Clubb v. Sentinel Life Ins. Co.

• Decision Date: 28 March 1935
• Docket Number: 25464.
• Citation: 181 Wash. 284,42 P.2d 792
• Parties: CLUBB v. SENTINEL LIFE INS. CO.
• Court: Washington Supreme Court

42 P.2d 792

181 Wash. 284

CLUBB v. SENTINEL LIFE INS. CO.

No. 25464.

Supreme Court of Washington, En Banc.

March 28, 1935

Appeal from Superior Court, Thurston County; John M. Wilson, Judge.

Action by Carl Clubb against the Sentinel Life Insurance Company. Judgment for plaintiff, and defendant appeals.

Reversed and remanded with instructions.

George F. Hannan, of Seattle, and John H. Dunbar of Olympia, for appellant.

Vanderveer & Bassett and John Geisness, all of Seattle, for respondent.

HOLCOMB Justice.

Respondent had judgment in the court below upon the verdict of a jury in the full amount sued for, of $1,245, for permanent total disability benefits alleged to be due respondent. Appellant admitted that it owed respondent $394.28, which it tendered into court.

On April 4, 1929, a policy of accident insurance was issued to respondent in which policy it was stated that his occupation was license inspector and his duties were, 'inspector office and traveling duties only.' The policy was kept in force until January or February, 1932, when respondent lost his employment as license inspector for the state, since which time he had taken up no new occupation. On November 16 1932, respondent was struck by an automobile and has since suffered a partial paralysis on the left side of his body which, according to the evidence, not only interferes with the movement of the left arm and leg, but prevents him from assuming any mental responsibility or doing any sustained work.

The material parts of the policy are these:

'Or if such injuries shall within ninety days from date of accident wholly and continuously disable the insured from performing any and every kind of duty pertaining to his occupation, for the period of one day or more, so long as the insured lives and suffers such continuous total disability, the company will pay him the weekly accident indemnity specified.

'Or if such injuries shall within ninety days from the date of the accident or immediately following a period of total disability, continuously disable the insured from performing one or more important daily duties pertaining to his occupation or for total disability beginning more than ninety days from the date of the accident causing the disability, the company will pay for the period of such disability or disabilities, but not exceeding twenty-six consecutive weeks, one-half of the weekly accident indemnity specified. * * *

'Provided no claim shall be made for surgical benefits under the schedule of operations, if the insured on account of such injuries for which weekly indemnity is payable shall enter a public licensed hospital and be continuously confined therein solely on account of said injury, weekly indemnity otherwise payable for the period of such confinement, but not exceeding twelve consecutive weeks for any one such injury, will be increased fifty per cent. * * *

'1. This policy includes the endorsements and attached papers, if any, and contains the entire contract of insurance except as it may be modified by the company's classification of risks and premium rates in the event that the insured is injured after having changed his occupation to one classified by the company as more hazardous than that stated in the policy, or while he is doing any act or thing pertaining to any occupation so classified, except ordinary duties about his residence or while engaged in recreation, in which event the company will pay only such portion of the indemnities provided in the policy as the premium paid would have purchased at the rate but within the limits so fixed by the company for such more hazardous occupation.'

After his injury, appellant had information that he had ceased to be a license inspector and was doing other work classified by its schedule as more hazardous work. This resulted in a dispute between respondent and appellant which was later settled by respondent agreeing to accept weekly total disability benefits of $20 and by accepting a rebate on the premiums from June 30, 1932. This settlement was evidenced by a rider attached to the policy signed both by the company and respondent, which reads:

'Endorsement.

'In consideration of a reduction of $5.00 in the weekly benefits extended under the policy of which this endorsement is a part, it is understood and agreed that coverage extended by the policy is reduced to the following:

"Principal Sum ............. $5,000.00

"Weekly Accident Benefits ...... 20.00

'The premium applying to this policy is accordingly reduced to $21.50 per year or $5.38 quarterly.

'Accepted Carl Clubb Date Mar. 15, 1933.

'Attached to and forming a part of Policy No. A-117279 issued by Sentinel Life Insurance Company to Carl Clubb of Olympia, Washington.

'Date effective June 30, 1932.

'F. T. Harvey, President.

'Countersigned

'M. F. Lindsay (G. R.),

'Registrar.'

Thereafter, inasmuch as whatever rights respondent had were fully matured, he did not pay further premium. Appellant paid respondent weekly indemnity at the rate of $20 per week until August 31, 1933. In October, 1933, having caused respondent to be examined by its physician, who reported that respondent was no longer totally disabled but only partially disabled, appellant then offered to pay respondent partial disability benefits commencing October 15, 1933, which were refused and this suit by respondent followed.

The sum of $394.28 tendered into court by appellant includes total disability benefits at $20 per week from August 31, 1933, the date of its last payment, to October 15, 1933, and partial disability benefits at the rate of $10 for six months thereafter. Respondent sued for the full indemnity of $25 per week from the beginning of his disability to the date of trial, for which the jury awarded a verdict and judgment was entered thereon by the trial court. $880 had theretofore been paid to respondent and credited by him.

In one of its affirmative defenses, appellant alleged that a dispute existed as to the extent of respondent's disability, and that the settlement was made in accordance with the instrument above set out. Respondent in his reply simply denies each and every allegation contained in the affirmative defenses.

It is to be noted that the policy in this case differs from that Before us in Storwick v. Reliance Life Insurance Co., 151 Wash. 153, 275 P. 550. The decision in that case can therefore be of little help in deciding this case, so far as determining the terms of the policy are concerned.

The policy in this case did, however, state that the occupation of respondent was that of a license inspector and stated his duties. A statement as to occupation refers to the time when made, and is not an admission that the same occupation was that of insured at the time of a later accident; nor a warranty that insured will continue in that occupation or will not engage in any other occupation. 4 Couch on Insurance, § 892. Elmore v. Southern Surety Co., 207 Iowa, 872, 224 N.W. 32; United States Fidelity & Guaranty Co. v. McCarthy (C. C. A.) 50 F. (2d) 2. Consequently, there was a question of fact for a jury to determine, whether or not respondent was prevented from following the particular business or occupation of the insured even though he might be able to perform to some extent some other business or occupation. Elmore v. Southern Surety Co., supra.

There was a conflict between the expert witnesses as to what the degree of disability of respondent was, which was also a question for a jury, under proper submission, to determine.

Appellant at proper times moved for a new trial and for judgment notwithstanding the verdict, the last of which is the only error we find necessary to discuss.

Respondent asserts that the purported settlement was void and that the trial court did not err in refusing to rule that he was bound thereby as a matter of law. Respondent also asserts that as a matter of fact there was no actual dispute; that there was not consideration therefor; and that he was simply compelled to accept the reduced amount because of the pressure of his financial means.

No issue of overreaching, fraud, or mistake was tendered in the pleadings of respondent, nor was there any testimony admitted to support such a contention. Respondent testified on cross-examination that the settlement agreement about the policy was signed in the presence of his then attorney, naming him, who is known to the court to be a competent and reliable attorney.

'* * * The law favors an amicable settlement of claims of this character, and when such a settlement appears to have been fairly made, and has not been secured by fraud, false representations, or overreaching, it must be sustained. [Citing cases.]

'To avoid a settlement on the ground of fraud requires clear and convincing proof.' Nath v. Oregon Railroad & Navigation Co., 72 Wash. 664, 131 P. 251, 252.

One similar circumstance in this case to the above-cited case, is that for several months respondent retained the payments made to him under the settlement without questioning them. Had he been misled or defrauded, as now contended, he should have...