Court Opinion

ID: 9709932
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:57:52.351236+00
Date Added: 2024-06-11T18:22:52.860587
License: Public Domain

Dissenting Opinion
Prime, J.
— I would affirm the decision below and cite as controlling the reasoning applied in Lindgren v. Metropolitan Life Insurance Company (1965), 57 Ill. App. 2d 315, 206 N. E. 2d, 734. In the instant case, as in the case cited, the facts are clear that the insured employee was allowing premiums for the assumed group coverage to be withheld from her paycheck; and was functioning under the apparently correct belief that the coverage was in fact absolute. In both cases the termination was enacted between the insurer and the employer — in neither instance was the actual insured given notice of cancellation until after a claim had arisen. In the Lindgren decision, the Illinois Appellate Court, in ruling in favor of the insured employee, held that a termination of the master policy, without notice to the insured, was ineffective.
Further, I would hold that the decision in Poch v. Equitable Life Assurance Society, 343 Pa. 119, 22 A. 2d 590, 142 A. L. R. 1279, bears directly upon the instant situation:
“Upon a review of the authorities, and upon reason as well, our conclusion is that, under a group policy like that now before us, the insured employee must be regarded as a party to the insurance contract at least to the extent that *299the group policy cannot be cancelled or any of its effective provisions eliminated, by either the employer or insurer, except in a manner provided by the policy, without giving such employee notice of the intended cancellation or modification, so that he may timely exercise any conversion privilege which may be available to him under the terms of the policy or, where such privilege is not given, in order that he may seasonably obtain similar insurance protection on his own account elsewhere. . . .”
I feel strongly that inherent in modern society’s adapti-bility to the advantages of group insurance is the continuing need to observe the rights and privileges of the insured individual. If it is to be assumed, as I believe it must, that there is of necessity little personal contact and advisement between the insurer and insured in a group- policy — sometime involving hundreds or even thousands of individuals — then I feel compelled to determine that the rights of these individuals, if not protected by the policies whose premiums they willingly pay, must be protected by the courts of this state.
The language of Judge Arterburn in his concurring opinion in State Security Life Ins. Co. v. Kintner (1962), 243 Ind. 331, 339, 185 N. E. 2d 527, although referring to the time at which a premium is due, seems particularly pertinent to my reasoning in this instance:
“An insurance contract is a detailed and complex instrument, drafted by expert legal counsel, standardized and presented in mass-produced form and delivered to the applicant for acceptance, normally without benefit of legal counsel on his part. It has been called a ‘contract of adhesion’ for the reason that the insured is expected to ‘adhere’ to it as it is, with little or no choice as to its terms. . . .
“Coupled with this situation is the recognized fact that rarely, if ever, does an insured read his insurance contract, although the law has said, with reference to contracts generally, that a party is bound by what the instrument says, though ignorant of its terms. In fact, realistically, even if the insured had the inclination to attempt to read the policy, I doubt that he would gain much more knowledge than he previously had because of the technical language he would encounter. I doubt that most lawyers or even judges *300(who say one is presumed to have read his insurance policy) ever read them.”
I fail to understand how a group insurer can praise the advantages of this type of policy, and yet defend against a claim such as here, with the contention that he had no duty to inform his insured of cancellation. Admittedly, this could become a cumbersome procedure and might foreseeably necessitate rate adjustments. However, some detriment accompanies most advantages and I cannot believe that mere convenience should outweigh the rights of the individuals involved.
It is my opinion that the insured had a vested interest in the protection for which she paid, at least to the extent that she could not be divested of all protection without the benefit of adequate notice.
I also have grave doubts concerning the cancellation of this policy and, indeed, whether or not it was actually cancelled.
I call attention to the testimony of Edward Sparkowitz :
“I called the South Bend Office of Prudential and spoke with the manager. I told him I would like to drop this group policy and he said he would have to go through the Chicago Office and send a form for the employees to sign.
“He said it couldn’t be terminated through him. I did not receive a form for the employees to sign. I called them again and they said no form had come through. There were times when I only talked to girls on the phone at the office and I spoke to a new manager, Kruger. This could have been in April. He said that he just started, didn’t know much about it, would look into it and let me know. I think I called on May 5, 1961.
“I talked to them later, that they would have to sign a paper from Prudential. I talked to Mrs. Lancaster before the January phone call. I don’t remember if she replied. I kept deducting from each employee’s pay, waiting until papers came.
“I don’t know what day the policy was cancelled.
*301“I had conference with everyone about the termination. I was told by Prudential that I was liable for the money deducted. I still haven’t received the form.”
We also have testimony given by Emily Schang, witness for The Prudential, and office supervisor for the Northern Indiana Agency for Prudential.
“When a case is lapsed, we carry it in a D.S.P. Account as arrears, and if it doesn’t clear it is carried in arrears and taken out of our account. It’s a bookkeeping transaction. We do not carry the account for a month, the premiums are due the first. It is carried to balance the account arrearage until something comes from Home Office.
“We can’t strike one of these oif our records for purposes of accounting until the form comes from the Home Office. Nothing was sent to Mr. Sparkowitz on 4/10/61. Nothing went to Mrs. Lancaster. Prudential had no contact with Mrs. Lancaster in regard to the lapse. Employment Security Programs are a substantial volume of the business at Prudential.
“This case was transferred from the LaSalle Agency. It was not belated because we didn’t want to accept responsibility of cancellation. We try to conserve all of our business.”
It appears from the above statements that there was slip shod bookkeeping in this matter from beginning to end, which does little credit to the appellant here. In my opinion there is considerable doubt as to the day of cancellation or whether the Home Office actually did cancel.
The only evidence appearing in the record on this score is a letter written to the assured, Sparkowitz, by a minor functionary, a bookkeeper in an agency office.
I would affirm.
Note. — Reported in 219 N. E. 2d 607.