Gulf Guar. Life Ins. Co. v. Duett
| Decision Date | 07 March 1996 |
| Docket Number | No. 93-CA-00133-SCT,93-CA-00133-SCT |
| Citation | 671 So.2d 1305 |
| Parties | GULF GUARANTY LIFE INSURANCE COMPANY v. Tammy DUETT, Administratrix of Billy Dewayne Duett, Deceased. |
| Court | Mississippi Supreme Court |
Appeal No. 924809 from Judgment dated November 23, 1992, Gray Evans, Ruling Judge, Humphreys County Circuit Court.
Stephanie M. Rippee, Butler Snow O'Mara Stevens & Cannada, Jackson, W. Scott Welch, III, Butler Snow Firm, Jackson, for appellant.
Roy O. Parker, Jr., Tupelo, for appellee.
Before PRATHER, P.J., and PITTMAN and McRAE, JJ.
I. STATEMENT OF THE CASE
This case involves the interpretation of a contract for credit life insurance between Billy Duett (Billy) and Gulf Guaranty Life Insurance Company (Gulf Guaranty). In October 1989, Billy Duett bought a new pick-up truck, which he financed through the Guaranty Bank and Trust Company of Belzoni, Mississippi. The loan was for $26,100.90, and was to be paid in three annual installments of $8,700.30. The installments were to become due beginning May 15, 1990, and the final payment was to be due May 15, 1992.
Billy purchased credit life insurance on the loan from Gulf Guaranty. He was issued a certificate of insurance and a schedule. The certificate clearly stated that its provisions were subject to the Group Credit Insurance Policy (the master policy), which was held by the bank.
The schedule issued to Duett indicated the following: (a) "amount of insurance"--"$26,100.90", (b) "type of loan"--"level", (c) "life premium"--"673.90", and (d) "Term of Ins.--Months"--"3 ANN PAY OF $8,700.30 EA BEG. 5-15-90".
The certificate of insurance that accompanied the schedule reads as follows:
BENEFIT: If this Certificate provides Level Life Insurance, the death benefit is level for the term of coverage and is equal to the Amount of Insurance shown in the Schedule. If this Certificate provides Reducing Life Insurance, the death benefit reduces throughout the term of coverage, beginning with the Amount of Insurance on the Date of Loan, decreasing uniformly each month by an amount equal to the "Amount of Insurance" divided by the number of months in "Term of Insurance--Months" both shown in the Schedule on the reverse side.
Billy Duett died July 24, 1991; at that time, he owed $8,700.30 on his truck loan. Gulf Guaranty paid $8,700.30 in death benefits. Billy's wife, Tammy Duett (Tammy), was named administratrix of Billy's estate. After unsuccessfully making demands on Gulf Guaranty, she brought suit in the Circuit Court of Humphreys County for $17,400.60--the difference between the $26,100.90 "amount of insurance" and the $8,700.30 amount of benefits already paid. She also sued for punitive damages. Both parties moved for summary judgment. The trial judge granted summary judgment in Tammy's favor and ordered Gulf Guaranty to pay $17,400.60 in additional death benefits and $15,000 in punitive damages, plus interest. On appeal, Gulf Guaranty raises the following issues:
A. WHETHER TAMMY DUETT IS ENTITLED TO ANY ADDITIONAL DEATH BENEFITS UNDER THE TERMS OF THE GROUP POLICY AND THE INDIVIDUAL CERTIFICATE OF INSURANCE ISSUED TO BILLY DEWAYNE DUETT?
B. WHETHER THE "INCORRECT PREMIUM" PROVISION GOVERNS?
C. WHETHER GULF GUARANTY'S ACTIONS JUSTIFY AN AWARD OF PUNITIVE DAMAGES.
II. LEGAL ANALYSIS
The standard of review when a trial court issues a summary judgment is as follows:
We review de novo the record on appeal from a grant of a motion for summary judgment. In Brown v. Credit Center, Inc., 444 So.2d 358, 362 (Miss.1983), we interpreted Rule 56 and the standards that the trial courts should use in considering a motion for summary judgment. We explained that
The trial court must review carefully all of the evidentiary matters before it--admissions in pleadings, answers to interrogatories, depositions, affidavits, etc. The evidence must be viewed in the light most favorable to the party against whom the motion has been made. If in this view the moving party is entitled to judgment as a matter of law, summary judgment should forthwith be entered in his favor. Otherwise the motion should be denied.
Northern Elec. Co. v. Phillips, 660 So.2d 1278, 1281 (Miss.1995) (citations omitted). Gulf Guaranty's arguments are analyzed according to these principles.
Gulf Guaranty argues that Billy:
purchased level credit life insurance coverage at three different levels, one for each of the three terms of coverage specified in his certificate. Billy Dewayne Duett died during the third level term of coverage, and during that term his coverage was for the level amount of $8,700.30. As a consequence, Gulf Guaranty's payment of $8,700.30 to the Bank fulfilled Gulf Guaranty's obligations under the policy and the certificate. No additional policy benefits or interest is due.
In support of this argument, Gulf Guaranty points out that the term of insurance is listed on the schedule as three annual payments of $8,700.30 each, beginning May 15, 1990. According to Gulf Guaranty, the "clear and unambiguous" language of the contract indicates that Billy purchased level insurance at three different levels, which entitled him to coverage in the following amounts: (a) $26,100.90 prior to May 15, 1990, (b) $17,400.60 from May 16, 1990 until May 15, 1991, and (c) $8,700.30 from May 16, 1991 until May 15, 1992. 1
Guaranty also cites the master policy, which outlines the procedure for calculating the premiums for credit life insurance:
Premiums--Life: The required premiums for Life Insurance for each one hundred dollars ($100.00) of "Amount of Insurance" and for each month of the "Term of Insurance--Months" are shown in the table below.
Type Premium
Reducing 6 2/3 cents
Level 13 1/3 cents
Joint Reducing 11 7/12 cents
Joint Level 23 1/3 cents
The premiums for other amounts of insurance and terms of insurance are in direct proportion to the premium rates quoted above.
According to Gulf Guaranty, when this provision is applied, Billy's premium under its interpretation of the policy would have been $673.90--which is exactly what Billy was charged. On the other hand, Gulf Guaranty argues that "if Duett's coverage was at one level amount for 31 months as the plaintiff argues, his total premium would have been approximately $1,095.04, almost twice what he actually paid."
To the contrary, Tammy argues that her husband purchased level insurance and that she is entitled to the entire amount of coverage--$26,100.90. To support her argument, she cites the definition of level life insurance given in the certificate of insurance, which states that level life insurance is "level for the term of coverage and is equal to the amount of insurance."
Our familiar rule of contract interpretation is that a clear and unambiguous contract will be enforced as written. Century 21 Deep South Properties, Ltd. v. Keys, 652 So.2d 707, 717 (Miss.1995). Furthermore, Heritage Cablevision v. New Albany Elec. Power System of City of New Albany, 646 So.2d 1305, 1313 (Miss.1994) (quoting Osborne v. Bullins, 549 So.2d 1337, 1339 (Miss.1989)). Moreover, "[t]he familiar public policy" in this State is that "courts must interpret the terms of an insurance policy (and the statutes from which they derive) liberally in favor of providing coverage for the insured." Aetna Cas. and Sur. Co. v. Williams, 623 So.2d 1005, 1008 (Miss.1993).
Undisputedly, the schedule shows that Billy bought "level" insurance and that his "amount of insurance" was $26,100.90. Under the definition of level insurance in the certificate of insurance, neither the premium amount nor the "Term of Ins.--Months" entry is relevant to the calculation of death benefits. Therefore, Gulf Guaranty's arguments on this point are specious. The contract indicates that Billy's coverage was to be "level" for the "amount of insurance" of $26,100.90, which would entitle Tammy to the remaining death benefits she seeks to recover.
In the alternative, Gulf Guaranty argues that, if its interpretation of the policy is incorrect, then this situation is governed by the "Incorrect Premium" provision of the policy. That provision states:
Incorrect Premium: If the premium charge for either life or disability insurance in connection with any loan is less than the premium which should have been charged according to the rates specified above, then the maximum amount of insurance for which the company will be liable will be reduced to the amount which the premium that was actually charged would have purchased under the premium rate specified according to the term of insurance. If any excess premium is inadvertently charged, the amount of the excess shall be refunded promptly as soon as the excess is discovered.
To refute this argument, Tammy cites Standard Life Ins. Co. of Indiana v. Veal, 354 So.2d 239 (Miss.1977), in which the insurance company argued that a spouse was not covered on a joint policy because the premium charged was that charged for a single coverage policy. The Veal court held...
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