Denis v. Woodmen Acc. and Life Co.

• Decision Date: 27 May 1983
• Docket Number: No. 82-788,82-788
• Citation: 214 Neb. 495,334 N.W.2d 463
• Parties: Arlene DENIS, Appellee, v. WOODMEN ACCIDENT AND LIFE COMPANY, a Nebraska corporation, Appellant.
• Court: Nebraska Supreme Court

Page 463

334 N.W.2d 463

214 Neb. 495

Arlene DENIS, Appellee, v. WOODMEN ACCIDENT AND LIFE COMPANY, a Nebraska corporation, Appellant.

No. 82-788.

Supreme Court of Nebraska.

May 27, 1983.

Syllabus by the Court

1. Insurance. When uncertainty or ambiguity results from the wording of an insurance policy, a construction favorable to the insured will be adopted.

2. Insurance. Fair doubt in the meaning of the wording of an insurance policy will be resolved against the insurer as the drafter of the contract.

3. Insurance. An ambiguous exclusionary clause in a policy of insurance will be construed in favor of the existence of coverage.

Keith A. Prettyman of Woodmen Acc. and Life Co., Lincoln, for appellant.

Mark L. Laughlin, of Venteicher, Laughlin, Kulig & Lang, Omaha, for appellee.

KRIVOSHA, C.J., BOSLAUGH, McCOWN, WHITE, HASTINGS, CAPORALE, and SHANAHAN, JJ.

SHANAHAN, Justice.

Arlene Denis sued Woodmen Accident and Life Company to recover benefits afforded in a "Major Medical" policy. The District Court granted summary judgment in favor of Arlene, namely, that Arlene's pregnancy and the subsequent childbirth were risks covered by Woodmen's policy, and from such judgment Woodmen appeals. We affirm the District Court's judgment.

The sole question relates to a construction of language in Woodmen's policy. Arlene was not married when Woodmen issued the policy on July 16, 1979. While the policy was in force, Arlene became pregnant but was still not married. Although Arlene married during her pregnancy, her husband was never an insured under the policy. On October 29, 1981, Arlene gave birth to a child through a Caesarean section. The policy excluded "any loss caused by pregnancy, childbirth ..." unless there was a "complicated pregnancy." A Caesarean section was a "complicated pregnancy" within the terms of the policy. Woodmen's liability depends on the following: "Any pregnancy of the Insured's spouse, or of the Insured, if a woman, that originates while this policy is in force and while the Insured and the Insured's spouse are both insured hereunder, which becomes a Complicated Pregnancy shall be deemed to be an insured sickness and benefits therefor will be payable ...." Woodmen denied Arlene's claim, contending that Arlene's pregnancy without her being married was not a loss covered by the policy inasmuch as the foregoing clause required that the "Insured" and the "Insured's spouse" both be insured under the policy. Arlene claims the requirement that "Insured's spouse" be insured under the policy must be fulfilled only if the insured is married at the time the pregnancy occurs. The District Court agreed with Arlene's interpretation of the clause in question and entered judgment that Woodmen pay the applicable benefits under its policy.

The issue in this case is whether a "complicated pregnancy" of an unmarried female insured is excluded from coverage under the policy.

One can fairly interpret the clause in question in more than one way. When this condition admitting of two or more reasonable meanings does exist in an insurance policy, there is ambiguity to be resolved by a court as a matter of law. See Columbia Heights Motors v. Allstate Ins. Co., 275 N.W.2d 32 (Minn.1979).

It is a long-standing and cardinal rule in Nebraska that when an insurance policy contains uncertainties or ambiguities fairly susceptible of two different constructions, the construction favorable to the insured will prevail and thereby afford coverage. See, New Masonic Temple Ass'n v. Globe Indemnity Co., 134 Neb. 731, 279 N.W. 475 (1938); Great Plains Ins. Co., Inc. v. Kalhorn, 203 Neb. 799, 280 N.W.2d 642 (1979).

In resolving any ambiguity in an insurance policy the principle or test is not what the insurer intended the words to mean, but what a reasonable person in the position of the insured would have understood them to mean. Cf., Kent v. Dairyland Mut. Ins. Co., 177 Neb. 709, 131 N.W.2d 146 (1964); Ehlers v. Colonial Penn Ins. Co., 81 Wis.2d 64, 259 N.W.2d 718 (1977).

Here, the construction suggested by Woodmen is plausible in view of the conjunctive language in the questioned clause, and it is understandable that...