Dullum v. Northern Life Ins. Co.

• Decision Date: 14 July 1942
• Parties: DULLUM <I>v.</I> NORTHERN LIFE INS. CO.
• Court: Oregon Supreme Court

169 Or. 233

127 P.2d 749

DULLUMv.

NORTHERN LIFE INS. CO.

Supreme Court of Oregon.

Argued April 21, 1942.

Reversed July 14, 1942.

Insurance — Pleading — Disability

1. In action on life and permanent disability benefits policy, complaint must allege that plaintiff suffered disability as defined in policy.

Insurance — Pleading — Disability

2. In action on life and permanent disability benefits policy, defining disability as bodily injury or disease preventing insured from performing any work or following any occupation for wages or profit, complaint alleging only that plaintiff, because of his disability, could not perform any duties of his occupation of rural mail carrier, was demurrable.

Insurance — Pleading — Proof

3. In action on life and permanent disability benefits policy, where complaint alleged plaintiff's full performance of all conditions of policy, it was necessary for him to show that he furnished proof of claim as required by policy.

Insurance — Proof of disability

4. Where life and permanent disability benefits policy required insured to furnish proof of disability which had continued for not less than 90 days, proof of claim, filed less than one month after first day of insured's disability, was defective as "premature" and as affirmatively disclosing that conditions on which insurer's liability depended had not occurred when proof was filed.

Insurance — Pleading — Proof of claim

5. In action on life and permanent disability benefits policy, plaintiff, affirmatively alleging that all provisions of policy were complied with, could not prove waiver of defects in proof of claim filed before his disability had continued for time required by policy to be shown in such proof.

Insurance — Instructions — Disability

6. In action on life and permanent disability benefits policy, requiring proof of disability preventing insured from performing any work or following any occupation for wages or profits, instruction that term "disability" in policy did not mean state of absolute helplessness, but such disability as rendered insured unable to perform all substantial and material acts necessary for prosecution of his business or occupation in customary or usual manner, was error, prejudicial to defendant, as calculated to mislead jury.

Insurance — Instructions — Benefits

7. In action on life and permanent disability benefits policy, instruction to allow plaintiff specified monthly benefit, if he was disabled during stated period, was erroneous as eliminating policy provisions requiring plaintiff to show disability which would presumably thereafter prevent him from performing any work or following any occupation for compensation or profit during his life.

Insurance — Pleading — Evidence

8. In action on health and accident policy, where complaint set out only policy provisions respecting sickness indemnity, but alleged that plaintiff suffered sacroiliac sprain, resulting in total disability beginning after notice of defendant's cancellation of policy, and undisputed evidence disclosed that plaintiff suffered repeated and continuing traumatic injuries as result of his work, he was not entitled to relief under either sickness or accident indemnity provisions of policy.

Insurance — Disability claim

9. Under provisions of health and accident insurance policy for payment of monthly indemnity to insured, if affirmative proofs were furnished that insured suffered from sickness or disease contracted during continuance of insurance and was thereby totally disabled, and authorizing cancellation of policy by insurer, without prejudice to any claim originating prior thereto, no claim for sickness indemnity arose until insured was totally disabled because of sickness or disease.

Insurance — Written notice of claim

10. Under provision of health and accident policy that written notice of sickness on which claim may be based must be given insurer within ten days after commencement of disability from such sickness, claim for sickness indemnity arose on commencement of disability rather than sickness.

Insurance — Cancellation

11. An insurer had right to cancel health and accident policy, even if insured, who became totally disabled after cancellation, suffered from condition resulting in such disability in its early stages on date of cancellation.

                  See 29 Am. Jur. 1057
                  37 C.J., Life Insurance, § 311
                

Before KELLY, Chief Justice, and BAILEY, LUSK, RAND, ROSSMAN, and BRAND, Associate Justices.

Appeal from Circuit Court, Marion County.

L.H. McMAHAN, Judge.

Action by Jasper P. Dullum against the Northern Life Insurance Company on two disability insurance policies. Judgment for plaintiff, and defendant appeals.

REVERSED.

John J. Coughlin, of Portland (Griffith, Peck, Phillips & Nelson, of Portland, on the brief), for appellant.

Roy R. Hewitt and George A. Rhoten, both of Salem (Rhoten & Rhoten, of Salem, on the brief), for respondent.

This is an action by the plaintiff, Dullum, to recover on two insurance policies issued by the defendant corporation. On June 2, 1926, the defendant issued and delivered to the plaintiff its policy No. M32987, known as a life and permanent disability benefits policy, in the sum of $2,500. The only portion of this policy with which we are concerned is that which relates to the disability benefits. The relevant provisions are as follows:

"* * * If the insured shall furnish affirmative proofs that * * * he has become disabled by accident or disease as defined below, and that such disability has continued for not less than ninety days, the Company * * * will grant the following benefits: * * *

"Will pay to the insured, monthly, a sum equal to $10 for each $1000 of the Life Insurance, and will continue said monthly payments during such disability so long as the Insured shall live."

It is further provided that:

"The term `disability' as used herein shall mean bodily injury or disease, which independently of all other causes prevents the Insured from performing any work or following any occupation for wages or profit, and will, presumably thereafter during his entire life prevent him from performing any work or following any occupation for compensation or profit."

In apparent reliance on these provisions the plaintiff alleged in his complaint that his occupation was that of a rural mail carrier and that:

"* * * On or about October 27, 1937, and during the life of said policy, plaintiff became totally disabled for more than ninety days and on account of such disability plaintiff could not and did not perform any of the duties of said occupation since October 27, 1937, continuously up to the time of the filing of this complaint, and plaintiff has been continuously since October 27, 1937, until the filing of this amended complaint, under the treatment of a licensed physician, and that said disability of plaintiff consists of a sacro-iliac sprain and disability of plaintiff's back and the vertebrae and muscles thereof, and that on or about November 13, 1937, plaintiff furnished affirmative proof to the defendant of his said disability * * *."

To the first cause of action, as above set forth, a general demurrer was filed and overruled. At the close of the testimony the defendant moved for a directed verdict on the first cause of action for the reason, among others, that the plaintiff had failed to allege or prove a disability within the definition of disability contained in the policy. The motion was denied; an exception was taken and allowed, and the plaintiff received a verdict. The sufficiency of the complaint was properly challenged in the trial court and is before us for determination.

BRAND, J.

1, 2. It is elementary that the complaint must set forth that the plaintiff has suffered a disability as defined in the policy. By comparing the provisions of the policy with the allegations of the complaint, it will appear that the "disability" covered by the policy means bodily injury or disease which, independently of all other causes, prevents the insured from performing any work or following any occupation for wages or profit. The complaint contains no such allegation, but on the contrary alleges that "on account of such disability the plaintiff could not and did not perform any of the duties of said occupation", namely, that of a rural mail carrier. The disability covered by the policy is one which "will, presumably thereafter during his entire life, prevent him from performing any work or following any occupation for compensation or profit." There is no such allegation in the complaint, nor is there any allegation that the disability is permanent or that it will continue, presumably, for any period of time, the only allegation being that the disability has continued up to the time of filing the amended complaint.

There is a material distinction between an occupational policy under which the insured is entitled to benefits if he is totally disabled on account of which he can perform none of the duties of his occupation, on the one hand, and a policy conditioned upon the inability of the insured to perform any work or follow any occupation for wages or profit, on the other. This was not an occupational policy; therefore it became necessary for the plaintiff to allege the greater degree of disability required by the plain terms of the policy. App. 241, 23 N.E. (2d) 802 (1939); Buffo v. Metropolitan Life Insurance Co., 277 Ill. App. 366 (1934); Garms v. Travelers Insurance Co., 273 N.Y.S. 39 242 App. Div. 230, affirmed in 266 N.Y. 446, 195 N.E. 147 (1934); McKillips v. Railway Mail Association, 10 Wash. (2d) 122, 116 P. (2d) 330 (1941); American National Insurance Co. v. Briggs, (Texas) 70 S.W. (2d) 491 (1934); Parten v. Jefferson Standard Life Insurance Co., 30 Ga. App. 245, 117 S.E. 772 (1923); Lee v. New York Life Ins. Co., 188 N.C. 538, 125 S.E. 186 (1924); Nickolopulos v. Equitable Life Assur. Soc., 11 N.J. Misc. 371, 166 A. 178 (1933), 113 N.J.L. 450, 174 A....