Title: Parker v. Continental Casualty Co.

State: kansas

Issuer: Kansas Supreme Court

Document:

191 Kan. 674 (1963)
383 P.2d 937
FLOY S. PARKER Appellee,
v.
CONTINENTAL CASUALTY COMPANY, a Stock Insurance Company, Appellant.
No. 43,314

Supreme Court of Kansas.
Opinion filed July 10, 1963.
Roscoe W. Graves, of Emporia, argued the cause and was on the briefs for the appellant.
Marc A. Hurt, of Emporia, argued the cause and was on the briefs for the appellee.
The opinion of the court was delivered by
HATCHER, C.:
This action involves the application of the "grace period" provision of the Uniform Policy Act pertaining to policies of accident and sickness insurance.
There is no controversy as to the pleadings, and the facts are not in dispute.
The plaintiff, Floy S. Parker, is a resident of Emporia, Kansas. She is the sole beneficiary of an insurance policy issued by the defendant, Continental Casualty Company, to Wilbern W. Parker, plaintiff's husband. The policy provided indemnity for loss of life through accidental means. The policy was issued January 23, 1952. It provided for payment of premiums quarterly.
Wilbern W. Parker paid all quarterly premiums due under the policy except the one due February 1, 1961. He died on February 24, 1961, as the result of accidental injury. On February 28, 1961, plaintiff paid the quarterly premium due February 1, 1961, by mailing defendant a check for $25.00. Plaintiff notified defendant of the death of Parker on March 2, 1961. The defendant sent plaintiff proof of loss forms which were promptly executed and returned to the defendant.
There was no "grace period" specifically set forth in the policy for the payment of renewal premiums not paid by the renewal dates. The defendant denied liability under the policy and this action was commenced.
*676 The plaintiff contended that a thirty-one day "grace period" was made a part of the policy by reason of the provision of G.S. 1961 Supp., 40-2203 (A) (3).
The defendant contended that the statute providing for a "grace period" did not become effective until five years after the act became effective on June 30, 1951, by reason of the provision of G.S. 1961 Supp., 40-2213.
The district court rendered judgment in favor of the plaintiff and defendant has appealed.
We will first present the pertinent section of the act.
G.S. 1961 Supp., 40-2202 covers the form of the policy to be used and does not require specific attention.
G.S. 1961 Supp., 40-2203 contains the following introductory statement:
The paragraph (C) to which the section refers, deals only with filing policies and submission of policies to the insurance commissioner.
Paragraph (A) (3) of G.S. 1961 Supp., 40-2203 provides that a provision shall be included in the policy as follows:
G.S. 1961 Supp., 40-2204 provides:
The section with which we are chiefly concerned, G.S. 1961 Supp., 40-2213, provides:
The act contains the following penalty provision:
The last two sections of the act (Laws of 1951, Chapter 296) which were not carried into the General Statutes should also be noted.
The appellant summarizes its contention as follows:
The appellant would contend that the effective date of G.S. 1961 Supp., 40-2202, 40-2203, and 40-2204 was June 30, 1956, while the effective date of the other sections of the act was June 30, 1951.
The construction suggested by appellant, if sustained, would render the entire act unconstitutional. The Constitution of Kansas does not permit closely related parts or sections of an act to become effective at different times.
Article 2, Section 19, provides:
This court first considered the matter in Comm'rs of Cherokee Co. v. Chew, 44 Kan. 162, 24 Pac. 62. It is stated:
In Comm'rs of Miami Co. v. Hiner, 54, Kan. 334, 38 Pac. 286, it is again stated:
The question was next considered in State v. Newbold, 56 Kan. 71, 42 Pac. 345. In that case this court was considering an act relating to fees and salaries of the county officers of Summer County. The act changed the fees and salaries of all of the county officers except the county surveyor. The act provided that the county surveyor was to receive compensation for his services as now provided by law, "... but he shall not receive pay for keeping his office open for the convenience of the public for more than one day each week." It was noted in the opinion:
In the opinion the court stated:
The last case in which the question was considered is that of State, ex rel., v. Meek, 86 Kan. 576, 120 Pac. 555. As the case reviews the previous decisions and contains the last expression of this court, we quote from the opinion at some length:
It is the duty of this court to uphold legislation rather than defeat it. It is presumed that the legislature intended to pass a valid law. If there is any reasonable way to construe legislation as constitutionally valid, it should be so construed.
In State ex rel., v. Fadely, 180 Kan. 652, 308 P.2d 537, the court stated, beginning at page 658 of the opinion:
(See, also, Quality Oil Co. v. du Pont & Co., 182 Kan. 488, 322 *681 P.2d 731, and State, ex rel., v. Board of County Commissioners, 188 Kan. 318, 362 P.2d 81.
In Felten Truck Line v. State Board of Tax Appeals, 183 Kan. 287, 327 P.2d 836, it is stated:
There is still another reason why the construction which appellant attempts to place on G.S. 1961 Supp., 40-2213, would not be tenable. Chapter 296 of the Laws of 1951 repealed, effective June 30, 1951, all of the existing statutes pertaining to policy provisions for accident and sickness insurance. It repealed G.S. 1949, 40-1109, which contained some seventy separate paragraphs covering policy provisions most of which were similar to the provisions of G.S. 1961 Supp., 40-2203. It repealed G.S. 1949, 40-1109a which covers policy provisions for family expense polices. It repealed G.S. 1949, 40-1405 to 40-1408, which covered policy provisions for mutual assessment, health and accident associations.
We cannot assume that although these sections were specifically repealed, the legislature intended that they remain effective, by implication, for a period of five years, such time as it is contended G.S. 1961 Supp., 40-2202, 40-2203, and 40-2204, were to become effective. Neither can we assume that there was intended to be a period of five years without statutory requirements for policy provisions.
We construe G.S. 1961 Supp., 40-2213, to mean that a policy, rider or endorsement which could have been lawfully used or delivered or issued for delivery immediately before the effective date of the act, could be used for five years after the effective date of the act without containing the additional provisions set out in G.S. 1961 Supp., 40-2202 and 40-2203, but that such provisions would be read into the policy.
It will be noted that the only place the word "used" is found in *682 the statute is in G.S. 1961 Supp., 40-2213. The legislature intended that the old policies could be used for a period of five years, subject to the provision of the act, while the companies were adjusting their policy provisions to conform to the new law.
We are informed that such a construction cannot be harmonized with the fact that section 13 of the act (G.S. 1961 Supp., 40-2213) also permits policies to be used and issued for a five year period without being subject to section 4 of the act (G.S. 1961 Supp., 40-2204). Perhaps it cannot. However, we should not for that reason destroy the intent and purpose of the legislature. Section 4 (A) of the act is in the same situation as sections 2 and 3 (G.S. 1961 Supp., 40-2202 and 40-2203) insofar as the application of section 13 is concerned. We do not believe the legislature intended to include the reference to section 4 (B) in section 13. The reference appears to be an inadvertent error. The language used in section 4 (B) has the same effect as that used in G.S. 1949, 40-1408, and is quite similar to the language used in G.S. 1949, 40-1109 (i). These provisions were repealed. It cannot be assumed that the legislature intended to repeal the two provisions without some provision to replace them before the expiration of five years. It must have been the intent of the legislature to make reference only to section 4 (A) in section 13 of the act. As so construed, all of the provisions of the act are in harmony.
The intent and purpose of the legislature should govern the construction of a statute even though words or statutory references at some place in the statute must be inserted or omitted.
It has been stated:
The policy in question was subject to the grace period provided by G.S. 1961 Supp., 40-2203 (A) (3) from the time it was issued.
The appellant also complains of the judgment allowing appellee attorney fees as a charge against appellant in the amount of $400. The complaint is well founded.
G.S. 1961 Supp., 40-256 provides in part as follows:
*684 The phrase "without just cause or excuse" was added to the section by amendment in 1957. (Laws of 1957, Chap. 276, Sec. 1.) The language used appears to be clear and unambiguous. The question for determination is, did the appellant have "just cause or excuse" for challenging the application of the grace period, as provided in G.S. 1961 Supp., to the policy in question? We believe that what has been said in the opinion leaves no doubt but that it did.
Whether attorney fees are to be allowed must depend on the facts and circumstances of each particular case. We are constrained to hold that an insurance company has just cause to seek an interpretation of the ambiguous provisions of a statute. It is only where the insurer refuses "without just cause or excuse" to pay in accordance with the terms of the policy that an allowance can be made to the insured for reasonable attorney fees. (Allen v. Hartford Fire Ins. Co., 187 Kan. 728, 359 P.2d 829; Fleming v. National Cash Register Co., 188 Kan. 571, 363 P.2d 432; Wolf v. Mutual Benefit Health & Accident Association, 188 Kan. 694, 366 P.2d 219, and Lindesmith v. Republic Mutual Fire Ins. Co., 189 Kan. 201, 368 P.2d 35.)
The judgment of the district court ordering payment of the principal sum due under the policy is affirmed. That part of the judgment ordering defendant to pay plaintiff's attorney fees in the sum of $400 is reversed.
APPROVED BY THE COURT.