Court Opinion

ID: 875468
Source: CourtListenerOpinion
Date Created: 2013-06-04 20:00:53.514653+00
Date Added: 2024-06-11T15:37:19.307248
License: Public Domain

No. 12184

        I N THE SUPREME COURT O T E STATE O M N A A
                               F H         F OTN

                                    1972

EDNA MEAGHER,

                           P l a i n t i f f and Respondent,

BENEFIT TRUST LIFE INSURANCE COMPAMI,
a corporation,

                          Defendant and Appellant.

Appeal from: D i s t r i c t Court of t h e Third J u d i c i a l D i s t r i c t ,
             Honorable S i d G. Stewart, Judge p r e s i d i n g .

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 d e l i v e r e d t h e Opinion of t h e Court,

      I n an a c t i o n by t h e b e n e f i c i a r y of a group h e a l t h and
a c c i d e n t p o l i c y a g a i n s t t h e i n s u r e r t o c o l l e c t a $5,000 d e a t h
b e n e f i t , t h e d i s t r i c t c o u r t of Powell County, t h e Hon. S i d G.
Stewart, d i s t r i c t judge, g r a n t e d a d i r e c t e d v e r d i c t i n favor
of t h e b e n e f i c i a r y and e n t e r e d judgment thereon.                   From t h e
judgment and t h e d i s t r i c t c o u r t ' s d e n i a l of t h e i n s u r e r ' s motion
f o r a new t r i a l , t h e i n s u r e r a p p e a l s .
      P l a i n t i f f - r e s p o n d e n t i s Edna Meagher, t h e b e n e f i c i a r y named
i n t h e p o l i c y i s s u e d by d e f e n d a n t - a p p e l l a n t , B e n e f i t T r u s t L i f e
Insurance Company.                The p o l i c y provided f o r a d e a t h b e n e f i t i n
t h e amount of $5,000.                The i n s u r e d , Kenneth V, Wheeler, s u f f e r e d

a gunshot wound on March 18, 1969 and d i e d on A p r i l 2 , 1969.
      The u n d e r l y i n g q u e s t i o n on a p p e a l i s whether t h e p o l i c y was
i n e f f e c t on t h e d a t e of Wheeler's death.                     The d i s t r i c t c o u r t
h e l d t h a t i t was, g r a n t i n g a d i r e c t e d v e r d i c t t o t h e b e n e f i c i a r y
a t t h e conclusion of a l l t h e evidence a t t h e j u r y t r i a l .                         We
agree.
      Wheeler was an employee of t h e Milwaukee r a i l r o a d from
February 1968 t o October 5 , 1968, a t which time he submitted
h i s v o l u n t a r y r e s i g n a t i o n from t h i s employment.             A t a l l times
m a t e r i a l t o t h i s a c t i o n , t h e r a i l r o a d had a c o n t r a c t w i t h B e n e f i t
t o provide a group i n s u r a n c e p o l i c y t o t h e r a i l r o a d ' s employees.
The monthly premium was $8.40 which t h e r a i l r o a d deducted from
t h e employee's pay and r e m i t t e d t o B e n e f i t .                 The deduction
covered t h e premium f o r t h e following month.
      The p o l i c y c o n t a i n e d t h e following p r o v i s i o n s , among o t h e r s ,
pertinent t o t h i s action:
         he coverage on an I n s u r e d s h a l l a u t o m a t i c a l l y
       t e r m i n a t e a t t h e e a r l i e s t of t h e following d a t e s :
       ( a ) a t t h e beginning of t h e month f o r which I n s u r e d
       f a i l s t o make, when due, any r e q u i r e d c o n t r i b u t i o n
       towards t h e payment of premium                     ***  ( e ) a t t h e end
       of t h e month i n which h i s employment w i t h t h e Employer
        t e r m i n a t e s . II
      The p o l i c y a l s o containea t h e following conversion p r i v i l e g e
i n t h e event of termination o E t h e i n s u r e d ' s employment with t h e
railroad :
      It
        I f employment with t h e Employer i s terminated
      and t h e Insured t a k e s up f u l l time employment
      elsewhere, the Insured s h a l l be e n t i t l e d , s u b j e c t
      t o t h e Company's r e g u l a r underwriting r u l e s , t o
      convert h i s insurance t o an i n d i v i d u a l policy of
      insurance, provided w r i t t e n a p p l i c a t i o n and t h e
      f i r s t premium payment a r e made t o t h e Company
      w i t h i n t h i r t y - o n e days from t h e d a t e of termina-
      t i o n of employment.        **      *I1

      Premiums were deducted from Wheeler's pay f o r t h e months of
March 1968 through October 1968, during which time he was c a r r i e d
on t h e "collected l i s t " compiled by t h e r a i l r o a d and furnished
t o Benefit.        For t h e months of November and December 1968 and
January 1969, Wheeler was c a r r i e d on t h e l'uncollected l i s t "
furnished by t h e r a i l r o a d t o Benefit.            I n February 1969, t h e
r a i l r o a d s e n t Wheeler a check r e p r e s e n t i n g compensation f o r h i s
unused vacation time l e s s a deduction of $16,80 f o r two months
insurance premiums.             Following Wheeler's death on A p r i l 2 , 1969,
Benefit s e n t Wheeler a n o t i c e a f premium due i n t h e amount of
$8.40.      Qn J u l y 18, 1969, some t h r e e and one-half months a f t e r

Wheeler's death, Benefit forwarded a check t o t h e b e n e f i c i a r y
i n t h e amount of $25.20, covering a refund of premiums f o r t h e
months of October 1968 and February and March 1969,
      P r i o r t o t r i a l t h e d i s t r i c t c o u r t denied B e n e f i t ' s motion
f o r summary judgment.            Jury t r i a l was had on J u l y 1, 1971,              At

t h e conclusion of a l l t h e evidence, Judge Stewart granted a
d i r e c t e d v e r d i c t t o t h e b e n e f i c i a r y i n the f a c e amount of t h e
policy,      Judgment was entered thereon on J u l y 8, 1971.                        Benefit

moved f o r a new t r i a l which was denied on August 26, 1971.
Benefit now appeab from t h e judgment.
     A s h e r e t o f o r e i n d i c a t e d , the underlying i s s u e upon appeal i s
whether t h e l i f e insurance p o l i c y was i n e f f e c t on t h e d a t e of
Wheeler's death,           Benefit contends t h a t t h e p o l i c y had terminated
p r i o r t o Wheeler's death under t h e express policy terms h e r e t o f o r e

quoted providing f o r automatic termination i n t h e 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
$8.40 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
f o r p l a i n t i f f b e n e f i c i a r y i n t h e f a c e amount of t h e death
b e n e f i t contained i n t h e policy i s c o r r e c t .
     The judgment of t h e d i s t r i c t c o u r t i s affirmed.

                                                       Associate J u s t i c e          %'

     C h F Justice