Ballinger v. C and S Bank of Tucker

• Court: Georgia Court of Appeals
• Writing for the Court: MARSHALL
• Citation: Ballinger v. C and S Bank of Tucker, 229 S.E.2d 498, 139 Ga.App. 686 (Ga. App. 1976)
• Decision Date: 17 September 1976
• Docket Number: No. 2,No. 52479,52479,2
• Parties: K. W. BALLINGER v. C & S BANK OF TUCKER et al

Page 498

229 S.E.2d 498

139 Ga.App. 686

K. W. BALLINGER v. C & S BANK OF TUCKER et al.

No. 52479.

Court of Appeals of Georgia, Division No. 2.

Sept. 17, 1976.

Rehearing Denied Sept. 29, 1976.

Michael J. King, Charles H. Hyatt, Decatur, for appellant.

King & Spalding, Ralph B. Levy, A. Felton Jenkins, Jr., Atlanta, for appellees.

MARSHALL, Judge.

Ballinger brings this appeal from the grant of summary judgment by the trial court for and on behalf of the defendants below, the C & S Bank of Tucker and the Prudential Insurance Company of America.

The pertinent facts establish that Ballinger negotiated a loan with the C & S Bank on July 1, 1969, in an amount in excess of $4,000. He requested and was issued credit life and disability insurance by Prudential to the extent of the loan. Several days after the loan was negotiated, Ballinger was injured and suffered total disability. Ultimately, Ballinger sought to enforce the disability provisions of the credit insurance, but Prudential denied coverage and offered to return the unearned premium as required by the policy.

Prudential denied coverage inasmuch as the policy terms provided that disability payments would not be payable for any indebtedness where the debtor was not gainfully employed on the date the indebtedness was incurred. It is undisputed that Ballinger was unemployed on July 1, 1969. Ballinger asserts that he did not furnish any information pertaining to his employment status on July 1, 1969, when the loan was negotiated. He contends that the application was completed by the loan officer at the bank from information contained on applications from earlier loans, and that any incorrect information was due to the negligence of the bank acting as agent for Prudential. In view of the incontestability clause in the basic group policy, Ballinger contends that Prudential and the bank are estopped from denying liability.

The bank and Prudential, on the other hand, contend that misinformation, whether emanating from the loan officer or from Ballinger, is immaterial. The basic group policy excludes indebtednesses incurred on a date when the debtor is unemployed. Thus, it is the contention of the bank and Prudential that the question presented by the motion for summary judgment was one of uninsurability, rather than invalidity of the policy because of misrepresentation or negligence.

Ballinger enumerates as error the grant of the aforesaid motion for summary judgment and the refusal of the trial court to strike as a defense his alleged uninsurability based upon unemployment at the time the indebtedness was incurred. Held:

Resolution of the question of whether the fact of unemployment at the time the credit was extended rendered the disability coverage void or was a matter of misinformation going to the validity of the contract will be determinative of both enumerations of error.

Looking to the disability rider of the insurance contract, under the general heading of 'eligibility,' it is provided that the classes of indebtedness eligible for insurance shall in no event include any indebtednesses where the debtor is not gainfully employed on the date such indebtedness is incurred.

Ballinger was not furnished a copy of the master group policy. However, shortly after he obtained the loan, a payment book together with a certificate of insurance was delivered by mail. The certificate of insurance referred to both the life and disability credit insurance. On page 3 of that certificate, Ballinger was advised under a heading of 'exclusions' that disability benefits would not apply to an indebtedness incurred at a time when the debtor was not gainfully employed.

Insurance is a matter of contract, and the language used is to be accorded its general and ordinary meaning, bearing in mind that the contract is to be construed in accordance with the intention and understanding of the parties, and, in construing it, the court can go no further than a fair construction of the language used will permit. North British &c. Ins. Co. v. Tye, 1 Ga.App. 380, 389, 58 S.E. 110; Parris & Son v. Campbell, 128 Ga.App. 165(1), 196 S.E.2d 334; Cherokee Credit Life Ins. Co. v. Baker, 119 Ga.App. 579(1a), 168 S.E.2d 171. In construing a contract of group insurance we must construe together the master group policy and the certificate of insurance, for it requires both to make the contract. Cherokee Credit Life Ins. Co. v. Baker, 119 Ga.App. 579, 168 S.E.2d 171, supra; Barker v. Coastal States Life Ins. Co., 138 Ga.App. 164, 166, 225 S.E.2d 924.

As we perceive the credit life insurance afforded Ballinger, it guaranteed the payment of his indebtedness in the event of his death. The disability rider thereto further guaranteed a supply of cash up to the full amount of the indebtedness as a substitute for a disrupted flow of income caused by a disability. In the latter event, the insurer excepted disability payments where there was no loss of funds caused by disability, because the debtor was unemployed at the time the debt was incurred. There can be no doubt that the clear intent of the parties as manifested by the language of this contract of insurance was to exclude coverage for...