Title: STANDISH v BUSINESS MEN S ASSUR C

State: montana

Issuer: Montana Supreme Court

Document:

N o . 13527 I N THE SUPREME COURT OF THE STATE O F MONTANA 1977 MELVIN STANDISH, P l a i n t i f f and Respondent, BUSINESS MEN'S ASSURANCE COP'IPANY OF AMERICA, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e S i x t h J u d i c i a l D i s t r i c t , Honorable Jack D. Shanstrom, Judge p r e s i d i n g . Counsel of Record: For Appellant: Berg, Angel, Andriolo and Morgan, Bozeman, Montana Charles F. Angel argued, Bozeman, Montana For Respondent : Bennett and Bennett, Bozeman, Montana Lyman H. Bennett, Jr. argued and Lyman H. Bennett, I11 argued, Bozeman, Montana F i l e d : W R 2 2 ' ' 7 Submitted: March 9, 1977 Decided ' ; 4 R 2 0 r g n Clerk M r . J u s t i c e John Conway Harrison delivered the Opinion of the Court. Defendant appeals from denial of a motion for judgment notwithstanding the verdict by the d i s t r i c t court, Park County. The jury returned a verdict i n favor of p l a i n t i f f Melvin Standish i n the amount of $7,679.32. The p a r t i e s agree t h i s amount i s due, i f there was coverage under the group health insurance policy purchased by Brand S o Lumber Company f o r i t s employees from defendant, Business Men' s Assurance Company of America. O n appeal, the standard of review from a denial of a motion f o r judgment notwithstanding the verdict made pursuant t o Rule 50(b), M.R.Civ.P., i s the same as t h a t f o r review of a motion f o r directed verdict. Sheeketski v. Bortoli, 86 Nev. 704, 475 P.2d 675; 9 Wright & Miller, Federal Practice and Procedure, C i v i l $2524. A directed verdict may be granted only where it appears as a matter of law t h a t p l a i n t i f f cannot recover upon any view of t h e evidence, including the legitimate inferences t o be drawn from ic. Parrish v. W i t t , Mont . , 555 P.2d 741, 742, 33 St. Rep. 999,l,000; Slagsvold v. Johnson, Mont . , 544 P. 2d +42, 443, 32 St.Rep. 1273, 1275, and cases c i t e d therein. Here, the basic question on appeal i s whether p l a i n t i f f was :overed by the group insurance policy. There a r e two aspects to chis question 1) had p l a i n t i f f met the i n i t i a l e l i g i b i l i t y re- quirements, 2) had he been terminated ending policy coverage p r i o r t o the injury. W e f i r s t note t h a t because there was no employee payment o r orher ai'firmative a c t on the p a r t of the employee which i n i t i a t e s coverage, the determination of when coverage began o r when it ends requires inferences from circumstantial evidence. There a r e a number of similarities between the instant case and cases involving the question of coverage under the Worker's Compensation Act or other social legislation, and while both are for the benefit of the employee and paid by the employer, there is a major difference between the two. Worker's Compensation coverage is required by statute, while the group health insurance policy is not. The Worker's Compensation statute is construed to prevent avoidance of the statute. Here the provisions of the insurance policy which must be interpreted. Those provisions in question here are: "An Individual in an eligible class of Individuals shall be eligible for insurance under this policy as follows : " ( b ) on the day following the date the Individual completes one calendar month of membership in an eligible class .I1 The termination provision reads: " ( b ) If an Individual's insurance under this policy is contingent upon employment, the insurance of such Individual shall terminate upon termination of such employment. Cessation of active work shall be deemed termination of employment, except that while an Individual is absent on account of sickness or injury, employment shall be deemed to continue until premium payments for such Individual's insurance are discontinued. At the option of the Policyowner, the insurance of an Individual may be continued during a temporary lay-off but not beyond the end of the policy month following the policy month in which the lay-off starts, or may be continued during an authorized leave of absence granted by the policyowner for reasons other than sickness or injury, but not beyond the period ending three months after such leave of absence starts . ' I The questions to be determined for coverage are ( 1 ) when, if ever, did coverage begin, ( 2 ) was the cessation of active work due to injury, and ( 3 ) if it was, when were the premiums discontinued? There was testimony that plaintiff began work on Brand S Lumber Company projects i n mid-March, 1974. A t that time he was paid by Norman Kelly, who was a construction supervisor for Brand S. Kelly was a full-time emplcoyee of Brand S and he was reimbursed by Brand S for wages he paid t o those who worked for him. During t h i s i n i t i a l period no deductions were made for social security o r taxes from p l a i n t i f f ' s wages. During the f i r s t weeks of May, while Kelly was on vacation, p l a i n t i f f was paid directly by Brand S. In l a t e May, prior t o going t o Colorado on a Brand S e project, Kelly had plaintiff placed on the company's computerized payroll. The crew returned from Colorado on June 26 and both plaintiff and a coworker t e s t i f i e d that p l a i n t i f f worked on June 27. Plaintiff and the coworker t e s t i f i e d t e s t i f i e d they both took that Friday o f f , and the e n t i r e next week as well a s t h e i r July 4 holiday, intending to return t o work a f t e r the vacation. The coworker did return, but p l a i n t i f f injured h i s ankle i n an automobile accident and he reported that he could not return u n t i l it had healed. O n o r about July 30, plaintiff was injured when a .41 magnum gun he was handling f e l l t o the ground, discharged, and wounded p l a i n t i f f i n both legs. Plaintiff t e s t i f i e d he was given notice of h i s termination i n August, while he was s t i l l i n the hospital. Defendant presented evidence t o the effect that the checks paid t o p l a i n t i f f prior t o being put on the Brand S. computer pay- r o l l were just reimbursement checks paid indirectly t o p l a i n t i f f instead of directly. A number of business records were introduced giving June 26 as the termination date. It i s clear most of those records were made a f t e r the July 30 accident, but there was t e s t i - mony t h i s was done without any knowledge of the accident. ' , . 'The insurance 5iil from defendant t o Brand S shows t h a t Brand S had deleted p l a i n t i f f because he had not been employed a s u f f i - clent period of time. This document was a l s o prepared i n e a r l y Xugus t . It i s c l e a r there were factual disputes t o be determined t o find i f there was coverage under the policy. These f a c t u a l questions were decided by the jury i n favor of p l a i n t i f f . It does not appear from the evidence t h a t there was no coverage a s a matter of law and therefore the motion f o r a judgment notwith- standing the verdict was properly denied. P l a i n t i f f ' s argument on punitive damages based on an alleged violation of the d i s a b i l i t y sections of the insurance code i s without merit. Disability insurance was not raised i n the pleadings and throughout h i s p r e t r i a l memorandum p l a i n t i f f speaks only of rnedical b i l l s under the health insurance. There was no c l e a r showing of the existence of d i s a b i l i t y insurance, nor i s there ally showing of the r e q u i s i t e oppression, fraud, o r malice t o bring t h i s case under the r u l e of S t a t e ex r e l . Larson v. D i s t r i c t Court, 149 Mont. 131, 423 P.2d 598. The judgment of the d i s t r i c t court i s affirmed. Me Concur; i I