Cudd v. John Hancock Mut. Life Ins. Co., No. 0031

• Court: Court of Appeals of South Carolina
• Writing for the Court: GOOLSBY
• Citation: 279 S.C. 623,310 S.E.2d 830
• Parties: Albert D. CUDD, as Administrator of the Estate of Kenneth Joe Cudd, Appellant, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Respondent. Ella W. CUDD, Appellant, v. JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Respondent.
• Decision Date: 28 December 1983
• Docket Number: No. 0031

Page 830

310 S.E.2d 830 279 S.C. 623 Albert D. CUDD, as Administrator of the Estate of Kenneth
Joe Cudd, Appellant,
v.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Respondent.
Ella W. CUDD, Appellant,
v.
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, Respondent. No. 0031. Court of Appeals of South Carolina. Dec. 28, 1983.

Page 831

[279 S.C. 625] Howard S. Thomas and James J. Raman, Spartanburg, for appellants.

William M. Grant, Jr., of Haynsworth, Perry, Bryant, Marion & Johnstone, Greenville, for respondent.

GOOLSBY, Judge:

An administrator and a designated beneficiary brought these actions to collect medical and life insurance benefits respectively under a group policy issued by the respondent, John Hancock Mutual Life Insurance Company, to the decedent, Kenneth Joe Cudd, through his employer, the Kohler Company. Albert D. Cudd, the decedent's administrator, and Ella W. Cudd, the decedent's designated beneficiary under the group policy's life insurance provision, appeal the lower court's direction of verdicts in both cases. We affirm.

The evidence in the two cases, which were consolidated for appeal, is substantially the same. The issues on appeal involve [279 S.C. 626] an interpretation of a policy provision, the admissibility of certain evidence, the impact of the Labor Management Relations Act, 1947 [29 U.S.C. §§ 141 et seq.], and the effect of a state statute mandating that group health insurance policies contain continuation and conversion privileges. 1978 S.C. Acts 547.

The facts are largely undisputed. John Hancock issued a group policy to the employees of the Kohler Company. The decedent

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was one such employee. At midnight on February 1, 1979, he and other employees walked off their jobs on strike. Fifty-two (52) days later on March 25, 1979, the decedent, still out on strike, received injuries in a car crash. He was hospitalized, lived three more days, and died on March 28, 1979.

On the last full work day before the strike began, the employer distributed to supervisors and foremen and posted on company bulletin boards pursuant to its contract with the union a notice addressed to all employees. The notice counseled that "[e]mployees who do not work ... will not be covered for ... Company Fringe Benefits, unless the employee pays the full premium separately." The announcement also warned that "the Company may permenently [sic] fill with new employees, the jobs vacated by strikers."

Kohler Company discontinued paying its share of the premiums due under the group policy when the decedent went on strike. The decedent elected not to pay them separately.

The policy expressly states that "[e]mployment for insurance purposes terminates on the date the employee ceases active work with his ... [e]mployer...." Under the policy, an employee is

considered "actively at work" for the purposes of insurance if he reports for work on the date in question at his usual place of employment with his ... [e]mployer ... and ... he is able to perform all of the usual and customary duties of his occupation on a regular full-time basis.

An informational brochure given to all Kohler employees advised them with regard to their group life insurance coverage that should "you leave the Company for any reason before retiring, your coverage continues for 31 days after the date you terminate."

[279 S.C. 627] The appellants' principal argument centers on the trial court's direction of verdicts in John Hancock's favor. They assert that the trial court erred in ruling as a matter of law that the decedent's employment with Kohler Company terminated and he ceased active work when he left on strike.

In passing upon a defendant's motion for a directed verdict, the trial court is bound to consider the evidence in the light most favorable to the plaintiff [ King v. North River Ins. Co., 278 S.C. 411, 297 S.E.2d 637 (1982); Cain v. Noel, 268 S.C. 583, 235 S.E.2d 292 (1977) ]; and if the evidence permits but the single reasonable inference that the plaintiff has failed to make out his case a duty arises for the court to direct a verdict in the defendant's favor. Lail v. S.C. State Highway Dept., 244 S.C. 237, 136 S.E.2d 306 (1964); Owens v. S.C. State Highway Dept., 239 S.C. 44, 121 S.E.2d 240 (1961). The evidence here established such a duty in each case.

The appellants argue, however, that a withholding statement showing that Kohler Company compensated the decedent after his death for unused vacation and deducted a small sum for dependent life insurance created a jury issue regarding whether the decedent's employment with Kohler had actually terminated before he was fatally injured. Kohler, like many employers, pays employees for their earned accumulated leave when their employment with the company comes to an end. Several days after his death, the company on April 6, 1979, paid the decedent for the leave time which he had accumulated prior to going on strike. From the amount due the decedent for unused vacation, the...