Copyright 1994 Bergen Record Corp.
BATTLE OVER VICTIMíS INSURANCEBy CHRISTOPHER KILBOURNE
Diabetes didn't kill Albert "Tiny" Manzo -- four bullets did.
In fact, the cause of death was about the only aspect of the 1983 murder of the popular Paterson restaurateur that was not cloaked in mystery.
Police who discovered Manzo's naked, 350-pound body stuffed inside the trunk of his Lincoln Continental in Hillside immediately noticed two things out of the ordinary: Manzo's massive arms and legs had been wrapped in plastic, and his chest was ripped open with a quartet of gunshot wounds.
Nevertheless, Manzo's diabetes is the reason an insurance company is refusing to pay off on a $500,000 life insurance policy taken out shortly before the murder.
Although Manzo's death obviously was unrelated to that condition, Massachusetts Mutual Life Insurance Co. contends that his failure to admit to his diabetes on an insurance application amounted to fraud and that the insurance contract therefore should be rescinded.
A sometimes skeptical state Supreme Court panel heard arguments in the case Tuesday and is expected to rule in the next several months.
The trial court that heard the case ruled in favor of Massachusetts Mutual. But in June 1989, the Appellate Division of Superior Court reversed that judgment. In a 2-1 decision, the Appellate Division said that Manzo's heirs should receive the full amount of the policy less a higher premium -- about $3,000 rather than $1,300 -- that he would have been charged had the company known about his diabetes.
Writing in dissent to that appellate ruling, Superior Court Judge David Landau said that Manzo had committed a form of fraud and that the missing information would "naturally and reasonably influence" Massachusetts Mutual's decision to issue a policy.
However, in his arguments Tuesday before the Supreme Court, a lawyer for the company conceded that Manzo would have been issued a policy -- at the higher premium -- even if he had disclosed his diabetes. But attorney Eugene Haring argued that it would be "insurance by hindsight" for the court to uphold life insurance policies based on false applications, requiring only that the premiums be adjusted retroactively.
A rule of law that does not require truthful answers on insurance applications will encourage people to lie about their medical histories, Haring said. That could lead to the issuance of policies -- or unrealistically low premiums -- to high-risk candidates, with the end result being higher insurance costs for everyone, he said.
But Justice Robert L. Clifford seemed skeptical. He wondered why, if Manzo's estate pays the higher premium, would it be unfair to require Massachusetts Mutual to make good on a policy that it admittedly would have issued even if it had known about Manzo's diabetes.
Relying on a misrepresentation about diabetes to get out of paying life insurance on a man who was shot to death smacks of the company saying "ah -- we finally found a way out of this lousy case," Clifford said.
Michael Chazkel, a lawyer for the Manzo family, argued that it would not be an undue burden on the insurance industry to require companies to honor policies where a misrepresentation on the application was "innocent" and where the policy would have been issued even without the false statement.
Manzo, who ran unsuccessfully for mayor of Paterson in 1974, applied for the policy June 8, 1983, and underwent a required physical exam three weeks later. He paid a $200 deposit toward the policy on July 24.
Manzo disappeared in mid-August of that year while traveling from one of his two Paterson restaurants toa meeting in Wayne. Police found his body Aug. 22 inside the trunk of his car, which was parked at a Hillside supermarket.
The murder was never solved. The Union County prosecutor and police investigators speculated that Manzo was killed as a result of involvement with organized crime figures. One theory is that he angered local mob figures by attempting to open an illegal gambling club in Paterson without their permission.
Ironically, the friendly and gregarious Manzo had based his mayoral campaign on a law-and-order platform, promising to hold public hangings in the yard of the Passaic County Jail.
Manzo's wife and sons still run the Brownstone Restaurant in Paterson. His son Albert said the family is doing fine, although it would be nice for his mother's sake if the high court orders the insurance company to pay the $500,000.
"We are going to be here for a long time, with or without it," he said.