Gordinier v. Continental Assur. Co.

• Citation: 7 N.W.2d 298,69 S.D. 137
• Decision Date: 28 December 1942
• Docket Number: 8560.
• Parties: GORDINIER v. CONTINENTAL ASSUR. CO.
• Court: Supreme Court of South Dakota

7 N.W.2d 298

69 S.D. 137

GORDINIER v. CONTINENTAL ASSUR. CO.

No. 8560.

Supreme Court of South Dakota

December 28, 1942

W. F. Bruell, of Redfield, for appellant.

Sterling & Clark, of Redfield, for respondent.

WARREN Judge.

This was an action brought by the plaintiff who sought to recover permanent disability benefits due on a group life policy of insurance. A verdict on all the issues was returned by the jury in favor of the plaintiff. Defendant moved for judgment notwithstanding the verdict and the court granted the order and entered judgment for the defendant upon all the issues. A motion for a new trial was overruled and plaintiff appeals.

Appellant for some years prior to December, 1934, was employed in the Redfield, S. Dak., office of the Northwestern Public Service Company. All its employees were insured in a group insurance policy in which appellant was a participant. Appellant's insurance was of the combined life, accident and health type which, in the event of disability, the insurer or defendant would pay the amount of insurance in force at the time of the receipt of proof of disability in monthly installments according to the schedule outlined in the certificate.

The insurance was issued as of December 24, 1934, and was effective from that day and continued in force for one year. Both certificates were based upon the employer-employee relationship.

Appellant terminated her employment with above company on January 15 1935. Such an act automatically terminated the policy according to its terms, unless appellant availed herself of the privilege o having a separate and independent policy issued to her. The language in the policy relating to termination reads: "In the event of the insurance ceasing because of termination of employment with the Employer, the Employee shall have the right, upon written application and payment of the required premium to the Company within thirty-one days after the date of cessation of the insurance, to obtain without medical examination a new and individual policy. ***"

There is testimony to the effect that after leaving her position with the company, January 15, 1935, appellant felt she could not afford to pay the premiums so she dropped it. There is no evidence that appellant made application and paid the required premium for an individual policy. The fact that this insurance expired on December 24, 1936, is undisputed.

Becoming ill on January 15, 1935, appellant testified she was compelled to sever her employment at that time. An arthritic condition resulted from the incipient ailment causing appellant to claim permanent disability from January 15, 1935.

From an examination of the appellant's various assignments of error, it would seem that the respondent has grouped for the Court's convenience all of the issues for our decision into three propositions which, we believe, will dispose of the matters in contention before us. We will first treat the contract of insurance and appellant's compliance with the terms thereof with reference of notice to the company and proof of any claim for alleged disability.

A clause in appellant's policy expressly requires that the respondent or insurer must receive due notice and proof in writing of permanent and total disability during the continuance of the insurance in order that insured can recover disability payments. It reads: "Upon receipt by the Company, during the continuance of this insurance, of due notice and proof-in writing-that any Employee, while insured hereunder, and prior to his sixtieth birthday, has become permanently and totally disabled, and as a result of bodily injury or disease and will be permanent, continuously and wholly prevented thereby for life from engaging in any occupation and performing any work for wage or profit, the Company will waive further payment of premium as to such Employee and will pay to such Employee in full settlement of all obligations under this policy the amount of insurance in force hereunder upon his life at the time of receipt of due proofs of such disability, in a fixed number of instalments as shown in the Schedule of Instalment Payments below."

Appellant, although claiming total disability, disregarded compliance with terms of the contract by not giving due notice and proof (while policy was in force) until September 23, 1940. The authorities have held that failure of insured to pay premiums or furnish notice and total disability proof causes a policy to lapse, notwithstanding that the total disability began while policy was in force.

Here we have a situation in which appellant claims to have paid a premium after leaving her employment, also claiming that she was ill and was totally disabled; yet she had neglected to procure an individual policy, such as contemplated in the contract upon her leaving the employment, and had given no notice of ill-health or disability to the insurer, as required in the policy, excusing her neglect by stating that she had not read the policy and knew nothing about the provisions and had given it no attention until advised by friends several years after she had laid it away. She then procured it out of a certain box and after considering it, sought advice from her counsel, who wrote the insurer-respondent to obtain the necessary blanks.

The letter written by appellant's counsel seems to be the first knowledge of...