Hargraves v. Continental Assur. Co.
| Decision Date | 12 January 1970 |
| Docket Number | No. 5--5055,5--5055 |
| Citation | 247 Ark. 965,448 S.W.2d 942 |
| Parties | , 41 A.L.R.3d 1411 D. T. HARGRAVES, Jr., Appellant, v. CONTINENTAL ASSURANCE COMPANY, Appellee. |
| Court | Arkansas Supreme Court |
W. G. Dinning, Jr., Helena, for appellant.
Anderson & Anderson, Helena, for appellee.
Appellant D. T. Hargraves, Jr., claimed that, under the terms and conditions of a group policy issued by appellee Continental Insurance Company to Interstate Grocer Company, he was entitled to recover medical expenses incurred by him. The trial court found that appellant was not a full time employee and therefore excluded under the terms and provisions of the policy coverage. For reversal appellant relies upon the following points:
'I. The appellant was insurable under the terms and conditions of the master policy and the application attached thereto.
II. After the issuance of the certificate of insurance and the acceptance of premiums thereon, the appellee had the burden of proof showing that the appellant came within the exclusion provisions of the policy.'
The record shows that Mr. Hargraves is a partner in the Hargraves Insurance Agency and as such is a general agent for appellee. In such capacity he had participated in placing the master policy here involved with Interstate Grocer Company in 1959. In 1966 he began to acquire stock ownership in Interstate Grocer Company and thereafter became a member of the Board of Directors. Later he was elected Vice President. A certificate of insurance under the group policy was issued to him in January, 1967, upon an application that made no inquiries about the status of the applicant relative to temporary or part time employment. With reference to his duties Mr. Hargraves testified as follows:
'Q. Now as a Vice President, which I believe you show that you are, what are your duties with the corporation?
A. My duties are, I would say, would by if you call them a duty, to consult with Mr. Max Moore, the principal, who is the President and generally operates the business. I have been going over there a couple of times at least a week and sometimes going over to sign checks when he wasn't there, taking at times inventories, check over the accounts receivable, check over the accounts receivable on occasion, consult with him about the condition of the equipment, buildings, etc.
Q. Is that in your capacity as Vice President or member of the Board? Or as both?
A. It would be as both--as first Vice President and member of the Board.
Q. Do you have a fixed salary as Vice President?
A. No, I do not.'
The policy provision in question here provides
(4)ELIGIBILITY
(a) CLASSIFICATION AND DEFINITION: All individuals in the following classes are
eligible for insurance under the Policy
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Class : Definition
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: All Employees
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(b) EXCLUSIONS: All individuals in the following classes are to be excluded
from coverage:
Drivers & Part Time or Temporary
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Employees
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We find more than ample evidence to substantiate the trial court's finding, sitting as a jury, that appellant was not a full time employee.
It has been suggested that the phrase 'Drivers and part time or temporary employees' can be construed, because of the disjunctive 'or', to exclude only those persons whose employment status is on a casual, transient or transitory basis without any idea of a permanent or prolonged status, rather than those whose regular employment is not full time. We do not agree. The phrase 'part time' is defined by Merriam-Webster New International Dictionary (2d ed.) as:
On the other hand 'temporary' is defined as:
'Lasting for a time only; existing or continuing for a limited time; not permanent; ephemeral; transitory; as, temporary relief; a temporary position.'
We think the better usage of the word 'or' here is to mean in the alternative, Hines v. Mills, 187 Ark. 465, 60 S.W.2d 181 (1933), because otherwise the term 'part time' would add nothing to the class of persons excluded.
It is also suggested that Hargraves acquired a status of coverage under our decision in Palmer v. Standard Life & Accident Ins. Co., 238 Ark. 585, 383 S.W.2d 285 (1964), not only with respect to his status as an employee but also in connection with the exclusion. We do not agree. The policy in the Palmer case provided:
'* * * Certifies that a Group Accident and Health Policy has been issued to the Employer shown below, and that the Employee named herein became eligible for benefits, subject to the terms of the Policy, on the Effective Date indicated. * * * provided that on the Effective Date shown above he is then regularly performing the duties of his occupation; otherwise the Effective Date shall be the date of his return to active duty.'
The facts there showed that Palmer had a working arrangement with a grain company whereby he promoted sales of the grain company's commodities and the grain company in turn made collections from farmers for Palmer's work in dusting the crops. Since Palmer at the time of the injury was still performing the same occupation in the same manner as when the policy was issued, we held that he was an employee within the terms of the policy. In so doing we said: '* * * The great weight of authority is that the term 'employment', as used in a policy of group insurance, refers to a status rather than a contractual relationship.' We understand the Palmer case as saying just that and do not understand it to mean that when a person obtains a certificate of insurance he then has a status of coverage notwithstanding the exclusions of the policy.
Affirmed.
I feel that the majority has not only misconstrued the effect of the holding in Palmer v. Standard Life & Accident Ins. Co., 238 Ark. 585, 383 S.W.2d 285, but has also ignored a cardinal rule of construction of insurance contracts. I also feel that the majority has misconstrued appellant's argument relating to the application of the Palmer case. It treats the contention of appellant as though he were asserting that the rule there followed would be applicable to a 'status of coverage.' I do not so interpret the argument, but submit that appellant correctly asserts that the rule is applicable to his status as an employee other than a 'part time or temporary employee.'
I consider testimony by Hargraves as to his status with the grocery company other than that set out in the majority opinion to have significance. Hargraves received no compensation from the company except for fees paid for attendance at meetings of the board of directors. The only other payments made were the dividends paid him as a stockholder. He said that he signed company checks on numerous occasions and weekly payroll checks sometimes; that he would supervise the preparation of the payroll and checks when Moore was absent; that he consulted with Moore about the stock, the condition of the trucks, the progress of salesmen in making company sales; that he checked the accounts receivable and often assisted in collection of delinquencies. He estimated that the duties he performed on behalf of the company required an average of an 'hour or so' per day. He spent most of his time at the company's place of business during one week when both Mr. and Mrs. Moore were away because of illness.
The policy provided that individuals should become insured subject to policy provisions in accordance with applications for the policy. The policyholder, Interstate Grocer Company, was required to furnish the names of all individuals who from time to time became eligible for insurance. The individuals insured were defined as those who make written request to the policyholder on company forms and agree to contribute toward the payment of premiums, subject to certain conditions not here material.
Appellant asserts that he was insurable under the terms and conditions of the master policy. He also argues that appellee failed to meet its burden of proving that appellant was excluded...
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