Court Opinion

ID: 6526971
Source: CourtListenerOpinion
Date Created: 2022-07-19 19:21:34.044467+00
Date Added: 2024-06-11T15:55:14.350794
License: Public Domain

JOHNSON, Judge
(dissenting).
The appellee, Verbon G. Jackson, brought this suit against the appellant, Blue Cross-Blue Shield of Alabama, on a hospital insurance policy issued by the appellant. The facts were presented to the trial court by written stipulation in addition to the insurance contract and letters of cancellation offered by the parties. The court below entered judgment for the appellee in the amount of $86.90. The stipulation of facts states as follows:
“Plaintiff, employed by Goslin-Birmingham Manufacturing Company, and as an employee of said company had Blue Cross-Blue Shield insurance under a group policy. In 1962 GoslinBirmingham Manufacturing Company took out insurance with another company and under the provisions of the policy, Blue Cross cancelled its group policy. On January 9, 1963, Blue Cross-Blue Shield mailed an official notification to Mr. Jackson, informing him that his coverage would terminate as of February 10, 1963. On January 7th a similar notification was directed to Goslin-Birmingham Manufacturing Company. On January 29th similar notifications were directed both to Mr. Jackson and to Goslin-Birmingham Manufacturing Company. Mr. Jackson received the first notification on January 10, 1963 and the second on January 30th, both of these notifications informed him his coverage would be terminated on February 10th.
*599“Mr. Jackson’s son, Tommy, entered University Hospital on February 5th and was discharged February 13th. Blue Cross-Blue Shield paid for hospital charged for the 5th through the 10th, the date which the said cancellation became effective. The question presented here is whether Blue Cross-Blue Shield is also responsible for the last three days that plaintiff’s son was in the hospital.”
The pertinent part of the insurance contract, and that part upon which the appellant relied in its letters of cancellation, is Section VII, Paragraph 3, which states:
“OTHER COVERAGE — If the subscriber is a member of a group which has group hospitalization coverage other than furnished by the Corporation, the contract between the subscriber and the Corporation and all rights hereunder may be terminated at any time on thirty (30) days written notice to the subscriber or to his remitting agent, if any.”
It appears that the notice of cancellation was sufficient, and that it was received by the appellee (subscriber) and by his remitting agent, Goslin-Birmingham Manufacturing Company. Since all members of the appellee’s immediate family were covered by the contract, the appellee’s son, Tommy, was entitled to hospital services so long as the contract remained in force.
The question presented on this appeal is the same as that presented in the court below — -namely, when a group hospital policy provides that the policy and all rights thereunder may be terminated by the insurer at any time on thirty days notice if the insured is a member of a group which has group hospitalization coverage other than that furnished by the insurer, is the insurer liable for hospitalization occurring thirty days after notice of termination, where such hospitalization commences before the expiration of the thirty day period but after the notice of cancellation.
Inasmuch as the notification received by the appellee on January 10th stipulated that his contract would be terminated on February 10th, cancellation of the policy could not have become effective before February 10th.
Our Supreme Court has held, in effect, that cancellation of a group policy cannot be effectuated legally without an employee’s consent where the employee has an accrued cause of action at the time of cancellation. See Hill v. Metropolitan Life Ins. Co., 266 Ala. 285, 96 So.2d 185.
In Pennsylvania Casualty Co. v. Perdue, 164 Ala. 508, 51 So. 352, an insured sought to recover indemnity under a policy of health insurance for a sickness which lasted for a period of 26 weeks, and which allegedly began on July 5, 1905. The defendant insurance company filed a plea to the complaint which set out a provision of the policy that “ ‘The company may cancel this policy by mailing notice of cancellation to the assured’s address given in the schedule, with its check for the unearned part, if any, of the premium,’ ” and with an allegation of a cancellation of July 8, 1905. The court in holding this plea had stated:
“For one thing, it fails to deny in any form liability for the period from July 5th to July 8th, and so fails to answer the complaint in its entirety, as it professes to do; for another the interpretation of the contract put forward by this plea is not to be accepted, because, not rendered necessary by the letter, -it entirely destroys the spirit of the contract. * * * ”
In Benefit Ass’n Ry. Employees v. Bray, 226 Ala. 444, 147 So. 640, we find:
“It is also said to be contrary to the spirit of the contract of health insurance so as to interpret a clause in the policy which permits its cancellation without cause as to authorize it to be done under such a provision during the sickness covered by it.”
*600The spirit or purpose of a hospitalization policy, as well as a sickness or accident policy, is protection against sickness or disability which commences while the policy is in force, and, therefore, I am of the opinion that the spirit or purpose of the contract would be destroyed by holding that the insurer could legally effect a unilateral cancellation of the contract when a sickness or disability has commenced while the contract is still in force and which sickness or disability continues after the effective date of such cancellation, unless the contract contains an express provision to the contrary.
Thus, I would hold that where a provision in a hospital insurance policy permits the insurer to cancel the policy on a certain number of days notice, and the insurer gives notice of such cancellation, cancellation of the policy is not legally effectuated if at the effective date of cancellation liabilities have arisen before the effective date which would continue after that date.