Continental Western Insurance v. Clay

The opinion of the court was delivered by

McFarland, J.:

This is a declaratory judgment action wherein Continental Western Insurance Company (Continental) seeks to rescind, ab initio, a temporary automobile liability insurance binder issued to Mark Clay. The district court held that: (1) Clay made fraudulent misrepresentations in his application for coverage; (2) Continental had the right of rescission ab initio as to Clay’s claim; and (3) Continental’s right of rescission does not extend to claims made by Michael D. Johnson, a passenger in the Clay vehicle who was injured in the accident…