Court Opinion

ID: 9617127
Source: CourtListenerOpinion
Date Created: 2023-08-22 04:52:22.147173+00
Date Added: 2024-06-11T09:13:36.796774
License: Public Domain

SPENCE, J.
I dissent.
The policy in question is clear and unambiguous in its application to the admitted facts; and, in my opinion, the result reached by the trial court and by the majority is erroneously based upon a “forced construction against the insurer.” (Coit v. Jefferson Standard Life Ins. Co., 28 Cal.2d 1,11 [168 P.2d 163, 168 A.L.R. 673]; see also New York Life Ins. Co. v. Hollender, 38 Cal.2d 73, 81 [237 P.2d 510].)
The policy here was a “Non-caneellable Income Policy” insuring only against disability resulting in “continuous, necessary and total loss of all business time,” with the amount of indemnity limited in two respects: (1) a maximum possible indemnity of two hundred dollars per month and (2) a general limitation set forth in section 25 providing that “Indemnity for disability will not be paid under this policy at a rate in excess of the average earnings of the Insured for the period of time that he has been actually employed during the two years immediately preceding the commencement of the disability. ...”
The trial court found: “That it is true that Plaintiff has been voluntarily retired and has not been gainfully employed since January of 1946 and it is true that Plaintiff has had no earnings at any time during the two years immediately preceding the commencement of his disability which occurred on September 17, 1952.” This finding, which is based upon admitted facts, clearly demonstrates that plaintiff is not entitled to recover any indemnity under the terms of the policy.
It is difficult to follow the reasoning of the majority opinion. It declares that the meaning of section 25 is “questionable” and that it is “more reasonable to construe section 25 as applying only where the insured had been actually employed during at least a part of the prior two-year period.” Thus the majority’s construction of the policy produces the following illogical results: if the insured had had average earnings of fifty dollars per month while employed during *892the preceding two-year period, he would have been limited in his recovery of indemnity to fifty dollars per month during his disability; but as the insured had had no employment or earnings during the preceding two-year period, he is entitled to recover the maximum possible indemnity of two hundred dollars per month during his disability. I cannot agree. The provisions of section 25, limiting the indemnity to a rate not in excess of the insured’s earnings during the specified period, whether read alone or in conjunction with the other provisions of the policy, are too clear and unambiguous in their application to the admitted facts to permit any such unreasonable and “forced construction” in support of plaintiff’s recovery.
In conclusion, it should be said that there appears to be nothing unfair or inequitable in the terms of the policy as written. The policy was “non-cancellable” insofar as the insurer was concerned, but it could be terminated by the insured. The premium was no doubt fixed in the light of the clear limitations of the policy concerning the indemnity payments. The insurer could not refuse renewal premiums and manifestly could not control the insured’s activities. The choice of renewal or termination rested each year solely with the insured, which choice could be made by him in the light of his probable plans and of the provision that “all premiums paid during said two years for that portion of the disability indemnity in excess of the amount of such earnings will be returned upon request of the Insured. ...” Pursuant to that provision, and upon learning that the insured had had no earnings, the insurer here offered to return his premiums. Under the admitted facts and the plain provisions of the policy, he was entitled only to the return of such premiums and was not entitled to any indemnity.
I would reverse the judgment of the trial court.
Traynor, J., concurred.