Corral v. Fidelity Bankers Life Ins. Co., 2

• Court: Court of Appeals of Arizona
• Writing for the Court: HATHAWAY
• Citation: 129 Ariz. 323,630 P.2d 1055
• Parties: Lydia CORRAL, Mario Corral, Alfredo Corral and Lupe Corral, Plaintiffs/Appellants, v. FIDELITY BANKERS LIFE INSURANCE COMPANY, Defendant/Appellee. 3883.
• Docket Number: CA-CIV,No. 2,2
• Decision Date: 01 July 1981

Page 1055

630 P.2d 1055 129 Ariz. 323 Lydia CORRAL, Mario Corral, Alfredo Corral and Lupe Corral, Plaintiffs/Appellants,
v.
FIDELITY BANKERS LIFE INSURANCE COMPANY, Defendant/Appellee. No. 2 CA-CIV 3883. Court of Appeals of Arizona, Division 2. July 1, 1981.

[129 Ariz. 324]

Page 1056

Stanfield, McCarville, Coxon & Fitzgibbons by David A. Fitzgibbons and Robert M. Yates, Casa Grande, Richard LaPaglia, Jr., Eloy, for plaintiffs/appellants.

Wildermuth & Wildermuth by John R. Wildermuth, Coolidge, for defendant/appellee.

OPINION

HATHAWAY, Chief Judge.

Whether life insurance coverage existed at the time of the death of decedent, Alfredo Corral, no formal policy having issued, is [129 Ariz. 325]

Page 1057

the underlying question of this lawsuit. Summary judgment was entered in favor of defendant and against plaintiffs, decedent's widow and surviving children.

We must determine whether summary judgment was improperly granted because (1) a material fact issue remains as to the existence of the principal-agent relationship between the insurance company and the local insurance sales office, and (2) the conditional receipt given to the decedent upon application for insurance created a contract of insurance.

On July 11, 1977, decedent submitted to the James C. Stamm agency, a licensed independent general agency operating out of Florida, through its local agent, Jeffrey Tanham, his written application for life insurance in the sum of $60,000 with double indemnity for accidental death. On that date, he paid his first premium in the sum of $300, and received a conditional receipt. He paid a second premium of $243 to the Stamm agency on August 24, 1977, and a third premium of $242 on September 9, 1977. He was accidentally shot and killed on September 12, 1977.

In essence, plaintiffs contend that a life insurance contract existed between decedent and Fidelity; Fidelity contends that it had not accepted decedent as an insurable risk on the date of his death. The first page of the application contained the following:

"1. That Parts I and II of the Application, including any supplements or amendments to the Application, shall become part of the policy applied for. The undersigned will be bound by all representations, statements, answers and agreements pertaining to the Proposed Insured.

2. (a) That if the deposit taken with the Application is at least equal to the full first premium for the amount and plan of insurance applied for on the mode of premium payment selected, the liability of the Company shall be as stated in the Conditional Receipt bearing the same number and date as this Application.

(b) That if no deposit is taken at the time of completing this Application, the Company shall have no liability unless and until a policy is issued and the first premium is paid during the lifetime of the Proposed Insured and while the Proposed Insured's health, habits and occupation remain the same as represented in this Application."

The "conditional receipt" given decedent at the time of his application and payment for the first premium provided:

"This receipt must not be detached and delivered to the Applicant unless payment has been made and standard issuance is expected.

CONDITIONAL RECEIPT

Received $300.00 as the first premium on the life of Alfredo Corral hereinafter called the Proposed Insured, for which an Application bearing the number above is made this day to the Fidelity Bankers Life Insurance Company. This payment is made and accepted subject to the following conditions:

Insurance for the smaller of the amount applied for and the amount specified in the last paragraph of this Conditional Receipt will commence on the Effective Date, as defined below, under the terms and conditions of the policy applied for and usually issued by the Company, provided that on the Effective Date the Proposed Insured is acceptable to the Company as a standard risk under its published rules, limits and standards for the plan and for the amount applied for; otherwise, there shall be no liability on the part of the Company except to return the amount received under this Conditional Receipt. In the event that accidental death benefits or premium waiver disability benefits must be declined or rated or in some way restricted, the life insurance alone may, nevertheless, be effected subject to the terms and conditions of this Conditional Receipt. If less than the full first premium has been paid, any insurance that may be effective shall be in force only for the amount which the partial[129 Ariz. 326]

Page 1058

premium so paid can purchase when applied as an annual premium but in no event to exceed the amount applied for and the maximum limits stated in the last paragraph of this Conditional Receipt.

'Effective date' as used herein means the latest of: (a) the date of Part I of the Application; (b) the date of completion of all medical examinations, tests, x-rays, and electrocardiograms required by published Company rules but not later than sixty (60) days after the date of Part I of the Application; (c) Policy Date, if any, requested in the Application.

The Maximum Amount of Insurance which may become effective prior to policy delivery, including any amount of insurance currently in force or applied for in this Company, is (a) $100,000 of life insurance, and (b) $50,000 of accidental death benefits in conjunction with life insurance. All benefits under group and accident policies shall be disregarded in computing these limits."

It is axiomatic that summary judgment should not be granted where disputed facts exist which, if true, could affect the final judgment. Livingston v. Citizen's Utility, Inc., 107 Ariz. 62, 481 P.2d 855 (1971). The movant for summary judgment must prove lack of a genuine issue as to any material facts and failure to establish entitlement to judgment as a matter of law does not require the opposing party to file opposing affidavits. Lujan v. MacMurtrie, 94 Ariz. 273, 383 P.2d 187 (1963). Thus, to affirm the granting of summary judgment the papers of the moving party must show entitlement thereto as a matter of law, ibid, and...