Deckert v. Western & Southern Life Ins. Co.

• Decision Date: 30 July 1943
• Docket Number: No. 104.,104.
• Citation: 51 F. Supp. 44
• Parties: DECKERT v. WESTERN & SOUTHERN LIFE INS. CO.
• Court: U.S. District Court — Eastern District of Kentucky

51 F. Supp. 44

DECKERT v. WESTERN & SOUTHERN LIFE INS. CO.

No. 104.

District Court, E. D. Kentucky, Covington.

July 30, 1943.

Carl H. Ebert, of Newport, Ky., and Sawyer A. Smith, of Covington, Ky., for plaintiff.

Rouse, Price & Adams, of Covington, Ky., for defendant.

SWINFORD, District Judge.

This is an action to recover under the disability clause in a life insurance policy.

The plaintiff, Deckert, since early youth had been engaged in the trade of tanning leather. He had become adept in operating a leather splitting machine and doing all things necessary to finish leather. In the year 1919 he entered the employ of the American Oak and Leather Company as a leather splitter. He continued in this until 1939 when he and his friend Shepherd formed a partnership known as Deckert, Shepherd and Company. This partnership was the result of the abandonment by the American Oak and Leather Company of certain types of its work and Deckert and Shepherd, two employees, formed this independent business and held the clients of their former employer. The business was not large and was in reality an outlet for the labor of the partners with one or two associates. The business was growing slowly from an annual net earning of $1,706.56 for the first year ending June 30, 1940, to $7,497.62 for the year ending June 30, 1942.

On September 15, 1941, while operating a leather embossing machine the plaintiff was injured in such a way that resulted in the amputation of his right hand about three inches above the wrist and injury to his left hand as described by his physician in the following questions and answers:

"Now, look at the left hand and tell how much is gone.

"The Deponent: The first, index finger on the left hand, about one-half of the palm surface, the tip of the finger, is gone; the second finger, the first joint is gone. The third finger, the first joint is gone; the fifth finger is more or less intact; some scarring on the tip of the fifth finger.

8. "Doctor, Mr. Deckert has testified that there is no feeling in the ends of his fingers; can you give the Court the explanation of that? A. There is probably no feeling at all in the ends of the second and third fingers, as I have described it; and the feeling in the end of the first finger is gone, probably due to the fact that the sense of nerve and feeling has been destroyed and is gone."

At the time of the injury the plaintiff had in force a contract of insurance with the defendant which contained the following clause:

"Waiver of Premiums and Agreement to Pay Monthly Income Supplementary contract attached to and hereby made part of Life Insurance Policy No. 394692 A, Dated April 26th, 1929, in the sum of $10,000, issued by The Western and Southern Life Insurance Company on the life of James Edward Deckert.

"If, while the policy to which this supplementary contract is attached is in full force and effect, the insured shall, subsequent to the date hereof, viz * * * April 26th, 1929, and prior to attaining the age of sixty (60) years (nearest birthday), become wholly disabled as a result of bodily injury or disease which originates or is sustained or contracted after the date hereof, and be so disabled continuously for not less than ninety (90) days prior to the receipt by the Company of proofs thereof as hereinafter defined and required; and if, solely by reason of such bodily injury or disease, the insured is prevented from performing any work or following any occupation or engaging in any business for wages, remuneration or profit, the Company will, upon receipt at the Home Office of due and satisfactory proofs of such disability made in the lifetime of the insured on forms prescribed by the Company, grant the following benefits:"

There is no dispute between the parties as to the evidence or as to the amount in controversy. The sole question for determination is whether or not the law of Kentucky justifies a recovery on the facts contained in the record.

The rule in Kentucky is well established that total disability exists within the meaning of the policy when it is of such a character as to prevent the insured from doing all the substantial acts required of him in his business. National Life & Accident Ins. Co. v. O'Brien's Ex'x et al., 155 Ky. 498, 159 S.W. 1134.

This rule has been consistently followed in later cases and may be found forcefully expressed in these cases: Prudential Ins. Co. of America v. Harris, 254 Ky. 23, 70 S.W.2d 949; Mutual Life Ins. Co. of New York v. Beckman, 261 Ky. 286, 87 S.W. 2d 602; and Prudential Ins. Co. of America v. Asbury, 291 Ky. 400, 164 S.W.2d 957. This has been called the liberal rule, but should more appropriately be called the just rule of construction. Where a person is engaged in a definite and apparently permanent occupation, which is certainly an element of the risk on which the contract and premiums to be paid are based, it doesn't seem to me to require any especially liberal construction to say that it was that employment and that one alone that the contracting parties had in mind when the insurance contract was entered into. It is with knowledge of their liability and the law applicable that insurance companies fix their rates and premiums and to require a premium fixed to cover a certain type of employment and then deny recovery on the basis of the assured being able to make a living doing some undreamed of type of work is to my mind not only fallacious legal reasoning but the height of tragic comedy to the assured who thought he was insuring his future against the job he held at the time the contract was written.

The plaintiff here has lost one hand and to all practical purposes the sense of touch in the other hand. His business as a leather splitter or tanner has been destroyed because he is unable to personally do the work required. His capital was not the few hundred dollars invested in a small amount of equipment, but his personal skill to judge and handle leather and treat it for sale and use in upholstery. This small business could not justify the maintaining of an executive officer but what it needed was skilled craftsmen to actually handle the leather. The business under proper management and subject to the vicissitudes of economic fortune might eventually be able to pay Deckert to act for it solely in the capacity of manager, but this accident occurred in 1941 and it must be judged as of that year, not on some future possibility. That was the year when the contract of insurance was renewed by payment and acceptance of the premium. The whole context of the questionnaire indicates that the company was especially interested in what was the nature of the work being performed. They thus knew what possibility of injury they were insuring against. Had the assured been injured while engaged in a different occupation there would likely have been complaint on the part of the defendant on that score.

The Kentucky Court of Appeals expressly holds that it makes no material distinction between a policy insuring against general disability insurance and specific occupational insurance.

In Prudential Insurance Co. of America v. Harris, supra 254 Ky. 23, 70 S.W.2d 951, Commissioner Stanley, speaking for the court said: "Insurance of this nature readily falls into two general classes. One may be termed occupational and the other general. The former type of policy undertakes specifically to insure only against disability to transact the duties pertaining to or to perform labor in a particular occupation, which is usually that in which the person insured is at the time or is customarily engaged. The other type undertakes to insure against disability from performing any sort of remunerative labor. The...