Carter v. General Am. Life Ins. Co., 33568

• Decision Date: 24 February 1970
• Docket Number: No. 33568,33568
• Parties: Margaret Carney CARTER, Plaintiff-Appellant, v. GENERAL AMERICAN LIFE INSURANCE COMPANY, a Corporation, Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 253

452 S.W.2d 253

Margaret Carney CARTER, Plaintiff-Appellant, v. GENERAL AMERICAN LIFE INSURANCE COMPANY, a Corporation,

Defendant-Respondent.

No. 33568.

St. Louis Court of Appeals, Missouri.

Feb. 24, 1970.

Wilburn A. Duncan, Anthony F. Vaiana, St. Louis, Dalton, Treasure & Bullard, Kennett, for plaintiff-appellant.

Murphy & Kortenhof, Joseph M. Kortenhof, St. Louis, for defendant-respondent.

DOERNER, Commissioner.

This action was brought by plaintiff as beneficiary under a group insurance policy issued by defendant to recover an accidental death benefit in the amount of $7,000, interest thereon, damages for alleged vexatious refusal to pay, and a reasonable attorney's fee. A jury was waived, and trial to the court resulted in a judgment in favor of defendant, from which the plaintiff prosecutes this appeal. We affirm.

The material facts are without substantial dispute. Plaintiff's deceased husband, Donald L. Carter, was employed by the McDonnell Aircraft Corporation on October 11, 1966, as a unit analyst, cost reduction. Prior thereto the defendant had issued to McDonnell three separate group policies covering McDonnell's employees, each of which provided for different forms of insurance. Policy G--5546 provided for life insurance coverage; policy ADD--1357 provided benefits for accidental death or dismemberment; and policy GH--1244 provided benefits for certain hospital and surgical expenses. Only two copies of each contract existed, one of which was given to McDonnell and the other retained by the defendant. Each employee of McDonnell was required to participate in the group insurance plan, and to contribute each month, by a deduction from his pay check, a part of the total amount which the defendant billed McDonnell for the cost of the three policies, the balance being paid by McDonnell. On the date Carter was employed he was given a single certificate of insurance, to which further reference will be made, in which plaintiff was named as the beneficiary. It was agreed that the deceased had never examined the group policies.

Carter resigned from his employment at McDonnell on April 5, 1968, and did not work there after that date. On April 13, 1968, he was involved in an automobile accident and died as a result of crushing injuries to his chest. Defendant admitted that Carter suffered an accidental death within the meaning of the group policy providing that coverage.

Each of the group insurance policies contained a provision that the insurance under that policy terminated on the date of termination of the employee's employment with the employer, McDonnell. However, the group life insurance policy contained a conversion clause, under which an employee whose employment had terminated had the right, upon his application to the defendant within 31 days after such termination and the payment of the applicable premium, to obtain '* * * a policy of life insurance, without disability or other supplementary benefits, in any one of the forms then customarily issued by the Company, except Term Insurance, in an amount not to exceed the amount of life insurance which ceases because of such termination. * * *' And the last paragraph of the termination clause of the group life insurance policy reads that if the employee is entitled by the terms of the policy to convert all or part of his insurance to an individual policy but dies during the period allowed for its conversion, the amount of insurance which might have been converted would be paid as a claim under the policy, whether or not application for conversion had been made or the first premium therefor had been paid. Based on his earnings, Carter was insured for life insurance in the amount of $7,000. Inasmuch as Carter had died within the thirty-one day conversion period, upon receipt of notice and proof of claim defendant promptly paid the sum of $7,000 to plaintiff as the amount due under the life insurance coverage.

Plaintiff also claimed that she was entitled to $7,000 as an accidental death benefit, and defendant conceded that the plaintiff would have been entitled thereto had Carter died prior to April 5, 1968, the day he resigned. As stated, the group accidental death and dismemberment policy provided, as did the group life insurance policy, that the insurance on any employee insured under that policy terminated automatically on the date of termination of the employee's employment. However, unlike the group life insurance policy, the group accidental death policy did not contain any conversion clause. Defendant took the position that under the terms of the group accidental death policy such coverage had ceased on April 5, 1968, the date Carter resigned from the defendant, and therefore refused to pay. We observe, parenthetically, that the third group insurance policy, that for medical care coverage, is not here involved.

Both the group life insurance policy and the group accidental death policy contained a paragraph which stated that the defendant would issue to each employee insured under the policy an individual certificate setting forth a statement of the insurance protection to which he was entitled, to whom payable, and such limitations and conditions in the master policy as pertain to the individual employee. However, rather than three individual certificates, what the defendant in fact issued to Carter was one certificate evidencing his coverage under all three of the group policies; and what was, and was not, stated in the certificate of insurance forms the basis of plaintiff's action.

As to what was stated in the certificate plaintiff points to three paragraphs, the first of which appears on page four, under the heading 'Conversion Privilege,' and reads:

'(1) If the insurance, or any portion of it, on any Employee covered under this policy ceases because of termination of employment for any reason whatsoever, or because of termination of membership in the class or classes of Employees eligible for insurance under this policy, or because such insurance is terminated under the terms of the provision entitled 'Extended Insurance,' then such Employee shall be entitled to have issued to him by the Company, without evidence of insurability, upon his written application to the Company made within thirty-one days after such termination, and upon payment within the said period of thirty-one days of the premium applicable to the class of risks to which he belongs and to the form and amount of the policy at his then attained age, nearest birthday, a policy of life insurance, without disability or other supplementary benefits, in any one of the forms then customarily issued by the Company, except Term Insurance, in an amount not to exceed the amount of life insurance which ceases because of such termination. Any such individual policy so applied for by any such Employee shall be effective the first day following the expiration of the conversion period.'

The second paragraph likewise appears on page four of the certificate, under the heading 'Death Benefit During Conversion Period,' and states:

'If the Employee is entitled by the terms of the Policy to convert all or part of his insurance to an individual policy but dies during the period...