Final answer:
The defense mechanism being displayed in the statement about family history and diabetes is denial, as the individual is refusing to accept the reality of the diabetes diagnosis.
Step-by-step explanation:
In response to the statement, "The tests must be wrong. No one in my family has diabetes," the defense mechanism being displayed is denial. Denial is a defense mechanism where a person refuses to accept the reality of a fact, thereby avoiding a potentially distressing truth. It's a way to cope with the emotional impact of such information. In this case, the individual is dismissing the possibility of having diabetes despite test results, likely due to the emotional discomfort associated with the diagnosis and the belief that it cannot affect them if it has not affected their family members.