434 N.E.2d 585 (Ind.App. 1 Dist. 1982), 1-481A104, Nationwide Mut. Ins. Co. v. Neville

Docket Nº:1-481A104.
Citation:434 N.E.2d 585
Party Name:NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant-Appellant, v. Janet A. NEVILLE, Administratrix of the Estate of William Keith Neville, Plaintiff-Appellee.
Case Date:April 29, 1982
Court:Court of Appeals of Indiana

Page 585

434 N.E.2d 585 (Ind.App. 1 Dist. 1982)

NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant-Appellant,

v.

Janet A. NEVILLE, Administratrix of the Estate of William

Keith Neville, Plaintiff-Appellee.

No. 1-481A104.

Court of Appeals of Indiana, First District.

April 29, 1982

Page 586

Robert A. Fanning, Locke, Reynolds, Boyd & Weisell, Ralph A. Cohen, Ice, Miller, Donadio & Ryan, Indianapolis, G. Terrence Coriden, Lawson, Pushor, Mote & Coriden, Columbus, for defendant-appellant.

Vernon J. Petri, Petri, Fuhs & Doehrman, Indianapolis, Patrick W. Harrison, Cline, King & Beck, Columbus, James G. Holland, Indianapolis, for plaintiff-appellee.

STATEMENT OF THE CASE

RATLIFF, Presiding Judge.

Nationwide Mutual Insurance Co. appeals from the judgment of the Bartholomew Circuit Court which awarded Janet A. Neville, Administratrix of the Estate of William Keith Neville, thirty thousand dollars ($30,000) as compensatory damages, one hundred forty-five thousand dollars ($145,000) as punitive damages, and fifteen thousand four hundred sixty-eight dollars and forty-nine cents ($15,468.49) interest on her claim for death benefits of William Keith Neville under a group insurance policy. We affirm in part and reverse in part.

STATEMENT OF THE FACTS

Nationwide Mutual Insurance Co. (Nationwide) and the Indiana Volunteer Firemen's Association, Inc. (IVFA) negotiated a group insurance contract to provide disability and death benefits for members of IVFA. Indiana Volunteer Firemen's Association, Inc. informed Nationwide that it wanted insurance for heart or circulatory malfunctions in addition to the statutorily required coverage. The negotiation process took four to five years to complete. The provision of the policy providing for accidental death benefits reads as follows:

"If Injury or a heart or circulatory malfunction shall result in the death of an Insured, the Company will pay, subject to

Page 587

the aggregate maximum set forth in Item 3 of the Application, the Accidental Death Benefit set forth therein provided, that if such death is a result of a heart or circulatory malfunction: (a) the first symptoms of such must appear within 24 hours after having participated in the fighting of a fire or other Emergency duty, (b) the Insured is, at the time of such participation, under age 60, (c) the Insured has not previously incurred medical expense for a heart or circulatory condition, and (d) death occurs within 90 days following the date of such participation."

Record at 164. The policy defines injury as follows:

" 'Injury' whenever used in the Policy means injury which causes loss resulting directly and independently, of all other causes, from an accident sustained while the Policy is in force with respect to the Insured, providing such accident and injury was caused by and arose out of the duties of the Insured as a volunteer fireman."

Record at 164.

William Keith Neville (Neville) was a member of the Marietta Volunteer Fire Department. He had been a member of the department for approximately ten years. In the early morning hours of September 30, 1973, Neville was called to fight a house fire. Neville entered and exited the house, which was filled with thick black smoke, two or three times. On each occasion when Neville exited the house, he would clear his throat, cough, and take a deep breath before reentering the house. The last time Neville came out of the house, he was holding his chest and gasping for air. Neville was taken by ambulance to Shelbyville Hospital and then transferred to Johnson County Hospital. Neville suffered from smoke inhalation and a severe myocardial infarction (heart attack). While in the hospital, he had various arrhythmias, a cardiac arrest, and heart failure. After being successfully resuscitated, Neville was treated with drugs for his arrhythmias and heart failure. He progressed quite well, and plans were being made for his discharge when he died in his sleep on October 30, 1973. The final diagnosis of Neville's condition was acute myocardial infarction-anteriolateral and ventricular flutter (cardiac arrest). The secondary diagnosis was congestive heart failure. An autopsy performed on Neville revealed that he also suffered from arteriosclerosis.

On November 13, 1973, Mrs. Neville, through Fire Chief Isley of the Marietta Volunteer Fire Department, filed a claim with Nationwide for the accidental death benefit of thirty thousand dollars ($30,000) under the policy negotiated by IVFA. Nationwide investigated the claim by correspondence with Dr. John M. Records, Neville's physician, Fire Chief Isley, and the hospital. By a letter dated February 21, 1974, Nationwide advised Fire Chief Isley that it had received all the information submitted on behalf of Mrs. Neville and that it was denying the claim. The reason for the denial of the claim was stated as follows:

"Injury, as used in the Policy, means injury which causes loss resulting, directly and independently, of all other causes, from an accident sustained while the Policy is in force, providing such accident and injury was caused by and arose out of the duties of the Insured as a volunteer fireman. Accidental Death benefits are payable if injury or circulatory malfunction results in the death of an Insured, however, no benefits shall be payable if the Insured has previously incurred medical expense for a heart or circulatory condition. In reviewing the information received, we note that Mr. Neville received a work-up for hypertension in 1968 and had been on medication for this condition since that time. As it appears that Mr. Neville did incur medical expense for a circulatory condition, we would be unable to qualify this claim for benefits."

Record at 171.

Janet Neville, as Administratrix of the Estate of William Keith Neville, filed a complaint in Shelby Circuit Court on October

Page 588

25, 1974, against Nationwide, alleging Nationwide breached the insurance contract by failing to pay the accidental death benefit. Mrs. Neville prayed for thirty thousand dollars ($30,000) compensatory damages, interest, and one hundred fifty thousand dollars ($150,000) punitive damages because of Nationwide's alleged intentional, wilful, and wrongful conduct in refusing to comply with the terms of the policy. After a change of venue to Bartholomew Circuit Court, trial by jury was had on Mrs. Neville's complaint. The jury returned a verdict of thirty thousand dollars ($30,000) compensatory damages and one hundred forty-five thousand dollars ($145,000) punitive damages. The trial court entered judgment on the verdict and added fifteen thousand four hundred sixty-eight dollars and forty-nine cents ($15,468.49) as prejudgment interest. Nationwide perfected this appeal.

ISSUES

Nationwide raises the following issues which we have restated and renumbered:

1. Whether the trial court erred in denying Nationwide's second Motion for Summary Judgment.

2. Whether the trial court erred in giving Plaintiff's Final Instruction No. 6 which instructed the jury on proximate cause.

3. Whether the trial court erred in denying Nationwide's Motion for Judgment on the Evidence.

4. Whether the trial court's judgment is not supported by sufficient evidence and is contrary to law.

5. Whether the trial court erred in allowing consideration of the claim for prejudgment interest when there was no mention of prejudgment interest in the pre-trial order and in assessing prejudgment interest.

6. Whether the trial court erred in denying Nationwide's Motion in Limine and to Strike.

7. Whether the trial court erred in denying Nationwide's request for a continuance of the trial since Nationwide's Motion in Limine and to Strike was denied.

8. Whether the trial court erred in giving Preliminary Instruction No. 2 and Plaintiff's Final Instruction No. 3 which instructed the jury that Nationwide had the burden of proving it was not liable for the death benefits under the policy.

9. Whether the trial court erred in giving Plaintiff's Final Instruction No. 1 which instructed the jury on the rules of contract construction.

10. Whether the trial court erred in giving Plaintiff's Final Instruction No. 2 which instructed the jury on the construction of exclusionary provisions in an insurance contract.

11. Whether the trial court erred in giving Plaintiff's Final Instructions Nos. 9 and 10 which instructed the jury on punitive damages.

DISCUSSION AND DECISION

Issue One

Nationwide filed a second motion for summary judgment on January 17, 1980. The basis of its motion was that Neville died of a heart or circulatory malfunction and that he had previously incurred medical expenses for a circulatory condition (hypertension). Nationwide also contended that there were no facts to sustain the punitive damages claim. Mrs. Neville opposed the summary judgment on the grounds that her husband suffered an injury which resulted in his demise and that even if the heart or circulatory malfunction provision of the policy was applicable, there existed a material issue of fact as to whether hypertension is a heart or circulatory condition. The trial court denied Nationwide's motion which Nationwide claims was error.

A trial court may grant a motion for summary judgment only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Kendrick Memorial Hospital v. Totten, (1980) Ind.App., 408 N.E.2d 130. In determining whether a genuine issue of material fact exists, a court will construe all

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materials on file liberally in favor of the nonmoving party and will resolve all doubts against the moving party. Moll v. South Central Solar Systems, (1981) Ind.App., 419 N.E.2d 154. The trial court in ruling on a motion...

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