Court Opinion

ID: 9700033
Source: CourtListenerOpinion
Date Created: 2023-08-25 21:07:11.329073+00
Date Added: 2024-06-11T18:21:03.099019
License: Public Domain

Yeager, J.,
dissenting.
I find no difficulty in concurring in the result arrived at by the majority opinion. I cannot however agree with much of the reasoning employed in arriving at that result.
I do not disagree with the conclusion that the group insurance policy which is the basis of the controversy in this action is subject to interpretation and application of the Illinois insurance code and the pertinent decisions of the courts of Illinois, provided reference thereto becomes necessary. If however the terms of the policy and other documents, which must in the very nature of things be looked to for the ascertainment of the true meaning of the policy, are clear and unambiguous and reflect the intention of the parties, which intention is not violative of law, no valid purpose can be served by reference to the Illinois code or the decisions of the courts of that state.
I agree that a certificate issued by an insurer to a person eligible for insurance under a group insurance policy may properly be construed to be a part of the insurance contract and may even in case of conflict be controlling. It may not however be employed to destroy the clear, meaningful, and unambiguous terms of the engagements between the contracting parties. What I have said will become clear from a reading of' the majority opinion and the following which I think is *162the true attitude which should be adopted in the determination of this case.
This is an action at law brought by Hazel Exstrum as plaintiff against the Union Casualty and Life Insurance Company, a corporation, defendant, in the district court for Buffalo County, the purpose of the action being to recover on a group life insurance policy whereunder Clayton D. Exstrum became insured with the plaintiff as the named beneficiary. Proof of the death of her husband was made by the plaintiff, and the defendant company refused to allow her claim. By stipulation of the parties, a jury was waived and trial was had to the court. After trial judgment was rendered for the plaintiff. The defendant filed a motion for new trial which was overruled. From the order overruling the motion for new trial and the judgment the defendant appealed.
Following a hearing in this court an opinion was adopted affirming the judgment of the district court. That opinion is reported as Exstrum v. Union Casualty & Life Ins. Co., 165 Neb. 554, 86 N. W. 2d 568. Thereafter the case was before the court on motion for rehearing the consequences of which are that the former opinion was withdrawn.
The case was tried on an amended petition of the plaintiff and an answer thereto by the defendant. A reply was filed after the conclusion of the presentation of the evidence.
The material facts, about which there is no substantial dispute, which are the basis of the action, are that prior to the year 1954 and during that year a trust and trusteeship was in existence. The trust and trusteeship had been created by agreement between Central States Area Employers Association and 10 others, as first party, and Central States Drivers Council, Southern Conference of Teamsters, and their affiliated local unions, acting on behalf of their members now or hereafter employed as drivers, helpers, or in such other capaci*163ties as may be mutually agreed upon, second party. The first party will be hereinafter referred to as employers and the second party will be referred to as the union.
The trust was denominated Central States, Southeast and Southwest Areas Health and Welfare Fund, and its purpose, to the extent necessary to refer to it herein, was to receive contributions from employers who were members of the first party in order to provide and pay for life insurance for drivers and helpers represented by the second party. The trust will be hereinafter referred to as the fund. The fund was under the joint control of representatives of the employers and the union who are denominated trustees. The union and the employers had no direct control over the trust functions or funds of concern in this action.
Brown Transfer Company, which will be referred to as Brown, was an employer within the meaning of the agreement. From and after September 13,1954, Exstrum was an employee of Brown and was represented by the union.
By the agreement provision was made, among other provisions, for the acquisition of life insurance for employees in the classification of Exstrum. The trustees were the sole procurers of the insurance and the policy or policies of insurance were taken in their name. Funds for the payment of the premiums were paid and payable into the fund in the hands of the trustees and were payable by the trustees to the insurance company. There was no contractual obligation for payment of premiums for insurance by either the union or the employers on life insurance. Life insurance was available only to members of the union.
The defendant issued to the trustees a 1-year renewable term nonparticipating life insurance policy for the term beginning April 1, 1952, and ending March 31, 1953. The policy was amended as of April 1, 1953. The policy with these amendments was thereafter in full *164force' and effect and is the entire contract of insurance which is of concern in this case. Two of the amendments are of concern here. The first of these is as follows:
“3. Each employee not insured on the effective date of his employer’s insurance is insured on the first (1st) day of the calendar month following two (2) full calendar months of contributions made by his employer on his behalf.”
This provision was applicable to Exstrum since it is made clear by the record that he was not employed On the effective date of Brown’s insurance. Exstrum was not entitled to insurance until contributions for premiums were made for 2 calendar months after he became eligible for insurance. He became a member of the union September 13, 1954, and was thereafter eligible for insurance. Thus the 2-month period for Exstrum began October 1, 1954, and ended November 30, 1954, unless it was interrupted by operation of the second amendment, which is the following:
“4. Each employee not in active employment on the effective date of his insurance after the effective date of this policy shall be insured on the first (1st) day of his employment.”
Under the terms of the second of these quoted provisions, if Exstrum was not in active employment on December 1, 1954, he could not become entitled to insurance thereafter until he again became actively employed.
Exstrum performed no service for Brown after November 20, 1954. He died January 19, 1955. There is evidence that Exstrum was an employee of Brown who did not work regularly but performed service only on call;' that he was not called after November 20, 1954; that actually he was not available for work after November 20, 1954, because of sickness; but that he was never discharged as an employee by Brown.
In the light of this evidence the plaintiff insists that *165Exstrum remained in active employment until after December 1, 1954. On the other hand the defendant urges that active employment as used in the policy means active and actual engagement in the performance of service for Brown.
Under the definitive and declaratory provisions of the policy of insurance issued by the defendant to the trustees and other facts disclosed by the record, I think it must be said that the contention of the plaintiff in this respect is correct and Exstrum was not, within the meaning of the policy, out of active employment as contended by the defendant.
While it is true that Exstrum was not actually engaged in employment after November 20, 1954, the policy by its terms accords to his status thereafter active employment. The status was removed from the category of inactivity by the declaration that eligible employees shall not be regarded as out of active employment if this is caused by sickness.
The policy defines those employees who were or became eligible for insurance as follows: “ ‘Eligible employee’ as used in this policy means an employee» actively at work with a Contributing Employer whose employment is covered under the collective bargaining agreement establishing the Central States, Southeast and Southwest Areas Health and Welfare Fund.”
The collective bargaining was on behalf of certain named organizations “* * * acting on behalf of their members now or hereafter employed as drivers, helpers, or in such other capacities as may be mutually agreed upon, * * Exstrum came within the categories named on September 13, 1954.
The policy contains provisions as to when termination of the insurance of an employee takes place. It first provides that it shall take place: “Thirty (30) days after termination of employment.”
Next it provides: “Termination shall be deemed to occur upon cessation of active employment.”
*166Next is a provision and declaration that an eligible employee may not be regarded as being out of active employment if he is absent on account of sickness. It is to be observed that this definition has reference to those who are covered by the collective bargaining agreement and not necessarily to those who may at the time have or be entitled to insurance protection. It purports to say, when the statement is read with reference to the policy, the trust agreement which by its declarations reflects the collective bargaining agreement, and the purposes to be served, that those who were out of employment on account of sickness may not be regarded as out of active employment. It is as follows: “Cessation of active employment in the classes of employees eligible for insurance shall be deemed termination of employment except that while an employee is absent on account of sickness * * the insurance shall be deemed to continue until premium payments for such employee’s insurance are discontinued.”
Any insistence that these provisions of the policy apply only to employees who have been employed a sufficient length of time to have' acquired insurance fails to give full effect to the policy as by its own terms it must properly be interpreted. Further any contention that they refer only to the termination provisions of the policy and therefore have application only to those employees who have by lapse of time become insured is without merit.
The placement of the reservation or exception with regard to inactivity on account of sickness does not cause them to become foreign to the situation of Exstrum after November 20, 1954. In reason instead, in the light of the declarations of the policy construed as they must be with the trust agreement and its references to the collective bargaining agreement, they may well be said to have been appropriately placed to receive the application which has been given to them herein.
It is to be observed that one who has been in active *167employment for 2 months has passed beyond the point of mere eligibility for insurance. He is ab initio insured. It would have been simple and understandable for the defendant to have said “insured” or “insured employee” instead of, as it did, “eligible employee” if that had been the purpose and intention. If it had done so there could be no doubt of the meaning. This it failed to do. The reasonable conclusion is that by the use of the word “employee” the intention was to extend the reservation or exception relating to inactivity on account of sickness beyond those who had already become insured.
It becomes necessary only to refer to the provisions of the policy as they have already been pointed out herein to find this intended extension of the reservation or exception. It was clearly intended and so declared to extend the reservation or exception to all “employees eligible for insurance.” All of the members of the class which included Exstrum were eligible employees. ’ Employee within the specific definition of the policy means eligible employee. Thus Exstrum was an employee out of work on account of sickness and accordingly had insurance on December 1, 1954.
If it should be said that the policy is capable of some other interpretation as well as the one given to it herein, then the following rule must be applied:
“An insurance policy which is susceptible of more than one interpretation will be given the one most favorable to the insured.” O’Neil v. Union Nat. Life Ins. Co., 162 Neb. 284, 75 N. W. 2d 739. See, also, Woodring v. Commercial Casualty Ins. Co., 122 Neb. 734, 241 N. W. 285; Machurek v. Ohio Nat. Life Ins. Co., 125 Neb. 35, 249 N. W. 81; Jensen v. Lincoln Hail Ins. Co., 125 Neb. 87, 249 N. W. 94; Peony Park v. Security Ins. Co., 137 Neb. 504, 289 N. W. 848; Koehn v. Union Fire Ins. Co., 152 Neb. 254, 40 N. W. 2d 874.
The policy of insurance provides for the continuance of payment of premiums as a condition of insurance re*168maining in force and effect. The failure to pay premiums was pleaded as a defense. It however is not available as a defense since liability on the policy was denied before action was commenced on the sole ground that Exstrum was not in active employment a sufficient length of time to have insurance under the policy. Under these circumstances the following rule is applicable, which rule removes from consideration any question of whether or not premiums were paid: “A party who gives one reason for his conduct and decision as to a matter involved in controversy cannot after litigation has begun defend upon another and different ground.” Serven v. Metropolitan Life Ins. Co., 132 Neb. 637, 272 N. W. 922. See, also, Moore v. Washington Nat. Ins. Co., 135 Neb. 29, 280 N. W. 221; O’Neil v. Union Nat. Life Ins. Co., supra.
As pointed out this is an action at law wherein a jury was waived. It calls for the application of the rule that the findings of the court have the effect of a verdict of a jury, and judgment thereon will not be disturbed unless it is clearly wrong. See Scottsbluff Nat. Bank v. First State Bank, 162 Neb. 475, 76 N. W. 2d 445. The findings and judgment of the district court in this case may not be said to be clearly wrong.
For the reasons set out herein the judgment of the district court should be affirmed.