rights of the parties and which do not fall within the scope of this Section include the necessity . . . of giving notice."
N.3 Had we determined that Illinois law governed the adequacy of notice, we would still have denied Pacific's motion in the absence of more evidence on prejudice. We read Illinois law as accepting evidence of prejudice as one factor in determining whether the delay in giving notice is reasonable, although, unlike California law, absence of prejudice does not automatically nullify the effect of late notice. See Simmon v. Iowa Mutual Casualty Co., 3 Ill. 2d 318, 121 N.E.2d 509, 511 (1954); Casualty Indemnity, 731 F.2d at 459.
N.4 These cases included: New Jersey Chiropractic Society v. Radiological Society of New Jersey, No. C-886-76 (N.J. Super. Ct.); Wilk v. American Medical Association, No. 76 C 3777 (N.D. Ill.); Health Care Equalization Committee of the Iowa Chiropractic Society v. Iowa State Medical Society, No. 79-391-A (S.D. Iowa); State of New York v. American Medicai Association, No. 79 Civ. 1732 (E.D.N.Y.) (dismissed June 9, 1980); Slavek v. American Medical Association, No. 77-1726 (E.D. Pa.) (dismissed April 17, 1979). See AMA's Answers to First Set of Interrogatories at 6.
N.5 Federal Rule of Civil Procedure 56(d) allows this court to grant partial summary judgment by ascertaining what material facts exist without substantial controversy and directing such further proceedings in the action as are just.
N.6 This conclusion is bolstered by the rule of construction that exclusions in insurance contracts are interpreted narrowly. If two or more interpretations are reasonable, the court must adopt the interpretation that supports coverage. McLaughlin v. Connecticut General Life Ins. Co., 565 F. Supp. 434, 441 (N.D. Cal. 1983) (California law); Sears, Roebuck & Co. v. Reliance Ins. Co., 654 F.2d 494, 499 (7th Cir. 1981) (Illinois law); Stevens Bedding Warehouse, Inc. v. Maryland Casualty Co., No. 85 C 460 1, Memorandum Op. at 6 (N.D. Ill. Oct. 2, 1986) (Grady, J.).
N.7 Our disposition of this issue obviates the need to determine whether Pacific's alleged failure to attach the application to the policy upon delivery to the AMA precludes Pacific from alleging misrepresentations in the content of that application.