Court Opinion

ID: 877298
Source: CourtListenerOpinion
Date Created: 2013-06-04 21:19:18.32378+00
Date Added: 2024-06-11T15:26:11.661454
License: Public Domain

No. 14751
                     IN THE SUPREME COURT OF THE STATE OF MONTANA

MARY E. CAMERON, individually and
MARY E. CAMERON AS PERSONAL REPRESENTATIVE
in intestacy of the estate of Archie H.
Camerson, deceased,
                              Plaintiffs and Appellants,
               VS.

FIRST NATIONAL BANK IN BOZEMAN, a
national banking association, and UNIVERSAL
UNDERWRITERS LIFE INSURANCE COMPANY, a
Stock Company,
                              Defendants and Respondents.

Appeal from:         District Court of the Eighteenth Judicial District,
                     Hon. W. W. Lessley, Judge presiding.
Counsel of Record:
     For Appellants:
               Landoe, Brown, Planalp, Kommers & Lineberger,
                Bozeman, Montana
               Gene I. Brown argued, Bozeman, Montana
     For Respondents:
               Anderson, Symrnes, Brown, Gerbase, Cebull & Jones,
                Billings, Montana
               Rockwood Brown argued, Billings, Montana
               Drysdale, McLean, Screnar & Cok, Bozeman, Montana
               James J. Screnar argued, Bozeman, Montana

                                        Submitted:   November 2, 1979

         i+ -
          :L
Filed:
Mr. Justice Gene B. Daly delivered the Opinion of the Court.
     This is an appeal from a summary judgment granted by
the District Court of the Eighteenth Judicial District,
Gallatin County, in favor of the defendants-respondents.
Plaintiff-appellant Mary E. Cameron, as personal represen-
tative of her father's estate, brought an action to quiet
title to a mobile home that was being purchased by her
father from Premier Homes, Inc., under a retail installment
sales contract at the time of his death.     By this action
she also sought to have defendants pay the remaining balance
of the purchase price on the mobile home for their failure
to provide her father, Archie Cameron, with a policy of
credit life insurance.   Summary judgment was granted in
favor of respondents after both sides had answered inter-
rogatories and after respondents had filed affidavits in
support of their motion for summary judgment.    The judgment
was granted on the grounds that there never was a contract
of insurance.
    Mary Cameron is the daughter of Archie Cameron and
is the personal representative of his estate.    Cameron died

on January 20, 1978.   One of the assets of his estate was a
1972 Columbia mobile home which Cameron purchased from re-
spondent Premier Homes, Inc., on August 10, 1976.    On that

date Cameron signed a retail installment contract with
Premier to purchase the mobile home.    Boid Lehman, Premier's

salesman, handled the transaction.     The retail installment
contract contained the following provision regarding credit
life insurance:
     "CREDIT LIFE AND DISABILITY INSURANCE is not
     required by Seller in connection with this
     transaction. Buyer as of the date hereof, is
     able to perform usual activities or occupation,
     and otherwise qualifies for such insurance.
     This insurance may be obtained through Seller
     for the term of this contract at the cost
     indicated below:

          ( )   Credit Life Insurance $ 307.50
          ( )   Credit Life and disability
                Insurance             $

     "I desire credit ( ) life and ( ) disability
     insurance. I AM UNDER 66 YEARS OF AGE.
     "Date 8-10-76      x /s/ Archie H. Cameron
                             Signature of Insured
                                Buyer
     "THIS IS NOT A COMMITMENT TO PROVIDE CREDIT
     LIFE OR CREDIT LIFE AND DISABILITY INSURANCE."
The total deferred contract price included the $307.50
premium for credit life insurance.   The retail installment
contract was assigned to respondent First National Bank of
Bozeman the same day.   The insurance policy was to be with
respondent Universal Underwriters Life Insurance Company.
Premier Homes, as part of its business selling mobile homes,
had an agreement with Universal Underwriters Life Insurance
Co. whereby Premier Homes acted as Universal's agent for
the purpose of selling credit life insurance.
    Cameron did not receive an application for credit
life insurance until September 14, 1976, when he completed

and signed an application prepared for him by Boid Lehman.
On the application Cameron indicated that he had high blood
pressure and was under treatment, that he had been treated
for arthritis, that he was not working at the time, and
that he was drawing disability from the Three Forks Port-
land Cement Co.   This application was forwarded to the
main office of Premier Homes, where Helen Martin, an em-
ployee of Premier, determined that Cameron was ineligible
for credit life coverage under rules dictated to Premier
by respondent Universal Underwriters Life Insurance Co.
In his affidavit, which the District Court accepted as
being true, ~ o i dLehman, the salesman who sold the mobile
home to Cameron, stated that six days later, on September
20, 1976, at the request of the manager of Premier's home
office, he drove to Cameron's home in Three Forks and per-
sonally notified Cameron that he was not qualified for
credit life insurance and that he did not have any coverage.
This "request" was corroborated by the affidavit of Helen
Martin, a fellow employee of Premier Homes.    Cameron never
received written notice that his application for credit
life insurance with Universal Underwriters Life Insurance
Co. had been rejected.   No policy was ever issued to
Cameron.    His application was never forwarded by Premier
to Universal, since Premier's employee Helen Martin deter-
mined that it should be summarily denied.    The District
Court found that Universal never had notice that an appli-
cation had been made and that it was unaware that Archie
Cameron ever existed or that credit life coverage was being
claimed until a demand for payment on the policy was made
by the attorney for the Cameron estate in a letter addressed
to Premier on March 23, 1978.   This demand was refused.
     Although Cameron's application for credit life insur-
ance was rejected on September 20, 1976, the $307.50 premium
for insurance which had been included in the contract price
was not refunded or credited to his account until March
1978, after Cameron's death and after the attorney for his
estate had demanded payment on the policy.    At that time

a refund and credit of the $307.50 premium plus interest
was made.
     Two principal issues are presented to this Court on
appeal :
        1. Whether or not defendants-respondents were en-
titled to summary judgment as a matter of law if they failed
to follow the provisions of section 33-21-204(2), MCA, and
section 33-21-206 (3), MCA?
        2.   Whether or not there remained any genuine issues
of material fact making summary judgment improper in this
case?
        Mary Cameron argues that summary judgment was improperly
granted to respondents in this case because there remained
genuine issues of material fact and because respondents
were not entitled to summary judgment as a matter of law.
Rule     56(c), M.R.Civ.P.   The reason respondents were not
entitled to judgment as a matter of law is that they failed
to comply with the requirements of Montana's statutes regu-
lating credit life insurance.     Specifically, respondents
failed to deliver an application for credit life insurance
to Cameron at the time the indebtedness was incurred, August

10, 1976, and they failed to either accept or reject his
application within thirty days of that date, contrary to
the provisions of section 33-21-204(2), MCA; although re-
spondents "required" Cameron to make a payment of $307.50
in connection with credit life insurance, a policy was
never issued; although respondents allegedly gave oral
notice in person, they failed to give him immediate written
notice of that fact as required by the statute, section

33-21-206(3), MCA; and, respondents failed to make an appro-
priate credit to his account promptly, not doing so until
contacted by the attorney for Cameron's estate in March
1978.    Each of these actions or lack of action was contrary
to the provisions of section 33-21-206(3), MCA.     Respondent
First National Bank in Bozeman is liable under these provi-
sions as a "creditor" under section 33-21-103(3), MCA.
     Furthermore, respondents as the moving parties failed
to meet their burden to establish the absence of any genuine
issues of material fact and consequently are not entitled
to summary judgment.
     Respondents contend that the summary judgment was
proper as a matter of law.    There never was a contract for
insurance, as Cameron's application for credit life insur-
ance was promptly rejected by respondents and personal
notice - -               --
       of this rejection was given Q Premier's employee,
Boid Lehman - September - -
            on          20, 1976.     The payment of an
insurance premium by Cameron as part of the total deferred
price of the mobile home did not create a contract of
insurance.   No policy was ever issued, and respondent Uni-
versal Underwriters never knew of Cameron's application, as
it had been summarily denied by Premier.     Therefore, sum-
mary judgment was proper.    Section 33-21-206(3), MCA, only
applies where the creditor "requires" the debtor to carry
credit life insurance.   Since the retail installment con-
tract provided that insurance was not required, this sec-
tion is also inapplicable to the present case.     (Even if
this Court accepts appellant's argument that section 33-21-
206(3), MCA, applies where the debtor is required - -
                                                  to make
a payment in connection with credit life insurance, appel-
lant waived the advantage of the written notice requirement,
which is intended solely for his benefit.)
    As a preliminary matter, it must be determined whether

First National Bank of Bozeman ("Bank") and Universal
Underwriters Life Insurance Company ("Insurance Company"),

as well as Premier Homes, Inc. ("Premier") are proper
parties to this action.     Respondent Bank is potentially
liable for the obligations of a "creditor" under section
33-21-206(3), MCA, because it comes within the definition
in section 33-21-103(3), MCA:
       "'Creditor' means the lender of money or
       vendor or lessor of goods, services, property,
       rights, or privileges, for which - -
                                        payment is
       arranged through a-credit transaction or any
       successor - - right, title, or interest
                 to the
       of such a lender, vendor, - lessor. " (Em-
       ---                       or
       phasis added.)
       Since the Bank took an assignment of the retail
installment contract, it must comply with the requirements
of section 33-21-206(3), MCA, as Premier's successor in
interest.    Respondent Insurance Company is not liable in
any event because, even though Premier may have acted as
its agent in passing upon Cameron's application for credit
life insurance, the requirements of section 33-21-206(3),
MCA, are directed at a creditor and not at an insurer.
       Appellant Mary Cameron contends that summary judgment
was improperly granted to respondents in this case because
there remained genuine issues of material fact and because
respondents were not entitled to judgment as a matter of
law.    Rule 56(c), M.R.Civ.P.,   provides that summary judg-
ment "shall be rendered forthwith if the pleadings, deposi-
tions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is
no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law."
       The first issue in this appeal is whether or not re-
spondents were entitled to judgment as a matter of law.
Appellant urges that respondents were not entitled to sum-
mary judgment because they failed to comply with the re-
quirements of sections 33-21-204(2) and 33-21-206(3), MCA,
which are part of Montana's model act for the regulation of
credit life insurance and credit disability insurance.
     Section: 33-21-204, MCA, provides in relevant part:
     "(1) All credit life insurance and credit dis-
     ability insurance sold shall be evidenced by
     an individual policy or in the case of group
     insurance by a certificate of insurance, which
     individual policy or group certificate of in-
     surance shall be delivered to the debtor at
     the time the indebtedness is incurred except
     as hereinafter provided.
    " (2) - - individual policy - group certi-
           If the                    or
    ficate of insurance - - delivered - -
             -             is not            to the
    debtor - - - - indebtedness is incurred,
             at the time the
    a        - the                                -a
    - COPY of - application for such p a i c y or -
             -
            p   p

    notice of proposed insurance, signed by the
    debtor and setting forth the name and home of-
    fice address of the insurer, the name or names
    of the debtor, the amount of payment by the
    debtor separately in connection with credit
    life insurance and credit disability insurance
    coverage, and a brief description of the cover-
    age provided or to be provided, shall be -- de-
    livered- the debtor - - - - such indebted-
        - - to               at the time
    - -is incurred. The copy of the application
    ness
    for or notice of proposed insurance shall re-
    fer exclusively to insurance coverage and shall
    be separate and apart from the loan, sale, or
    other credit statement of account, instrument,
    or agreement unless the information required
    bv this section is prominently set forth therein.
     .
     ~'
    Upon approval - - application, if any, or
                    of the
    acceptance of - insurance - within 30 z y s
                 - the             and
    of - -
    -    the date upon which       indebtedness?^ in-
    curred, the insurer shall -- individual
                                 cause the
    policy or group certificate of insurance - beto -
    delivered - -
                to the debtor.     he application or
                - -
    notice of proposed insurance shall state that,
    upon acceptance by the insurer, the insurance
    shall become effective as of the date the in-
    debtedness is incurred." (Emphasis added.)
Subsection (2) applies only when the credit life insurance
is not evidenced by a policy delivered to the debtor at
the time the indebtedness is incurred.
    Appellant contends that since respondents failed to
deliver a copy of the application for credit life insurance
to Cameron on August 10, 1976, when the indebtedness on the
mobile home was incurred, and did not provide him with an
application until September 14, 1976, they have violated
t h e p r o v i s i o n s of t h i s s u b s e c t i o n .     Furthermore, a p p e l l a n t

a r g u e s t h a t t h e t h i r d s e n t e n c e o f s e c t i o n 33-21-204(2),

MCA, means t h a t r e s p o n d e n t s w e r e r e q u i r e d t o a c t on t h e

a p p l i c a t i o n by e i t h e r a c c e p t i n g o r r e j e c t i n g i t w i t h i n 30

d a y s from t h e d a t e t h e i n d e b t e d n e s s w a s i n c u r r e d .         since

t h e i n s t a l l m e n t s a l e s c o n t r a c t was s i g n e d o n August 1 0 ,

1976, and Cameron d i d n o t r e c e i v e a n a p p l i c a t i o n u n t i l

September 1 4 , 1976, i t a l l e g e d l y w a s n o t a c t e d upon w i t h i n

t h e t i m e p r o v i d e d by s t a t u t e .

        Contrary t o a p p e l l a n t ' s contentions, it i s c l e a r t h a t

s e c t i o n 33-21-204,        MCA,     s p e a k s o n l y t o t h e s i t u a t i o n where

a c o n t r a c t f o r c r e d i t l i f e i n s u r a n c e h a s been e n t e r e d , and

t h e s e c t i o n i s n o t a p p l i c a b l e i n t h i s c a s e where t h e r e was

no c o n t r a c t and where no p o l i c y w a s e v e r i s s u e d .

        A r c h i e Cameron's a p p l i c a t i o n f o r c r e d i t l i f e i n s u r a n c e

w a s d e n i e d , and no p o l i c y was i s s u e d .            Mere payment o f t h e

premium d o e s n o t create a c o n t r a c t o f i n s u r a n c e .                 43 Am.Jur.2d

I n s u r a n c e BS 195, 208,         210.        F u r t h e r m o r e , t h e i n s u r e r ' s de-

l a y i n accepting o r r e j e c t i n g an a p p l i c a t i o n does n o t c r e a t e

a c o n t r a c t of insurance.             I n Weaver v. W e s t C o a s t L i f e I n -

s u r a n c e Co.   ( 1 9 3 5 ) , 99 Mont. 296, 304, 4 2 P.2d 729, 733,

t h i s Court observed:

        " I t i s a w e l l - s e t t l e d r u l e , e s t a b l i s h e d by
        t h e g r e a t w e i g h t o f a u t h o r i t y , t h a t mere
        d e l a y i n p a s s i n g upon a n a p p l i c a t i o n f o r
        i n s u r a n c e c a n n o t be c o n s t r u e d a s a n a c c e p -
        t a n c e t h e r e o f by t h e i n s u r e r s o a s t o sup-
        p o r t an a c t i o n - contractu."
                                   ex

        I t i s a p p p a r e n t t h a t t h e r e was no c o n t r a c t o f i n s u r a n c e

i n t h e c a s e before t h i s Court.                 A reading of          the statute

demonstrates t h a t it i s intended t o apply o n l y i n t h e

s i t u a t i o n where a p o l i c y o f i n s u r a n c e i s u l t i m a t e l y i s s u e d

by t h e i n s u r e r .    Another s t a t u t e , s e c t i o n 33-21-206(3),
MCA,     d e a l s s p e c i f i c a l l y with the s i t u a t i o n involved i n

t h i s c a s e , where no p o l i c y o f i n s u r a n c e was e v e r i s s u e d .

F i n a l l y , t h e language o f s e c t i o n 33-21-204(2), MCA, demon-

s t r a t e s t h a t it i s a p p l i c a b l e o n l y "[ulpon approval of t h e

a p p l i c a t i o n , if any, o r a c c e p t a n c e of t h e i n s u r a n c e       . . ."
        The second s t a t u t e which a p p e l l a n t c l a i m s was v i o l a t e d ,

s o a s t o make summary judgment improper, i s s e c t i o n 33-21-

2 0 6 ( 3 ) , MCA, which p r o v i d e s :

        " ( 3 ) - - c r e d i t o r requires - debtor - -
                  If a                                     a               t o make
        a payment i n c o n n e c t i o n w i t h c r e d i t l i f e
        -
        insurance        or    c r e d i t d i s a b i l i t y i n s u r a n c e and
        a n i n d i v i d u a l p o l i c y o r group c e r t i f i c a t e of
        insurance i s not issued, the c r e d i t o r s h a l l
        immediately g i v e w r i t t e n n o t i c e t o s u c h
        d e b t o r and s h a l l promptly make a n a p p r o p r i -
        a t e c r e d i t t o t h e account."                (Emphasis added.)

        Respondents c o n t e n d t h a t by i t s own t e r m s , t h i s p r o -

v i s i o n i s i n a p p l i c a b l e b e c a u s e t h e r e t a i l i n s t a l l m e n t con-

t r a c t e x p r e s s l y p r o v i d e d t h a t "CREDIT LIFE AND DISABILITY

INSURANCE i s n o t r e q u i r e d by S e l l e r i n c o n n e c t i o n w i t h

t h i s transaction."             Such a n i n t e r p r e t a t i o n m i s r e a d s t h e

s t a t u t e , which a p p l i e s " [ i l f a c r e d i t o r r e q u i r e s a d e b t o r

t o make a payment i n c o n n e c t i o n w i t h c r e d i t l i f e i n s u r -

ance    . . ."        The c r i t i c a l words a r e " r e q u i r e s       . . . pay-
ment," n o t " r e q u i r e s      .. .     insurance."           Thus, even though

c r e d i t l i f e i n s u r a n c e was n o t r e q u i r e d , i f t h e p u r c h a s e r

s e l e c t e d t o i n s u r e , payment of t h e premium a l l e g e d l y was

required.         I t i s n o t d i s p u t e d t h a t payment o f t h e $307.50

premium was made a t t h e t i m e t h e c o n t r a c t was s i g n e d and

t h a t t h a t amount was i n c l u d e d i n t h e t o t a l c o n t r a c t p r i c e

t o cover c r e d i t l i f e insurance.

        What t h i s a l l b o i l s down t o i s a q u e s t i o n of f a c t

which was n e i t h e r a d d r e s s e d nor r e s o l v e d by t h e t r i a l

court--namely,           was a payment r e q u i r e d ?            I f a payment was

r e q u i r e d , t h e s t a t u t e a p p l i e s ; i f no payment was r e q u i r e d ,
the statute does not apply.     Respondents do little more
that argue that the statute does "require" insurance, not
payment, to become effective, and we have rejected that
argument.
        A determination on this point is necessary for the
resolution of this matter and, as such, is a genuine issue
of material fact.     If payment was required, respondents
could not be entitled to a judgment as a matter of law be-
cause of their failure to comply with section 33-21-206(3),
MCA .
        It does not appear that the required standards were
seriously applied here.     We have an affidavit by the sales-
man, not a disinterested party, that he gave personal notice
to a man now deceased who cannot answer.    His co-worker, who
cancelled the application for insurance, gave affidavit that
the salesman was asked to notify Cameron, not that he did
so.     Thereafter, the affiants attempted to obtain insurance
for Cameron; no attempt was made to refund the premium
paid by Cameron.    The most logical inference that flows
from these facts does not favor respondents.     If the in-
ferences are correctly drawn against movant, there seems
little doubt the present result could stand.
        We have the same situation in regard to the payment
of the insurance premium in the first place.     If all in-

ferences are drawn against movant, the answer would be that

Cameron was required to make the initial payment if he
wanted the insurance.
        In a case of this kind when available evidence is
flimsy at best and most of it subject to dispute only by a
deceased person, equity and fairness demand more evidence
than produced here before summary disposal.    At the very
l e a s t , a p r o c e d u r e s h o u l d be f o l l o w e d which would i n some

manner t e s t t h e c r e d i b i l i t y of t h e two w i t n e s s e s a g a i n s t

t h e word of a d e c e a s e d p e r s o n .       Some e f f o r t s h o u l d be made

t o d e t e r m i n e i f t h e d e c e a s e d was r e q u i r e d t o make t h e p r e -

mium payment when he d i d , t h e r e f o r e p l a c i n g him under t h e

p r o t e c t i o n o f s e c t i o n 33-21-206(3),        MCA.

        The summary judgment o f t h e D i s t r i c t C o u r t i s v a c a t e d

a s i m p r o p e r l y i s s u e d and t h e c a u s e remanded f o r f u r t h e r

p r o c e e d i n g s c o n s i s t e n t w i t h t h i s opinion.,,d''
                                                                   i
Mr. Justice John C. Sheehy speci.211~
                                    concurring:

     I agree that the summary judgment against Cameron must
be vacated, and the matter remanded to the District Court
for further proceedings, but on different grounds than set
forth in the majority opinion.
     The District Court, in its memorandum attached to its
order granting summary judgment, placed weight on the fact
that in the application for credit to Premier Homes, Inc.,
there was contained the statement "THIS IS NOT A COMMITMENT
TO PROVIDE CREDIT LIFE OR CREDIT LIFE AND DISABILITY IN-
SURANCE. "
     It should be understood that the quoted statement,
contained in the application for credit, has no bearing
whatever insofar as the insurer, Universal Underwriters Life
Insurance Company is concerned.   The application for credit
is not designed to be an application for insurance.     It is
designed to go to Premier Homes, Inc., the creditor, and
eventually to its assignee, First National Bank of Bozeman.
The application for credit has no part in the decision of
Universal Underwriters as to whether it will issue credit
life or disability insurance on this particular risk.
     The reason the language appears on the credit application
form is an outgrowth of the federal Truth in Lending Act.
Pub. L. 90-321, Title I, S106(b), 82 Stat. 148; 15 U.S.C.
1605(b).     Because that language appears in the application
for credit, the creditor, Premier Homes, Inc., is not required
to include the cost of insurance in computing the finance
charge percentage which the creditor must disclose to the
borrower under the federal Truth in Lending Act.   When this
purpose of the language on the application for credit form
is understood, one sees that it has no bearing on whether

Cameron is entitled to insurance.
     Because the credit application form itself is not an
application for insurance, it was necessary, as the facts
in this case show, for an agent of Premier Homes, Inc. to
return to Cameron on September 14, 1976, to obtain a true
application for insurance.   It is this form which Cameron
filled out, and truthfully indicated the fact that he was
retired because of disability, and suffered from arthritis
and other ailments.
     There is a second element in the memorandum opinion of
the District Court which must at this point be explained away.
The District Court held that because Premier itself refused
the credit life application, "no notice or instruments were
ever given to Universal Underwriters Life Insurance Company
about the application, and likewise no policy was issued
therefore.   Universal Life Insurance Company was unaware that
Archie Cameron ever existed, and had no knowledge whatsoever
of claimed credit life coverage for this person."
     That finding of the District Court disregards the fact
that Premier Homes, Inc. was an agent of Universal Underwriters
Life Insurance Company.   Universal is bound by the acts
of its agent, and by the agent's knowledge.   In fact, all
knowledge of the agent relating to matters within the agent's
          A
authority aae imputed to the insurance company.     Section
28-10-604, MCA.
     In this case Vniversal's agent collected the insurance
premium, took the written insurance application, determined
itself that the application did not fit the insurer's under-
writing rules, and the agent on its own turned down the
insurance for Cameron. But at that point, under the statute
then in existence, it was the duty of the insurance company,
through its agent or otherwise, to "immediately give written
notice to such debtor" and to "promptly make an appropriate
credit to the account."   Section 33-21-206(3), MCA.
     The reason that those strict provisions of insurance
law apply to credit life and disability business is because
of the nature of this business in our present commercial
world.   In the credit life business insurers do not compete
with each other to get insureds, but rather they compete
with each other to get agents such as Premier Homes, Inc.
Because the creditor, the lender, is also the agent of the
insurance company writing credit life, the insurance company
has e n t e t o business it would not otherwise have.   For
this reason, insurance companies allow to such creditors as
agents a substantial portion of the credit life premium for
writing the business.   This is one of the factors that cause
premiums for credit life and disability to be quite high in
relation to the risk assumed, That the procedure is successful
is attested to by the fact that there is a high "penetration"
of credit life and disability insurance in installment
credit risks; some report as high as 90 to 95 percent.
     The National Association of Insurance Commissioners was
aware of this when it proposed the model law that Montana
has adopted as its credit life and disability insurance
provisions.   Section 33-21-101, et seq., MCA.
     Because of the prospective peril for borrowers-insureds
in credit transactions, the model code incorporates strict
provisions with respect to denial of coverage, and provides
for immediate notice to the borrower, as well as return of his
premium through a reduction of his debt account.
     If we ignore the plain mandates of these statutes re-
lating to insurance, we negate the intention of the legislature
in these matters, and substitute our own rules of insurance
law instead of what the legislature established.    The
insurer, through its agent, did not follow the law in turning
down the insurance coverage in this case.    It kept for one
and a half years the premium which it should have returned
immediately.   "Oversight" or "inadvertence" is not a legal
excuse for thus ignoring the lawful duty imposed upon the
insurer.   The only lawful way that we can give effect to the
intention of the legislature in these matters is to hold
here that the insurance company, having failed in its lawful
duty to give prompt written notice that the borrower was not
insured, and failing to give prompt return of the paid premium,
is estopped to claim now, after the death of the insured,
that he is not covered by the insurer.
     We cannot condone the failures of the insurer when
there are but three or four pages of statutes relating to
credit life and disability insurance on our law books, by
allowing it to shelter itself under the claims of oversight
and inadvertence, when the duty of the insurer is to conduct
its business in this state according to our laws.   This is
not too much to ask of such an insurer.
     The only fact issue upon which this case depends is
whether the creditor required the debtor to make the premium
payment in connection with his application for credit life
insurance, under section 33-21-206, MCA.     On the record,
it appears that this was the case.   If Premier Homes, Inc.,
at the time of the application in this case, made it a practice
to add the cost of insurance to the borrower's debt in the
usual case where Universal Life Underwriters was to be the
insurer, it might then be concluded that the debtor was in
fact required to make the premium payment.    That is the single
fact issue which I think is involved in this case, because
otherwise it appears estoppel prevents the company from
raising the no-contract issue.
     The claim of Premier Homes and Universal Underwriters
that Cameron "waived" his right to written notice and immediate
repayment of his premium cannot be sustained, because waiver
is a "voluntary abandonment of a known right."   There is
no way that I can see, after the death of Cameron, to prove
his knowledge of these factors.

                                            Justice