George Washington Life Insurance Co. v. Morgan, 1697.

• Decision Date: 08 December 1955
• Docket Number: No. 1697.,1697.
• Citation: 118 A.2d 685
• Parties: GEORGE WASHINGTON LIFE INSURANCE CO., Inc., a body corporate, Appellant, v. Mrs. Nora MORGAN, Appellee.
• Court: D.C. Court of Appeals

Page 685

118 A.2d 685

GEORGE WASHINGTON LIFE INSURANCE CO., Inc., a body corporate, Appellant, v. Mrs. Nora MORGAN, Appellee.

No. 1697.

Municipal Court of Appeals for the District of Columbia.

Argued October 10, 1955.

Decided December 8, 1955.

Laidler B. Mackall, Washington, D. C., for appellant. George B. Mickum III, Washington, D. C., also entered an appearance for appellant.

Charles S. Sures, Washington, D. C., for appellee.

Before CAYTON, Chief Judge, and HOOD and QUINN, Associate Judges.

QUINN, Associate Judge.

The questions for decision on this appeal are: (1) Whether a medical and surgical expense policy providing benefits for sickness and accident had lapsed because of late payment of premiums; (2) Whether, if the policy was not in force at that time, the insurer was nevertheless liable to appellee plaintiff below, because it was estopped to deny liability or had waived its right to assert its non-liability; and (3) Whether the sickness originated while the policy was in force.

The policy was issued to plaintiff in December 1952 and its terms required payment of monthly premiums in advance on the second day of each month, but provided a grace period of fifteen days after the premium was due, during which time the insurance was to remain in full effect. With one exception, all payments through July 1954 were made either prior to the premium due date or during the grace period. Plaintiff testified that she received a notice prior to the due date for August 1954. Failing to make payment, she received three additional notices during the same month, one of which was subsequent to the grace period. She testified that once prior to August 1954 she had made a payment after the expiration of the grace period which was retained by the insurer and that she was never notified that her policy had lapsed. She further testified that she sent a letter to the insurer explaining that payment would be forthcoming. On August 30, plaintiff sent the premiums for the months of August and September and it was stipulated that these payments were received on September 2, 1954. Both premiums were retained by the insurer. Thereafter plaintiff submitted a claim for reimbursement of medical expenses arising from a diarrhea condition. She testified that she was treated for this condition by her family physician prior to August 17; that she thereafter started hemorrhaging and as a result was hospitalized from September 9 to 16, 1954. When the insurer denied liability, she filed suit and the trial court, sitting without a jury, found that her illness originated while the policy was in force and that the policy had not lapsed because of late premium payment. The court thereupon entered judgment against the insurer for $192.50.

The record reveals that plaintiff's policy lapsed on August 17, 1954, the terminal date of the grace period. Appellant contends that it did not waive this lapse and that it was not estopped from denying liability because of its prior acceptance of a late premium. We believe this contention to be correct. The essence of waiver of lapse for non-payment of premium is an act or a course of conduct on the part of the insurer which reasonably leads the insured to believe that lapse will not be enforced.¹ The record in this case does not establish such conduct by the insurer. In considering the evidence it is to be noted that there are two provisions in the policy which have an important bearing on the pivotal question. The first is "Additional Provision No. 4" which states in substance that if any premium payment is not received by the insurer on or before its due date or within the grace period, the policy shall terminate without further notice. Thus, the insurer was not required to give plaintiff any notice that the policy had lapsed, and she could not have relied on its failure to do so as evidence that she was induced to believe...