Continental Cas. Co. v. Beaty

• Decision Date: 27 May 1969
• Docket Number: No. 42495,42495
• Citation: 455 P.2d 684
• Court: Oklahoma Supreme Court
• Parties: CONTINENTAL CASUALTY COMPANY, a corporation, Plaintiff in Error, v. Charles Sam BEATY, Defendant in Error.

Page 684

455 P.2d 684

CONTINENTAL CASUALTY COMPANY, a corporation, Plaintiff in Error, v. Charles Sam BEATY, Defendant in Error.

No. 42495.

Supreme Court of Oklahoma.

May 27, 1969.

Syllabus by the Court

1. Contracts of insurance will be liberally construed in favor of the object to be accomplished, and conditions and provisions of every contract of insurance will be construed against the insurer who proposes and prepares the policy. If a policy of insurance and provisions in connection therewith are capable of being construed in two ways, that interpretation should be placed upon them which is most favorable to the insured.

2. Where a verdict and judgment are authorized by the evidence, and another would be unwarranted, same will not be reversed on appeal on account of errors alleged to exist in the instructions given.

Appeal from District Court of Muskogee County; Claude Garrett, Judge.

Plaintiff sued upon policy issued by defendant providing indemnity benefits for total disability. Judgment was entered upon jury verdict for plaintiff and defendant appeals. Affirmed.

Rucker & Tabor, Tulsa, for plaintiff in error. Thomas A. Wallace, Sapulpa, of counsel and on the brief.

Norman & Wheeler, Chester Norman, Chal Wheeler, Muskogee, for defendant in error.

BERRY, Vice Chief Justice.

The issues in this appeal concern provisions of a group insurance health and accident insurance policy issued by plaintiff in error to defendant in error, a qualified member of the American Medical Association.

The policy provided for monthly indemnity to an eligible member in event of total disability from injury or sickness, which wholly and continuously prevented insured from performing duties of his profession. Insured, a practicing anesthesiologist in Muskogee, Oklahoma, applied for a policy carrying $500.00 monthly benefits, paying premium ($319.00) with application. Insurer accepted the application and on March 15, 1963, issued the policy.

On December 1, 1964, insured notified the company of total disability existing since November 18, 1963, and requested forms for filing proof of loss showing disability. Insured denied the claim, refused to pay under terms of the policy, and tendered back the amount of premium. Among other provisions the policy defined 'Eligible Member' as a doctor '* * * actively performing the full-time duties of his occupation.' Insured answered 'Yes' to inquiry in the application as to whether engaged full-time in his profession.

The enrollment application, after establishing grounds for eligibility asked:

'8. Do you understand and agree, under the terms of the policy issued to the American Medical Association, that:

'(b) No indemnity for loss of time is payable during the first 365 days of any period of total disability due to accident or sickness?'

Insured answer yes.

Relative to monthly indemnity the policy provided:

'If total disability of the Insured commences while the policy is in force as to the Insured, and continues throughout 365 consecutive days, the Company will pay the amount of the Monthly Indemnity stated in the Schedule for each month (or one-thirtieth of such Monthly Indemnity for each day) throughout which such total disability continues beyond such 365 consecutive days; provided that for a period of total disability due to sickness, the amount payable for total disability after the Insured's seventieth birthday, shall be one-half the amount of the Monthly Indemnity stated in the Schedule, and for total disability after the Insured's seventy-fifth birthday shall be one-fourth the amount of the Monthly Indemnity stated in the Schedule.'

Requirement as to notice of claim for benefits provided:

'Written notice of claim must be given to the Company within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the claimant to the Company at 310 South Michigan Avenue, Chicago 4, Illinois, or to any authorized agent of the Company, with information sufficient to identify the Insured, shall be deedmed notice to the Company.'

After denial of the claim for benefits insured filed this action alleging permanent disability resulting from a stroke suffered November 17, 1963, filing of proof of loss and performance of conditions of policy, and defendant insurer's continuing refusal to pay. Plaintiff asked judgment for amount of disability benefits accrued and accruing under terms of policy, as well as those becoming due after trial and judgment.

Defendant admitted issuance of the policy. However, liability was denied upon ground plaintiff was not actively engaged in occupation upon a full-time basis as stated in application, and defendant would not have issued policy had true facts been known, and tendered back the premium.

Plaintiff had practiced his specialty in Muskogee since 1946. In 1962 he had undergone surgery, was away from the city taking special training, and also while undergoing approximately a month's treatment out of state, but then returned to full-time practice. During 1963 plaintiff's practice decreased and he had made application for employment in other states. Cross-examination elicited testimony showing plaintiff's income declined from approximately $20,000.00 in 1961 to approximately $6,000.00 in 1963. There was other testimony indicating plaintiff suffered physical ailments during this time which prevented his taking cases, and also spent six months taking post graduate work in 1961--1962. Plaintiff was not hospitalized, but after suffering the stroke remained at home most of the time and was under physician's care.

The evidence showed plaintiff, the only qualified anesthetist in Muskogee, was available and answered all calls for his services until becoming physically incapacitated. Medical testimony showed plaintiff had made satisfactory physical recovery, but was incapacitated by the stroke from practicing medicine.

After plaintiff rested defendant demurred upon grounds of insufficiency of the evidence, and because plaintiff's evidence showed failure to comply with the policy terms by giving the 20 days notice provided both in the policy and under state law. Motions for directed verdict wre interposed by both parties and overruled. After receiving instructions, the jury returned a verdict for plaintiff in the amount due under the policy to that date. This appeal was perfected from the judgment entered upon the verdict.

Defendant's principal contention states:

'The insured of a health and accident policy who sues the insurance company on a claim arising under the policy must prove that he complied with the provisions as to notice and proof of loss, and where the policy provided in statutory form that notice of claim be given within twenty days after claim arose and evidence showed conclusively that notice was first received over a year after the claim arose, the insured cannot recover.'

Defendant urges the required form of notice was set forth in the policy. Having failed to give the prescribed 20 day notice, or notice as soon thereafter as reasonably possible, defendant insists the trial court erred in overruling the demurrer to the evidence, and motion for directed verdict. The authorities cited to support this argument, that giving such notice was a condition precedent to the insurer's liability, do not provide satisfactory authority.

Union Mutual Ins. Co. v. Huntsberry, 57 Okl. 89, 156 P. 327, was based upon special provisions in our early laws providing for establishment of mutual hail insurance companies...