Full opinion text
MEMORANDUM OPINION AND ORDER REGARDING CROSS-MOTIONS FOR SUMMARY JUDGMENT BENNETT, Chief Judge. TABLE OF CONTENTS I.INTRODUCTION.1174 A. Factual Background.1174 1. General background.1174 2. Pertinent medical background.1175 3. The search for health insurance.1179 a. Initial contact with Midwest Benefits.1179 b. Life Investors application.1180 c. Fortis application.1182 4. Fortis’s rescission .1184 5. Summarg of factual disputes.1188 B. Procedural Background.1188 II. LEGAL ANALYSIS.1189 A. Standards For Summary Judgment.1189 B. Equitable Rescission .1191 1. Generally .1191 2. Construing and interpreting insurance contracts under Iowa law.... 1192 3. Question 18(k).1194 a. The question.'.1194 b. Can Kiel’s knowledge be imputed to Fortis?.1195 i. Knowledge of tamoxifen use.1195 it. Scheme to perpetuate a fraud on Fortis? .1199 c. “Treatment for”.1203 i. Arguments of the parties.1203 ii. Analysis.1206 d. “Consulted with a physician concerning”.1209 i. Arguments of the paHies.1209 ii. Analysis.1211 4. Question 15.1213 a. The question.1213 b. Arguments of the parties.1213 c. Analysis.1214 III. CONCLUSION.1217 I. INTRODUCTION A. Factual Background 1. General background The plaintiffs, Karen Schmidt and Daniel Schmidt (“Schmidts”), are husband and wife. Karen is a self-employed business owner and is currently the owner/operator of several businesses including a video rental and tanning business (known as “Home Video” and “The Sun Tanner”), a payday loan business housed near the video and tanning business, Hampton Home Store and the Coonley apartment building. Karen is also a Radio Shack dealer in connection with the video and tanning businesses, and a U.S. Cellular agent in connection with the Hampton Home Store. In approximately 1988, Karen was personally involved in securing a health and disability insurance plan for a full-time employee of the video and tanning business. From approximately 1990 through August 2001, Daniel Schmidt was employed by the Hampton-Dumont Community School District as the director of maintenance. In approximately 1988, prior to Daniel obtaining his position with the Hampton-Dumont Community School District, the Schmidts purchased a family health insurance policy from Blue Cross Blue Shield (“BCBS”). The Schmidts were covered by the BCBS policy when Karen was diagnosed with breast cancer and underwent a mastectomy followed by chemotherapy in 1989. When Daniel began his employment with the Hampton-Dumont Community School District, and secured health insurance for his family via that employment, the Schmidts terminated their BCBS policy on the basis of cost and duplication of benefits. At no point did the Schmidts have health insurance coverage through any of the businesses that they owned. In the summer of 2001, the Schmidts were anticipating the purchase of the Hampton Home Store — a major appliance retail store which also services appliances. At this time, the Schmidts were considering the possibility of Daniel ending his employment with the Hampton-Dumont Community School District and co-operating the Hampton Home Store with Karen. The sale of the Hampton Home Store to the Schmidts was to be completed on August 13, 2001. At this time, the Schmidts had health insurance through the Hampton-Dumont Community Schools under a self-funded plan — but, this coverage would lapse following the termination of Daniel’s employment with the school district. Therefore, obtaining replacement health care insurance prior to the completion of the sale of the Hampton Home Store to the Schmidts became a priority. Karen was particularly concerned with obtaining replacement coverage in light of her breast cancer history, which is explained in great detail below. When Daniel expressed an interest in leaving his position at the school district in favor of co-operating the Hampton Home Store with Karen, Dr. Lee Morrison, the superintendent of the school district, recommended that the Schmidts contact the school district’s insurance agent, Loren Kiel, at Midwest Group Benefits, Inc. in Decorah, Iowa, to discuss their options for purchasing replacement health care insurance. 2. Pertinent medical background Dr. Keith Hansen, D.O., has been Karen’s primary care physician since 1973. On March 21, 1989, a mammogram performed on Karen revealed the presence of a mass in ‘her right breast. A biopsy "of the mass wag conducted on that same day. The biopsy revealed a medullary carcinoma and Karen was diagnosed with stage II breast cancer, with one of eighteen lymph nodes positive. On March 29, 1989, Karen underwent a radical partial mastectomy with axillary dissection. The surgery was performed by Dr. Hansen and Dr. Richard Francis, M.D. The last time Karen had detectable residual cancer was at the time of her mastectomy on March 29, 1989. Following the surgery, Karen began seeing Dr. Peter Silberstein, M.D., who at the time was an oncology/hematology specialist at The Park Clinic in Mason City, Iowa. Karen’s first visit with Dr. Silberstein was on April 20, 1989. Under Dr. Silberstein’s supervision, Karen underwent six months of chemotherapy — from approximately April 1989 through September 1989. In approximately November of 1989, following the completion of the chemotherapy regimen and after finding that the tumor was estrogen and progesterone receptor positive, Dr. Silberstein prescribed the prescription drug-tamoxifen for Karen- — which Karen then began taking. The last progress note in Karen’s chart with Dr. Silberstein was entered on December 26, 1990 — this is the last date Dr. Silberstein believes he saw Karen as a patient. With regard to tamoxifen, the December 26, 1990, progress note indicates: In regards to the TAMOXIFEN. She currently is on TAMOXIFEN and taking it only once a day. Her ER/PR is positive. I told her that I would slightly recommend that she continue on that though she wanted to discontinue the TAMOXIFEN because of her hot flashes. That would [ ] have been reasonable, since many oncologists do not give both chemotherapy and the TAMOXIFEN. Defendant Fortis Insurance Company’s Appendix in Support of Its Resistance to Plaintiffs’ Motion for Summary Judgment and Defendant’s Motion for Summary Judgment, Doc. No. 34, at 8 (“Deft.’s App.”). Following December 1990, Dr. Hansen continued to renew Karen’s original tamoxifen prescription initiated by Dr. Silberstein, and Karen remained on a daily tamoxifen regiment through 1996. Dr. Hansen’s progress notes throughout this time period contain numerous references to Karen’s tamoxifen prescription and usage, for example: • February 5, 1990 — “The patient calls in stating she is on Tamoxifen, post CA of the breast.” Plaintiffs’ Appendix in Support of Motion for Summary Judgment, Doc. No. 18, at 140 (“Plf.s’ App.”). • August 5, 1991 — “In for recheck of her dysfunctional uterine bleeding related to her Megaee [handwritten ‘Tamoxifen’] therapy and recent treatment with Provera.” Deft.’s App. at 9. • November 19, 1991 — “Patient is wondering about how much follow-up she should do at this point on her Tamoxifen therapy and post CA of the breast.” Deft.’s App. at 10 • May 6, 1992 — “She is on TAMOXIFEN lOmg bid.” Deft.’s App. at 11. • September 22, 1992 -“Her routine medication is Nolvadex.” Deft.’s App. at 11. • February 4, 1993 — “Also is in for six month follow-up of her Tamoxifen. ...”; “Also history of CA of the breast with Tamoxifen therapy.” Plf.s’ App. at 139. • March 15, 1994 — “She has questions concerning continuing Nolvadex, effects of lack of Estrogen on heart attack, bone disease, etc. Advised her that probably if economics of the medicine is not a problem she should continue on Nolvadex for another five years.” Plf.s’ App. at 139. • December 18, 1995 — “She is on Tamoxifen and Provera.... She takes no other medications.” Deft.’s App. at 14. • December 28, 1995 — “She is presently on Tomixifen (sic).... ” Deft.’s App. at 14. • November 26, 1996 — “She is on no medications.” Deft.’s App. at 15. • February 24, 1997 — “States she did get her first period now a year after discontinuing her Tamoxifen.” Deft's App. at 15. Karen took tamoxifen for approximately seven years. Karen was not participating in a clinical trial at the time she used tamoxifen. Dr. Hansen’s medical records in the years following Karen’s mastectomy and chemotherapy treatment contain numerous references to her history of breast cancer, for example: • May 6, 1992 — “She does have a history of CA of the right breast with mastectomy. She does routine follow-up with mammograms, chest x-ray and blood work.” Deft.’s App. at 11. • February 04, 1993 — “Also history of CA of the breast with Tamoxifen therapy.” Plf.s’ App. at 139. • August 11, 1993 — “This patient is having CBC, diagnostic, free T4 and serum iron levels drawn for routine followup of her metastatic CA of the breast.” Plf.s’ App. at 139. • December 18, 1995 — “History of CA of the right breast with mastectomy.” Deft.’s App. at 14. • June 16, 1996 — “History of cancer of the breast.” Deft.’s App. at 14. On two occasions, the references to Karen’s history of breast cancer in Dr. Hansen’s progress notes is more involved. The first is the progress note of November 19,1991, which reads: Patient is wondering about how much follow-up she should do at this point on her Tamoxifen therapy and post CA of the breast. Did talk to Dr¡ Ryan. She needs a CBC and platelet count quarterly. Needs a diagnostic chem panel and chest x-ray annually. Of course, she should come-in with any symptoms at any time. Deft.’s App. at 10. The second is on March 15, 1994, when Karen visited Dr. Hansen to discuss her five-year survival-ship: The patient is in basically to discuss her five year survivalship of her CA of the breast. She has questions concerning continuing Nolvadex, effects of lack of Estrogen on heart attack, bone disease, etc. Did discuss her case with Dr. Bate and then sat down and discussed it with the patient. Advised her that probably if economics of the medicine is not a problem she should continue on Nolva-dex for another five years. It does have cholesterol lowering and protective benefits as well as protection from osteoporosis. Did recommend a yearly mammogram and yearly blood work but otherwise don’t think she needs any other followup at this time. Plf.s’ App. at 139. Karen’s medical records also indicate that in the years following her mastectomy and chemotherapy treatment, she had the following procedures performed: (1) twelve blood panels ; (2) ten blood chemistry analyses; (3) three bone scans; (4) four chest x-rays ; and (5) eleven mammograms of the contralateral breast. In addition to the progress notes generated by Karen’s visits to Dr. Hansen in the years following her mastectomy and chemotherapy treatment, the record contains a medical record from the Mason City Clinic dated February 14, 1997. This document is classified as a “Progress Note” and was authored by Betty Krones, RN OBG, nurse to Dr. Faust. From the context of the record, Karen appears to have contacted Dr. Faust’s office, and spoke with Nurse Krones, about gynecological concerns. In part, the record provides the following: Karen is a new patient to our office. In 1989 she had breast cancer which was treated with mastectomy and chemotherapy. She was on TAMOXIFEN and PROVERA but discontinued it in April 1996. Her hot flashes have since decreased. However, since February 9, 1997, she has been bleeding the last 3 days.... She is worried about her risk of cancer because the breast cancer was estrogen feed. She wonders what Dr. Faust would recommend for her. I consulted with Dr. Faust. He advises he would like to see her on his call day next week to talk to her about her cancer risk. In the meantime, he recommends if she would like she can stop by the office and check a hemoglobin to make sure that she is not severely anemic.... Patient voiced understanding and agreed to this plan. At this time she has declined to come in for a hemoglobin. She will monitor the symptoms and call back as needed. Otherwise, keep her appointment here next week. Appointment was scheduled for February 21,1997. Deft.’s App. at 28. There are no medical records in the record establishing that Karen, in fact, showed up for the February 21,1997, appointment with Dr. Faust. In August 2002, Karen was seen in the Hereditary Cancer Prevention Clinic at Creighton University in Omaha, Nebraska “for evaluation and counseling related to her risk for hereditary breast ovarian cancer.” Plf.s’ App. at 241. Given Karen’s own breast cancer at age 35, and the fact that her sisters and mother had experienced either breast or ovarian cancer, Karen underwent genetic testing to determine whether she had a BRCA1/2 mutation. Id. Genetic testing revealed that Karen did have a BRCA 1 mutation, putting her at a high risk of cancer in the contralateral breast and ovarian cancer. Id.; see Defendant Fortis Insurance Company’s Second Supplemental Appendix, Doc. No. 63, at 181, 192-93 (indicating that Karen had tested positive for the BRCA 1 mutation) (“Deft.’s Second Supp.App.”). In light of testing positive for the BRCA 1 mutation, in January 2003, Karen consulted with Dr. Thoo H. Tan, D.O., at the Hampton Clinic, and Dr. Harsha U. Jayawardena, M.D., at the Mason City Clinic, about a prophylactic mastectomy of the left breast and a prophylactic hysterectomy. Deft.’s Second Supp.App. at 181, 192-93. Both Dr. Tan and Dr. Jayawardena agreed that due to her breast cancer history and positive test for the BRCA1 mutation that the prophylactic mastectomy and hysterectomy should be scheduled. 3. The search for health insurance a. Initial contact with Midwest Benefits As described above, in the summer of 2001 the Schmidts were in search of replacement health insurance so that Daniel could transition out of his job with the Hampton-Dumont Community School District, and into a position as an active co-owner of the various businesses owned by the Schmidts. On the advice of the school superintendent, Dr. Lee Morrison, Karen contacted the school district’s insurance agent, Loren Kiel (“Kiel”). In 2001, Kiel was the president of Midwest Benefits, Inc. (“Midwest Benefits”), in Decorah Iowa. Kiel was also affiliated with Group Benefits Consultants, Inc., a company which handled third party administration of retirement plans, self-funded group health plans, and flexible benefit plans. Kiel has been involved in the insurance business since 1984 and is licensed to sell life, accident and health insurance in Iowa. In 2001, Kiel worked with an assistant, Karla Baumler (“Baumler”). At that time, Baumler had obtained her insurance license for health care products, and worked on individual quotes and applications, small group quotes and applications, and some customer service work. Deft.’s App. at 133; Plf.s’ App. at 24. Karen first contacted Midwest Benefits by telephone sometime in June 2001. Karen discussed the fact that Daniel was intending to leave his employment with the school district and transition into co-ownership of their small businesses, and that hopefully this transition would be complete by the time the sale of the Hampton Home Store to the Schmidts was finalized. Karen also indicated that Daniel’s transition was contingent on the Schmidts obtaining replacement health insurance coverage as close to the closing date on the Hampton Home Store sale as possible. Given Karen’s history of breast cancer, described in detail above, she was concerned over whether they would be able to obtain health insurance coverage. After her initial contact, Karen conversed with Kiel and Baumler on a number of occasions before any application for insurance was submitted. According to Kiel, the conversations were generally about “what the benefits were of the various plans that were available and the different .... deductibles and premium rates and so forth for each plan, somewhat about how that compared to current coverage that they had under the group plan, what might be good, in terms of coverage.” Plf.s’ App. at 6. Other than a comparison of the options available, another key topic of conversation was Karen’s concern over obtaining coverage due to her breast cancer history. See id. (“we talked about— The concern was about the prior history back a number of years”). The parties agree that Karen told Kiel and Baumler that she had breast cancer and a mastectomy in 1989 — however, what additional details, if any, Karen told Kiel and Baumler about her medical history is hotly contested by the parties. b. Life Investors application Kiel recommended that the Schmidts first submit an application for health insurance coverage to Life Investors Insurance Company of America (“Life Investors”). Kiel recommended Life Investors first because he felt it offered the best coverage, was a quality company, had the best rates, and was most likely to offer coverage to someone who had a past medical history. Deft.’s App. at 146; Plf.s’ App. at 6. On the advice of Kiel, the Schmidts decided to submit an application to Life Investors. In preparation for the submission of the Life Investors application, Karen compiled some of her medical records surrounding her cancer treatment and provided them to Kiel and Baumler. See Deft’s App. at 150 (“On the advice of Karla and Loren together, and talking with them, we decided that the best would be for me to get the medical records and a letter from my doctor saying I had these conditions and send them in with the application.”). While these records were not exhaustive, they did contain portions of Dr. Silberstein’s progress notes, portions of Dr. Hansen’s progress notes, some mammogram results, and some blood test results. See Deposition Exhibit 4, Plf.s’ App. at 132-202. Karen also procured a letter from Dr. Hansen for submission with her application which reads: To Whom It May Concern: [Karen Schmidt] has been under my care since 1973. She has a significant history of breast cancer with mastectomy in 1989. She has done well since that time and has not had any evidence of recurrence. She has had regular and routine check-ups and follow-ups and now 12 years post disease is considered to be disease free. Other than the above, the patient has no significant medical history and is an extremely healthy woman for her age, and has no health risks. If there are any questions in regard to the above, please feel free to contact me. Plf.s’ App. at 134. The letter is dated July 17, 2001, and is signed by Dr. Hansen. Sometime in July 2001, Midwest Benefits mailed the Life Investors application to Karen and Daniel to fill out. The Schmidts filled out, signed and dated the Life Investors application on July 26, 2001, and mailed it back to Midwest Benefits with a packet of Karen’s medical records and the July 17, 2001, letter from Dr. Hansen. On the application, Karen and Daniel checked ‘Tes” in response to Questions 2(k), which asked: “Has any person listed in question number 1 EVER had or to the best of your knowledge now have: ... Disorder of skin, cyst, tumor or any cancer?” Plf.s’ App. at 121. In the following section which required details regarding “yes” answers, the Schmidts identified Karen as the family member associated with the “yes” answer to Question 2(k), and there is a handwritten notation to “see Dr’s reports attached” where it asks for details. Plf.s’ App. at 122. Karen and Daniel also checked “Yes” in response to Question 4(a) which asked: “Has anyone above, within the past 5 years: ... Had a check-up, consultation, lab test, illness, injury, surgery?” In the section that asks for details, the Schmidts again identified Karen as the family member associated with the “yes” answer, and in the box for providing details wrote “yearly mamogram (sic) — see attached reports.” Id. Dr. Hansen’s July 17, 2001, letter and at least some of the progress notes contained in medical records Karen provided were attached by Kiel and/or Baumler and submitted along with the Life Investors application. Plf.s’ App. at 7, 17, 26. Baumler testified that this additional documentation was submitted because the application asked if any proposed insured had ever had cancer and asked for details regarding her cancer history. See Plf.s’ App. at 26 (“they asked if she ever had anything. She had to answer that. That’s why we included all of that information.”). Around the time the Life Investors application was submitted, approximately the end of July 2001, Kiel informed Karen of the Gramm-Leach-Bliley Financial Services Modernization Act (“Gramm-Leach-Bliley Act”) and provided her with some written information regarding the Gramm-Leach-Bliley Act. Deft.’s App. at 153-54. After reviewing the information, Karen composed a letter to Life Investors which read: To Whom It May Concern: As provide (sic) by the Financial Services Modernization Act/Gramm-Leach-Bliley, we request that any information provide (sic) by us to your company in regards to our application for health insurance NOT be forwarded to any Medical Information Bureau. Furthermore, we request that any and all information Life Investors compiles in regards to our application NOT be forward (sic) to any Medical Information Bureau as provided in the same Financial Services Modernization Aet/Gramm-Leach-Bliley. Thank you for your consideration of this matter. Plf.s’ App. at 130 (emphasis in original). The letter is dated July 24, 2001, and is signed by both Karen and Daniel Schmidt. Karen prepared the letter in an attempt to prevent dissemination of the medical records she submitted along with the Schmidts’ application to entities other than Life Investors. Def.’s App. at 154. Kendy Robinson, of the Health Service Unit at Live Investors, sent Kiel a letter dated August 10, 2001, regarding the underwriting status of the Schmidts’ application. It is characterized as an “Agent Action Report” and states: For Your Action: • Karen will be denied due to health history of Breast cancer. • Shall we continue? • This is your second request. Comments: Certificate will be pending until information is received. Plf.s’ App. at 118. Kiel does not recall when this letter was received. On August 28, 2001, Baumler sent a fax to Linda Smith of the Health Service Unit at Live Investors. The fax stated: Please discontinue the request for a new individual policy on Daniel Schmidt and daughter Kathy. This application was sent in and due to Daniel’s spouse Karen being denied the whole family has decided to get a policy elsewhere. If you have questions, please call. Plf.s’ App. at 117. In a letter sent to Daniel, dated August 30, 2001, Life Investors acknowledged that it had been advised of his request to withdraw his application and stated that it had ceased evaluation of the Schmidts’ application for insurance as requested. Plf.s’ App. at 119. c. Fortis application Sometime after Kiel and Karen became apprised that there was a problem with the Life Investors application, it was decided that the Schmidts should submit an application for health insurance to Fortis Insurance Company (“Fortis”). Part of the rationale behind submitting an application to Fortis was the fact that the application only asked for medical history for the past ten years. Deft.’s App. at 135; Plf.s’ App. at 27. The Fortis application required the Schmidts to cheek “Yes” or “No” in response to the following question: WITHIN THE LAST 10 YEARS HAS ANY PROPOSED INSURED: 18. HAD ANY DIAGNOSIS OF, RECEIVED TREATMENT FOR, OR CONSULTED WITH A PHYSICIAN CONCERNING: .... k) Cancer? Provide location, type of cancer and treatment received. Plf.s’ App. at 81. Karen had a number of conversations with Kiel and Baumler regarding how this question should be answered. Regarding the conversations over how Question 18(k) should be answered, Kiel testified as follows: Q: Okay. Did you talk with Karen about how to fill out the health questionnaire and specifically question 18K? A: I think we talked about it some — at some length about the entire application, that anything within the last ten years should be reported, but not anything— It’s not asking for anything older than ten, so I don’t recall if we talked about just one item or the whole thing. Q: Did the issue about Karen’s health history, though, come up, in terms of— A: Yes. Q: —how to approach the Fortis application? A: Yes. Q: Okay. Did she ask for your input on how to complete it? A: She may have. She may have. We might have talked, because of the prior condition, talked about that should or what should be put down and what was not necessary to put down. Q: Did you advise Karen that she could answer no to that cancer inquiry on the Fortis application? .... A: Well, let me answer that question in general. It was my understanding, from what I had seen of the medical records and what Karen and I had talked about, that she was not being treated for cancer in the last ten years, had not had that condition, was not — was in good health, as indicated by her doctor. And therefore, the question’s asked, as asked on the application, which says, in the last ten years, she could very truthfully put down as being — the answer being no. Q: And you believe that her — based on what you knew, that she was answering the question truthfully? A: Yes.... Q: And did you advise her of such?.... A: As to the information that I was— that I knew about and from our discussions, I felt absolutely the answer that she put down was correct. Plf.s’ App. at 11. As to conversations with Karen about how to fill out Question 18(k), Baumler testified as follows: A: .... To me, that application was asking, have you been treated for, anything in the last ten years? She had not been. I mean, in talking to her, and the information she had, to me, it was very-clear that she answered the question to the best of her knowledge and correctly. s|s % # * * Q: Did you talk to Loren about the Tamoxifen issue? A: Uh-huh. Q: Before the [Fortis application] packet went out? A: Uh-huh. Q: And what did you and Loren talk about relative to Tamoxifen? A: We basically talked about the same thing that Karen and I talked about. I mean, I remember going back and forth. And it’s like, okay, you know, how would you answer [Question 18(k) ]? And we both agreed that, I mean, within the last ten years, she had not been taking anything for treatment. I mean, if I would have been filling out the application, I would have done, filled it out the same way she did, I mean. Plf.s’ App. at 28-29. In regard to her consultation with Kiel and Baumler regarding the correct response to Question 18(k), Karen testified as follows: Q: So the focus of these five conversations [with Kiel and Baumler] was how to answer the question, within the last ten years, has any proposed insured had any diagnosis or received treatment for or consulted with a physician concerning cancer? A: Yes. Q: Okay. Tell me, as best you can recall, what was discussed in that regard. A: What was discussed was the fact that I had breast cancer in 1989. I had a mastectomy very shortly thereafter. I was cancerfree at that time. After the mastectomy, I received chemotherapy in an adjuvant setting, and I took Tamoxifen as a preventative medication. Q: Anything else that you recall being discussed in those five conversations pri- or to completion of [the Fortis application]? A: It was extensive discussion about the fact that I had breast cancer, that I took Tamoxifen as a preventative medication and the chemotherapy. Q: Tell me what — -Do you recall the specifics of those conversations? A: That I wanted to make sure that we answered the question correctly, that I had given careful consideration to it, and that I wanted them to assure me that they had also. And did I answer the question correctly? Am I answering correctly? And their response was yes. * * * * * * Q: Did they express, and by them I mean Loren and/or Karla, express any concerns or questions as to how question 18K should be filled out? A: Question 18K was given careful consideration by Loren, Karla and myself. And after the discussions that we had in regards to my health history, all three of us agreed that we had- — that the answer to question [18]K was no. Deft.’s App. at 157-58. Baumler mailed a Fortis individual medical insurance application to Karen on August 8, 2001. Daniel and Karen Schmidt completed and signed the application on August 9, 2001 and mailed the application back to Midwest Benefits. The Schmidts checked “No” in response to Question 15, which asked: “Have any of the proposed insureds ever been declined, postponed, charged an extra premium or had a portion of coverage excluded for life, disability, or medical insurance or had such coverage rescinded?” Plf.s’ App. at 80. In response to Question 18(k), the Schmidts also checked “No.” Plf.s’ App. at 81. The Schmidts left page 5 of the application, which allotted space for applicants to provide additional medical details, blank. Plf.s’ App. at 83. Karen did not have any discussions with Kiel or Baumler as to whether to provide additional medical details on page 5 of the Fortis application. Deft.’s Statement of Material Facts at ¶ 56. At the end of the application, directly above the signature block where the Schmidts signed and dated the application, the following appears: I represent to the best of my knowledge and belief, that all statements and answers on this enrollment form are complete and true. The enrollment form and any amendments shall be the basis for the contract. I also agree that: .... We, the undersigned Proposed Insured(s) and agent acknowledge that the Proposed Insured(s) has read the completed enrollment form. We understand and acknowledge that any fraudulent statement or material misrepresentation on the enrollment form and/or any amendments may result in claim denial or contract rescission, subject to the time limit on certain defenses or incontestability provisions of the contract. Plf.s’ App. at 84. Kiel signed the portion of the Fortis application “no” where he was asked if he was aware of any mental or physical disease or deformity of any proposed insured which was not disclosed on the enrollment form. Plaintiffs’ Statement of Material Undisputed Facts in Support of Their Motion for Summary Judgment, Doc. No. 18, at ¶ 46. The application was subsequently mailed by Baumler to Fortis on August 13, 2001. The packet of medical records that Karen provided to Midwest Benefits, and that had been submitted with the Life Investors application, was not submitted with the Fortis application. Deft.’s Statement of Material Facts at ¶ 60. There is a dispute as to whether Dr. Hansen’s July 17, 2001, letter was submitted with the Fortis application. Fortis notified Midwest Benefits that coverage had been extended to the Schmidts in a correspondence dated August 20, 2001. The policy that Fortis issued to the Schmidts had an effective date of September 1, 2001. 4. Fortis’s rescission As discussed above, in August 2002, Karen went to the Hereditary Cancer Prevention Clinic at Creighton University in Omaha, Nebraska in order to undergo genetic testing to determine if she had a BRCA1/2 mutation. Dr. Henry Lynch, M.D., the physician overseeing Karen’s genetic testing, wrote Fortis a letter dated August 13, 2002, requesting preauthorization for the proposed testing. Amongst other information, the letter noted that “Karen has a history of breast cancer at 35.” Plf.s’ App. at 241. Receipt of this letter by Fortis triggered an investigation in Karen’s medical history. In a letter dated September 14, 2002, and addressed to Daniel Schmidt, Fortis indicated that it had received a statement of expense from Dr. Hansen, and indicated that more information regarding Karen’s medical history would be necessary before Fortis’s liability could be determined. In the letter, Fortis asked that Karen provide the name and address of any doctors or hospitals by who she had been treated in the past 11 years, and the name and address of any pharmacies where she purchased prescription medication within the past 11 years. Plf.s’ App. at 243. In addition, Fortis asked Karen to sign a medical records release. LeeAnn Szopinski, Senior Individual Medical Underwriter for Fortis, wrote the following letter, dated March 12, 2003, to the Schmidts: During the course of your recent claim for benefits under the above policy, we received information regarding Karen Schmidt. This prompted a review of Karen’s medical history and medical records were obtained from Dr. Hanson. In reviewing these medical records, we discovered medical information that was not disclosed on your application for insurance. As you know, at the time you applied for coverage, we asked you to complete an application/enrollment form. Karen’s eligibility for insurance coverage with our company was based on the information included in the application/enrollment form. We found misrepresentation on questions (sic) 18K of the application/enrollment form. Had our Underwriting Department been aware of this medical history at the time the application/enrollment form was approved, Karen’s eligibility for insurance coverage with our company would have been affected. In light of this additional information, the following adverse action would have been required at the time that your policy was issued. We are enclosing an Amendment of Application that excludes coverage for Karen Schmidt from the effective date of the policy. If you choose to accept the above Amendment of Application, please sign, date and return it to Fortis in the enclosed envelope. Your policy will,remain in force, limited by the Amendment of Application. If you choose not to accept and sign the Amendment of Application, you will leave us no alternative except to rescind the entire policy back to the effective date of September 1, 2001. We require notification within SO days of receipt of this letter of your intentions. Fortis will arrange for any appropriate refund of premium, less any claims, which may have already been paid. If you have any new information that may impact this decision please submit this information in writing. Plf.s’ App. at 244-45 (emphasis in original). At this point the Schmidts obtained counsel, through whom they appealed this decision internally with Fortis and filed a complaint with the Iowa Insurance Commissioner. See Plf.s’ App. at 67-68. Karen then procured letters from both Dr. Silberstein and Dr. Hansen for submission to Fortis in conjunction with their appeal. Dr.. Silberstein’s letter was dated March 24, 2003, and stated, in relevant part: Karen Schmidt had a right modified mastectomy in March of 1989 for medul-lary carcinoma of the right breast with 1/18 lymph nodes positive for metastatic carcinoma. She was treated with chemotherapy (Adriamycin, Cytoxan and 5-FU) in an adjuvant setting. After that she received tamoxifen. Tamoxifen, at that point in time, was a preventative prophylactic measure to prevent cancer from[ Jrecurring; but it was not an active treatment for cancer since this, was given in an adjuvant setting with no evidence that she had any cancer. Plf.s’ App. at 69, 230. Dr. Hansen’s letter was dated April 2, 2003, and stated, in relevant part: [Karen Schmidt] has been under my care since 1973. In 1989 she was diagnosed with breast cancer, underwent a mastectomy with adjuvant therapy and radiation. Later that year when she was under the joint care of Dr. Peter Silberstein, oncologist, and myself, discussions were held about Tamoxifen for prophylactic purposes. According to my records and recollection Dr. Silberstein thought it was important that she go on Tamoxifen as prophylaxis. To the best of my knowledge this patient has had no active diagnosis or treatment for any cancer following surgical and radiation treatment in 1989. She has been cancer-free in the interval. The Tamoxifen she was on for seven years was purely as a prophylaxis. It was discontinued at that time as studies came out showing that there was no benefit to using it for more that five years. Therefore, to the best of my knowledge and my records Tamoxifen was prescribed for this patient, who was deemed to be cancer-free, as a prophylactic measure due to her history of breast cancer only.... Plf.s’ App. at 70, 231. After learning of Fortis’s decision to rescind the policy, Kiel also faxed Fortis a handwritten letter which indicated that Karen had not been treated for cancer during the relevant ten-year period, and that she had only taken preventative measures during that time— therefore, on these basis, Kiel requested a reversal of Fortis’s decision to rescind the policy. Plf.s’ App. at 72. A May 22, 2003, letter from Michael Prudlow, Individual Medical Underwriting Correspondent for Fortis, to counsel for the Schmidts, indicated that “[a]fter careful review, we find that our actions have been appropriate.” Plf.s’ App. at 247. The letter states the basis for Fortis’s decision as follows: Despite the fact that Ms. Schmidt’s diagnosis and primary treatment occurred in 1989, she did continue the use of Tamoxifen until 1995. Additionally, Ms. Schmidt underwent follow-up visits with the doctor(s) to be screened for any recurrence of the cancer, well after 1989. The Enrollment Form completed by the Schmidts asks: “Within the last 10 years has any proposed insured: Had any diagnosis of, received treatment for, or consulted with a physician concerning:” The Schmidts answered “no” to all of the health statement questions despite the fact that Ms. Schmidt took prescription medication and underwent follow-up exams within the ten years prior to the application date. Had we been aware of this information at the time of application, an offer of coverage would not have been extended to Ms. Schmidt. Id. (emphasis in original). A June 2, 2003, letter from Margaret Chase (“Chase”), Market Conduct Analyst for Fortis, to the Iowa Insurance Commission indicates the following as the basis for Fortis’s decision: The Enrollment Form completed by the Schmidts asks: ‘Within the last 10 years has any proposed insured: Had any diagnosis of, received treatment for, or consulted with a physician concerning:” The Schmidts answered “no” to all of the health statement questions on the Enrollment Form. On or about February 19, 2003, a routine claims investigation was conducted. As a result, medical records were requested from Dr. Peter Silberstein and Dr. Keith Hansen. These records indicate that Mrs. Schmidt was diagnosed with breast cancer in 1989. A further review of these records documents the fact that Ms. Schmidt took prescription medication (Tamoxifen) and underwent follow-up exams for cancer within the ten years prior to the application date. Had we been aware of this information at the time of the application, an offer of coverage would not have been extended to Ms. Schmidt. After careful review of this matter, we find that our actions have been appropriate. Plf.s’ App. at 249-50. A second letter from Chase to the Iowa Insurance Commissioner, dated June 19, 2003, states, in part: Enclosed, please find copies of Ms. Karen Schmidt’s medical records. The highlighted areas pertain primarily to question 18k which asks: Within the last 10 years has any proposed insured: 18. Had any diagnosis of, received treatment for, or consulted with a physician concerning: k. “Cancer? Provide location, type of cancer and treatment received.” The medical records indicate that Ms. Schmidt consulted with a physician and received treatment with Tamoxifen until 1995. Based on our underwriting guidelines, an offer of coverage would not have been extended. Plf.s’ App. at 251. A September 12, 2003, letter from Michael Prudlow to the Schmidts’ counsel stated, in pertinent part: According to [Dr. Silberstein and Dr. Hansen], Ms. Schmidt was prescribed Tamoxifen as a prophylaxis to prevent the recurrence of cancer. While this is true, it should also be considered that had Ms. Schmidt not had cancer, she would not have been prescribed Tamoxifen. This medication is commonly used by breast cancer survivors due to the frequency of recurrence. While annual mammograms may be part of a routine exam, it is also true that these are more urgent for those women with a history of breast cancer. Ms. Schmidt’s exam results were certainly reviewed with her history of cancer taken into consideration as her doctors were aware of this history. Please refer to the Other Provisions page of the certificate, specifically the paragraph regarding Misstatements. As the certificate indicates, “if any relevant fact about you is found to have been misstated, the true facts will be used to determine if the insurance is in force.” This paragraph is applicable to question 18k regarding Ms. Schmidt’s health history. Furthermore, the final paragraph on page 6 of the enrollment form states: “We, the undersigned Proposed Insured(s) and agent acknowledge that the Proposed Insured(s) has read the complete enrollment form. We understand and acknowledge that any fraudulent statement or material misrepresentation on the enrollment form and/or any amendments may result in claim denial or contract rescission, subject to the time limit on certain defenses or incontestability provisions of this contract. The decision to review additional medical information via medical records is based upon the history as provided by the applicants. If an application provides a “clean” or uneventful medical history, an offer of coverage is extended as the applicant has attested to the fact that the information they have provided is complete and accurate. Applicants are not expected to have knowledge of what the company underwriting guidelines are. They are expected to provide a complete and accurate personal health history to be reviewed and considered for an offer of coverage. There are no guarantees of coverage as all applications for major medical insurance are fully underwritten. As stated in our prior correspondence of August 6, 2003, if the amendment agreeing to remove Ms. Schmidt is- not signed and returned, the entire policy will be rescinded back to its original effective date. This deadline has been extended since May 30, 2003 and will not be extended any longer. Since the amendment has not been returned, we will proceed with the rescission of Mr. and Ms. Schmidt’s policy. They will receive an entire refund' of their premiums, less any claims paid. Plf.s’ App. at 253-54. In a September 22, 2003, letter to Daniel Schmidt, Fortis notified him of the rescission of the Schmidts’ entire health insurance policy/certificate back to the effective date of September 1, 2001. Plf.s’ App. at 255. A separate correspondence from Fortis to Daniel, also dated September 22, 2002, indicates that the policy was terminated effective September 1, 2001, as there had been no response to Fortis’s reformation offer. Plf.s’ App. at 75. Included in this second correspondence was a check in the amount of $7,365.97, which represented all premiums paid by the Schmidts minus all claims paid by Fortis. Id. 5. Summary of factual disputes There are three general areas of factual dispute in the record that the court will summarize here merely for purposes of clarification and focus. First, there is a factual dispute as to Kiel’s knowledge, if any, of Karen’s tamoxifen usage prior to submission of the Fortis application. Second, there is a factual dispute as to whether Karen’s tamoxifen usage constituted treatment for cancer and whether her follow-up examinations (i.e. mammograms, blood panels, chest x-rays, and five-year survivalship appointment) constituted consultation with a physician regarding cancer. Finally, there is a factual dispute surrounding whether or not Karen had been actually denied coverage by Life Investors at the time the Schmidts answered and submitted their Fortis application. The court will discuss each of these disputes, including whether the dispute generates a genuine issue of material fact, in greater detail in the legal analysis section. B. Procedural Background On September 29, 2003, the Schmidts filed suit against defendant Fortis in the Iowa District Court in and for Franklin County. - The plaintiffs’ petition, entitled “Petition for Declaratory Judgment,” contained two counts. The first count sought declaratory judgment that the Schmidts made no fraudulent misrepresentations on the Fortis enrollment form and that Fortis was not entitled to fully or partially rescind the policy. See Petition for Declaratory Judgment, Doc. No. 1, Exh. B. The second count alleged breach of contract, asserting that Fortis’s unlawful rescission of the policy had caused economic damage to the plaintiffs in that the plaintiffs have had to pay for various medical services and prescription drugs for which Fortis is liable under the unlawfully rescinded health insurance policy. Id. On November 6, 2003, Fortis removed the action to this court on the basis of diversity jurisdiction under 28 U.S.C. § 1332, as the plaintiffs are residents of Hampton, Iowa, and Fortis is a Wisconsin corporation with its principal place of business in Wisconsin, and as the amount in controversy exceeded the $75,000.00 jurisdictional amount. (Doc. No. 1). On November 18, 2003, Fortis filed an Answer and Counterclaim in which it categorically denied that the plaintiffs were entitled to the relief sought, and asserted a counterclaim for declaratory judgment under the Declaratory Judgment Act, 28 U.S.C. § 2201, that the plaintiffs made fraudulent misrepresentations or fraudulently concealed material information on the enrollment form and that Fortis had the legal right to rescind the policy. (Doc. No. 5). The plaintiffs filed an Answer to Counterclaim on December 8, 2003, in which they denied the allegations in Fortis’s counterclaim and again requested declaratory judgment that they made no fraudulent misrepresentation on the enrollment form and that Fortis therefore had no right to rescind the policy. (Doc. No. 7). On May 28, 2004, the plaintiffs filed their Motion for Summary Judgment. (Doc. No. 18). On August 16, 2004, Fortis filed a Motion for Summary Judgment. (Doc. No. 32). On August 18, 2004, Fortis filed its Resistance to Plaintiffs’ Motion for Summary Judgment. (Doc. No. 38). Attached to both Fortis’s Motion for Summary Judgement, and Resistance to Plaintiffs’ Motion for Summary Judgment, was a Combined Brief In Resistance to Plaintiffs’ Motion for Summary Judgment and in Support of Defendant’s Motion for Summary Judgment. See Doc. Nos. 32 & 38. On August 23, 2004, the plaintiffs filed their Local Rule 56.1(d) Reply to Defendant’s Statement of Material facts. (Doc. No. 41). On September 24, 2004, the plaintiffs filed their Resistance to Defendant’s Motion for Summary Judgment (Doc. No. 50), to which they attached their Supplemental Appendix in Support of Plaintiffs’ Motion for Summary Judgment and in Resistance to Defendant’s Motion for Summary Judgment, as well as a Supplemental Statement of Additional Material Facts in Support of Plaintiffs’ Motion for Summary Judgment and in Resistance to Defendant’s Motion for Summary Judgment. See Doc. No. 50. On October 4, 2004, Fortis moved to file under seal its Reply Brief in Support of Fortis Insurance Company’s Motion for Summary Judgment (Doc. No. 62), its Local Rule 56.1(d) Reply to Plaintiffs’ Supplemental Statement of Additional Material Facts (Doc. No. 63), and a Second Supplemental Appendix (Doc. No. 63). Fortis’s motion to file these documents under seal was granted, and the documents were so filed. See Doc. No. 65. On December 20, 2004, the plaintiffs filed a Second Supplemental Appendix. (Doc. No. 72). Telephonic oral argument on the cross-motions for summary judgment was held on December 21, 2004. At oral argument the plaintiffs were represented by Chad A. Swanson of Dutton, Braun, Staack & Hellman, P.L.C., in Waterloo, Iowa. Fortis was represented by Michael W. Thrall and Debra L. Hulett of Nyemaster, Goode, Voigts, West, Hansell & O’Brien, P.C., in Des Moines, Iowa. Counsel for both parties did an exceptionally competent and professional job in briefing and arguing their respective positions to the court. A bench trial on this matter is currently scheduled for January 24, 2005, in Fort Dodge, Iowa. II. LEGAL ANALYSIS A. Standards For Summary Judgment This court has considered in some detail the standards applicable to motions for summary judgment pursuant to Federal Rule of Civil Procedure 56 in a number of prior decisions. See, e.g., Kaydon Acquisition Corp. v. Custum Mfg., Inc., 301 F.Supp.2d 945, 952 (N.D.Iowa 2004); Wells Dairy, Inc. v. Travelers Indemnity Co. of Illinois, 241 F.Supp.2d 945, 958-59 (N.D.Iowa 2003); Swanson v. Van Otterloo, 993 F.Supp. 1224, 1230-31 (N.D.Iowa 1998); Dirks v. J.C. Robinson Seed Co., 980 F.Supp. 1303, 1305-07 (N.D.Iowa 1997); Laird v. Stilwill, 969 F.Supp. 1167, 1172-74 (N.D.Iowa 1997); Rural Water Sys. # 1 v. City of Sioux Ctr., 967 F.Supp. 1483, 1499-1501 (N.D.Iowa 1997), aff'd in pertinent part, 202 F.3d 1035 (8th Cir.2000), cert. denied, 531 U.S. 820, 121 S.Ct. 61, 148 L.Ed.2d 28 (2000); Tralon Corp. v. Cedarapids, Inc., 966 F.Supp. 812, 817-18 (N.D.Iowa 1997), aff'd, 205 F.3d 1347, 2000 WL 84400 (8th Cir.2000) (Table op.). Thus, the court will not consider those standards in detail here. Suffice it to say that .Rule 56 itself provides, in pertinent part, as follows: Rule 56. Summary Judgment (a) For Claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory judgment may, at any time after the expiration of 20 days from the commencement of the action or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in the party’s favor upon all or any part thereof. (b) For Defending Party. A party against whom a claim .... is asserted .... may, at any time, move for summary judgment in the party’s favor as to all or any part thereof. (c) Motions and Proceedings Thereon.... The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a)-(c) (emphasis added). Applying these standards, the trial judge’s function at the summary judgment stage of the proceedings is not to weigh the evidence and determine the truth of the matter, but to determine whether there are genuine issues for trial. Quick v. Donaldson Co., 90 F.3d 1372, 1376-77 (8th Cir.1996); Johnson v. Enron Corp., 906 F.2d 1234, 1237 (8th Cir.1990). An issue of material fact is genuine if it has a real basis in the record. Hartnagel v. Norman, 953 F.2d 394 (8th Cir.1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). As to whether a factual dispute is “material,” the Supreme Court has explained, “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Beyerbach v. Sears, 49 F.3d 1324, 1326 (8th Cir.1995); Hartnagel, 953 F.2d at 394. If a party fails to make a sufficient showing of an essential element of a claim with respect to which that party has the burden of proof, then the opposing party is “entitled to judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); In re Temporomandibular Joint (TMJ) Implants Prod. Liab. Litig., 113 F.3d 1484, 1492 (8th Cir.1997). In reviewing the record, the court must view all the facts in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences that can be drawn from the facts. See Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348; Quick, 90 F.3d at 1377 (same). A case in which the issues involved are primarily questions of law “is particularly appropriate for summary judgment.” TeamBank, N.A. v. McClure, 279 F.3d 614, 617 (8th Cir.2002) (citing Adams v. Boy Scouts of America-Chickasaw Council, 271 F.3d 769, 775 (8th Cir.2001)); Bank of Am. Nat’l Trust & Sav. Ass’n v. Shirley, 96 F.3d 1108, 1111 (8th Cir.1996) (“Where the unresolved issues are primarily legal rather than factual, summary judgment is particularly appropriate.”); Aucutt v. Six Flags Over Mid-America, Inc., 85 F.3d 1311, 1315 (8th Cir.1996) (same). With these standards in mind, the court turns to consideration of the parties’ cross-motions for summary judgment. B. Equitable Rescission 1. Generally Under Iowa law, fraudulent misrepresentation in the inducement to contract gives rise to three distinct actions: (1) a cause of action at law for money damages; (2) a defense to a breach-of-contract claim; and (3) a ground for rescission of a contract in an action in equity. See Gunderson v. ADM Investor Serv., Inc., 85 F.Supp.2d 892, 919 (N.D.Iowa 2000); Oeltjenbrun v. CSA Investors, Inc., 3 F.Supp.2d 1024, 1050 (N.D.Iowa 1998); Utica Mut. Ins. Co. v. Stockdale Agency, 892 F.Supp. 1179, 1191 (N.D.Iowa 1995). In this instance, the case at hand concerns whether Fortis’s rescission of the policy based on an alleged fraudulent misrepresentation by the plaintiffs in filling out the enrollment form was wrongful. Therefore, at this juncture the focus is only on fraudulent misrepresentation as grounds for rescission. Generally, in Iowa, “fraudulent misrepresentations leading to the creation of a contract give[s] rise to a right of rescission.” Robinson v. Perpetual Servs. Corp., 412 N.W.2d 562, 568 (Iowa 1987); see First Nat’l Bank in Lenox v. Brown, 181 N.W.2d 178, 182 (Iowa 1970) (“It is a well settled principle of equity that misrepresentations amounting to fraud in the inducement of a contract, whether innocent or not give rise to a right of avoidance on the part of the defrauded party.”). Under Iowa law, five elements must be proven where a party seeks to rescind a contract based on a fraudulent misrepresentation: (1) a representation, (2) falsity, (3) materiality, (4) an intent to induce the other to act or refrain from acting, and (5) justifiable reliance. City of Ottumwa v. Poole, 687 N.W.2d 266, 269 (Iowa 2004); Rubes v. Mega Life And Health Ins. Co., Inc., 642 N.W.2d 263, 269 (Iowa 2002); Hyler v. Garner, 548 N.W.2d 864, 872 (Iowa 1996): Swihart v. Universal Underwriters Life Ins. Co., 669 N.W.2d 260 (Table), 2003 WL 21361008 at *3 (Iowa Ct.App. Jun.13, 2003); Wilden Clinic, Inc. v. City of Des Moines, 229 N.W.2d 286, 292 (Iowa 1975); see also Dishman v. American General Assurance Co., 193 F.Supp.2d 1119, 1123 (N.D.Iowa 2002); Gunderson, 85 F.Supp.2d at 920; St. Paul Reinsurance Co., Ltd. v. Commercial Fin. Corp., 2000 WL 33915816 at *5 (N.D.Iowa Nov.20, 2000); Utica, 892 F.Supp. at 1193. Importantly, proof of scienter, which is required to sustain an action at law for fraudulent misrepresentation, is notably absent. See Hyler, 548 N.W.2d at 871 (noting that rescission can be obtained absent proof of scienter and pecuniary damage); Wilden Clinic, Inc., 229 N.W.2d at 292 (recognizing that in equity, relief from fraud can be granted absent a showing of scienter or pecuniary damage). As this court thoroughly discussed in Utica Mutual Insurance Company v. Stockdale Agency, 892 F.Supp. 1179 (N.D.Iowa 1995), lack of the element of scienter is a historical distinction between the proof required to sustain an action in equity to rescind the contract and that required to sustain an action at law for fraudulent misrepresentation. See id. at The Iowa Supreme Court recently discussed this important distinction: An action to rescind a contract is regarded as less severe, and hence less demanding in its proof requirements, than an action at law for damages based on fraud. Hyler, 548 N.W.2d at 871. In an equitable rescission action, it is .not the knowledge of falsity that is at issue but “whether misrepresentations induced the complaining party to contract.” Utica, 892 F.Supp. at 1195. As this court stated in Hyler, injecting an “intent to deceive” element in a rescission case would reintroduce the concept of scienter, “making the elimination of this requirement in equity cases illusory.” , Hyler, 548 N.W.2d at 872; see Rubes, 642 N.W.2d at 269. In order to uphold the historical distinction between at law and in equity relief for- fraudulent misrepresentation, the concept of scienter must never enter the equation in determining whether a party is justified in pursuing the equitable relief of rescission — therefore, the intent necessary to sustain an equity action is merely the intent to induce the complaining party to contract. Utica, 892 F.Supp. at 1195; Rubes, 642 N.W.2d at 269; Hyler, 548 N.W.2d at 871. In an equity action for fraudulent misrepresentation, fraud may be inferred from the circumstances, words and actions in evidence. Utica, 892 F.Supp. at 1197; accord Wilden Clinic, 229 N.W.2d at 292 (“Fraud may arise from facts and circumstances, and an intent to defraud may properly be inferred from circumstances, words, and actions shown in evidence.”). In this case, Fortis identifies the Schmidts “no” responses to Questions 15 and 18(k) as fraudulent misrepresentations giving rise to Fortis’s right to rescind the policy back to its effective date of September 1, 2001. The Schmidts concede that the only element of equitable rescission at issue is falsity, and that all of the remaining four elements are established. Therefore, like the parties, the court will focus exclusively on the element of “falsity” in determining whether the record supports summary judgment for either party. However, before delving into the arguments of the parties and the legal analysis of the cross-motions for summary judgment, the court will first set forth the basic principles of contract construction and interpretation under Iowa law. 2. Construing and interpreting insurance contracts under Iowa law Under Iowa law, an application for insurance becomes a part of the insurance contract by virtue of Iowa Code § 515.94 where -the application “by the terms of such policy, is made a part of the policy, or of the contract of insurance, or [is] referred to in the contract of insurance, or which may in any manner affect the validity of such policy.” Iowa Code § 515.94; see Utica, 892 F.Supp. at 1201. The For-tis enrollment form specifically states that “[t]he enrollment form and any amendments shall be the basis for the contract” and that “any fraudulent statement or material misrepresentation on the enrollment form and/or any amendment may result in claim denial or contract rescission.” Plf.s’ App. at 84. Further, the letter accompanying the policy states that the “contract has been issued based on the statements ... made in [the] Application for Insurance,” and “[a]ny incorrect statement ... could void ... coverage or cause a claim to be denied.” Plf.s’ App. at 105. Therefore, the question of whether any terms in the enrollment form are ambiguous must be decided under the standards for determination of the ambiguity of terms in an insurance contract. Therefore, the court will briefly review the rules and principles governing interpretation of insurance contracts under Iowa law. The policy must be construed as a whole, giving its terms their ordinary, not technical, meaning. Id.; see Lee County v. IASD Health Serv. Corp., 2000 WL 290367 at *4 (Iowa Dist.2000); AMCO Ins. Co. v. Rossman, 518 N.W.2d 333, 334 (Iowa 1994); Pappas v. Bever, 219 N.W.2d 720, 721 (Iowa 1974). Words left undefined by the policy are not given their technical meaning, but rather the ordinary meaning which a reasonable person would accord them. A.Y. McDonald Indus., Inc. v. Ins