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. e du/thir dc ir c uit_2000/207Filed September 27, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No: 99-5165

GUARDIAN LIFE INSURANCE COMPANY OF AMERICA Appellee

v.

DONNA M. GODUTI-MOORE, individually and as

Executrix of the Estate of Kevin H. Moore Defendant/Third-Party

Plaintiff

v.

ROBERT BECKETT, GUARDIAN AGENCY,

NATIONAL PENSION CONSULTANTS,

Donna M. Goduti-Moore, individually and as Executri x to the Estate of Kevin H. Moore, Appellant

On Appeal from the United States District Court

for the District of New Jersey, Trenton AT NO. 97-1418 (MLC)

District Judge: Honorable Mary L. Cooper

Argued March 8, 2000

BEFORE: ALITO and STAPLETON, Circuit Judges and POLLAK,* District Judge

(Filed: September 27, 2000)

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* Honorable Louis H. Pollak, United States District Judge for the Eastern District of Pennsylvania, sitting by designation.Steven P. Del Mauro, Esq.

Robert P. Lesko, Esq. (Argued) Del Mauro, Digiamo & Knepper 8 Headquarters Plaza

North Tower Morristown, NJ 07960

Counsel for Appellee Guardian Life Insurance Company

of America

Donald R. Belsole (Argued)

Belsole & Kurnos 3 Prospect Street Morristown, NJ 07960

Counsel for Appellant

OPINION OF THE COURT

POLLAK, District Judge:

This appeal concerns a $500,000 life insurance cont ract ("the policy") between appellee, The Guardian Life Insurance Company of America ("Guardian"), and Kevi n H. Moore, the deceased husband of appellant, Donna M. Goduti-Moore. Guardian, a New York corporation, bro ught this diversity action against Ms. Goduti-Moore, a c itizen of New Jersey, in New Jersey's federal district court seeking a declaratory judgment respecting the parties' rights and obligations under the policy. In particular, Guardi an sought to determine whether the policy had lapsed on the d ay before Mr. Moore's death. The District Court grante d Guardian's motion for summary judgment, holding tha t the policy had so lapsed, and we review that determinat ion de

novo.

Facts

The policy was signed by Guardian and Mr. Moore on October 4, 1994, with Ms. Goduti-Moore as its prima ry beneficiary. The policy's basic terms specified, in ter alia: that premiums could be paid either yearly or by som e mutually-accepted fraction of a year, that such pay ments

2had to be made prior to the applicable coverage per iod, and

that each payment's "due date" would be followed by a thirty-one-day "grace period." As discussed infra, this appeal essentially turns on how the policy's due da te and grace period provisions should be interpreted and a pplied.

When the policy was issued and delivered, Mr. Moore and Guardian agreed to change the frequency of payment from an annual schedule to a monthly one, and Mr. Moore opted for a "Guard-o-Matic Premium Arrangement," by which premiums were to be drawn automatically from his checking account with Growth Bank. Pursuant to this Guard-o-Matic Premium Arrangement, Guardian made Mr

. Moore aware that, although the policy specified pay ments as due on the fourth of each month, all Guard-o-Mat ic clients' payments were, as a practical matter, with drawn on or about the fifteenth. Consistently with this prac tice, Guardian deducted premium payments from Mr. Moore's designated account each month from January 16, 1995 1 until July 15, 1996. On July 30, 1996, however, Mr. Moore closed his checking account with Growth Bank, and h e did not arrange for the Guardian premiums to be paid fr om any other source. Consequently, on August 15, Guardian' s draft demanding that month's premium was returned unpaid.

On August 21, Guardian notified Mr. Moore that he w as being removed from the Guard-o-Matic program and th at his method of payment was to be "changed to regular billing." Among other information, the notice conta ined the following description of Mr. Moore's payment obliga tions:

Premium Due 08/04/96 113.50 Premium Due 09/04/96 113.50 Amount Due $267.00

Mr. Moore never paid his August insurance premium, and he died on September 5, 1996.

Discussion

Appellee asserts, and the District Court held, that Mr. Moore died one day too late to collect benefits fro m the

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1. Mr. Moore apparently paid his first three premiu ms--for October, November, and December of 1994--by a check dated Oc tober 31, 1994.

3Guardian life insurance policy. Under this approach , Mr.

Moore's due date for August of 1996 was, per the po licy's terms, August 4; the grace period commenced the nex t day, on August 5; and the grace period expired thirty-on e days after the due date, on September 4, causing Mr. Moo re's policy to lapse and his coverage to cease. See gene rally Appellant App. at 89 ("If the premium is not paid b y the end of the grace period, the policy lapses as of th e date of default. Upon lapse, the policy has no value.").

On the other hand, Ms. Goduti-Moore offers three reasons that the policy had not lapsed as of Septem ber 5. First, Ms. Goduti-Moore claims that, since the Augu st 4 due date fell on a Sunday, certain state laws regulatin g contractual interpretation required that the due da te be moved to Monday, August 5. Pursuant to this analysi s, the grace period began on August 6, and Mr. Moore's dea th, on September 5, occurred during the grace period's las t day. Second, Ms. Goduti-Moore argues that Guardian's not ice of August 21, which described Mr. Moore's payment obligations, was ambiguous. The notice prescribed $ 113.50 as due on August 4, 1996; $113.50 as due on Septemb er 4, 1996; and an apparently total "Amount Due" of $2 67, for

which no due date was articulated. Ms. Goduti-Moore claims that the August 21 notice could reasonably h ave meant that Mr. Moore's August premium was, as part of the undated "Amount Due," due on the later date con tained in the notice, September 4, rather than on the earl ier date, August 4. Thus, Ms. Goduti-Moore claims that the po licy's thirty-one-day grace period expired on October 5. T hird, Ms. Goduti-Moore argues that, by its practice of making

automatic withdrawals on the fifteenth of each mont h, Guardian waived its right, provided by the terms of the contract, to demand payment on the fourth of the mo nth. Hence, Ms. Goduti-Moore asserts that the policy's d ue date was August 15, and the grace period expired on Sept ember

15.

For the reasons given in the subsequent portions of this opinion, we agree with Ms. Goduti-Moore's first arg ument: Interpreting the contract's grace period in favor o f the insured, and applying New York's statute regulating contracts with Sunday due dates, we conclude that M r.

4Moore's premium was due on Monday, August 5. Thus, the

thirty-one-day policy's grace period provision bega n on August 6, and that period did not expire prior to M r. Moore's death on September 5. Since this analysis d ecides the appeal in Ms. Goduti-Moore's favor, we think it unnecessary to consider her other arguments.

Premiums Payable on Sunday

Since this diversity case involves the application of state statutory provisions regulating contractual interpr etation, a natural starting point would be to determine which state's substantive law applied: New York's or New Jersey's

. However, the District Court found it unnecessary to resolve the choice-of-law question; instead, it found a fal se conflict because the substantive law of New Jersey and the

substantive law of New York seemed to the court to be materially indistinguishable. See Dist. Ct. Op. at 8.

Neither party disagreed with the District Court's disposition of the choice-of-law question; moreover , in the presentation of this appeal, each of the parties ha s expressed the belief that the substantive law of Ne w York (Guardian's place of business and state of incorpor ation; the place of negotiation and execution of the insur ance contract; and the place of payment of premiums) and the substantive law of New Jersey (the decedent's domic iliary state) would both yield the same result.2

Since the parties are satisfied with the District C ourt's determination that the applicable substantive law o f New York and the applicable substantive law of New Jers ey are equivalent, we will not go behind that consensus. T o the contrary, we will assume--arguendo--that the partie s' consensus is soundly based. Since the New York stat ute relating to the construction of contracts whose due dates

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2. At oral argument, Ms. Goduti-Moore's counsel, Mr . Belsole, stated, "The policy couldn't have lapsed on the 4th of Augu st `96 because both New York and New Jersey law have a provision--a sta tutory provision-- that when a Sunday is a date of payment you go to M onday." And to this court's question, "I gather that you're in agreemen t with Mr. Belsole and, as I understand it, with the District Court, that t his case will be

decided the same way whether it's a matter of New York or N ew Jersey law?", Guardian's counsel replied, "Yes, I am."

5fall on weekends and holidays3 is, textually, more fleshed

out than the New Jersey statute dealing with a port ion of that subject matter,4 we will conduct our analysis within

the framework of the New York statute.5

Of the two New York statutes that regulate due date s falling on Sundays, the first is General Constructi on Law S 25, which governs the interpretation of private c ontracts:

S 25. Public holiday, Saturday or Sunday, in contractual obligation; extension of time wh ere performance of act authorized or required on Saturday, Sunday, or public holiday.

Where a contract by its terms authorizes or requires the payment of money or the performance of a condition on a Saturday, Sunday, or public h oliday, or authorizes or requires a payment of money or the performance of a condition within or before or after a period of time computed from a certain day, and such period of time ends on a Saturday, Sunday, o r public holiday, unless the contract expressly or im plicitly indicates a different intent, such payment m ay be made or condition performed on the next succ eeding business day . . . with the same force and e ffect as if made or performed in accordance with the ter ms of the

contract.

N.Y. Gen. Constr. Law S 25 (McKinney 1999) (hereina fter "S 25"). The second is General Construction Law S 2 5-a, which concerns public statutes and regulations:

S 25-a. Public holiday, Saturday or Sunday i n statutes; extension of time where performance of act i s due on Saturday, Sunday or public holiday

1. When any period of time, computed from a certain day, within which or after which or before w hich an act is authorized or required to be done, ends o n a Saturday, Sunday or a public holiday, such a ct may be

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3. N.Y. Gen. Constr. Law S 25 (McKinney 1999).

4. N.J. Stat. Ann. 36:1-1 (1999).

5. Within their appellate briefs and oral arguments , the litigants have focused attention almost exclusively on the applica tion of New York law.

6done on the next succeeding business day . . . except

that where a period of time specified by con tract ends on a Saturday, Sunday or a public holiday, t he extension of such period is governed by sect ion twenty- five of this chapter.

N.Y. Gen. Constr. Law S 25-a (McKinney 1999) (herei nafter "S 25-a").

In briefing this appeal, Goduti-Moore has relied on S 25- a. The opening words of the caption of S 25 -"Publi c holiday, Saturday or Sunday, in contractual obligat ion" - strongly imply that S 25 has greater pertinence to the private contractual dispute presented in the case a t bar than S 25-a, the opening words of whose caption are "Public holiday, Saturday or Sunday in statutes." This impl ication is markedly enhanced by the fact that S 25-a expres sly

defers to S 25 when a contract is involved. 6 At or al argument, Guardian attempted to justify its focus o nS 25- a by contending that S 25-a and S 25 are equivalent . But appellee's argument on this point seems incomplete for two reasons. First, the text of S 25 is broader than S 25-a in potentially relevant ways. Section 25 has two claus es: one, which deals with specified dates that fall on Sunda ys, and another, which concerns periods of time that end on Sundays. See supra. The terms of S 25-a, however, o nly include the latter of these clauses, which regulate s time periods ending on Sunday; S 25-a does not appear to govern specified dates that fall on Sundays. Thus, even if S 25 and S 25-a were parallel with respect to periods of tim e, S 25-a has little direct relevance to the issue presented here, namely, treatment of a particular "due date" that f alls on Sunday.

Second, although S 25 and S 25-a were passed simultaneously and have similar general purposes, t heir different legal contexts -- one regulating private contracts and the other regulating public statutes -- implica te different norms and consequences, which further sup port reading S 25 more broadly than S 25-a. For example,

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6. "[W]here a period of time specified by contract ends on a Saturday, Sunday or a public holiday, the extension of such a period is governed by section twenty-five of this chapter."

7Burgess v. Long Island Railroad Authority, 587 N.E. 2d 269

(N.Y. 1991) -- a S 25-a case on which Guardian reli es -- concerned a statutory "stay" applied to the limitat ions period in suits against New York public authorities . Under New York law, plaintiffs suing such authorities wer e required to allege that the defendant had not acted on their grievance despite thirty days' notice thereof. Acco rding to a separate statute, this thirty-day notice period was excluded from the one year limitations period, operationally allowing plaintiffs one year and thirty days to commence the ir suit. In his case, Mr. Burgess claimed that the stay shou ld be extended by three days beyond this year and thirty days, since his injury occurred on Friday evening, after the Long Island Railroad Authority had closed for the weeken d. Thus, he was unable to file his grievance immediate ly after his injury occurred. Notwithstanding the fact that his suit accrued on Friday, Mr. Burgess asserted that his limitations period, including the thirty-day stay, should have begun on Monday, and he should have been allow ed to file his lawsuit within a year and thirty-three days of his injury.

The New York Court of Appeals rejected Mr. Burgess' s argument, inter alia, out of respect for "the inter ests of uniformity" that arise in applying statutes of limi tations to varied administrative contexts. Id. (disapproving a ny rule "whereby the time in which to commence an action ag ainst a public authority would vary case to case"). Becau se public regulations tend to regulate broad categorie s of actors and activities, providing a uniform standard was one apparent impetus for the Burgess court's interpreta tion of S 25-a. With respect to S 25, however, the affected contracts govern the actions of particular parties, who sign and have access to the particular details of said contracts. Thus, the interests in administrative uniformity and in respe cting general public expectations, which seemed to concer n the court in Burgess, appear substantially reduced in t he

context of S 25. Based on the two statutes' distinc t language and their different legal contexts, we con clude that S 25 and S 25-a are not equivalent. Thus, the New York statute applicable to the present controversy isS 2 5, which regulates private contracts.

8As quoted more fully supra, S 25 provides that "[w] here a

contract by its terms authorizes or requires the pa yment of money . . . on . . . Sunday, . . . unless the contr act expressly or implicitly indicates a different inten t, such payment may be made . . . on the next succeeding bu siness day." N.Y. Gen. Constr. Law S 25. Thus, the vital l egal question is whether the terms of Guardian's insuran ce policy could, when read in the light most favorable to Mr. Moore, as the insured, reasonably be construed as e ither "authoriz[ing]" or "requir[ing]" the payment of mon ey on Sunday, August 4th, for purposes of S 25.

The relevant portions of Guardian's policy read as

follows:

Premium Payment

All premiums, including the first, are payab le in advance. After the first premium, premiums a re payable annually . . . . Premiums may be pai d . . . [semi-annually, quarterly, or] in any other manner acceptable to Guardian. . . . [A] change [in payment frequency] must result in a premium falling due on each policy anniversary.

Due Date and Default

The premium due date is the date on which th e premium is payable. Any premium that is not paid on its due date is in default; this due date is the date of

default.

Grace Period

Guardian allows a grace period of 31 days af ter the due date for premium payments.

Appellants App. at 89.

In construing S 25, New York's courts apparently ha ve not yet considered a case such as this, where an in surance contract's due date is followed by a grace period. 7 Our

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7. Guardian asserts that "New York decisions dealin g with [S 25-a] clearly reject [appellant's] argument." However, cases anal yzing S 25-a are not overly helpful with respect to the present appeal, which concerns a portion of S 25 that is not contained in S 25-a. Mo reover, even if cases concerning S 25-a were legally pertinent, the three decisions cited by Guardian have materially distinct facts from the ca se at bar:

9analysis of this issue of first impression proceeds in two

steps. First, we hold that the policy's ambiguous l anguage

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Desmond-Americana v. Jorling, 153 A.D.2d 4 (N.Y. Ap p. Div. 1989), applied S 25-a to New York's Administrative Procedu re Act. The latter statute requires agencies to adopt proposed rules w ithin 180 days of the last public hearing held, unless a continuation not ice is filed before

that time. An agency may file a maximum of two such noti ces, each of which would add 90 days to the original 180-day period. I n DesmondAmericana, the Department of Environmental Conserva tion held its last hearing on November 9, 1987; two timely continuatio n notices were filed, which extended the adoption period through Thursday , November 3, 1988; but the agency did not file its notice of ado ption until Friday, November 4. The agency asserted that its notice was not untimely filed because the original 180-day adoption period had en ded on Saturday, May 7, 1988. The agency argued that, since, underS 25-a, it could (counterfactually) have filed its continuation noti ce on Monday, May 9, two extra days should be added to the final adoptio n deadline of November 3. The Desmond-Americana court agreed that S 25-a would have allowed a timely extension notice on Monday, M ay 9. But the court held that, under the Administrative Procedure Act, the effect of a hypothetical extension filed on that date would onl y have been to add 90 days to the 180-day period measured from the last p ublic hearing. Thus, although the agency could have filed its continuati on notice on Monday without penalty, the total number of days added by such filing, for purposes of the Administrative Procedure Act, would not have changed; the agency's notice of adoption still was required within 360 days of the last public hearing.

Abrams v. Design Works, Inc., 198 A.D.2d 252 (N.Y. App. Div. 1993), applied S 25-a to N.Y. C.P.L.R. 214(5), which provi des a three-year statute of limitations for personal injury suits, a nd to N.Y. C.P.L.R. 203(b)(5), which allows a 60-day extension if a sum mons is delivered to the sheriff. In Abrams, the plaintiff 's action acc rued on March 3, 1987; he forwarded the summons and complaint to the sheri ff on February 28, 1990, which extended the limitations period until W ednesday, May 2, 1990; but the corporate defendant was not served un til Friday, May 4, 1990. Mr. Abrams argued that, since the initial thr ee-year limitations period ended on Saturday, March 3, 1990, two days s hould be added to the end of the extension period. The Abrams court d isagreed, holding that the effect of the statutory extension, which a dded sixty days to the ordinary three-year limitations period, was unchang ed by the fact that the last day for obtaining such an extension fell o n Saturday. The extension statute did not grant sixty days from the time said extension was filed; rather, it granted an extra sixty days f rom the date of

accrual. Thus, regardless of S 25-a, the maximum total time available to Mr. Abrams, under N.Y. C.P.L.R. 203 and 214(5), was thr ee years and sixty days from March 3, 1987.10defining the term "due date" could reasonably be co nstrued

as "authoriz[ing]" or as "requir[ing]" payment on S unday, August 4; either interpretation would suffice to ju stify applying S 25 to the policy's due date. Second, we hold that, by virtue of S 25, Mr. Moore could have paid his in surance premium on August 5 without being in default; there fore, the due date (per the contractual provisions quoted supra)

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Burgess v. Long Island Railroad Authority, 587 N.E. 2d at 269, applied S 25-a to Pub. Auth. 1276(1) and (2), which provide a one-year limitations period for suits against public authori ties and which require that grievances be presented directly to such autho rities for thirty days before a lawsuit may be filed, and to N.Y. C.P.L.R. 204(a), which excludes this thirty-day "stay" from limitations period calc ulations. The Burgess plaintiff was allegedly injured on the tracks of th e Long Island Railroad on Friday, September 2, 1988, after business hours. He did not serve the defendant with a summons and complaint until Tuesda y, October 3, 1989, which was one year and thirty-one days after his accident. The plaintiff claimed that his limitations period shoul d be extended by three days because he could not have presented his grieva nce to the defendant, for purposes of Pub. Auth. 1276(2), unti l Monday, September 5, 1988. The court rejected Mr. Burgess's argument because he had not been required, under any statute, to present his gr ievance to the agency on the very day of his accident. On the contrary, M r. Burgess could have satisfied Pub. Auth. 1276(2) by presenting his grie vance to the authority on any day within the statutorily allotted year. Th us, the court interpreted N.Y. C.P.L.R. 204(a)'s "stay" as merely having extended the ordinary one-year limitations period to one year an d thirty days; and the court held that this extended period, measured from the accrual date, should have the same total duration, regardless of whether the action accrued on a Saturday.

Each of the above cases involves a procedure for ex tending a statutory period of time, pursuant to which the lengthened pe riod is measured by the event marking the original period's beginning. Thus, the fact that S 25-a grants such plaintiffs an "extra" day to see k their extension does not affect the date of the final, extended deadline ; for, whether an

extension were obtained with or without the aid ofS 25-a, the total duration allotted was simply the sum of the origina l period and the extension. In contrast, the grace period in Ms. God uti-Moore's case is explicitly measured by the due date, i.e., the end of the standard payment period. Therefore, if S 25 granted Mr. Moor e one additional day to pay his premium before going into default, that" extra" day would delay both the date on which the grace period began and the date on which the policy would have lapsed.

11also could be reasonably construed as August 5. Sin ce the

grace period began the day after the due date, i.e. , on August 6, Mr. Moore's death on September 5 occurred during the last day he was entitled to benefits und er the policy.

A. Mr. Moore's Payment Was "[A]uthorize[d]" on Sund ay

As the District Court correctly noted, the above-qu oted terms of the policy are not ambiguous with respect to the numerical date they purport to specify. In Mr. Moor e's case, the "policy anniversary" was October 4, and he had arranged for a monthly payment schedule; thus, prem ium payments would ordinarily be due on the fourth of a ny given month. Pursuant to S 25, however, if the term s of Mr. Moore's policy "authorize[d]" payment of money on a Sunday, that payment could be made on the succeedin g business day "with the same force and effect," unle ss the contract indicated some specific, contrary intent. 8

We find that Guardian's policy is at least ambiguou s as to whether the term "due date," as the "date on whi ch the premium is payable," can be read as "authoriz[ing]" a premium payment on August 4 sufficiently for purpos es of S 25. It might be argued on Guardian's behalf that the policy "authorize[d]" premium payments during the g race period, but not on the due date itself. Support for such an interpretation might arise from Guardian's practice , per the Guard-o-matic Premium Arrangement, of drawing payme nts on the fifteenth of each month, even though such withdrawals would occur during the policy grace per iod with respect to almost all of Guardian's clients. 9 Under this interpretation, the "due date," despite its apparen tly exhortative title, would be construed as a pure for mality, which marks the beginning of the grace period, but which is not a date of any substantive significance in te rms of "authoriz[ing]" payments. Thus, S 25 would not have applied to the policy's due date provision; the pre mium

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8. Guardian has not argued that such contrary inten t is indicated here. Indeed, Mr. Moore's policy does not appear to have contemplated issues surrounding Sunday due dates at all.

9. The exception being any Guardian clients whose"p olicy anniversary" happens to fall on the fifteenth.

12would have remained due on August 4, per the policy 's

explicit terms; and the thirty-one-day grace period would have commenced on August 5 and terminated on September 4.

But the language and operation of Guardian's policy also admits of another reasonable interpretation, pursua nt to which the due date provision did "authorize[ ]" pay ment for purposes of S 25. The policy's definition of due da te as the "date on which the premium is payable" seems explic itly to contemplate premiums' payment as being permitted an d appropriate on that day. Indeed, it is difficult to understand a "date" on which when premiums are "payable" might be, if it were not a date on which such payments were "authorize[d]."

The idea that premium payments were authorized on t he policy's due date finds further support in the poli cy's requirement that payments must be rendered on the d ue date if an insured wishes to avoid default. Guardia n suggests that the above interpretation of the polic y's due date is inconsistent with the policy's grace period provision, which protects from financial burden any insureds w ho pay premiums after the due date, provided that such pay ments are made within thirty-one days. But it does not se em unreasonable, much less illogical, to suggest that both the due date and the grace period serve to "authorize[ ]" premium payments. Thus, interpreting the terms of t he contract in favor of the insured, we conclude that the language and structure of the policy show that Guar dian's insurance contract could reasonably be interpreted as "authoriz[ing]" payment on Sunday, August 4. And th at fact alone is sufficient to bring the policy's due date provision within the scope of S 25.

B. Mr. Moore's Premium Payment Was "[R]equire[d]" o n Sunday

Parallel logic suggests that the policy also could be construed as "requir[ing]" payment on August 4 for purposes of S 25. By its terms, the "date on which premiums are payable" seems to "require[ ]" payment on the designated due date, and so does the contractual declaration that those who do not pay on that date are in

"default."

13In response, it could be argued, on Guardian's beha lf,

that Mr. Moore's payment was not actually "require[ d]" on August 4, since no financial penalty for non-paymen t could be imposed until after the grace period had expired . The interesting issue of statutory construction, howeve r, is whether any such financial penalty is necessary for a due date to "require[ ] payment" underS 25. For two rea sons, we hold that it is not. First, by placing the word"req uire" and "authorize" together, and by focusing on what a con tract prescribes "by its terms," the statutory text sugge sts that any explicit, formal designation of a "require[d]" payment-- such as the designation in Mr. Moore's policy--is p roperly within the province of S 25.

Second, a contrary interpretation of S 25, which wo uld define the term "requires" as necessarily including a financial penalty of some kind, would demand that c ourts decide what form of penalty would be sufficient. On e possible interpretation following this approach wou ld hold that only a "substantial" penalty, relative to the total value of the contract, could truly "require" payment on a certain date. Presumably, under such analysis, if Mr. Moore were charged x percent of his premium for nonpayment on the due date, that due date would be deemed to have "require[d] . . . payment" for S 25 purposes, but i f his penalty were some lesser percent, y, the due date w ould not have done so. Discerning what degree of financial b urden would constitute a requirement under such a reading of S 25 would pose a formidable task for New York cour ts to undertake. Nothing in S 25's text, history, structu re, or purpose appears to mandate that such delicate lines be drawn, however, and we further find no basis to con clude that such a task is implicit in the statute.

Another possible interpretation of S 25 would deman d only a de minimis financial penalty before a paymen t were deemed "require[d]." The necessity of some formal m arker of the parties' intent--in the form of a de minimis pe nalty or otherwise--before invoking S 25 would seem curious, however, since S 25 itself seems intended tofill co ntractual "gaps," where contractual intent has not been clear ly expressed. Also the text, history, structure, and p urpose of S 25 provide no indication that such an anomalous r esult is statutorily necessary.

14On the contrary, S 25's broad text--which seems to apply

to all "require[d]" payments, not only to those who se default is financially penalized--is confirmed by the statu te's general legislative purpose: protecting contracting parties from having to make payments on Sunday. A more urge nt case for statutory protection would no doubt arise in cases where financial hardships followed from default, bu t we

find no reason to believe that New York's statute w as intended to apply only to such cases. Especially wh en the policy's terms are construed in the insured party's favor, Mr. Moore's contract with Guardian appears formally to have "require[d]" payment of his insurance premium on Sunday, August 4. And we find that New York law pro tects contracting parties from any "require[d]" payment o n Sunday, even when no direct financial burden falls on those who fail to pay.

C. Mr. Moore's Grace Period Began on Tuesday

Having concluded that Mr. Moore could have paid his premium on Monday, August 5 without falling into de fault, the final task is to explain how this conclusion af fects the policy's grace period. Guardian's policy provides f or "a grace period of 31 days after the due date for premium payments," and it further defines the term"due date " as "the date of default." Since the "date of default," by the operation of S 25, did not occur until Monday, Augu st 5, it is reasonable to construe the contractually-defined "due date" as also having moved to August 5. Hence, by t he policy's terms, the thirty-one day grace period beg an on Tuesday, August 6, and Mr. Moore's life insurance c overage with Guardian had not yet lapsed on September 5, th e day

he died.

For the foregoing reasons, the District Court's dec ision granting summary judgment to Guardian is reversed, and the case is remanded for further proceedings consis tent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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