Court Opinion

ID: 9547680
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:50:22.574307+00
Date Added: 2024-06-11T15:17:56.634920
License: Public Domain

FELDMAN, Justice,
specially concurring:
I concur with the result and agree with the thorough exposition contained in the majority opinion. I write only to state my belief that under the facts of this case it is not necessary to examine the actual policy in order to conclude that there is coverage for post-termination expenses incurred as the result of a pre-termination injury.
As the majority opinion indicates, the brochure failed to inform the insured that expenses for a pre-termination injury would not be paid after termination. Such an explanation might have conveyed to the insured the alarming idea that if he sustained a permanently and completely disabling injury which prevented him from continuing to keep the policy in force, the insurer could not only terminate the policy but could also terminate its existing obligation to pay continuing medical expenses for injuries which had occurred while the policy was in force. Without such an explicit statement, the ordinary consumer reading the brochure would have a reasonable expectation that when a covered injury occurred while the policy was in full force, the company would be bound to continue to pay benefits up to the policy limits.
Thus, while I agree that there is an ambiguity when the policy is compared to the brochure, I think we need not even reach that question. Because the insurer advertised and sold the coverage through the brochure, and provided the insured with no other information, I would simply hold that the insurer is bound by the writing which contains all the coverage agreements given its insured. The insurer cannot defeat coverage by raising unusual exclusions or termination rights not contained in the information given the insured. It cannot rely upon the provisions of a master policy never shown the insured — and from a practical standpoint not even available to him — in order to subtract from the coverage reasonably to be expected by the insured after reading the sales material and information which was given him. See Preferred Risk Mutual Insurance Co. v. Thomas, 372 F.2d 227, 230-31 (4th Cir. 1967); Lecker v. General American Life Insurance Co., 55 Hawaii, 624, 525 P.2d 1114 (1974); Lewis v. Continental Life & Accident Co., 93 Idaho 348, 461 P.2d 243 (1969); Van Vactor v. Blue Cross Ass’n., 50 Ill.App.3d 709, 8 Ill.Dec. 400, 365 N.E.2d 638 (1977).
*546An insurer which has led its insured to believe that a risk is covered cannot be permitted to use an undelivered contract to prove the contrary. Preferred Risk Mutual Insurance Co., supra. Significant policy exclusions contained in an undistributed master contract but omitted from the brochure distributed to policyholders cannot be enforced. Van Vactor v. Blue Cross, supra.
Of course, my conclusion that the company is bound by the coverage reasonably to be inferred from its sales material does not in any way detract from the holdings reached in the majority opinion and, in fact, would make all the conclusions which flow from a finding of post-termination coverage, including the holding on “bad faith”, even more compelling.
MOTIONS FOR REHEARING DENIED
HAYS, Justice.
The jury instructions in this case were given before this court’s decision in Noble v. National American Life Insurance Co., 128 Ariz. 188, 624 P.2d 866 (1981). In the case at issue, the challenged instructions on the tort of bad faith were held not to constitute reversible error. We, however, do not approve the use of those instructions in future cases. Our case of Noble sets out the principles which should be embodied in instructions on cases involving the tort of bad faith.
The motions for rehearing are denied.
HOLOHAN, C. J., GORDON, V. C. J., and CAMERON and FELDMAN, JJ., concur.