Ellum v. Prudential Ins. Co. of America

Decision Date17 April 1970
Docket NumberNo. CV,CV
Citation274 A.2d 454,6 Conn.Cir.Ct. 379
CourtCircuit Court of Connecticut. Connecticut Circuit Court, Appellate Division

Gerald F. Stevens, Milford, for appellant (plaintiff).

James K. Killelea, Waterbury, for appellee (defendant).


The plaintiff brought this action to recover, as beneficiary, on an alleged life insurance policy after the death of her husband, the insured under the asserted policy. The complaint contains the following allegations. On or about May 10, 1967, agents of the defendant contacted James Albert Ellum, proprietor of Mobile Homes Service, Milford, Connecticut, concerning insurance under the employee security program of the defendant. At that time, James Albert Ellum employed James Adam Ellum as a serviceman, and the plaintiff, Celso E. Ellum, was the wife of the employee, James Adam Ellum. The agents represented to Albert and Adam that the life insurance coverage under the defendant's employee security program would be effective as of May 1, 1967, if Albert agreed to purchase this program. In reliance on and influenced by the representations made by the defendant's agents, Albert agreed to purchase the defendant's employee security program and paid the agents a premium for coverage under the program. In further reliance on these representations, Adam completed and signed, on May 10, an application for insurance coverage, including a life insurance benefit in the amount of $5000. The agents took the premium paid and represented to Albert and Adam that the coverage under the program was in effect as of May 1, 1967. On May 11, 1967, James Adam Ellum, the insured, unexpectedly died. Thereafter, the plaintiff and her representatives gave notice to the defendant of his death and demanded payment of the $5000 life insurance benefit, which has not been paid.

The defendant filed an answer to the complaint which includes two special defenses. The first of these asserts that James Adam Ellum signed an application for insurance which provided that insurance coverage would not become effective until the application had been received at the home office of the defendant and the application itself had been approved by the company. The application for insurance was received by the defendant at its home office on May 18, 1967, and rejected on or about May 24, 1967. Return of the advance premium was tendered.

The second defense states that no agent of the defendant had the authority to waive the conditions applicable to any insurance coverage resulting from the application, to modify the application, or to bind the defendant by making any promise or representation or by giving or receiving any information; and further that it was an express condition of the application for insurance that the insurance would take effect at the beginning of the calendar month the first day of which coincided with or next followed the later date of the completion by the insured of two months' continuous employment with his employer and the date of the application, provided the insurance program was then in effect and the insured was then employed by his employer. In the application, Adam stated that he had commenced continuous employment on April 17, 1967. Adam executed the application for insurance coverage on May 10, 1967, and died on May 11, 1967, which events all occurred within two months from the commencement of his employment.

The plaintiff filed a reply which included an allegation that the defendant is estopped from asserting its special defenses 'in that the plaintiff, Celso E. Ellum, beneficiary under the insurance policy of the decedent, James Adam Ellum, has been harmed by the misleading conduct of the defendant's agents which induced the decedent to change his position in reliance on defendant's agents' statements.'

Thereafter, the defendant filed a motion for summary judgment together with the affidavit of E. B. Flanagan, the agent who inserted the required information on the application. The motion for summary judgment was also accompanied by the affidavit of William B. Merritt, associate director of underwriting of the defendant's northeastern home office, whose staff approves such policies on behalf of the defendant and who is familiar with the terms and conditions of applications for insurance benefits. A copy of the application, signed by James Adam Ellum, was attached to the affidavits and marked as an exhibit. The plaintiff filed the affidavits of James Albert Ellum and Stella Kasenski, and copies of certain documents, in opposition to the defendant's motion for summary judgment.

On September 25, 1969, the motion for summary judgment was granted after argument. The trial court's memorandum of decision indicates that the court concluded that there was no genuine issue as to any material fact in this case.

In her appeal, the plaintiff presents only one assignment of error, that is, that the court erred in deciding that the pleadings, supporting affidavits on file, and exhibits did not raise an issue as to any material fact or law, and in granting the motion for summary judgment against the plaintiff's objection. Practice Book §§ 298, 299, 300, 303.

It should be noted that, among the many cases cited by the parties, the present one is unique in that the suit is not to recover on an insurance policy, because no policy had ever been issued or authorized by the defendant, nor was the premium accepted. Thus, it is obvious on the pleadings alone that the plaintiff's action is not based on a contract but rather on an application for a contract of insurance which had been rejected by the defendant.

The plaintiff concedes, as indeed she must, that no express authority was granted by the defendant, to either of the named agents who executed the affidavits in support of the motion for summary judgment, whereby they could bind the defendant by altering, modifying or waiving any conditions in the application for or the contract of insurance. Nor is there any suggestion of any existing evidential matter to raise the issue of apparent authority. Thus, at the outset, upon the record before us, there is no credible basis on which the claim of estoppel can be raised against the defendant.

We may disregard the prospectus initially presented to the employer of the decedent, because nowhere do we find any statement which was misleading or tended to mislead the plaintiff to her prejudice. Furthermore, at the end of the prospectus, in bold-face type, is found the cautionary statement: 'This is a brief description of the plan. Not a contract. The benefits are described in detail and governed by the policy.'

The application signed by the decedent also states, among other conditions precedent, that, if the application was approved by the company, the effective date of the policy would follow after at least two months of continuous employment with the employer adopting the program, if the program was not in effect when the application was made. Otherwise, the application provided, the effective date would occur 'at the beginning of the calendar month the first day of which coincides with or next follows the later of my completion of two months continuous employment with my employer (James Albert Ellum) and the date of this application, provided such program is then in effect and I am then employed by such employer.'

The receipt for payment of the advance premium given to the employer on May 10 states: 'If the said Insurance Company shall approve the application for such Program, the Program shall take effect on the Effective Date inserted on the application by the Insurance Company. If the Insurance Company shall not accept the application for such Program, the amount for which receipt is hereby acknowledged will be returned upon surrender of this receipt.'

It is undisputed that James Adam Ellum began continuous employment with the applicant employer on April 17, or three weeks and two days before the execution of the application on May 10. He died on May 11. It is not controverted that the application was received by the company on May 18 and rejected on May 26. It necessarily follows that none of the conditions set forth in the application was ever satisfied.

This situation, which appears of record, should be dispositive of the case. The plaintiff, however, asserts that the defendant is estopped from setting up its special defenses and from raising or relying on the conditions in the application which otherwise would defeat her claim. She alleges that the defendant's agents represented to the decedent that the claimed insurance coverage would be retroactive and would take effect as of May 1, eleven days prior to Adam's death. The defendant has denied that its agents had authority to modify the conditions of the application. The plaintiff does not claim in her brief that such authority was granted by the defendant. And nowhere does it appear that there was apparent authority for this purpose, in view of the plain, unambiguous language of the application and receipt, which are part of the record.

"There are two essential elements to an estoppel-the party must do or say something that is intended or calculated to induce another to believe in the existence of certain facts and to act upon that belief; and the other party, influenced thereby, must actually change his position or do some act to his injury which he otherwise would not have done.' Fawcett v. New Haven Organ Co., 47 Conn. 224, 227; Tradesmens National Bank v. Minor, 122 Conn. 419, 424, at p. 425, 190 A. 270, and cases cited therein. Estoppel rests on the misleading conduct of one party to the prejudice of the other. Franke v....

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