Court Opinion

ID: 9443440
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:20:05.58625+00
Date Added: 2024-06-11T17:29:29.104745
License: Public Domain

RIDDICK, Circuit Judge
(dissenting).
The appellant asserts that the findings of fact by the District Judge are supported by the undisputed evidence in the case. On these findings the judgment appealed from should be affirmed.
The Judge found:
In 1944 all employees of all divisions of the Crossett Companies were covered by the same contract of group insurance. In that year the insurance carrier asked for a rate increase. The employees of all divisions of the Crossett Companies except the Crossett Paper Mills voted to retain the insurance then in effect, the Crossett' Companies paying the increase in rates. The Crossett Paper Mills employees elected to take an insurance plan offered by the appellee on an agreement that the Crossett Companies would pay the difference in cost between the new insurance and the old. This insurance covered all employees of the Paper Mills who applied for its benefits without regard to their union affiliations or to rates of >pay.
In June 1950 the employees of divisions of the Crossett Companies other than the Paper Mills changed their plan of insurance to one of larger coverage. Thereafter, the union or hourly-paid employees of the Paper Mills division of the Crossett Companies ■began negotiations with the management for a broader insurance coverage. These negotiations were between the management and the representatives of the International Brotherhood of Paper Makers, the union representative of the Paper Mills employees. The matter was considered by the parties as a proper subject for collective bargaining between the management and the union representatives and was so treated. The salaried employees of the Paper Mills division not being members of the union were not represented in the negotiations. The negotiators decided to submit to the members of the Paper Makers Union two insurance plans, one submitted 'by the appellee and the other by the Metropolitan Insurance Company.
The ¡members of the union voted in favor of the plan offered by appellee, under which the employees and the Paper Mills shared the premium cost, and which required for its adoption its acceptance by 75 per cent of the employees eligible for insurance under it. More than 75 per cent of the approximately 600 members of the union applied for insurance under the plan offered, and on December 2, 1950, the Crossett Paper Mills applied to appellee for insurance in accord with the plan. The application provided that the insurance should become effective on a date agreed on by the appellee and the Crossett Paper Mills. The appellee issued its Group Policy No. 3171, “which, pursuant to agreement between defendant, by its official representative, Mr. L. R. Burris, and Crossett Paper Mills, by its official representative, Mr. John Henry Allen, was made effective December 3, 1950, as to all union employees, and that date appears on the policy”. Paragraph 13 of the policy provides that “This policy, together with the application of the Employer, copy of which is attached hereto, and the individual *162applications, if any, of the insured employees constitute the entire contract * * * »
At the time the application for the policy was made the salaried employees of the Paper Mills, not subject to the provisions of the labor agreement, had not been given a chance to state a preference as to the insurance coverage desired or as to the carrier desired, or to participate in the insurance applied for. The management decided that the nonunion or salaried employees should have the same opportunity as that granted the union employees to choose between the plan of insurance offered by the Metropolitan Insurance Company and that offered by appellee. Accordingly, the management addressed a letter to the salaried employees of the Paper Mills division,.advising them of the action of the union employees, enclosing information concerning the plans of insurance upon which the union employees had voted and a ballot upon which each salaried employee was requested to indicate by his vote whether he desired the Metropolitan plan, the appellee’s plan, or no insurance, and asking that the ballots showing the preference of each individual employee be marked and returned by December 10, 1950. The salaried employees were advised of the contributions which the company would make to the payment of the cost of either plan accepted, and that the plan applied for by the company would be the one chosen by a majority of the salaried employee group. The Crossett Paper Mills and the appellee, through their authorized representatives, agreed in writing that if the salaried employees accepted the plan offered by appellee the insurance as to them would become effective as of January 1, 1951.
About December 10, 1950, the ballots of the salaried employees were returned and counted. Appellee’s plan received the majority vote. The salaried employees were given an opportunity to apply for insurance under this plan and their applications were taken after December 10, 1950.
Finding No. 8 of the District Judge is as follows:
“As stated above, it was the agreement of Mr. J. H. Allen, representing Crossett Paper Mills, and Mr. L. R. Burris, representing the defendant, that the plan would become effective January 1, 1951, for the non-union salaried employees. Mr. Allen so advised all salaried employees who made application with him, and all the certificates subsequently issued, which came over his desk, carried that effective date. There was only one policy, No. 3171, issued, and the result of the agreement was to make the policy effective as to the union members and the plant guards on December 3, 1950, and effective as. to the non-union salaried- employees on January 1, 1951. And, while the policy does not expressly provide, either in the •body thereof or by rider, that the effective date as to non-union salaried employees is January 1, 1951, this date was agreed upon and fixed pursuant to the terms of paragraph 2 of the application, which is a part of the policy, to the effect that ‘The insurance for eligible employees will become effective on a date agreed upon by the Employer and the Company.’ ”
The parties to the insurance contract were the Crossett Paper Mills and the appellee. The contract provided that the parties could fix its effective date. When it is seen, as the evidence shows, that the contract was to replace another on which premiums had been and were being paid,-the practical necessity for this provision is apparent to prevent overlapping premium payments and to arrange for the -cancellation of the old contract as of the effective date of the new. The provision of the contract permitting the parties to it to fix its effective date was within the competence of the parties as was their action under it in fixing different effective dates for different groups of employees who applied for different coverage at different times.
On the facts found by the trial judge, admitted by appellant to be supported by the undisputed evidence, it is -conclusively established that Gulledge applied for insurance to become effective Januáry 1, 1951, and that he authorized the Crossett Paper Mills to pay for insurance effective as of that date. Until the effective date of the *163new policy and the cancellation of the old, he was still covered by the old policy. The appellant is now permitted to recover under an insurance 'contract to which Gulledge was never a party and never attempted' to become a party.