Opinion ID: 1408914
Heading Depth: 1
Heading Rank: 3

Heading: contracts for the benefit of third persons

Text: Should the court on remand determine that jurisdiction is not preempted by the Railway Labor Act, but rather that the controlling issue is the determination of whether or not the Travelers Insurance policy is a contract for the benefit of third parties such as Mrs. Downing, then, in that event, it will be necessary to resolve the latter issue. We hold that issue is, in the context of the present record, a question of fact which could not properly have been resolved on summary judgment. We reach that conclusion because of the following authorities and analysis which would be applicable, construing the facts in the present record, in a light most favorable to the claimant. Mrs. Downing claims that she is a beneficiary of the contract, although she is not specifically named in the insurance contract. On the other hand, Travelers Insurance Company asserts that the contract is a contract of indemnification, although the word indemnification or phrases having that import do not specifically appear therein. In Williston on Contracts (Third Edition) § 369 the rule is stated: In practically every jurisdiction, a beneficiary to whom the insurer has promised the insured that the insurance money shall be paid is given a right to enforce the policy, and generally by a direct action. This result has been reached in jurisdictions adhering to the strict doctrine of privity of contract by statute; but in most states without the aid of a statute. Ordinarily, a beneficiary of such an insurance contract may maintain an action thereon, though not named therein, when it appears by fair and reasonable intendment that his rights and interests were in the contemplation of the parties, and were being provided for at the time of making the contract. Williston, supra, at page 906 reads: The beneficiary of a contract of group insurance has been given the same direct right to enforce the policy as in ordinary life insurance cases. The contract of group insurance being ordinarily between an insurance society and an employer for the benefit of his employees, there is a defeasible vested interest in both the insured employee and the latter's beneficiary, enforceable only on the fulfillment of all the conditions of the policy. The rights of the beneficiary to enforce the contract are further defined in Williston, supra, at page 908: A third party beneficiary in an ordinary contract is subject to the limitation of its terms as he has no greater rights under it than are provided in the contract itself. However, upon the death of the insured, or upon the occurrence of any other contingency or condition which results in a claim becoming payable, a right vests in the beneficiary which the insurer cannot defeat unless fraud, collusion or some similar circumstance can be shown. In Bergkamp v. Carrico, 101 Idaho 365, 613 P.2d 376 (1980) this court held: Where the terms of a contract are ambiguous, its interpretation and meaning is a question of fact and extrinsic evidence may be considered in attempting to arrive at the true intent of the contracting parties. In Concrete Contractors v. E.B. Roberts Construction Co., 664 P.2d 722 (Colo. App. 1982) the court stated: The key question is the intent of the parties to the actual contract to confer a benefit on a third party. That intent must appear from the contract itself or be shown by necessary implication. It is a question of fact to be determined by the terms of the contract taken as a whole, construed in the light of the circumstances under which it was made and the apparent purpose the parties were trying to accomplish. Based upon the foregoing authorities, it is apparent that if the facts and documents in the record are construed in a light most favorable to Mrs. Downing, the party against whom summary judgment was sought, that there are substantial issues of fact raised which rendered the disposition of the case on summary judgment improper, and therefore the case must be remanded for trial on the merits. Travelers has asserted that it is fearful that certain defenses which might be maintained by the railroads are not maintainable by Travelers, but as noted below, each of the exclusions set forth in the collective bargaining agreement are incorporated verbatim in the group insurance policy contract. Furthermore, the collective bargaining agreement would be admissible into evidence as one of the extrinsic circumstances to be utilized in interpreting the group insurance policy contract. IV