Crowell v. Federal Life & Cas. Co.

• Decision Date: 29 May 1975
• Docket Number: Docket No. 20070,No. 3,3
• Citation: 61 Mich.App. 377,232 N.W.2d 710
• Parties: Gerald CROWELL, Plaintiff-Appellant, v. FEDERAL LIFE AND CASUALTY COMPANY, Defendant-Appellee
• Court: Court of Appeal of Michigan — District of US

Page 710

232 N.W.2d 710

61 Mich.App. 377

Gerald CROWELL, Plaintiff-Appellant, v. FEDERAL LIFE AND CASUALTY COMPANY, Defendant-Appellee.

Docket No. 20070.

Court of Appeals of Michigan, Division No. 3.

May 29, 1975.

Leave to Appeal Denied Aug. 27, 1975.

Released for Publication Sept. 9, 1975.

White, Spaniola, Knudsen, Stariha & Potuznik, by John S. White, Muskegon, for plaintiff-appellant.

William M. Newman, Muskegon, for defendant-appellee.

Before HOLBROOK, P.J., and BRONSON and KELLY, JJ.

HOLBROOK, Presiding Judge.

In September of 1966, Gerald Crowell entered into an insurance contract with Federal Life and Casualty Company. The pertinent portions of that insurance policy state:

                "Policy section 3
                       *   *   *
                "D. Total Disability         Monthly    24 Months
                      --Sickness             indemnity  for any
                                             $200       one
                                                        Sickness
                     (1) Non-confining or
                         confining sickness
                     (2) Confining Sickness  Monthly    Lifetime
                         and continued       Indemnity  for any
                         Disability          $200       one
                         after (D1)                     Sickness
                

"Confining Sickness', means that as a result of Sickness the Insured is confined to his residential premises or yard, except for necessary vists to a hospital or doctor's office for treatment.

"Total Disability', means that as a result of Injury Sickness, the Insured is under the regular care and attendance of a duly licensed doctor of medicine or osteopathy, other than himself, is completely unable to perform each and every duty pertaining to his occupation and is not gainfully employed in any other occupation, except that if a monthly indemnity has been paid for 12 months during any period of continuous total disability, then for the balance of the period of such continuous total disability, the term total disability in addition shall mean the complete inability of the Insured to engage in any gainful occupation for which he is reasonably qualified by education, training or experience.'

The total annual premium for the policy was $201.50.

In March of 1969, Gerald Crowell had a severe heart attack. As a result of that heart attack, he was disabled. He had been employed by the Continental Motors Company and operated a used-car lot. Federal Life and Casualty paid to Crowell benefits under Section 3D(1) of its insurance policy. That section provided benefits for 24 months. Federal Life and Casualty paid approximately $6,500 under this provision.

Federal would not pay under Section 3D(2) because it found Crowell unqualified under the confinement clause. On October 27, 1971, Crowell filed suit in Muskegon County Circuit Court claiming payment of proceeds under Section 3D(2).

Apparently due to what was considered to be detrimental to plaintiff's health, a trial before the court without a jury and without plaintiff's presence was conducted. Defendant presented the testimony of its chief claims examiner, but, in the main, reliance was had upon the depositions of plaintiff's treating doctor, Claude VanAndel, D.O., the examining physician engaged by defendant, David A. Amos, M.D., and plaintiff. In a written opinion, the trial judge found: 'I am persuaded that the greater weight of evidence is that he is totally disabled and can not engage in gainful employment without danger to his health. There is no serious contention of counsel for the defendant in that this is not the case.' ¹ The court held 'However, the court is of the opinion that I may not enlarge upon the terms of the written agreement between the parties so as to render meaningless the contractual definition placed upon confining illness. Courts are obligated to refrain from rewriting contracts that are not ambiguous and I can find no ambiguities within the meaning of the confinement clause of this contract which would require going beyond the boundaries of the contract for clarification.'

Judgment was entered for the defendant on March 27, 1974. The plaintiff appeals.

While the 'confinement clause' may be reviewed generally as a single, unitary concept, it may be written in a wide variance of language, which will obviously lead to differences in construction and application. See Anno., When is one confined to house within meaning of health or accident insurance policy, 29 A.L.R.2d 1408, 1424. In general, it is said in 1A Appleman, Insurance Law & Practice, § 652, p. 570:

'The courts recognize that it is just such provisions as these which have brought health policies into disrepute, to the point where the public believes that the 'big print gives it to you, and the little print takes it away'. Since the buying public is not aware of the meaning of the average limited risk contract, the courts will hold them to be as little restrictive as possible. Such provisions as these are, at the most, considered a mode of determining the condition and extent of illness rather than a means of regulating an insured's conduct, and refer to a substantial confinement, or a condition which requires that a substantial part of the insured's time be spent indoors.' (Footnotes omitted.)

A review of the development of interpretation of this clause, throughout the country, discloses widely divergent approaches and conclusions. Possibly the best discussion is found in the exhaustive analysis in 29 A.L.R.2d, Supra, et seq., and Later Case Service. The annotator did conclude that 'the great majority of cases support the so-called liberal construction view'. (Footnotes omitted.) Id. at 1412. ² It is written, at p. 1413, that:

'Two quite generally accepted doctrines, with reference to the insured's right to recover under a specific factual situation, emerge from the cases.

'The first of these is the doctrine that 'house confinement' clauses are not violated where the insured occasionally departs from within the four walls of the house for the purpose of getting fresh air and exercise, in a bona fide attempt to improve his health, particularly where such departures are undertaken by the direction of a physician, or where he visits his physician's office or a hospital for examination and treatment.

'On the other hand, where the insured is able to, and does, leave his house for primarily business or other nontherapeutic records, he can no longer be considered within the scope of a 'house confinement' clause.' (Footnotes omitted.)

The key factors would seem most often to be (1) whether the individual is substantially confined and (2) the distinction between therapeutic purposes and business or personal purposes. ³

In Michigan, the development of the interpretation of this clause is no less unclear than in the country as a whole. In Hoffman v. Michigan Home & Hospital Association, 128 Mich. 323, 328, 87 N.W. 265, 267, 54 L.R.A. 746, 748 (1901), the Court approved an instruction given by the trial judge which stated, in pertinent part:

"(I)f you find from the testimony in this case that the plaintiff was continuously confined to his home on account of a sickness or disease covered by the terms of his policy, to the extent that he was necessarily, in good faith, there the larger portion of the time, and only went forth either from necessity for consultation with, or by direction of, his physician, Dr. Barth, in whose charge and care he was, if you so find, then and in that case the plaintiff is entitled to recover for the term so continuously confined * * *."

This would appear to fall within the substantially confined criterion. However, Hoffman was distinguished in Shirts v. Phoenix Accident & Sick Benefit Association, 135 Mich. 439, 443--444, 97 N.W. 966, 968 (1904), seemingly on the basis that 'the circumstances of (that) case are so different that it does not fall within the rule there (in Hoffman) stated'. Further, a review and comparison of the clauses as written in Hoffman and Shirts reveals small but distinct differences in language.

Shirts was relied on in Cooper v. Phoenix Accident & Sick Benefit Association, 141 Mich. 478, 104 N.W. 734 (1905), where the clause in question conditioned liability upon the insured being 'necessarily, entirely, and continuously confined to the house and subject to the calls of a registered physician in good standing.'

A more liberal approach was taken to the problem in Van Dusen v. Interstate Business Men's Association of Des Moines, Iowa, 237 Mich. 294, 211 N.W. 991 (1927). That case relied upon Letherer v. United States Health & Accident Insurance Co., 145 Mich. 310, 108 N.W. 491 (1906). The Letherer decision involved an issue of disability. ⁴

Without clear precedent to guide us, we approach this case under general tenets of insurance law, E.g., liberal construction in favor of the insured and in favor of coverage, ⁵ and believe the majority rule is the proper frame of reference. See Manuel v. American Income Life Insurance Co., 254 La. 316, 324, 223 So.2d 817, 820 (1969), where the Court stated: 'It appears to us that in view of the purpose to be served by such insurance, and the intention of the insureds when securing it, that the liberal interpretation rule is the better one to follow, * * *.' ⁶

In plaintiff's deposition the following appears:

'A. (I)n case my wife happens to go to the store, I like to go along. I can walk in the store without being in a hurry. I can take my time and walk or stroll.

'Q. (by Mr. White, plaintiff's attorney) Go around the store?

'A. Right; and if I get to feeling bad, I can walk back to the car and sit down.

'Q. This same thing happens once or twice a week?

'A. When I get bored walking around in the house, I get her to take me to Yankee's, or someplace where I can take my time, look at something, and look around.

'Q. You walk around your home, around your neighborhood?

'A. Yes, in the yard. I get out and walk around in the yard.

'Q. You have a dog?

'A. Yes, I have a Boston bull terrier that I take with me, just walk him around in order to be...