Court Opinion

ID: 9625716
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:49:19.702228+00
Date Added: 2024-06-11T14:56:19.465039
License: Public Domain

Fontron, J.,
dissenting and concurring in part: It is important to understand that this is not a case of an insurer sitting on its hands after it has received an application and then attempting to evade coverage upon learning that the applicant has died. Some dates are important on this point.
The insurance application is dated February 8, 1969, although it was filled out perhaps a week earlier. The premium receipt bears date of February 7. The receipt contains the provision that the company shall have sixty days to consider and act upon the application and if the company fails to offer a policy within that time, such shall be deemed a declination. The application itself provides that if the applicant receives no policy within said 60-day period the application will be deemed to have been declined.
The application disclosed that Mr. Tripp had been treated by a Pittsburg physician for a stomach disorder and it was stipulated and agreed by the parties that the company made attempts to contact the doctor, but received no response. Mr. Euwer, the soliciting agent, testified that he had notified Mrs. Tripp to such effect.
On May 23, 1969, the company wrote the manager of its Kansas City office the following letter:
"To: C. M. Graham, Manager State & District 1-70 Date 5-23-69
“From: O. E. Mueller, Subject Trapp, Donald E.
Assistant Secretary 1039 Barnett
Kansas City, Kansas
Agent Euwer # 37
“Dear Mr. Graham:
“After writing to Dr. Veach on two different occasions and to you on three different occasions to try to get medical information which I need on this *40applicant, I have decided that it is impossible to get it. Therefore, I have retired this file.
“Immediately refund the advance premium deposit of $15.36 and pick up receipt no. 3508 and return it to me.
Very truly yours,
/s/ Otto E. Mueller
Otto E. Mueller
Assistant Secretary”
This letter was received in Kansas City on May 26, 1969. The following day Mr. Euwer attempted to contact plaintiff at his home but there was no one home. On June 1, Mr. Euwer again went to the plaintiff’s home to tender the premium and discovered at this time that plaintiff’s daughter had died May 29, 1969.
As I understand the court’s opinion, it is bottomed primarily on our decision in Service v. Pyramid Life Ins. Co., 201 Kan. 196, 440 P. 2d 944, and not on estoppel. I would agree that the elements of estoppel, as they have been delineated by this court (see Place v. Place, 207 Kan. 734, 486 P. 2d 1354), are not established by this record.
The Service case is clearly distinguishable from the case at bar on its facts. In the first place the company’s regional manager in that case had assured the applicant that he was covered by insurance when he paid the advance premium. This court held that the regional manager had implied authority to bind his company in this regard and that a temporary contract of insurance was thereby effected, as the applicant and the manager had both intended. Such is not the situation here. There is no evidence that a general or managing agent made any such representation to Mr. Tripp. It is true that Tripp testified that when he paid the premium to Mr. Euwer, the latter said that Tripp was covered. However, Euwer was a soliciting agent only, and it is not contended otherwise. The application itself clearly states that only the company officers named therein may modify contracts or waive any company rights or requirements, and then only in writing, and that no statements by other persons are binding on the company. This court has held many times that where such a provision is written into an application an agent cannot orally modify the terms or conditions under which the policy shall become effective. (Smither v. United Benefit Life Ins. Co., 164 Kan. 447, 454, 190 P. 2d 183; Service v. Pyramid Life Ins. Co., supra, p. 205.)
An additional distinction is pertinent. The application in Service *41was executed June 30, and a yearly premium was then advanced. The premium receipt was much the same as in the present case and provided in part that if the application was not approved and accepted by the company within 60 days that the insurance applied for should not become effective. Mr. Service was killed in a motor accident July 21, well within the 60-day period. As of the date of death the company had neither notified the applicant that it would accept his application, or that it would not accept it (although the trial court found the company had decided to approve the application on June 15). On July 22, and apparently after having been notified by telephone of the death, fhe company mailed a supplemental application to Mr. Service for the same amount of insurance but at a higher rate. Under these circumstances this court held that the temporary insurance which went into effect when the application and the premium payment were delivered to the general agent, on the latter’s assurance that Service was then covered, was still in force and effect when Mr. Service died, and the company was therefore held liable.
In Service, the court said that the temporary insurance remained in effect until the company either issued a policy or otherwise notified the insured during his lifetime. The insurance company did neither in the Service case; the attempted notification came too late after the applicant’s death. Our opinion was entirely right and just under the circumstances existing in that case.
Here, however, the situation is quite different. Both the receipt and the application gave notice that if no policy was issued within 60 days the insurance application had been declined. That period had expired before the daughter’s death and its expiration without issuance of a policy was tantamount to notice of the company’s rejection. No other notice was required. Of course the applicant would be entitled to refund of the premium payment but tender of payment had been attempted prior to the daughter’s death and tender was actually made on June 1.
I am in accord with the rule that where ambiguity is found in an insurance policy it is to be construed strictly against the insurer. The rule represents a fair and equitable principle and should be applied in the construction of insurance documents prepared by the insurer. However, the rule of strict construction does not relieve a tentative insurance purchaser of the obligation to read the papers which govern the transaction, nor was the rule intended to rewrite *42insurance contracts when they are fairly expressed and untainted by fraud.
The court’s opinion ignores the final paragraph of the receipt— which is not written in small lettering — stating that the company shall have 60 days in which to act on the application and if a policy is not offered within that time the company is deemed to have declined it. It ignores also the similar provision in the application. To require the company to give a written notice of rejection after the 60-day period has expired goes far beyond our decision in Service and is, I believe, a wholly gratuitous requirement.
I concur with that portion of the opinion disallowing an attorney’s fee, but otherwise I am obliged to dissent.
Fromme, J., joins in the foregoing dissenting and concurring opinion.