Exstrum v. Union Cas. & Life Ins. Co.

• Decision Date: 06 December 1957
• Docket Number: No. 34243,34243
• Citation: 86 N.W.2d 568,165 Neb. 554
• Parties: Hazel EXSTRUM, Appellee, v. UNION CASUALTY AND LIFE INSURANCE COMPANY, a corporation, Appellant. *
• Court: Nebraska Supreme Court

Page 568

86 N.W.2d 568

165 Neb. 554

Hazel EXSTRUM, Appellee, v. UNION CASUALTY AND LIFE INSURANCE COMPANY, a corporation, Appellant. ^*

No. 34243.

Supreme Court of Nebraska.

Dec. 6, 1957.

Syllabus by the Court.

1. A contract is made at the time when the last act necessary for its formation is done, and at the place where that final act is done.

2. Where a party gives a reason for his conduct and decision touching anything involved in a controversy, he cannot, after litigation has begun, change his ground, and put his conduct upon another and a different consideration.

3. When the certificate delivered to an employee, to certify that he is insured under a group or master policy, is executed by the same insurance company which issued the group policy, then such policy, the application therefor, the certificate given the employee, and all amendments and riders attached to each, together constitute the entire contract between the employee and the insurance carrier.

4. When the certificate delivered to an employee to certify that he is insured under a group or master policy is not revoked, recalled, or canceled by the insurance carrier, and proof of death is made by the beneficiary and all conditions precedent under the terms of the insurance contract are complied with, the insurance carrier is estopped to deny liability under the group insurance policy.

Stiner & Boslaugh, Hastings, for appellant.

Dryden & Jensen, Kearney, for appellee.

Heard before SIMMONS, C. J., and CARTER, MESSMORE, CHAPPELL and WENKE, JJ.

MESSMORE, Justice.

This is an action at law brought by Hazel Exstrum as plaintiff against the Union Casualty and Life Insurance Company, a corporation, defendant, in the district court for Buffalo County, the purpose of the action being to recover on a group life insurance policy issued on the life of Clayton D. Exstrum, deceased, husband of the plaintiff, wherein she was named as beneficiary. Proof of the death of her husband was made by the plaintiff, and the defendant company refused to allow her claim. By stipulation of the parties, a jury was waived and trial was had to the court. After trial to the court, judgment was rendered for the plaintiff. The defendant filed a motion for new trial which was overruled. From the order overruling the motion for new trial, the defendant appeals.

We summarize the amended petition of the plaintiff. It alleged that prior to October 1, 1954, the defendant entered into a group policy of life insurance with contributing employers and trustees and successors of the Central States, Southeast and Southwest Areas Health and Welfare Fund; that the plaintiff's husband, Clayton D. Exstrum, was an employee of the Brown Transfer Company, a contributing employer to the welfare fund, from March 5, 1954; that Clayton D. Exstrum was employed by the Brown Transfer Company as a truck driver and dock worker, but not working regular hours; that he was a regular, active employee of the Brown Transfer Company and remained so up to and including the date of his death on January 19, 1955; that Clayton D. Exstrum became a member of the union, and by virtue of an agreement between the truck drivers' union and the Brown Transfer Company, the latter remitted payments directly to the Central States, Southeast and Southwest Areas Health and Welfare Fund of Chicago, Illinois, which were the premiums for the insurance in this matter; that the defendant issued and delivered to Clayton D. Exstrum a certificate of life insurance setting forth the effective date of such insurance as October 1, 1954; and that the Brown Transfer Company commenced remittance to the defendant in accordance with instructions. It was further alleged that such amounts were accepted and retained by the defendant. The plaintiff alleged the death of her husband, the proof thereof, and claim made to defendant; that the policy of insurance was in full force and effect, all premiums paid thereon, and all conditions precedent to the establishment of liability complied with; and that on March 3, 1955, the defendant, by letter to the plaintiff, refused to pay under the policy of insurance. The plaintiff prayed for judgment in the amount of $2,500 and attorney's fees as provided under the statutes of Nebraska.

The defendant's answer, after making certain admissions, alleged that the policy of insurance did not become effective as to the decedent for the reason that he was not actively at work on and after January 1, 1955, the effective date of the policy; that the policy was an Illinois contract; and that under the law of Illinois the certificate of insurance was not considered a part of the insurance contract and there could be no right of action on the certificate issued to the insured as distinguished from the master policy. The answer prayed for dismissal of the plaintiff's action.

The plaintiff filed a motion for permission to file a reply which was allowed by the court to be filed at the time of the decision of the court finding for the plaintiff. The reply alleged that the defendant was estopped to claim any other defense to the policy than that evidenced by a letter denying liability which will be discussed later in the opinion.

While the defendant contends that the trial court abused its discretion in permitting the plaintiff to file a reply as heretofore indicated, we conclude that there was no prejudicial error on the part of the trial court in granting the plaintiff the right to file the reply, and the trial court did not abuse its discretion as contended for by the defendant.

The facts are not in dispute. The record discloses that the group insurance policy was issued as part of a plan to provide life insurance benefits for members of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen, and Helpers of America, which will hereinafter be referred to as the union. The assured named in the policy was the trustees and successors of the Central States, Southeast and Southwest Areas Health and Welfare Fund, which will hereinafter be referred to as the fund. The fund is, by written agreement, a trust. The general plan was that the employers having union contracts, and who are referred to in the insurance policy as 'contributing employers,' would contribute on behalf of their union members to the fund, and the fund in turn would pay premiums for group life insurance on the employees who were union members.

The Brown Transfer Company of Kearney, Nebraska, had been a contributing employer with respect to union members then in its employ since the creation of the fund in 1950. The union had a contract with the Brown Transfer Company requiring it to make contributions to the fund for each union member employee, after 30 days had elapsed following such employee becoming a member of the union. Clayton D. Exstrum, hereinafter referred to as Exstrum or the decedent, was employed by the Brown Transfer Company on March 5, 1954, and became a union member on September 13, 1954. The Brown Transfer Company made contributions to the fund for and on behalf of Exstrum. These contributions to the fund were made in connection with report and remittance forms. Four copies of these forms were made. The Brown Transfer Company retained one copy, and was sent to the La Salle National Bank of Chicago, Illinois, the receiving bank, one to the union, and one to the fund. The bookkeeper for the Brown Transfer Company identified certain exhibits which are the remittance sheets for the payment of premiums on Exstrum's insurance made by the Brown Transfer Company for the insurance on the life of Exstrum from and after November 1, 1954, to January 15, 1955. There is apparently no controversy with reference to the payment of the premiums by the Brown Transfer Company. We need not discuss these separate payments or the exhibits exemplifying them.

We deem it advisable at this point to set out some of the provisions of the insurance policy here involved.

A 'contributing employer' is defined in the insurance policy as follows: '* * * an Employer in good standing who is making payments into a Trust Fund, which is administered by the Assured for the purpose of providing insurance benefits for a class or classes of employees of such Employer pursuant to an agreement between the Assured and the Employer.'

The original policy was amended, wherein an eligible employee is defined as follows: "Eligible Employee' as used in this policy means an employee actively at work with a Contributing Employer whose employment is covered under the collective bargaining agreement establishing the Central States, Southeast and Southwest Areas Health and Welfare Fund.'

Paragraphs 1, 2, 3, and 4 of the policy amendment, relating to the effective date of insurance, provide as follows: '1. The effective date of this policy as to an employer becoming a Contributing Employer after April 1, 1952 shall be the first (1st) day of the calendar month following two (2) full calendar months from the date such employer becomes obligated to make his contributions to the Policyholder. The effective date as to such Contributing Employer may be a date earlier than that set forth by agreement between the Contributing Employer, the Policyholder, and the Company.

'2. Each employee employed on the effective date of his employer's insurance, for whom contributions have been made for two (2) full calendar months on his behalf prior thereto, is insured on such effective date.

'3. Each employee not insured on the effective date of his employer's insurance is insured on the first (1st) day of the calendar month following two (2) full calendar months of contributions made by his employer on his behalf.

'4. Each employee not in active employment on the effective date of his insurance after the effective date of this policy shall be insured on the first (1st) day of his employment.'

The policy also contains this provision with reference to issuance of certificates: 'The...