Even After 2,500 Corn Removal Surgeries and 700 Million Won Payout, Insurer Cannot File Another Invalidity Lawsuit After Initial Loss, Rules Supreme Court

An insurance company filed a second lawsuit claiming "contract invalidity" against a policyholder who underwent approximately 2,500 corn removal procedures and received about 700 million won in insurance payouts, but the Supreme Court overturned the lower court's ruling and remanded the case, siding with the policyholder. Since a final judgment had already been rendered against the insurer in a previous lawsuit, the principle of res judicata (the binding effect of a final judgment) means that the company cannot raise the same claim of invalidity regarding the same contract again.

Supreme Court, Seocho-gu, Seoul. Photo by Yonhap News Agency

According to the legal community, the Supreme Court (Presiding Justice Lee Suk-yeon) overturned the appellate court's ruling that had sided with insurer A in a lawsuit against policyholder B seeking confirmation of non-existence of debt and other claims, and sent the case back to the appellate court for reconsideration.

In 2016, B entered into an insurance contract with A, which included a special rider for "surgical expenses due to illness." Subsequently, B visited multiple medical institutions and underwent cryotherapy for corn removal approximately 2,500 times, receiving about 700 million won from A as surgical expense benefits.

Suspicious of this, A filed a lawsuit in 2018 to reclaim the paid insurance money, alleging that B had entered into the contract with the intent to fraudulently obtain insurance payouts, thus rendering the contract invalid. However, the court dismissed all of A's claims, and this decision was ultimately upheld by the Supreme Court in 2021.

Despite this, as B continued to undergo procedures and submit further insurance claims, A filed a second lawsuit, arguing that the insurance event had already occurred at the time the contract was signed, rendering the contract invalid, or that the mutual trust relationship had broken down, necessitating cancellation. In response, B filed a countersuit demanding payment of the insurance benefits that had been denied.

The first and second trial courts ruled in favor of the insurer. The appellate court determined that the continued surgeries and claims constituted significant "change of circumstances" occurring after the conclusion of the previous litigation, allowing the insurer to contest the contract's validity again.

However, the Supreme Court pointed out that the appellate court had misapplied the principle of res judicata. Since the central issue in both lawsuits was the "validity of the contract," A's new claims contradicting the final judgment could not be permitted. The Court stated, "A new cause arising after the conclusion of arguments refers to a 'new set of facts,' and does not include merely presenting new evidence about existing facts or a different legal assessment of the same facts."

The Court further explained, "Whether a legal act is invalid must be determined based on the circumstances at the time the contract was concluded," and added, "An increase in the number of procedures merely constitutes 'new evidence' supporting whether B had fraudulent intent at the time of contracting; it does not amount to a 'new set of facts' sufficient to overturn the effect of the prior ruling."

This content was produced with the assistance of AI translation services.