Court Opinion

ID: 9470535
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:08:18.97052+00
Date Added: 2024-06-11T17:41:56.979177
License: Public Domain

SETH, Chief Judge,
dissenting:
I must respectfully dissent from the majority opinion’s application of the doctrine of reformation. The case concerns a self-administered group life policy covering employees of Dresser Engineering Company. The basic policy coverage was changed by a rider.
The appellant states that the construction of this rider is the issue, thus:
“The construction of this rider and the negotiation between the parties resulting in the adoption of the rider as it applies to Robert Evans is the sole dispute between the parties.”
There was correspondence concerning changes in the policy. There was testimony concerning some of the subjects of the rider. The rider covers several subjects and was not drafted as if they were related, and they are not necessarily related as to subject matter. Paragraph (1) of the rider states “[ajnything in the policy to the contrary notwithstanding” with a (i) paragraph and a (ii) paragraph, and thus to override anything in the policy. Paragraph (2) of the rider recites instead that it amends a provision in the policy “to read as follows.”
The rider in (l)(i) and (ii) adds to the policy coverage for employees who are on approved leave of absence, and thereby creates a separate category of covered employees to meet Dresser’s employment practices and policies.
The second portion of the rider (paragraph (2)) refers to a definition already in the policy as to the term “active full-time” employment and provides a yearly total of hours to come within the definition. This definition relates in turn to the definition in the policy of “termination.” “Termination” as to employees generally means the cessation of “active full-time work.” The balance of the rider concerns matters not here concerned.
The rider in (l)(i), because it relates to those on leave, is directed to those persons who at the effective date of the rider were on “an approved leave of absence.” The deceased was covered by this (i) paragraph as he was then on an approved leave of absence. He was in that category.
The (l)(ii) paragraph of the rider also relates to those on leave and continues coverage for a period of one year “[i]f an Insured Person’s employment terminates because of an approved leave of absence.” The word “because” creates a problem and an ambiguity as the termination of “employment” there considered is restricted to one “because of,” or thus by reason of the “approved leave.” There was no employment termination “because” of the approved leave in the case before us. The trial court found as a fact that there was no “termination” at all.
It must be noted that in this rider, paragraph (l)(ii), the reference is only to those whose “employment terminates.” This is not a termination of active status, nor a termination of coverage but instead an end to employment with Dresser. It is not termination of employment “for the purpose of this policy,” or otherwise qualified, but instead is an unqualified end of employment. It is difficult to see how this could be brought about except by an affirmative act of the employer. It could not result from a life insurance policy definition. The employer here considered the insured to be an employee, and its acts so demonstrated.
Thus for employees who were on approved leave the rider overrode the policy *1183provisions relating to and defining “active full-time” work. This separate category was inserted to meet particular circumstances at Dresser. The cessation of full-time work as a “termination” was covered by the policy itself, and well defined, but only for situations not removed by the rider. This is what riders are for.
We are concerned only with this insured who was on an approved leave of absence when his coverage was created by the rider, and a person who was on the same leave of absence when he died. His “employment” could not have been terminated “because” of this leave.
The “construction” of the rider is thus a matter of resolving an ambiguity, and was resolved by the trial court on its determination of credibility of the witnesses who appeared before him. The rider needed no reformation but “construction” as appellant states. The trial court used the term “reformation,” but this cannot be determinative, nor need be considered by this court as the only applicable doctrine.
The testimony demonstrated that the deceased was on an approved leave; his employment was not terminated by Dresser (the trial court expressly so found), and instead he was considered by Dresser to be an employee at the time of his death; he received benefits as such; and Dresser paid the premiums on the policy to the Company including those for the decedent.
I would thus affirm the judgment of the trial court.