Court Opinion

ID: 5766602
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:24:17.842124+00
Date Added: 2024-06-11T08:41:40.040687
License: Public Domain

Steuer, J.
(dissenting). I dissent.
The clearly reasoned majority opinion rests squarely on the proposition that the Court of Appeals in deciding Eagon v. Union Labor Life Ins. Co. (2 A D 2d 843) by an affirmance without opinion (3 N Y 2d 785) flatly rejected the arguments of the dissenting opinion and thereby fixed the law of the State. If I held to that view I would perforce have to agree with the majority. While there are some facts in Eagon which might have warranted a determination on the basis of estoppel, it must be admitted that there is no internal evidence that the high court rested on them. However, I have difficulty in believing that that court would have overruled the prior holdings in this State, departed from the holdings in other jurisdictions and reached a conclusion which appears to be at variance with the logic of the situation without so stating.*
*270To put the question in its baldest terms: Does an incontestable clause in a group insurance policy after the expiration of the period require the company to pay one who by the terms of the policy is ineligible but whose name has been included in the list of those insured? What the insurer contracts to do is to insure certain employees of certain employers — the employers named in the policy and those of their employees who spend at least 30 hours a week in the service of the employers. For others, no coverage is contracted for or provided. It has always been the law of this State that the incontestable clause cannot serve to extend the risk or the coverage contracted in the policy (Matter of Metropolitan Life Ins. Co. v. Conway, 252 N. Y. 449). The court ( Cardozo, Ch. J.) pointed out that while an incontestable clause vitiates a forfeiting condition it will not prevail against a refusal to assume the risk (supra, p. 453).
That what is involved here is an extension of the risk there can be little doubt (Fisher v. United States Life Ins. Co. in City of N. Y., 249 F. 2d 879). Similar conclusions on both the fact that what is involved in this situation is an extension of the risk and is hence not affected by the incontestable clause have been reached in Michigan (Rasmussen v. Equitable Life Assur. Soc. of U. S., 293 Mich. 482), Ohio (AEtna Life Ins. Co. v. Hooper, 19 Ohio Law Abst. 123), Georgia (Washington Nat. Ins. Co. v. Burch, 270 F. 2d 300), and California (cf. John Hancock Mut. Life Ins. Co. v. Dorman, 108 F. 2d 220). Our attention has not been called to any case to the contrary in any jurisdiction, unless Eagon be so considered.
Unfortunately, difficulty arises from the attempt to apply the incontestable clause designed for individual policies to a group policy. In the former case the insurer deals vis-a-vis an individual. The company accepts him as a risk and after the period of incontestability arrives it may not complain that he was not as good a risk as he represented himself to be. In the case of a group policy the situation is entirely different. The insurance company does not deal with the respective beneficiaries, it does not accept them as risks, nor does it collect premiums from them. It deals with the entity applying for the insurance for the group; it contracts to insure those members of the group who come within the terms of the policy. It must rely on the entity to supply the names of the individuals but it says in effect only those individuals who come within the qualifications will be insured. As a consequence it is universally recognized that a certificate given by the insurer to an employee stating that he is included in the policy has no contractual or insuring effect (Boseman v. Insurance Co., 301 U. S. 196; Carp v. California-Western States *271Life Ins. Co., 252 F. 2d 337). Thereafter any inequity resulting is the fault of the entity and the insurer cannot be compelled to accept, through being misled, a risk it did not contract to undertake.
The order of Special Term should be affirmed.
Capozzoli, McGivern and Rabin, JJ., concur with Eager, J. P.; Steuer, J., dissents in opinion.
Order entered on July 25, 1967, reversed, on the law, with $50 costs and disbursements to appellant, plaintiff’s motion for summary judgment granted, and judgment rendered in favor of the plaintiff and against defendant in the sum of $40,000 with interest and taxable costs.

 This same conclusion was reached in regard to Eagon by the United States Court of Appeals for the Fourth Circuit in Fisher (infra, p. 884).