Gavin v. North Carolina Mut. Ins. Co.
| Decision Date | 07 August 1975 |
| Docket Number | No. 20079,20079 |
| Court | South Carolina Supreme Court |
| Parties | Betty M. GAVIN, Respondent, v. NORTH CAROLINA MUTUAL INSURANCE COMPANY, Appellant. |
F. Henderson Moore, Morris D. Rosen and Robert N. Rosen, Charleston, for appellant.
Donald M. Holler, Moncks Corner, for respondent.
This action was brought to recover actual and punitive admages for the alleged fraudulent failure of the defendant-appellant, North Carolina Mutual Life Insurance Company, to pay the face amount of an insurance policy issued on the life of Jessie M. Gavin, deceased. Plaintiff was the wife of the deceased and the named beneficiary under the policy.
As a result of solicitation by an agent of appellant, Jessie M. Gavin submitted an application to appellant for life insurance and a policy was issued on May 28, 1973, in the face amount of $1,000.00. No physical examination was required. The insured died on November 23, 1973 and a claim was filed shortly thereafter.
Appellant refused to pay the claim because of the alleged failure of the insured to disclose in his application for the insurance a preexisting illness. After the claim was filed, the respondent (beneficiary) was twice visited by agents of appellant attempting to secure from her a release of appellant's liability under the policy. She initially refused to do so but during the second visit she signed a purported release and received a check for $51.30, representing a return of the premiums paid on the policy. Shortly thereafter respondent brought this suit on the policy alleging that appellant's agent fraudulently induced her to sign the release. Appellant answered denying the the release was fraudulently obtained and further alleged that the policy was void because of the fraudulent failure of the deceased to disclose his preexisting illness when he applied for insurance.
When the case was called for trial appellant unsuccessfully moved for a continuance because of the absence of a medical witness. Subsequently, at the conclusion of the testimony, appellant moved for a directed verdict on the grounds that the evidence conclusively showed (1) that the policy of insurance was void because of the fraudulent failure of the deceased to disclose the condition of his health at the time of making the application and (2) the beneficiary had executed a valid release of all claims under the policy. The motion was denied and all issues were submitted to the jury, resulting in a verdict in respondent's favor for $948.70 actual damages and $6,500.00 punitive damages. The verdict for actual damages apparently represented the face amount of the policy less the previous return of premiums to respondent in the amount of $51.30. This appeal is from the foregoing judgment.
Original counsel for appellant died after the trial in the lower court and the filing of briefs in this appeal. Appellant's present counsel therefore participated only in oral argument, at which time they successfully moved to be allowed to file additional portions of the trial record, without which there would have been no basis for the consideration of the exceptions filed by appellants.
The exceptions on appeal charge error in the refusal of the trial judge to grant appellant's motion for a continuance and also renew appellant's contention that its motion for a directed verdict should have been granted.
Upon the call of the case for trial, appellant moved for a continuance on the ground that a doctor, a material witness, was unavailable to testify. This motion was granted at 4 p.m. on the first day of trial so that the doctor could appear the next day. He did not appear and a second motion for a continuance was made and denied. It is argued that the failure to grant the last motion was error.
A motion for a continuance because of the absence of a material witness is addressed to the discretion of the trial judge, and his ruling thereon will not be disturbed unless it is shown that there was an abuse of discretion. Norton v. Ewaskio, 241 S.C. 557, 129 S.E.2d 517.
It is apparent that the testimony of the absent medical witness concerned an illness of the deceased prior to the time the insurance application was signed. There was no dispute as to the actual state of the insured's health; the testimony was undisputed that he had suffered a prior material illness which was not disclosed on the application for insurance. The crucial disputed issue was why this admitted prior illness was not disclosed in the application. Since there is no showing that the doctor could have testified to any fact other than this admitted prior illness, his failure to testify could not have prejudiced appellant. The record consequently fails to show that the denial of the motion for a continuance constituted an abuse of discretion.
This action was based upon the alleged fraudulent breach of the insurance contract. The rule has long been followed in this State that the breach of a contract, committed with fraudulent intent, and accompanied by a fraudulent act will entail liability for punitive as well as actual damages. Wright v. Public Savings Life Insurance Company, 262 S.C. 285, 204 S.E.2d 57.
In order to sustain the verdict for actual damages it was necessary to show that the policy of insurance was in full force and effect at the time of the death of the insured. It was conceded that all premiums due on the policy had been paid and that the policy was in full force and effect at the death of the insured, with resulting liability of appellant thereunder, unless it was voided by the alleged fraudulent failure of the insured to reveal on the application for the policy a prior material illness.
The insured could not read or write and signed the application for the insurance by 'touching the pen'. Since the insured could not read or write, the agent filled out the application. There was testimony that the agent did not ask the insured about any prior illness or ask any of the specific questions set forth on the application. Respondent testified that the only mention of the health of the insured was a statement by the agent: 'I see your health is alright,' to which the insured replied: 'Yeah, our health is holding up pretty good.' It is inferable that the agent filled in the answers on the application so as to show the insured in good health, with no prior illness, when, in fact, the insured had suffered a prior hospitalization about two years before which would have been revealed if inquiry had been made.
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