Blum v. Prudential Ins. Co. of America

• Decision Date: 05 February 1975
• Citation: 333 A.2d 277,132 N.J.Super. 204
• Parties: Mildred S. BLUM, Plaintiff-Appellant, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 204

132 N.J.Super. 204

333 A.2d 277

Mildred S. BLUM, Plaintiff-Appellant, v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant-Respondent.

Superior Court of New Jersey Appellate Division.

Argued Jan. 14, 1975.

Decided Feb. 5, 1975.

Henry J. Catenacci, Newark, for plaintiff-appellant (Podvey & Sachs, Newark, attorneys).

Garrett E. Brown, Jr., Newark, for respondent (Stryker, Tams & Dill, Newark, attorneys).

Before Judges MATTHEWS, FRITZ and BOTTER.

PER CURIAM.

The trial judge entered summary judgment holding that plaintiff is not entitled to an additional $10,000 in coverage on the life of her deceased husband because he was not 'actively at work on full time' on April 1, 1969, the date that the increase in insurance went into effect on a group policy. We concur.

In 1947 defendant issued a group insurance policy to the trustees of the American Institute of Certified Public Accountants Insurance Trust. The policy afforded life insurance benefits of $10,000, later increased in 1954 to $20,000. Prior to his death Max L. Blum was a senior partner in an accounting firm and was insured under that policy. His wife, plaintiff herein, was the designated beneficiary for death benefits.

By amendment effective April 1, 1969, entered into between defendant and the successor trustee of the aforesaid trust, the life insurance coverage was increased to $30,000, subject to the conditions contained in said group policy amendment. Paragraph III(ii) of said amendment provides that the increase in insurance shall not apply:

* * * in the case of an Employee who was insured under the Policy on March 31, 1969, and who is not actively at work on full time on April 1, 1969, until return to work on full time (a retired Employee shall be deemed to be actively at work on full time when he is not in medical confinement.)

Paragraph II.2. of the amendment defines a full-time 'Employee' who is a partner or proprietor as one who 'devotes at least thirty hours per week to the conduct of the business of the proprietorship or partnership.' A notice to participating firms in early 1969 described the new benefits available for an additional premium and advised further that the increase in insurance becomes effective for personnel 'only if actively at work; otherwise such insurance becomes effective on the day of return to active work.' The notice also stated that retired partners who are insured will receive the additional insurance 'only if the individual is not confined for medical or surgical purposes.' The notice specified that the 'Plan as formally adopted and policies issued thereunder to the Trustee will control.'

For a number of years before his death Blum had a heart ailment, and for that reason he and his wife lived in Florida for three or four months each winter. Since his firm's office was in New Jersey, the last time he was in his office during the winter of 1968--69 was in October 1968, before leaving for Florida. While in Florida his work consisted of telephone conferences and some conferences at his apartment with clients who were also in the Miami area, according to the testimony of Mrs. Blum. She testified that she served lunch while they were talking business and then she would 'shoo them out when I felt it was too much for him.'

In a deposition Mrs. Blum testified that on March 30 or 31, 1969, she and her husband returned from Florida to see his doctor in New York. Blum spent about one hour at home on the morning of March 31 conferring with his managing partner. He saw his doctor in New York in the afternoon of March 31, returned home, and then, later in the afternoon, was taken by ambulance to a hospital in Newark. He was immediately placed in the intensive care unit. His wife stated she did not know if he was conscious, since she was allowed to see him for only five minutes each hour and was not permitted to talk to him. He remained in that condition until the next day, April 1, 1969, when at 4:30 p.m. he died.

In these circumstances it is clear that Blum was not 'actively at work on full time on April 1, 1969,' as required by the group policy amendment. Defendant has not contended that Blum failed to satisfy the 30-hour a week 'full time' requirement; simply that he was not 'actively at work' on the critical date. The contention of appellant is that Blum qualified since he was still an active member of his accounting firm, doing executive work, in the general time period prior to his death. Appellant contends that the phrase 'actively at work' may mean different things in different situations; that it is ambiguous; that as a phrase of limitation it should be construed strictly against the insurer, citing Butler v. Bonner & Barnewall, Inc., 56 N.J. 567, 576, 267 A.2d 527 (1970), and that the objectively reasonable expectation of the policyholder (Bryan Const. Co. v. Employers' Surplus Lines Ins. Co., 60 N.J. 375, 377--378, 290 A.2d 138 (1972), aff'g in part and rev'g in part 116 N.J.Super. 88, 281 A.2d 97 (App.Div.1971)),...