Dublinske v. Pacific Fidelity Life Ins. Co., 2--56842
| Decision Date | 25 June 1975 |
| Docket Number | No. 2--56842,2--56842 |
| Citation | 230 N.W.2d 924 |
| Parties | Leo DUBLINSKE, Administrator of the Estate of Marc Dublinske, Deceased, Appellant, v. PACIFIC FIDELITY LIFE INSURANCE COMPANY et al., Appellees. |
| Court | Iowa Supreme Court |
McCullough Law Firm, Sac City, for appellant.
Mack, Hansen & Gadd, Storm Lake, for appellees.
Considered en banc.
This case had its genesis in a dispute over the amount due plaintiff under a policy of credit-life insurance issued by defendant Pacific Fidelity Life Insurance Company (hereinafter Pacific) to plaintiff's decedent. The other defendants admitted ultimate responsibility to pay the insurance proceeds under a reinsurance agreement. Plaintiff claimed the amount due under the policy is $2680.20, while defendants asserted the correct amount to be $1518.78. Trial court found in favor of defendants and rendered judgment in the lesser amount. Plaintiff appeals. We affirm.
Marc L. Dublinske bought a car in Texas under a contract calling for payment in installments. The amount he originally owed under the contract was $2680.20, and the term of indebtedness was 30 months. The unpaid balance decreased under a schedule upon payment of monthly installments of $89.34 each. Past-due installments bore interest. Included in the original amount of $2680.20 was a premium of $50.25 for a credit-life insurance certificate on the life of Dublinske as debtor, issued by Pacific under a group policy and payable to General Motors Acceptance Corporation as creditor-beneficiary and to Dublinske's estate as secondary beneficiary.
After the original transaction, Dublinske purchased another item, not involved here, which increased the monthly payments and the unpaid monthly balances shown on the original schedule.
Dublinske later prepaid the contract in full. Thereafter, and within the original 30-month term of indebtedness, he died in an automobile mishap. At the time of his death, the unpaid balance on the contract according to the original schedule of installments would have been $1518.78 had he not prepaid the contract.
Pacific's insurance certificate states that (Italics added.)
The parties disagreed over the meaning of the italicized words. Dublinske's administrator took the position that Pacific owes $2680.20. Pacific contended that it owes $1518.78 (originally it contended it owed $1428.18 but later admitted the correct amount is $1518.78 under its interpretation of the certificate).
Dublinske's administrator sued Pacific on the certificate for $2680.20, plus exemplary damages. The parties tried the case without a jury, and the trial court granted the administrator judgment for $1518.78. The administrator appealed.
I. The administrator claims the language of the certificate is unambiguous. He reads it thus: Pacific will pay the greater of
(a) the original balance of the indebtedness under the schedule, or
(b) the net amount necessary to discharge the indebtedness at time of death.
He asserts that the original balance of indebtedness under the schedule was $2680.20, the net amount necessary to discharge the indebtedness at time of death was zero, the former amount is greater than the latter, and therefore Pacific owes $2680.20.
Pacific reads the certificate differently and supports its reading by the testimony of a company official as to Pacific's practice. See Hamilton v. Wosepka, 261 Iowa 299, 154 N.W.2d 164; 3 Corbin, Contracts, § 543A at 79--83 (1960) (1971 Supp.). Pacific contends that 'original' modifies 'scheduled' rather than 'balance' and that 'at the time of death' does not refer only to 'the net amount necessary to discharge the indebtedness' but also to 'the original scheduled balance of indebtedness'. It reads the certificate thus: Pacific will pay the greater of
(a) the balance of indebtedness at time of death according to the original schedule, or
(b) the net amount necessary to discharge the indebtedness at time of death.
Pacific says that the balance of indebtedness at time of death according to the original schedule was $1518.78, the amount necessary to discharge the indebtedness at time of death was zero, the former is greater than the latter, and therefore it owes $1518.78.
II. We find ourselves constrained to agree with plaintiff's assertion the language of the certificate is unambiguous. We need not therefore resort to the familiar rule that since Pacific drafted the certificate its language must be...
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