Title: Continental Casualty Company v. Davidson
Citation: 463 S.W.2d 652
Docket Number: 5-5475
State: Arkansas
Issuer: Arkansas Supreme Court
Date: March 1, 1971

463 S.W.2d 652 (1971) CONTINENTAL CASUALTY COMPANY, Appellant, v. Robert H. DAVIDSON, Appellee. No. 5-5475. Supreme Court of Arkansas. March 1, 1971. *653 Rose, Barron, Nash, Williamson, Carroll &amp; Clay, Little Rock, for appellant. McMath, Leatherman, &amp; Woods, Little Rock, for appellee. FOGLEMAN, Justice. Appellant asserts that the circuit court's instructions defining total disability were erroneous, in the light of the policy on which appellee sued. We find reversible error in that regard. A review of the evidence would serve no useful purpose. It is sufficient to say that there was evidence sufficient to support a finding of total disability whether the court's definition or appellant's is used. The pertinent policy provision is as follows: It is conceded that appellant paid total disability benefits to appellee for more than 12 months prior to September 17, 1968. Appellee then sued for benefits from that date until the date of trial and recovered judgment for these payments at the policy rate of $100 per month with statutory penalty and attorney's fees. As one of its defenses appellant denied that appellee was permanently disabled so that in the future he would be unable to return to his former employment or engage in any occupation for wages or profit. The circuit judge gave only the following instruction defining total disability: Appellant objected because the instruction would preclude the jury from considering appellee's ability to engage in any occupation for which he was reasonably qualified by reason of education, training and experience, other than his previous occupation. Appellant offered, and the court refused, the following instructions pertaining to total disability: Appellant concedes that the instruction given by the court would be correct were it not for the fact that total disability benefits are payable under two different conditions, i. e.: (1) benefits for a maximum of 12 months while the insured was totally disabled from performing any substantial and material duties of his former occupation; and (2) benefits thereafter so long as the insured is disabled from performing the material duties of any occupation for which he is reasonably qualified by reason of education, training and experience. We agree with appellant that all our previous cases, save one, have dealt with policies that were substantially similar, but which did not have two separate and distinct categories for payment of disability benefits. While the one exception involved only the question of liability for total disability in the usual sense, it was clearly recognized there that different considerations might have been involved had liability in the second category set out above been in issue. See Franklin Life Insurance Company v. Burgess, 219 Ark. 834, 245 S.W.2d 210. Part I of the policy there involved entitled the insured to monthly benefits for a maximum of 12 months while prevented by illness or injury from performing each and every duty pertaining to his occupation. Thereafter, the payments were to be continued so long as the insured should be wholly, necessarily and continuously disabled and prevented by such injury or illness from engaging in any occupation for wages or profit. In reducing the amount of attorney's fees allowed, the court noted that we had previously approved fees in excess of the amount of recovery in similar cases where the determination of questions involved also determined the liability of the insurance company for future disability payments. We said: While this language does not constitute binding authority for appellant's argument, it is clear recognition that the language in that policy defined two entirely different bases for liability for total disability. The language of the policy here is strikingly similar. If the words in the two clauses of each of the respective policies defining the total disability meant the same thing, then nothing short of recovery by the insured would prevent a judgment under the first clause from being res judicata *655 as to future liability under the second clause. Such a result does not seem to be a sensible one in light of the disparate language of the two clauses. In construing a contract, even one for insurance drawn by the insurer, we must assume that the use of different language to define different obligations was deliberate and accompanied by an intention to convey different meanings rather than the same one. Different clauses of a contract must be read together and the contract construed so that all of its parts harmonize, if that is at all possible, and, giving effect to one clause to the exclusion of another on the same subject where the two are reconcilable, is error. Kelsey and Fletcher v. Brown and Hackney, 165 Ark. 613, 264 S.W. 930; American Indemnity Co. v. Hood, 183 Ark. 266, 35 S.W.2d 353. A construction which neutralizes any provision of a contract should never be adopted if the contract can be construed to give effect to all provisions. Fowler v. Unionaid Life Ins. Co., 180 Ark. 140, 20 S.W.2d 611. What we said in Fowler is particularly appropriate here, viz: The rights and liabilities of the parties to an insurance contract must be determined by considering the language of the entire policy. American Indemnity Co. v. Hood, supra. Legal effect must be given to all the language used, and the object to be accomplished by the contract should be considered in interpreting it. Aetna Life Insurance Company v. Spencer, 182 Ark. 496, 32 S.W.2d 310. Whatever the construction of a particular clause standing alone may be, it must be read in connection with other clauses limiting or extending the insurer's liability. Aetna Casualty &amp; Surety Co. v. Sengel, 183 Ark. 151, 35 S.W.2d 67. In considering the phraseology of an insurance policy the common usage of terms should prevail when interpretation is required. National Investors Fire &amp; Casualty Co. v. Preddy (March 23, 1970), Ark., 451 S.W.2d 457. When we read the clear language of the two sentences of the total disability clause, giving their terms the meaning ascribed by common usage, the intention to describe two different types of total disability is inescapable. Whatever construction we might give the language of the second sentence describing total disability if it stood alone, when both clauses are read together we simply cannot say that it was contemplated that they define the same kind of disability. Consequently, appellant's specific objection was well taken and the instruction was incorrect for the reason stated by appellant. Therefore, we must reverse the judgment and remand the case for new trial. *656 It does not follow, however, that appellant's offered instructions must be given. While the giving of one of them might not be error, it can be said that both are ambiguous in that they would require appellee to be unable to perform all the substantial and material acts necessary to the prosecution, in a customary manner, of any occupation or business for which the insured is reasonably qualified by reason of his education, training and experience. It is only necessary that he be unable to perform any of such acts in order to qualify for benefits. Avemco Life Insurance Company v. Luebker, 240 Ark. 349, 399 S.W.2d 265, 21 A.L.R.3d 1378; Alexander v. Mutual Benefit Health &amp; Accident Ass'n, 232 Ark. 348, 336 S.W.2d 64; Franklin Life Insurance Co. v. Burgess, 219 Ark. 834, 245 S.W.2d 210. We clearly expressed a preference for an instruction using the word "any" in Avemco. If the words "any of" had been substituted for "all" in the offered instructions, appellant would have clearly been entitled to have one of them given. While both would then appear to be correct, appellant's requested instruction no. 2 would be preferable because it is more in keeping with our per curiam order of April 16, 1965, requiring that instructions not covered in AMI, Civil, be simple, brief, impartial and free from argument. In passing, we note that appellant's failure to request a correct instruction on the issue of total disability does not bar him from relief on appeal because he made a specific objection pointing out the respects in which the instruction given was an erroneous declaration of law. Collier Commission Co. v. Wright, 165 Ark. 338, 264 S.W. 942. In view of the disposition we make, we do not reach appellant's point as to the amount of attorney's fees allowed appellee. The judgment is reversed and the cause remanded for further proceedings not inconsistent with this opinion.