Benson v. Continental Casualty Company

• Decision Date: 29 July 1966
• Docket Number: Nos. 39733,39802,s. 39733
• Citation: 146 N.W.2d 358,275 Minn. 544
• Parties: William A. BENSON, Jr., Spec. Admr. of Estate of William A. Benson, Respondent-Appellant, v. CONTINENTAL CASUALTY COMPANY, Appellant-Respondent.
• Court: Minnesota Supreme Court

Page 358

146 N.W.2d 358

275 Minn. 544

William A. BENSON, Jr., Spec. Admr. of Estate of William A Benson, Respondent-Appellant, v. CONTINENTAL CASUALTY COMPANY, Appellant-Respondent.

Nos. 39733, 39802.

Supreme Court of Minnesota.

July 29, 1966.

On Rehearing Dec. 2, 1966.

Syllabus by the Court

Although the rule in our jurisdiction is that a contract of insurance is to be construed liberally in favor of the insured and strictly against the insurer, this does not mean tnat a clear provision of the insurance contract is to be ignored so as to make a liberal construction a generous or gratuitous construction.

Danforth & Allen, Minneapolis, for Continental Cas. Co.

Grant W. Anderson, Minneapolis, for respondent.

OPINION

FRANK T. GALLAGHER, C.

This matter involves two consolidated appeals. Defendant, Continental Casualty Company, appeals from a judgment against it for $5,367.50. Plaintiff, William A. Benson The company contends on appeal that the administrator's cross-appeal was not timely taken and that therefore the issues raised therein are not reviewable. In view of the fact that each party presented its case on the merits on oral argument before this court, we shall consider the case on that basis.

Jr., special administrator of the estate of William A. Benson (the insured), appeals from that portion of the judgment which denies him, as administrator, the right to recover monthly indemnity payments of $150 each for the loss of time due to sickness of the deceased from December 1, 1960, to September 23, 1961, inclusive.

On December 24, 1921, the company issued its cancelable policy to the insured, which policy provided among other things sickness indemnity benefits for house confining and nonconfining sicknesses as defined in the policy. Part V, paragraph A, of the policy provides:

'Confining Sickness. The Company will pay said Sickness Indemnity for the period during which the Insured shall be necessarily and continuously confined within the house solely by reason of sickness and throughout which he is therein regularly visited by a legally qualified physician.'

A rider attached to the policy, bearing the same date, provided in part that the policy limitation upon the length of time for which indemnity would be paid in the event of total disability and confinement to the house by reason of sickness was extended to 3 years.

Under Part V, paragraph C, the nonconfining sickness provision, the company agreed to pay the insured sickness indemnity for such period (not exceeding one month) as the insured, by reason of nonconfining sickness other than specified in paragraph B or by reason of convalescence from a confining sickness, was prevented from performing any duty pertaining to his occupation and throughout which he was regularly attended by a legally qualified physician although not confined within the house. Under that provision the total amount of indemnity the company agreed to pay was $150.

The policy, under its provisions, was to terminate on the insured's 60th birthday, which was on September 3, 1956. Any premiums received thereafter and accepted by the company were to be returned upon request.

It appears that during the effective time of coverage, the insured made timely premium payments and received benefits on at least two claims he filed with the company in 1951 and 1955. Although the policy was not to cover him after his 60th birthday, insured continued, through a mutual mistake, to make premium payments thereafter and the company continued to accept such payments through December 1961, some 5 years after the insured reached age 60. In March 1962, he tendered a check to the company which was rejected, and his policy was canceled. The December 1961 payment was the last one made. Both parties appear to agree that the policy lapsed or terminated on or about March 24, 1962, for failure to pay the premium thereunder Unless on or before that date the insured was entitled to benefits under the house confinement clause of the policy.

On September 19, 1961, the company acknowledged to the insured a notice of a claim under the policy and enclosed a preliminary form to be immediately completed by him and his attendant physician. Subsequently, claim forms were sent the insured by the company or its agents notifying him that in order to consider his claim it must have claim forms completed by him and his physician. After some further correspondence, the company wrote the insured on February 27, 1962, stating that the reports submitted to it indicated that the insured had not been continuously confined or under the regular care and attendance of a physician; also that his policy specifically The action was tried before the court without a jury. The court denied the administrator benefits from December 1, 1960, to September 9, 1961, but allowed recovery commencing September 9 and continuing to the date of death of the insured, which the court computed as being 30 months at $150 a month, totaling $4,500 plus interest and costs. The company moved for amended findings or a new trial, which motion was denied. The company appeals from the judgment entered, and the administrator appeals from that portion of the judgment which denied him monthly indemnity payments of $150 each from December 1, 1960, to September 23, 1961.

stated that coverage was not to continue past age 60. The letter admitted that both the insured and the company apparently had overlooked that point, and although the company claimed no liability, it proposed to pay the insured $150, which represented the maximum due for one month's disability based on nonconfinement. It enclosed a release form for the insured's signature and requested a return of his policy. After some further correspondence between the company and the insured, suit was brought against the company about December 1962, alleging that Since December 1, 1960, the insured had been confined to his home due to sickness and was therefore entitled to monthly payments of $150 under the policy. The insured died on February 24, 1964.

The legal issues raised by the company are: (1) Under the facts in evidence here, was the insured 'house confined' under the house confinement clause of the policy so as to entitle him to benefits? (2) Was the company as a matter of law entitled to judgment in its favor under the house confinement clause when, it claims, the uncontroverted facts show a total lack of house confinement?

The issue raised on the administrator's cross-appeal is: Where it was not reasonably possible to give notice to the company within 10 days as provided in the policy or 20 days as provided in the statutory form of policy (Minn.St. 62.0025, subd. 2) but notice was given as soon thereafter as reasonably possible, should an exception be made to the rule that disability payments are to be made only from the date of notice and the payments be made from the inception of the disability and confinement? He contends that the judgment should be for 36 months' indemnity payments for the period commencing December 1, 1960, the date the insured was placed on sick leave and confined to his house.

The administrator contends that the only questions in dispute are essentially questions of fact. He argues that the law in this state as applied by our court is that a house confinement clause in a health insurance policy should be liberally construed so as to give effect to the insured's purpose and intent when purchasing the contract, and that a health or disability policy containing a confinement clause covers an insured who is substantially or materially confined to his home. He contends that it is not necessary that the insured be bedridden, completely helpless, or continuously confined to his home and unable to move about, to meet the condition of confinement. The company claims, however, that the insured was not house confined within the clear meaning of the policy and that the judgment for the administrator is not justified by the evidence and is contrary to law.

It appears from the record that the insured had been living in retirement in Minneapolis at the time of death. He had been an employee of the Northwestern National Bank of that city for 48 years before reaching his compulsory retirement age of 65 on September 3, 1961. His last position at the bank was that of manager of its North American office, a position which he held until he began a leave of absence from the bank on December 1, 1960. He continued on his leave of absence until his retirement September 3, 1961.

The administrator testified that until May or June 1959 his father, the insured, appeared to be in very good health; that he The trial court found that the insured was given a physical and neurological examination at the clinic on July 13 and 14, 1959, by Drs. Kendall B. Corbin and A. E. Brown, who determined that he was suffering from a moderate degree of hypertension and a possible degenerative central nervous system disease; that subsequent examinations in November 1960 and June and December 1961 revealed gradual worsening of his condition, and in the opinion of Dr. Corbin, the insured was totally and permanently disabled in November 1960 with a...