Ellenwood v. Southern United Life Ins. Co., MM-90

• Decision Date: 20 July 1979
• Docket Number: No. MM-90,MM-90
• Citation: 373 So.2d 392
• Parties: Sara M. ELLENWOOD, as Personal Representative of Estate of Webster K. Ellenwood, Appellant, v. SOUTHERN UNITED LIFE INSURANCE COMPANY, a Foreign Corporation, Appellee.
• Court: Florida District Court of Appeals

Page 392

373 So.2d 392

Sara M. ELLENWOOD, as Personal Representative of Estate of Webster K. Ellenwood, Appellant, v. SOUTHERN UNITED LIFE INSURANCE COMPANY, a Foreign Corporation, Appellee.

No. MM-90.

District Court of Appeal of Florida, First District.

July 20, 1979.

Rehearing Denied Aug. 15, 1979.

Joseph A. Lane and R. Michael Kennedy of Kinsey, Vincent, Pyle, Williams & Tumbleson, Daytona Beach, for appellant.

William A. Parsons of Gosney, Cameron, Parsons & Marriott, Daytona Beach, for appellee.

ERVIN, Judge.

If the facts are undisputed and the terms of an insurance contract ambiguous was it error for the trial court to deny a motion for directed verdict in favor of the estate of decedent-insured? We conclude that it was and reverse with directions that judgment be entered for the estate.

Webster K. Ellenwood, the insured, on the date he applied for credit life insurance securing a $10,000 note maturing in two months, was suffering as he knew, from emphysema and diverticulitis. Unknown to him, and undiagnosed at that time, was that Ellenwood was then probably suffering from acute leukemia, ¹ a disease from which he died 26 days after the application was filled in and the premium accepted by the insurer's agent. No questions were asked him by the insurer's agent as to his health, nor did the application make reference to any evidence of insurability. ² Indeed, at trial, an officer of the insurer testified that the company's underwriting standards did not require such evidence for loans less than 90 days. Following the death of Mr. Ellenwood, the insurer denied coverage based upon the terms of the Evidence of Insurability clause of the master policy ³ which provided:

EVIDENCE OF INSURABILITY. The Company may require evidence of insurability satisfactory to it with respect to each eligible debtor who applies for insurance hereunder with respect to an indebtedness. If the company finds that any applicant is not an insurable risk according to its underwriting standards, it reserves the right to decline the insurance on the life by indicating its intention in writing to the creditor within 31 days from the time the individual Certificate was received by the Company. If the debtor should die during the 31 days, the insurance shall be deemed to have been in effect if the Company, acting on its regular underwriting methods, would have accepted the insurance. Any premium paid under this policy for insurance not granted will be refunded to the Creditor on demand. (emphasis supplied)

The case went to trial upon plaintiff's complaint seeking both a declaration of her rights under the policy as well as damages. Both the estate and the insurer moved for directed verdicts which were denied. At the conclusion of the trial the jury returned a verdict in favor of the insurer.

Southern Life bases its denial of coverage primarily upon the third sentence of the above clause, reasoning that since Mr. Ellenwood died within 31 days after the application was received by it, the insurance could not be deemed to have been in effect because Southern Life, acting on its regular underwriting methods, would not have issued the insurance once it discovered that Mr. Ellenwood was afflicted with leukemia. The estate responds that the sentence relied upon by the insurer must be considered within the context of the entire clause since the facts show that the insurer never required any evidence of insurability, either before Ellenwood died or 31 days after the certificate was received by it. As a result, it continues, the third sentence of the clause is ambiguous and consistent with the interpretation that the insurer's right to deny coverage existed only if it first required evidence of insurability.

Upon the facts presented there was no reason for the case to be presented to the jury. If the language of a contract is unambiguous and not subject to conflicting inferences, its construction is for the court, not the jury. Upchurch v. Mizell, 50 Fla. 456, 40 So. 29 (1905); Friedman v. Virginia Metal Products Corp., 56 So.2d 515 (Fla.1952). If, on the other hand, the facts are not in dispute (as here they were not since the evidence clearly showed that no evidence of insurability was ever requested), and there is an ambiguity in the policy, it is within the province of the trial judge not the jury to resolve the ambiguity as a matter of law. Cf. United Services Auto. Assoc. v. Porras, 214 So.2d 749 (Fla. 3d DCA 1968); New Amsterdam Casualty Co. v. Addison 169 So.2d 877 (Fla. 2d DCA 1964); United Services Auto. Asso'n. v. McCray, 348 So.2d 6 (Fla. 3d DCA 1977). Under either theory the trial court should have granted a motion for directed verdict either at the request of the insurer or the insured's estate since there was clearly no factual issue for a jury to resolve. See Furr v. Gulf Exhibition Corp., 114 So.2d 27, 29 (Fla. 1st DCA 1959).

This brings us to the next question whether, considering the commonly accepted rules governing the construction of contracts, the coverage clause of the policy was ambiguous? First, we are enjoined both by statute, Section 627.419(1), Florida Statutes (1977), and by case law, e. g., Price v. Southern Home Ins. Co., 100 Fla. 338, 129 So. 748 (1930); Feldman v. Central Nat. Ins. Co., 279 So.2d 897 (Fla. 3d DCA 1973); James v. Gulf Life Ins. Co., 66 So.2d 62 (Fla.1953), from considering an isolated sentence in a policy as determinative on the question of coverage. Rather the entire contract must be construed according to its terms and conditions and, if an ambiguity is found, the general principle is of course that such ambiguity must be construed against the party who drew the contract or chose the language used. 18 Fla.Jur., Insurance, § 407 (1971). Finally, where the terms of an insurance policy are susceptible to two interpretations, that interpretation which sustains the claim for indemnity, or which allows the greater indemnity will be adopted. Inter-Ocean Casualty Co. v. Hunt, 138 Fla. 167, 189 So. 240 (1939...