Court Opinion

ID: 9460916
Source: CourtListenerOpinion
Date Created: 2023-08-04 22:02:32.906233+00
Date Added: 2024-06-11T17:36:49.580597
License: Public Domain

WEBSTER, Circuit Judge
(dissenting).
I respectfully dissent.
In order for the District Court and the panel majority to perceive an ambiguity in the insurance policy it was necessary to ignore certain fundamental and well established rules of contract construction.
In testing for ambiguity, the entire contract must be reviewed as a whole to ascertain the interest of the parties;1 it is presumed that every condition was intended to accomplish some purpose;2 a court will attempt to give meaning and effect, if possible to every word and phrase in the context in determining the meaning thereof;3 it is not permissible to lift one sentence from the remainder of the policy and attach a peculiar meaning to that sentence standing alone;4 and “wherein some confusion appears, or an apparent discrepancy or repugnancy exists between the various policy expressions, the court will attempt to harmonize such provisions and seek a construction which will give reasonable force and *612effect to all of such provisions without conflict.” 5 Where the same words are used in different clauses of the insurance contract, they will ordinarily be understood to have been used in the same sense.6 In my view the total disability provisions of the certificate of insurance, read as a whole and in accordance with the foregoing rules of construction, can have but one meaning.
Originally Braniff paid the cost of a “basic” amount of term life insurance and employees were permitted to carry “additional” amounts of term life insurance under the policy at their own expense. In 1971 Braniff took over the entire cost but the distinction continued in relation to provisions in event of total disability of the insured. Thus, “term insurance” is defined in the policy as:
The amount of term insurance in force on an employee at any time while he is insured for term insurance will equal the sum of the Basic and Additional amounts, if any, shown on the Statement. (Emphasis added)
The first section relative to “Life Insurance for Employer — Total Disability Benefits” is preceded by the legend:
The Provisions set forth on this page will apply to amounts of term insurance excluding amounts of additional insurance. (Emphasis added)
The next section, labeled “Life Insurance for Employer — Extension of Insurance During Total Disability”, is preceded by the legend:
The provisions set forth on this page will apply only to amounts of additional insurance. (Emphasis added)
The policy thus provides for two kinds of term life insurance — basic and additional. “Additional” is included in the definition of term insurance, but is expressly excluded from the application of the first section on total disability. The next section on total disability is made applicable only to additional insurance. Read in this light, and giving meaning to each clause, the separate treatment for “basic” and “additional” term life insurance is clear. In the event of total disability before age 60, the employee is entitled to receive “the amount of insurance in force on the employee’s life” but “excluding amounts of additional insurance”. The next section provides that as to “additional insurance” the insurance coverage will be extended from date of total disability, and premiums thereon waived, until the death of the employee, at which time the amount of “additional insurance” in effect will be payable.
These integrated and inter-related provisions admit of no other reasonable interpretation. In order to find an ambiguity the majority must (1) hypothe-cate that “additional insurance”, although used only in the context of life insurance could mean some other type of benefit and (2) totally ignore the section which expressly deals with treatment of “additional insurance”.7 This, is my view, distorts in an impermissible manner a logical and unambiguously stated plan of life insurance with total disability benefits. If “additional insurance” meant something other than term life insurance, and all of the term insurance was to be paid out at time of total disability, as plaintiff contends, then the next following section providing for extended coverage and waiver of premium as to “additional insurance” in case of total disability would have no meaning or application at all.8 While in cases of *613doubtful meaning the construction most favorable to the insured will be adopted, “[t]his canon of construction * * * furnishes no warrant for avoiding hard consequences by importing into a contract an ambiguity which otherwise would not exist, or, under the guise of construction, by forcing from plain words unusual and unnatural meanings.” Bergholm v. Peoria Life Ins. Co., 284 U.S. 489, 492, 52 S.Ct. 230, 231, 76 L.Ed. 416 (1932). As we said in Terry v. New York Life Ins. Co., 104 F.2d 498, 504 (8th Cir. 1939):
Even though we might think that the meaning of the challenged words used by the insurer could have been better or more accurately expressed, that would constitute no justification for disregarding the plain import of appropriate language. Williams v. Union Central Life Ins. Co., supra, 291 U.S. 170, page 180, 54 S.Ct. 348, 78 L.Ed. 711, 92 A.L.R. 693.
I would reverse the judgment of the District Court with instructions to enter judgment in accordance with its original order and judgment entered July 30, 1973.9

. 13 J. Appleman, Insurance Law and Practice § 7383, at 11-12 (Rev. ed. 1965). See also 43 Am..Tur.2d, Insurance § 263 (1969).

. Appleman, supra note 1 at 10.

. Id.

. Id. at 12-13.

. Id. at 13; see Aetna Ins. Co. v. Sacramento-Stockton S.S. Co., 273 F. 55 (9th Cir. 1921) ; World F & M Ins. Co. v. Carolina Mills Distributing Co., 169 F.2d 826 (8th Cir. 1948).

. Willingham v. Life & Casualty Ins. Co., 216 F.2d 226 (5th Cir. 1954).

. “The sense in which a word or phrase is used is normally determined by its context.” Slay Warehousing Co., Inc. v. Reliance Ins. Co., 471 F.2d 1364, 1368 (8th Cir. 1973).

. As noted in the majority opinion, a Florida intermediate court found the provisions of this contract to be ambiguous. Moore v. Connecticut General Life Insurance Company, 277 So.2d 839 (Fla.App.1973). That court likewise totally ignored the provisions of the contract dealing with the additional term insurance excluded from the payout clause in event of total disability. These sections dealt with term life insurance and term life insurance alone. Paid-up life insurance was covered under separate provisions, and an em*613ployee was eligible to purchase paid-up insurance only if be was “insured for Additional Insurance” — again clearly indicating that “Additional Insurance” was something other than paid-up insurance.

. Judge Lord originally held the contract to be unambiguous but reversed himself following the Florida decision, supra, saying “I am uncertain.”