Court Opinion

ID: 5797576
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:21:24.881658+00
Date Added: 2024-06-11T08:42:24.370914
License: Public Domain

Lupiano, J. (dissenting).
The critical issue on this appeal is whether the two life insurance policies issued by defendant in *1471928 and 1930 on the life of decedent in the amounts of $10,000 and $5,000, were converted under one of the two specified methods for such conversion provided in said policies, and if so, under which method, or whether the conversion occurred as a consequence of a revision of the policies entered into between the decedent and defendant. Initially, it is noted that in all relevant and critical respects, the policies are clear and unambiguous. They provided for conversion in pertinent part as follows:
"conversion to paid-up policy. The Society, upon written request, and the return of this policy, will convert this policy into a fully paid-up participating whole life policy for the face amount of insurance hereunder, whenever the Reserve on this policy * * * equals the net single premium for such paid-up policy * * *.
"options on surrender or lapse. Within three months after default in the payment of any premium after two full years’ premiums have been paid, the Insured may surrender this policy and elect one of the following Options: * * * (b) To purchase non-participating paid-up life insurance, payable at the same time and on the same conditions as this policy, but without Double Indemnity or Total and Permanent Disability benefits” (emphasis supplied).
Decedent, an attorney, by letter and an accompanying request, respectively dated December 16 and 15, 1955, directed the defendant to endorse the $5,000 policy for "paid-up nonparticipating life insurance, including the 1955 dividend in the transaction, effective as of January 14, 1956” and upon the effectuation of such conversion, to return the policy to him. By letter dated January 12, 1956, this policy was returned to decedent, endorsed for paid-up nonparticipating life insurance, as requested. It was also noted in this letter that "if death occurred prior to the end of the three month period allowed for making an election, death claims would be based on premiums paid to December 14, 1955 and not on the reduced paid-up”. The endorsement dated January 10, 1956, attached by defendant to said policy, entitled "Non-Participating Paid-Up Life Insurance”, provided as follows: "Premium payments on this policy having been discontinued as of December 14, 1955 the insurance hereunder is, in accordance with the election made by the owner reduced to Three Thousand Three Hundred Forty Seven Dollars ($3347.00) of nonparticipating paid-up Life insurance, payable at the same time *148and under the same conditions as this policy but without further payment of premiums”.
Patently, the election made by decedent, there being an insufficient cash value or reserve to convert the policy into fully paid-up participating life insurance, was effected under the method listed under "options on surrender or lapse”. Decedent was fully aware that the $5,000 policy was converted into nonparticipating paid-up life insurance in the reduced amount of $3,347 and at no time did he dispute the assertion that premium payments on the original policy were discontinued as o/December 14, 1955.
Similarly, by letter dated February 28, 1956, directed to defendant, decedent acknowledged receipt of defendant’s bill for premium due March 15, 1956 on the $10,000 policy and forwarded said policy together with the request that it be converted into paid-up life insurance. Of critical significance was the statement therein that "according to [his] calculations, the paid-up value should be between $7,000 and $8,000”. The policy was returned by letter dated March 16, 1956, endorsed for paid-up insurance as requested. The endorsement attached to this second policy is similar to that attached to the other policy. Subsequent correspondence between the parties emphasizes the fact that decedent was completely aware that the policies were converted into paid-up nonparticipating life insurance in amounts less than their original face amount.
Under these circumstances, it is perfectly clear that the parties recognized that decedent had no intention of continuing to pay premiums with respect to the policies and desired to exercise an election to convert same into paid-up nonparticipating life insurance in amounts less than the face amount, thus evincing a clear resolve to exercise his option under the method delineated in the provisions entitled "option on surrender or lapse”. To this end, decedent surrendered the policies to defendant for endorsements in accordance with his requests. There is no showing on the present record of any revision entered into by the decedent and the defendant of the policies of insurance providing for exercise of an option to convert in some manner and with consequences other than those specifically provided for in the original policies prior to conversion. As aptly conceded by the majority, "we should refrain from rewriting insurance policies and give effect to the plain language of unambiguous clauses”. To hold, therefore, under the circumstances herein, that decedent, an attorney, *149obtained conversion of the policies to paid-up nonparticipating life insurance with the continued inclusion of disability and double indemnity benefits (allowable only upon conversion to fully paid-up participating whole life policy whenever the policy’s reserve plus dividend additions and accumulations equaled the net single premium for such paid-up policy), contradicts the clear and unambiguous provisions of these insurance agreements. In effect, the majority, under a claim of ambiguity in the agreements with consequent revision of those agreements, has rewritten the insurance policies.
Accordingly, I dissent and conclude that the judgment of the Supreme Court, New York County (Rosenberg, J.), entered November 7, 1973, in favor of defendant, should be affirmed.
Lane and Nunez, JJ., concur with Murphy, J. P.; Lupiano, J., dissents in an opinion and Capozzoli, J., concurs in dissent of Lupiano, J., and would also affirm for reasons stated by Samuel Rosenberg, J., at Trial Term.
Judgment, Supreme Court, New York County entered on November 7, 1973, reversed, on the law and on the facts, and judgment entered in favor of plaintiffs for the relief sought. Appellants shall recover of respondent $60 costs and disbursements of this appeal.
Settle order on notice.