Title: MEAGHER v BENEFIT TR LIFE INS CO
Citation: N/A
Docket Number: 12184
State: Montana
Issuer: Montana Supreme Court
Date: October 29, 1972

No. 12184 I N T H E S U P R E M E C O U R T O F T H E STATE O F M O N T A N A 1972 EDNA MEAGHER, P l a i n t i f f and Respondent, BENEFIT TRUST LIFE INSURANCE C O M P A M I , a corporation, Defendant and Appellant. Appeal from: D i s t r i c t Court of t h e Third Judicial D i s t r i c t , Honorable Sid G. Stewart, Judge presiding. Counsel of Record: For Appellant : Knight, Dahood, Mackay and McLean, Anaconda, Montana. David M. McLean argued, Anaconda, Montana. For Respondent: M. K. Daniels argued, Deer Lodge, Montana. Submitted : September 19, 1972 Decided : CJCT 3 ii j9:r2 M r . J u s t i c e Frank I , Waswell delivered the Opinion of the Court, I n an action by the beneficiary of a group health and accident policy against the insurer t o c o l l e c t a $5,000 death benefit, the d i s t r i c t court of Powell County, the Hon. Sid G. Stewart, d i s t r i c t judge, granted a directed verdict i n favor of the beneficiary and entered judgment thereon. From the judgment and the d i s t r i c t c o u r t ' s denial of the i n s u r e r ' s motion f o r a new t r i a l , the insurer appeals. Plaintiff-respondent i s Edna Meagher, the beneficiary named i n the policy issued by defendant-appellant, Benefit Trust Life Insurance Company. The policy provided f o r a death benefit i n the amount of $5,000. The insured, Kenneth V, Wheeler, suffered a gunshot wound on March 18, 1969 and died on April 2 , 1969. The underlying question on appeal i s whether the policy was i n e f f e c t on the date of Wheeler's death. The d i s t r i c t court held t h a t i t was, granting a directed verdict t o the beneficiary a t the conclusion of a l l the evidence a t the jury t r i a l . W e agree. Wheeler was an employee of the Milwaukee railroad from February 1968 t o October 5 , 1968, a t which time he submitted h i s voluntary resignation from t h i s employment. A t a l l times material t o t h i s action, the railroad had a contract with Benefit t o provide a group insurance policy t o the r a i l r o a d ' s employees. The monthly premium was $8.40 which the r a i l r o a d deducted from the employee's pay and remitted t o Benefit. The deduction covered the premium f o r the following month. The policy contained the following provisions, among others, pertinent t o t h i s action: he coverage on an Insured s h a l l automatically terminate a t t h e e a r l i e s t of the following dates: (a) a t the beginning of the month f o r which Insured f a i l s t o make, when due, any required contribution towards the payment of premium * * * (e) a t t h e end of the month i n which h i s employment with the Employer terminates. I I The policy also containea the following conversion privilege i n the event of termination o E the insured's employment with the railroad : I t I f employment with the Employer i s terminated and the Insured takes up f u l l time employment elsewhere, the Insured shall be entitled, subject t o the Company's regular underwriting rules, t o convert h i s insurance t o an individual policy of insurance, provided written application and the f i r s t premium payment are made t o the Company within thirty-one days from the date of termina- tion of employment. * * *I1 Premiums were deducted from Wheeler's pay for the months of March 1968 through October 1968, during which time he was carried on the "collected list" compiled by the railroad and furnished t o Benefit. For the months of November and December 1968 and January 1969, Wheeler was carried on the l'uncollected list" furnished by the railroad t o Benefit. In February 1969, the railroad sent Wheeler a check representing compensation f o r h i s unused vacation time l e s s a deduction of $16,80 for two months insurance premiums. Following Wheeler's death on April 2, 1969, Benefit sent Wheeler a notice af premium due i n the amount of $8.40. Qn July 18, 1969, some three and one-half months a f t e r Wheeler's death, Benefit forwarded a check t o the beneficiary i n the amount of $25.20, covering a refund of premiums for the months of October 1968 and February and March 1969, Prior t o t r i a l the d i s t r i c t court denied Benefit's motion for summary judgment. Jury t r i a l was had on July 1, 1971, A t the conclusion of a l l the evidence, Judge Stewart granted a directed verdict t o the beneficiary i n the face amount of the policy, Judgment was entered thereon on July 8, 1971. Benefit moved for a new t r i a l which was denied on August 26, 1971. Benefit now appeab from the judgment. A s heretofore indicated, the underlying issue upon appeal i s whether the l i f e insurance policy was i n effect on the date of Wheeler's death, Benefit contends that the policy had terminated prior t o Wheeler's death under the express policy terms heretofore quoted providing for automatic termination i n the event of (1) nonpayment of premium, or ( 2 ) termination of employment with the railroad. Specifically Benefit argues that no premiums were paid for the months of November, December, 1968 and January 1969, automatically terminating the policy; that the railroad's deduction of premiums in February 1969 from unused vacation pay did not work a reinstatement of the policy; and that under no view of the evidence was any premium paid for the month of April 1969, when Wheeler's death occurred. Benefit further avers that in any event Wheeler terminated his employment with the railroad in October 1968, automatically terminating his policy at the end of that month and that payment for unused vacation time in February 1969 did not constitute further employment by the railroad and reinstate his policy. We observe at the outset that ~enefit's contentions are bottomed on policy provisions relating to automatic termination without notice. We need not cornern ourselves with the status of the policy under these provisions prior to April 2, 1969, the date of Wheeler's death, as the status of the policy on that date is controlling. The uncontradicted evidence at the trial establishes that subsequent to Wheeler's death a notice of premium due directed to Wheeler was received at his address in Deer Lodge, The notice of premium due was admitted in evidence at the trial and this exhibit showed a net amount due of $8.40, representing the premium for the period commencing April 11, 1969, The face of the exhibit shows symbols indicating, at least by inference, a railroad policy noncancellable to April 10, 1969. The due date for the $ 8 . 4 0 premium covering the period commencing April 11, 1969, as shown on the notice was April 1, 1969, This evidence constitutes an admission by the insurer that the policy was paid up and non- cancellable on April 2, 1969, the date of Wheeler's death, and the insurer is bound thereby, Accordingly, the directed verdict for plaintiff beneficiary i n the face amount of the death benefit contained i n the policy i s correct. The judgment of the d i s t r i c t court i s affirmed. Associate Justice ' % C h F Justice