Haskins v. Occidental Life Insurance Co. of California

• Decision Date: 03 November 1972
• Docket Number: No. LR-71-C-177.,LR-71-C-177.
• Citation: 349 F. Supp. 1192
• Parties: John T. HASKINS, Plaintiff, v. OCCIDENTAL LIFE INSURANCE CO. OF CALIFORNIA, Defendant.
• Court: U.S. District Court — Eastern District of Arkansas

349 F. Supp. 1192

John T. HASKINS, Plaintiff, v. OCCIDENTAL LIFE INSURANCE CO. OF CALIFORNIA, Defendant.

No. LR-71-C-177.

United States District Court, E. D. Arkansas, W. D.

November 3, 1972.

COPYRIGHT MATERIAL OMITTED

Ralph E. Wilson, Osceola, Ark., and Philip Robbins, Phoenix, Ariz., for plaintiff.

W. S. Mitchell and Robert Lowry, Little Rock, Ark., for defendant.

Memorandum Opinion

HENLEY, Chief Judge.

This diversity case is a suit upon a policy of accident insurance issued in 1966 by the defendant, Occidental Life Insurance Co. of California, to the then wife of plaintiff, John T. Haskins of Little Rock, Arkansas, Mrs. Joanne Parrish Haskins. The policy was in the principal sum of $50,000, and the Company undertook to pay that sum to the beneficiary, Mr. Haskins, on account of the accidental death of the insured. The Company also undertook to pay to the insured the principal sum in the event of her accidental loss of specified portions of her body and to pay one-half of the principal sum in the event of accidental loss of one hand, or one foot, or the sight of one eye. The policy contained a number of "Exceptions" and specified that no benefits would be payable under the policy for loss resulting from suicide or attempted suicide regardless of the sanity or insanity of the insured.

Between the effective date of the policy and June 7, 1970, Mr. and Mrs. Haskins were divorced, and she remarried. However, the policy was kept in force, and there was no change of beneficiary. On the date just mentioned the insured died following her ingestion of a quantity of sleeping pills. She left no suicide note. The death was investigated by the Little Rock Police Department, by the Coroner of Pulaski County, Arkansas, and by the Arkansas State Medical Examiner.

Following the death of the insured, Mr. Haskins, through his law partner, Mr. James H. Larrison, Jr., made demand on the Company for payment of the principal amount of the policy. That demand was not complied with, and this suit was filed on September 16, 1971.

The defendant answered in due course and pleaded suicide on the part of the insured and also pleaded that plaintiff had not complied with the proof of loss requirement contained in the policy.

In early October of the current year the case came on for trial before Court and jury. Prior to the commencement of the trial counsel agreed that the proof of loss issue would be submitted to the Court and that the only issue to be submitted to the jury would be that of suicide, with respect to which issue the defendant assumed the burden of proof.

The evidence reflected the cause of death and also dealt with the personality of the insured and with her conduct preceding the death. It was rather clearly established that the insured was a highly unstable woman, that she had serious mental or emotional problems, and that she might have had a tendency toward suicide. However, as stated, she left no suicide note, there were no witnesses to the death, and the drugs that caused the death might have been taken accidentally.

After the evidence had been concluded instructions with respect to the suicide issue were settled in chambers, and at the conclusion of those proceedings the Court announced that it was ruling against the defendant on the proof of loss issue.

The suicide issue was then argued to the jury, and the jury was instructed on that issue. The jury by its verdict found that the insured had not committed suicide or at least that the defendant had not carried its burden of proving by a preponderance of the evidence that the insured had intentionally taken her own life.

Due to a controversy between the parties about interest entry of judgment was deferred. Counsel submitted informal briefs dealing with that controversy, and counsel for the defendant requested the Court to reconsider its ruling on the proof of loss issue. No complaint has been made about the jury's verdict on the issue of suicide, and the Court will say at this point that the jury's finding was certainly a permissible one in the light of the evidence.

In view of counsel's request for a reconsideration of the Court's ruling on the question of proof of loss the Court has carefully studied relevant policy provisions and certain evidence relevant to that issue. The Court has come to the conclusion that its initial ruling was correct, but that the issue merits discussion.

The basic insuring agreement, which appears on the first page of the policy, was that the Company would "pay a benefit for loss of life, loss of sight, or loss of hands or feet, resulting from accident within 90 days from the date of the accident, subject to the provisions, definitions and exceptions in this policy."

The policy then went on to specify benefits payable for various losses, to define certain terms, and to set out certain "Exceptions," including the suicide exception that has been mentioned.

The list of exceptions was followed by certain "General Provisions." The Court is concerned with the General Provisions entitled, respectively, "Notice of Claim," "Claim Forms," "Proofs of Loss," "Time of Payment of Claims," "Payment of Claims," and "Legal Actions."

The "Notice of Claims" provision required that written notice of a claim be given within 30 days after the occurrence or commencement of a loss or as soon as possible thereafter.

In the provision entitled "Claims Forms" the Company obligated itself to provide suitable forms within 15 days after receipt of a notice of claim. That provision then went on to state: "If such forms are not furnished within fifteen days after the giving of such notice, the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting within the time fixed in this policy for filing proofs of loss, written proof covering the occurrence, the character and the extent of the loss for which claim is made."

The "Proofs of Loss" provision required the submission of written proof of loss within an initial period of 90 days after the date of loss, which period would in some circumstances be extended to as much as a year but no longer unless the claimant should be legally incompetent.

The "Time of Payment of Claims" provision specified that any benefit payable under the policy would be paid immediately upon receipt of due written proof of loss.

The "Payment of Claims" provision was to the effect that in the case of accidental death the benefit would be paid to the named beneficiary, and that other benefits would be paid to the insured.

The "Legal Actions" provision was as follows: "No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished."

As has been said, the insured died on June 7, 1970. On June 15 of that year Mr. Larrison, who has been mentioned, wrote a letter to the Company identifying the insured by name, and the policy by number. The letter stated that demand was being made on the Company on account of the death of the insured, and a request was made that claim forms be furnished. The defendant concedes that this letter met the Notice of Claims requirement of the policy.

On June 30, 1970, a representative of the Company replied to Mr. Larrison's letter but did not transmit any claim forms. Instead, the Company requested further information as to the death. The writer pointed out that Mr. Larrison's letter gave no details of the death, and that if the insured had died from natural causes and not from accident, no benefit was payable under the policy.

Mr. Larrison did not reply to that letter, and no other information was furnished to the Company and no proof of loss was ever filed by plaintiff or on his behalf. There is no evidence that the Company ever made any investigation of the death of the insured prior to the filing of the suit well after the maximum time for the filing of a proof of loss had expired.

The position of the Company is that the proof of loss requirement was a valid requirement and that substantial compliance with it was a condition precedent to recovery on the policy. The plaintiff denies that that position has merit, and affirmatively plaintiff contends that the failure of the Company to supply forms as requested by Mr. Larrison amounted to waiver of the requirement in question.

Insurance policies of all sorts commonly contain provisions requiring insureds or beneficiaries to give notices of claims or occurrences or to supply proofs of loss, or to do both. The purpose of those requirements is to put the insurer on notice that a claim is being or may be made and to enable the insurer to make a prompt and proper investigation so that it can appraise its position and the extent of its exposure, and so that it can protect itself from fraud. National Casualty Co. v. Johnson, 1956, 226 Ark. 737, 293 S.W.2d 703. There is a difference between a "notice of claim" and a "proof of loss." A notice of claim is generally informal, and its principal purpose is to notify the insurer that a loss or accident has occurred. A proof of loss, which generally comes later, is designed to give more details about the nature and extent of the loss. Ibid. Where an accident policy is involved, the proof of loss should be sufficient to identify the insured, should advise that the injury or death was the result of accident, and should state the cause of the accident. Ibid. at page 740 of 226 Ark., 293 S.W.2d 703, citing 45 C.J.S. Insurance § 987, p. 1219; see also Dortch v. New York Life Insurance Co., 8 Cir., 1959, 268 F.2d 149.

Problems arising in connection with such requirements have been the subject of numerous decisions by the Supreme Court of Arkansas, the Court of Appeals for the Eighth...