No. 13527 IN THE SUPREME COURT OF THE STATE OF MONTANA 1977

MELVIN STANDISH, Plaintiff and Respondent,

BUSINESS MEN'S ASSURANCE COP'IPANY OF AMERICA, Defendant and Appellant.

Appeal from: DistrictCourt of the Sixth Judicial District, Honorable Jack D. Shanstrom, Judge presiding. 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

Filed:

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## ''7 Submitted: March 9, 1977 Decided

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ClerkMr. Justice John Conway Harrison delivered the Opinion of the Court.

Defendant appeals from denial of a motion forjudgment notwithstanding the verdict by the district court, Park County. The jury returned a verdict infavor of plaintiff Melvin Standish in the amount of $7,679.32. The parties agree this amount is due, if there was coverage under the group health insurance policy purchased by Brand SoLumber Company for itsemployees from defendant, Business Men's Assurance Company of America. On appeal, the standard of review from a denial of a motion forjudgment notwithstanding the verdict made pursuant to Rule 50(b), M.R.Civ.P., isthe same as that for review of a motion for directed verdict. Sheeketski v. Bortoli, 86 Nev. 704, 475 P.2d 675; 9Wright & Miller, Federal Practice and Procedure, Civil $2524. A directed verdict may be granted only where it appears

as a matter of law that plaintiff cannot recover upon any view of the evidence, including the legitimate inferences to be drawn from ic. Parrish v. Witt, 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 cited therein. Here, the basic question on appeal iswhether plaintiff was :overed by the group insurance policy. There are two aspects to chis question 1) had plaintiff met the initialeligibilityrequirements, 2) had he been terminated ending policy coverage prior to the injury. We firstnote that because therewas no employee payment or orher ai'firmative act on the part of the employee which initiates coverage, the determination of when coverage began orwhen it ends requires inferences from circumstantial evidence. There are a

### number of similaritiesbetween the instant case and cases involving the question of coverage under the Worker's Compensation Act or other social legislation,andwhile 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 whichmust 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 ofmembership in an eligible class.I1 

### The termination provision reads: "(b) If an Individual's insuranceunder this policy is contingentupon employment,the insurance of such Individual shall terminateupon termination of such employment. Cessation of activework shallbe deemed termination of employment, except that while an Individual is absent on account of sickness or injury,employment shallbe deemed to continueuntil premium payments for such Individual's insurance are discontinued. At the option of the Policyowner, the insurance of an Individualmay be continued during a temporary lay-off but notbeyond 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 coveragebegin, 

### (2) was the cessationof activework due to injury,and 

### (3) if itwas,when were thepremiums discontinued?There was testimony that plaintiff began work on Brand S Lumber Company projects inmid-March, 1974. Atthat 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 forwages he paid tothose who worked for him. During this initialperiod no deductions were made for social security or taxes from plaintiff's wages. During the firstweeks of May, while Kelly was on vacation, plaintiff was paid directlyby Brand S. In lateMay, prior togoing to Colorado on a Brand 

### Seproject, Kelly had plaintiff placed on the company's computerized payroll. The crew returned from Colorado

on June 26 and both plaintiff and a coworker testified that plaintiff worked on June 27. Plaintiff and the coworker testified testified theyboth took that Friday off, and the entirenext week aswell as theirJuly 4 holiday, intending to return towork afterthe vacation. The coworker did return, but plaintiff injured his ankle inan automobile accident and he reported that he could not returnuntil ithad healed. On or about July 30, plaintiff was injuredwhen a .41 magnum gun he was handling fellto the ground, discharged, and wounded plaintiff inboth legs. Plaintiff testifiedhe was givennotice of his termination inAugust, while he was 

### stillinthe hospital. Defendant presented evidence to the effect that the checks paid to plaintiff prior tobeing put on the Brand S. computer payrollwere just reimbursement checks paid indirectly toplaintiff instead of directly. A number of business records were introduced giving June 26 as the termination date. 

### It 

### isclear most of those records were made after the July 30 accident, but therewas testimony thiswas done without any knowledge of the accident. ' ,

# .'The insurance 5iil from defendant to Brand S shows that Brand S had deleted plaintiff because he had not been employed a sufficlent period of time. This document was alsoprepared inearly Xugust

# . It isclear there were factual disputes tobe determined to find if there was coverage under the policy. These factual questions were decided by thejury in favor of plaintiff. It does not appear from the evidence that there was no coverage as a matter of law and therefore themotion for a judgment notwithstanding the verdict was properly denied. Plaintiff's argument on punitive damages based on an alleged violation of the disability sections of the insurance code is without merit. Disability insurance was not raised in the pleadings and throughout his pretrial memorandum plaintiff speaks only of rnedical billsunder the health insurance. There was no clear showing of the existence of disability insurance, nor 

### is there ally showing of the requisite oppression, fraud, ormalice to bring this case under the rule of State ex rel. Larson v. District Court, 149 Mont. 131, 423 P.2d 

### 598. The judgment of the district court is affirmed.

Me Concur; 

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