First Nat. Bank of Anson County v. Nationwide Ins. Co., 8020DC222

• Decision Date: 04 November 1980
• Docket Number: No. 8020DC222,8020DC222
• Citation: 49 N.C.App. 365,271 S.E.2d 528
• Court: North Carolina Court of Appeals
• Parties: The FIRST NATIONAL BANK OF ANSON COUNTY, Administrator of the Estate of John Gatewood, Deceased, Plaintiff, and Bright M. Gatewood, Additional Plaintiff, v. NATIONWIDE INSURANCE COMPANY and Hornwood, Inc., Defendants.

Page 528

271 S.E.2d 528

49 N.C.App. 365

The FIRST NATIONAL BANK OF ANSON COUNTY, Administrator of

the Estate of John Gatewood, Deceased, Plaintiff, and Bright M. Gatewood, Additional Plaintiff, v. NATIONWIDE INSURANCE COMPANY and Hornwood, Inc., Defendants.

No. 8020DC222.

Court of Appeals of North Carolina.

Nov. 4, 1980.

E. A. Hightower, Wadesboro, for additional plaintiff-appellee.

Henry T. Drake, Wadesboro, for plaintiff-appellant Bank.

Taylor & Bower by George C. Bower, Jr., Wadesboro, for defendants-appellants.

WELLS, Judge.

Basic to a determination of this case is the construction of the first sentence of the Waiver of Premium Clause. The policy provided as follows:

WAIVER OF PREMIUM IN EVENT OF TOTAL DISABILITY

If a Certificateholder becomes totally disabled prior to his 60th birthday and satisfactory proof is furnished within one year after he becomes totally disabled and while the Policy is in force, that his total disability has continued uninterruptedly for a period of at least six months and to the date that proof is furnished, the Company will continue the Life Insurance on the Certificateholder without payment of premium during the further uninterrupted continuance of his total disability. If the Certificateholder dies during such a period of total disability but prior to the date that satisfactory proof of total disability is furnished, the Company will pay an amount equal to that which would have been continued if satisfactory proof of his total disability had been furnished. The amount of insurance continued or paid will be the amount for which he was insured on the date he became totally disabled, subject to any reduction at a specified age or other specified time as stated in the Schedule of Benefits.

If a Certificateholder dies while insurance is being continued in accordance with this provision, the Company will pay the amount then being continued on his life, provided notice of his death is given to the Company's home office within one year after the date of his death.

Proof of the continuance of total disability satisfactory to the Company must be submitted to the Company's home office on request, but not more often than once a year after total disability has continued for two years. The Company may, at its own expense, examine the Certificateholder when and so often as it may reasonably require, but not more often than once a year after disability has continued for two years.

Defendants contend that the sentence clearly created a condition precedent to the insurer's liability, requiring that the employee-insured furnish proof of his disability to defendant Nationwide's home office within the specified time. On this ground, defendants assign error to the trial court's denial of defendants' motions to dismiss at the close of plaintiff's evidence and at the close of all evidence, and for denial of defendants' motion for judgment notwithstanding the verdict.

As the finder of fact in this non-jury trial, the judge found this sentence to be ambiguous and susceptible of explanation by extrinsic evidence. The trial court made findings of fact

that the only contact or communication relative to or concerning the policy between Nationwide Insurance Company and Hornwood, Inc. or between said insurance company and employees of Hornwood, Inc. were (sic) by Hornwood, Inc.;

that under the terms of the policy the certificate holder was not required to make any reports or keep any records but that all of those duties and responsibilities were placed on the policyholder according to the terms of the policy;

That prior to his death, the certificate holder, John Gatewood, was not, under the terms of the policy, required to notify the defendant, Nationwide Insurance Company, of his total disability;

That under the terms of the policy satisfactory proof was furnished to the defendant, Hornwood, Inc., that John Gatewood, certificate holder, was totally disabled.

That under the terms of the policy, the only requirement of the certificate holder was that the certificate holder furnish proof of total disability to the company, Nationwide Insurance Company, upon request.

Upon his findings of fact, the trial court entered the following pertinent conclusions:

Upon the foregoing findings of fact, the Court concludes as matters of law that the section of the policy entitled "Waiver of Premium in Event of Total Disability" applies and no premiums were required to be paid to maintain the policy in force after August 1, 1974 because of his continued total disability for more than six months' time and his accidental death occurring prior to the insurance company's receiving notice of his total disability;

And that by virtue of said section the policy was in full force and effect at the time of John Gatewood's death on December 9, 1975;

And that the Group Policy of Insurance as it related to John M. Gatewood, Class C certificate holder, was in full force and effect on the date of his death, December 9, 1975;

An insurance policy is a contract between the parties, and the intention of the parties is the controlling guide in its interpretation. Hawley v. Insurance Co., 257 N.C. 381, 387, 126 S.E.2d 161, 167 (1962). Insurance policies must be given a reasonable interpretation. Where there is an ambiguity and the policy provision is susceptible of two interpretations, one of which imposes liability upon the company and the other does not, the provision will be construed in favor of coverage and against the company. Williams v. Insurance Co., 269 N.C. 235, 238, 152 S.E.2d 102, 105 (1967); Insurance Co. v. Surety Co., 46 N.C.App. 242, 244, 264 S.E.2d 913, 915 (1980). The words in the policy having been selected by the insurance company, any ambiguity or uncertainty as to their meaning must be resolved in favor of the beneficiary and against the company. Trust Co. v. Insurance Co., 276...