Couch v. Connecticut General Life Ins. Co., 68--246

• Court: Court of Appeal of Florida (US)
• Writing for the Court: HOBSON; PIERCE, Acting C.J., and MANN
• Citation: 216 So.2d 72
• Parties: Thomas H. COUCH, Appellant, v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Appellee.
• Docket Number: No. 68--246,68--246
• Decision Date: 04 December 1968

Page 72

216 So.2d 72

Thomas H. COUCH, Appellant, v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY, Appellee.

No. 68--246.

District Court of Appeal of Florida, Second District.

Dec. 4, 1968.

Peterson, Peterson & Harris, Lakeland, for appellant.

Gordon H. Harris, of Holland, Bevis, Smith, Kibler & Hall, Bartow, for appellee.

HOBSON, Judge.

Plaintiff-appellant, Thomas H. Couch, appeals a final summary judgment entered in favor of defendant-appellee, Connecticut General Life Insurance Company.

There exists no dispute as to the facts in the case sub judice. The plaintiff-appellant became employed as a juiceroom operator by the Juice Corporation of America in the summer of 1966, and became eligible to participate in the group insurance plan sometime in November, 1966. This insurance plan was provided by the Juice Corporation of America for its employees through the defendant-appellee, Connecticut General Life Insurance Company. On November 25, 1966, a certificate was issued to the plaintiff showing his participation in this group insurance plan. The plaintiff, along with other employees, agreed to aid in defraying the cost of the policy to his employer by allowing the employer to deduct an amount equal to thirty per cent of the premiums from his wages.

All premiums required of the plaintiff were deducted by his employer from November 25, 1966, through November 14, 1967. On November 14, 1967, the plaintiff sustained an on-the-job injury resulting in the amputation of his left leg above the knee.

Notwithstanding the fact that the Juice Corporation of America continued to deduct premiums from its employees' wages though the middle of November, 1967, the last premium payment made by the employer to the defendant-appellee covered only premiums due for the period ending August 10, 1967. At the expiration of the grace period on September 10, 1967, defendant-appellee, without notice to the individual employees, automatically discontinued its group policy insuring the employees of Justice Corporation of America as a result of the non-payment of premiums.

The question which is determinative of the case sub judice is whether or not a group insurer such as the defendant-appellee herein can be held liable under its policy, after the policy is cancelled because the employer failed to pay premiums, when the employer continues to withhold a portion of the premiums from its employees' wages. Simply stated, the question is whether or not the employer is an agent of the insurance company for the purpose of collecting premiums.

Our research has failed to reveal any controlling Florida statute or Florida case on point.

While there are some cases to the contrary, the better rule is that failure of the employer to pay the required premiums to the insurer operates to terminate the coverage of the policy. This is true despite payment by the insureds to their employer their share of the premiums due on the group policy involved. The basis of this rule is that the employer in a group insurance policy is ordinarily not considered the agent of the insurance company. Greer v. Equitable Life Assur. Soc. of United States (1936) 180 S.C. 162, 185 S.E. 68; Hanaieff v. Equitable Life Assur. Soc. of United States (1952) 371 Pa. 560, 92 A.2d 202; Milton v. Equitable Life Assur. Soc. (1954, Pa.) 102 Pittsb.Leg.J. 273; Rivers v. State Capital Life Ins. Co. (1957) 245 N.C. 461, 96 S.E.2d 431, 68 A.L.R.2d 205; Newman v. Home Life Insurance Company, 255 N.C. 722, 122 S.W.2d 701 (1963); Boger v. Prudential Insurance Company, 259 N.C. 125, 130 S.E.2d 64 (1964); and 1 Appleman, Insurance Law & Practice, § 43.

The plaintiff-appellant contends that the employer in the case sub judice should be considered the agent of the insurer for the purpose of collecting premiums and relies on Greer v. Equitable Life Assur. Soc. of United States, supra, to support his position.

The Green case reached a contrary result to the one we reach here as the group insurance policy in that case provided that while the premiums were payable by the employer, the cost of the premiums was to be borne jointly by employer and employees and limited the amount to be borne by the employees.

In the Greer case, the court stated 185 S.E. at page 70:

'Without a specific provision to that effect ¹ and regardless of other provisions of a policy of insurance with reference to the termination thereof, it cannot be disputed that, for a policy to remain in force, it is necessary that the premiums therefor be paid; and it is unnecessary to cite authority to sustain the position * * * that, Where the employer enters into a contract of insurance for the benefit of its employees and pays the premiums, such employer is not the...