Court Opinion

ID: 9487460
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:17:05.892152+00
Date Added: 2024-06-11T17:52:16.920405
License: Public Domain

GEORGE C. YOUNG, Senior District Judge,
dissenting:
The insured in this case, Mario D. La-Torre, applied for a $100,000 life insurance policy with disability income insurance. At the time of the application he paid a $158.00 premium for the life insurance and $211.42 for the disability income insurance. The appellant, Connecticut Mutual Life Insurance Company, issued a Conditional Advance Premium Receipt at the time of the payment on February 8, 1989. Thereafter, on February 22, 1989 the company issued its policy which contained an incontestability provision as follows:
We cannot contest this Policy, except for nonpayment of premium after it has been in force during the lifetime of the insured for a period of two years from the Date of Issue.
On February 15, 1991 the insured died, more than two years after the Conditional Advance Premium Receipt had been issued, but less than two years after the issue date of the policy. The company refused to pay the insurance to the insured’s beneficiary because it is alleged that Mr. LaTorre had failed to disclose on his application that he had Acquired Immune Deficiency Syndrome (AIDS).
The Conditional Advance Premium receipt issued by the company to the insured at the time of. the application for the policy on February 8, 1989 provided:
The purpose of this receipt is to provide a LIMITED amount of insurance coverage while we review the Application and other information to decide if we can issue the policy(ies) applied for. Because this receipt gives protection to persons whether or not insurable on a standard basis, we LIMIT coverage while we evaluate the Application and before the coverage under this receipt ends as specified below. This receipt does not commit us to issue any policy(ies) other than according to our usual underwriting standards. Nor are we obligated to provide insurance benefits where health or other conditions affecting insurability have been misrepresented.
WHEN COVERAGE ENDS — Coverage ends on the EARLIEST of the following dates:
1. Sixty days after the date of this receipt if any evidence of insurability we requested has not been given to us, or
2. The date we issue the policy(ies) as applied for, or
3. Thirty days after we issued a policy offering insurance on a basis different from that applied for or, if SOONER, *543upon your acceptance or rejection of any such offer, or
4. The date we reject the Application. Rejection is effective when you or the proposed insured receive oral notice. If the notice is mailed, rejection will be effective upon the earlier of: the date you receive such notice or; 5 days after such notice is mailed.
In this case the insured, Mario D. La-Torre, was issued a limited conditional coverage pursuant to the terms of the Conditional Advance Premium Receipt. As set forth above, this coverage ended either sixty (60) days after the date of the receipt if evidence of insurability requested by the insurer had not been produced, or the date the policy was issued, or the date the application was rejected, or thirty (BO) days after the issuance of a policy on different terms than those applied for. The result was that there were two contracts: first, one for temporary coverage pending a determination of insurability by the company, and secondly, the policy applied for. In this respect, there is a difference from the finding of American National Insurance Company v. Motto, 404 F.2d 167 (5th Cir.1968), wherein the court found that neither party intended a two-contract arrangement and that therefore the two-year period of contestability commenced with the date of application for insurance.
The insurance policy issued to Mr. La-Torre provided that the “Policy Date” was February 22, 1989, and further provided the “Date of Issue” was February 22, 1989, and that the “Final Expiration Date” was February 22, 2024. By the specific terms of the Conditional Advance Premium Receipt, the limited coverage provided by that receipt had ended. LaTorre had ten days after the receipt of the policy to return it to the company and have the premiums paid returned to him.
I find no ambiguity in the terms as above set forth and believe that the two-year period within which the company could contest its obligation to pay commenced on February 22, 1989, and that, therefore, the summary judgment granted by the district court should be reversed and the case remanded for further proceedings.
Accordingly, I respectfully DISSENT.