Continental Casualty Company v. Robertson

• Decision Date: 28 June 1957
• Docket Number: No. 16444.,16444.
• Citation: 245 F.2d 604
• Parties: CONTINENTAL CASUALTY COMPANY, Appellant, v. Michael S. ROBERTSON, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

245 F.2d 604 (1957)

CONTINENTAL CASUALTY COMPANY, Appellant, v. Michael S. ROBERTSON, Appellee.

No. 16444.

United States Court of Appeals Fifth Circuit.

June 28, 1957.

John E. Simpson, Robert M. Hitch, Savannah, Ga., Hitch, Miller & Beckmann, Savannah, Ga., of counsel, for appellant.

Gilbert E. Johnson, Savannah, Ga., for appellee.

Before HUTCHESON, Chief Judge, and TUTTLE and CAMERON, Circuit Judges.

CAMERON, Circuit Judge.

The main issue before us here is whether the court below erred in submitting to the jury the question whether poliomyelitis first manifested itself in appellee's child¹ after the effective date of a Family Poliomyelitis Expense Policy issued by appellant insurance company; and if so, whether recovery could be had against the company, not only for expenses provided by the policy, but for the penalties imposed by Georgia statute in cases where payment is refused in bad faith.² Appellee made written application for the policy and paid the premium July 7, 1954, and the undated policy declared its effective date to be July 22nd.³ The crucial language of the policy is this: "When any member of the family shall, by reason of poliomyelitis which first manifests itself after the effective date of this policy, require treatment commencing while this policy is in force * * * the Company will pay for the following items of expense * * *"

The trial court submitted to the jury the question of when polio, from which the child was ultimately found to be suffering, first manifested itself; and the jury returned a general verdict in favor of appellee for the full amount of expenses he had incurred, including also the statutory penalty and attorney's fee. Appellant takes the position that its motion for directed verdict, made at the conclusion of the plaintiff's evidence and renewed after defendant had put in its evidence, should have been granted.⁴

The rule generally applicable to the construction of insurance contracts has been thus stated by the Court of Appeals of Georgia:⁵ "The words employed in a contract of insurance are to be taken and understood in their plain, ordinary, usual and popular sense, * * *. Also, it is a cardinal principle of insurance law that a policy or contract of insurance is to be construed liberally in favor of the insured and strictly as against the insurer. The policies are prepared by the company by experts and legal advisers acting in the interest of the company, and the insured has no voice in the selection and arrangement of the words employed."

Michelle Frances Robertson, appellee's infant daughter, was stricken⁶ July 18th with an illness which, on July 26th, was declared by the doctors to be Poliomyelitis. The crucial question is when, during the days intervening between July 18th and July 26th, the illness "manifested itself" to be polio. The evidence upon which solution of that question must be based was given chiefly by appellee and by Dr. Schley, a pediatrician, and Dr. Waring, an orthopedist. From that evidence, viewed from the standpoint most favorable to appellee, these facts appear.

The infant became ill July 18th, and a general practitioner was called in, who found a sore throat and fever and administered penicillin. The family doctor returned to town on the 19th and relieved the physician first called, and the infant was brought to his office. He found the same symptoms present and gave a second injection of penicillin. She was brought back to his office on the 20th and, chiefly because she had not responded to the penicillin, she was taken to a hospital where other doctors were called into consultation. At that time she experienced difficulty in walking and the congestion in nose and throat persisted. All of the doctors, proceeding with the caution which ordinarily leads them to view all afflictions at that time of year as such, suspected that the illness might be polio; but they were unable to diagnose it as polio because all of the symptoms then existing were commonly found in a number of other diseases.⁷ But, although he had asked them "many many times," they did not advise appellee that they diagnosed the child's illness as polio until July 26th, which was the first time the symptoms had become sufficiently pronounced to permit them to classify it with any degree of assurance.

The tendency of the Georgia law to emphasize the "usual and common signification" of word meanings makes dictionary definitions important in determining whether, as contended by appellant, the evidence required the court to hold, as a matter of law, that polio had manifested itself on or before July 22nd. The transitive verb "manifest" is thus defined:⁸ "To show plainly; to make to appear distinctly; to put beyond question or doubt; to display; exhibit; reveal; prove; evince; evidence." The essential import of this definition is to recognize the verb "manifest" as embracing the concept of demonstrating plainly, distinctly, or beyond question.⁹

Appellant's argument is bottomed upon the contention that the policy before us would not impose liability upon the company if polio had its origin or inception on or prior to July 22nd. The company could have chosen language of such meaning, but it did not do so. It inserted a word possessing a more exacting connotation, one contemplating the advancement of the disease beyond the point of origin and to the state where its presence was plain, distinct or beyond question or doubt. The evidence before the court below did not sustain appellant's position that, as a matter of law, polio had "manifested itself" on or before July 22nd.¹⁰ Under these well settled principles, the court did not err in denying appellant's motion for directed verdict insofar as it related to appellee's expense outlay.

We think, however, that the court below committed error in permitting recovery of the twenty-five percent penalty and attorney's fees provided by the Georgia statute.¹¹ The company received from its agents (with whom appellee was connected) who had written the policy, a letter dated July 21, 1954 in which it was stated, "By the evening of the twentieth, the doctor diagnosed the illness of one child as polio." While the court correctly held that appellee was not bound by this statement, it, together with other circumstances revealed by the record, in our opinion rescued appellant from any obligation to pay the penalties provided in the quoted statute.¹²

The judgment of the lower court awarding appellee recovery of the full amount of expenses incurred by him is, therefore, Affirmed; and that portion of the judgment allowing recovery for statutory penalty and attorney's fees is Reversed and judgment rendered here for the appellant.

1 A baby two and one-half years old.

2 We will deal briefly also with appellant's claim that the court below committed error in certain remarks made by it in the presence of the jury.

3 Action was begun in a Georgia State Court and removed to the Federal Court because of diversity, and appellee sought to have the insurance contract reformed so as to make it effective at an earlier date. This position was based upon the fact that the written application was air-mailed from Atlanta to the Chicago home office of the company on July 7th,...