Case Title: Abbiati v. Buttura & Sons

Citation: 161 Vt. 314, 639 A.2d 988

Docket Number: 

State: vermont

Court: Vermont Supreme Court

Date: 1994-01-31T00:00:00Z

Document:
ABBIATTI_V_BUTTURA_AND_SONS.92-612; 161 Vt. 314; 639 A.2d 988

[Filed 31-Jan-1994]

 NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
 order that corrections may be made before this opinion goes to press.


                                 No. 92-612


Georgianne Abbiati                            Supreme Court

                                              On Appeal from
      v.                                      Washington Superior Court

Buttura & Sons, Inc. & American
Bankers Life Assurance Company of Florida     October Term, 1993


Stephen B. Martin, J.



George E. Rice and Joseph G. McHale of Goodrich & Rice, Montpelier, for 
  plaintiff-appellant

Richard E. Davis of Richard E. Davis Associates, Barre, and Jonathan P. Cawley
   of Williams & Green, Morrisville, for defendant-appellee Buttura & Sons

John Davis Buckley and Jeffry W. White of Theriault & Joslin, P.C., Montpelier,
   for defendant-appellee American Bankers Life Assurance Co.

PRESENT:  Allen, C.J., Dooley, Morse and Johnson, JJ.

     DOOLEY, J.   Plaintiff sued defendants, Buttura & Sons, Inc.,
and its life insurance carrier, American Bankers Life Assurance
Company of Florida, to recover additional compensation on a life
insurance policy provided to her deceased husband, Stuart Abbiati, by
Buttura & Sons, as part of his employee benefits package.  The trial
court awarded plaintiff $11,000 additional compensation and held
defendants jointly and severally liable for this amount. The court
also awarded plaintiff postjudgment interest on the $11,000, but
tolled the accrual of interest at the twelve percent rate



prescribed by 9 V.S.A. { 41a(a) as of the date of entry of
judgment.  The court then ordered that the judgment amount be placed
in an interest-bearing account to earn interest at the market rate
until distribution.  Plaintiff appeals the amount of additional
compensation awarded and the tolling of statutory interest; American
Bankers cross-appeals on the issue of joint and several liability for
the additional compensation and the denial of costs on its offer of
judgment.  We affirm the award of additional compensation and the
imposition of liability upon American Bankers.  We reverse the
court's denial of costs to American Bankers and remand for a
determination of such costs. Finally, the Court has divided on
plaintiff's challenge to the order denying her postjudgment interest
at the statutory rate as long as American Bankers pays the judgment
amount into an interest-bearing account for distribution after the
appeal.  This issue remains unresolved and must be reargued.

     Stuart Abbiati worked for defendant Buttura & Sons as an
estimator and granite salesman for a number of years.  He was paid a
salary for his work as an estimator, but he received commissions for
his work as a salesman. Buttura & Sons purchased group life insurance
coverage for its employees, including Stuart Abbiati, from American
Bankers.  The coverage was provided to the employees as a benefit on
a non-contributory basis.  The policy required Buttura & Sons to pay
$0.42 per month per $1,000 of coverage for each employee for life
insurance coverage of "2 1/2 times basic annual earnings rounded to
the next higher $1,000 to a maximum of $100,000." Buttura & Sons
implemented this provision by basing benefits, and its premium
payments, upon the basic salary of all non-union employees, including
those workers who also received commission income.  Stuart Abbiati



was informed of the scope of the benefit in 1985, when the
policy was first purchased, and signed an enrollment card listing
only his basic salary.

     American Bankers provided Buttura & Sons a "Policyholder's
Administration Manual" to explain its duties in administering the
group policy.  As the trial court found, Buttura & Sons was required
to perform various administrative tasks including "billing,
conversion of coverage, termination of coverage, submission of claims
and updated employee census data, including changes in employee
annual salaries."  It was the policy of American Bankers to request
from the employer an annual update of the names and wages of
employees.  This was done in 1986, and Buttura & Sons responded with
current information.  The trial court was unable to determine whether
it was done in 1987 and 1988.  In any event, Buttura & Sons did not
update information in those years so that when Stuart Abbiati died in
October 1988, the amount of his annual earnings, as shown in the
records of American Bankers, was $20,280 when in fact his annual
salary was $24,700.
    
     The salary discrepancy underlies some of the issues in this
litigation. American Bankers paid plaintiff's death claim based on
the 1986 information and refused to pay the additional amount to
reflect Stuart Abbiati's 1988 salary.  More significant in monetary
terms is plaintiff's argument that the death benefit payment also
should have reflected Abbiati's annual commission income, which was
around $20,000 at the date of his death.

     Plaintiff filed suit for the maximum payment allowed under the
policy, $100,000, minus the amount paid of $51,000, for a claim of
$49,000.  On March 9, 1992, American Bankers served plaintiff with an
offer of judgment pursuant to V.R.C.P. 68, in which it proposed to
pay $11,000 plus



prejudgment interest.  The offer was not accepted within ten
days and thus was deemed withdrawn.  See V.R.C.P. 68.

     After a bench trial, the court found that Buttura & Sons
incorrectly reported Mr. Abbiati's final salary to American Bankers. 
As a result, the court awarded plaintiff an additional $11,000, which
represented the difference between a death benefit of $62,000 due
based on Abbiati's $24,700 salary and the $51,000 previously tendered
by American Bankers.  The court rejected plaintiff's contention that
commission income was to be included in calculation of an employee's
salary.

     The court held defendants jointly and severally liable for the
additional $11,000 on the ground that Buttura & Sons was American
Bankers' agent for administrative work, such as reporting premiums. 
The court also awarded plaintiff interest at the statutory rate of
twelve percent on the $11,000 from Stuart Abbiati's date of death. 
The interest award was subsequently modified to market rate interest
on motion of American Bankers.

                             I.

     Plaintiff first argues that she was entitled to the policy
maximum of $100,000 based on two-and-one-half times her husband's
total annual earnings, including commissions, in excess of $40,000. 
Her contention is based on the wording of the benefit provision of
the life insurance policy issued by American Bankers to Buttura &
Sons: "2 1/2 x basic annual earnings rounded to the next higher
$1,000 to a maximum of $100,000."  She argues that the policy bases
benefits on "earnings" not "salary," and therefore, her benefits
should reflect her husband's commission income.

     The trial court rejected plaintiff's argument because it found
the argument inconsistent with the contractual relationships of the
parties.  It



concluded that under the policy between American Bankers and
Buttura & Sons, it was up to Buttura & Sons to define earnings and to
pay premiums and obtain coverage accordingly.  As to the employees,
including Stuart Abbiati, the court concluded that Buttura & Sons
agreed to provide coverage based on salary and not commissions.

     The trial court's findings of fact will be upheld unless clearly
erroneous. V.R.C.P. 52(a)(2).  Similarly, conclusions will be upheld
if supported by the findings.  See In re M.M., ___ Vt. ___, ___, 621 A.2d 1276, 1279 (1993).  We find the trial court's conclusions amply
supported by its findings which are, in turn, supported by the
evidence.

     At the outset, we agree with the trial court's characterization
of the contractual relationships.  A group insurance contract is a
primarily contract between the employer and the insurer.  See, e.g.,
Blue Cross-Blue Shield of Ala. v. Fowler, 195 So. 2d 910, 918 (Ala.
Ct. App. 1966); Blaylock v. Prudential Ins. Co.,