Hyken v. Travelers Ins. Co., 47655

• Decision Date: 02 October 1984
• Docket Number: No. 47655,47655
• Parties: Linda HYKEN, Plaintiff-Appellant, v. The TRAVELERS INSURANCE COMPANY, Defendant-Respondent.
• Court: Missouri Court of Appeals

Page 454

678 S.W.2d 454

Linda HYKEN, Plaintiff-Appellant, v. The TRAVELERS INSURANCE COMPANY, Defendant-Respondent.

No. 47655.

Missouri Court of Appeals,

Eastern District,

Division Two.

Oct. 2, 1984.

Lewis & Rice, Mark T. Keaney, St. Louis, for plaintiff-appellant.

Eugene K. Buckley, St. Louis, for defendant-respondent.

SIMON, Judge.

The plaintiff, Linda Hyken (Hyken), appeals from the grant of defendant's, The Travelers Insurance Company's (Travelers), motion for a judgment notwithstanding the verdict (N.O.V.) in her action for breach of an oral agreement to provide life insurance for her father, Sid Siteman (Siteman). The court's judgment N.O.V. was granted following the return of a verdict of $1.00 in favor of Hyken and the denial of her post-trial motion for $50,000 plus prejudgment interest and her alternative motion for new trial solely on the issue of damages. On appeal, Hyken contends that the trial court erred in sustaining Travelers' motion N.O.V. because there was sufficient evidence that (1) Travelers agreed to issue an insurance policy covering Siteman's life; (2) a jury could reasonably infer that Travelers' home office approved the coverage prior to the execution of the insurance application; (3) if Travelers' home office did not give advance approval it ratified coverage after learning of Siteman's death; and (4) Siteman was on duty the day that the policy would be effective; (5) that the trial court erred in denying plaintiff's post-trial motion because the jury verdict determined liability correctly but the damage award was inadequate in that only evidence on damages was of $50,000. We affirm.

We shall review the evidence in a light most favorable to Hyken, giving her the benefit of all reasonable inferences not in conflict with her position and shall disregard Travelers' evidence except as it may support Hyken's action. In May, 1974, Herbert Wolkowitz, president of Inland Oil and Transport Company (Inland) contacted Insurance Consultants, Inc. also known as Reed, Stenhouse, Inc. of Missouri (I.C.I.), about the possibility of obtaining life insurance coverage for Siteman, Chairman of the Board, Treasurer and stockholder of Inland. Wolkowitz talked to I.C.I.'s agent Steve McDonald about coverage and informed him that Siteman was in his seventies, gravely ill at times, recently hospitalized, and very frail. Wolkowitz also disclosed the name of Siteman's doctor to allow for further inquiry into Siteman's health condition. In the course of ensuing discussions, McDonald told Wolkowitz that individual coverage would probably be difficult to acquire, but indicated that a group plan could be a viable option. In mid June, McDonald, after having discussed various plans for group coverage with Roger Smith, a salesman for Travelers with limited underwriting authority, contacted Wolkowitz to set up a meeting concerning these plans. During that meeting with Wolkowitz on June 14, McDonald related Smith's indication that Travelers would be willing to write a group policy for Inland. Wolkowitz was also told that Smith saw no problem including Siteman in this group plan because the home office computer had approved of the preliminary numerical data. During this meeting additional information was obtained on Siteman and general factual information acquired on Inland as requested by Smith in order to facilitate formulation of a proper policy. At the meeting Wolkowitz completed and signed an application for insurance and tendered a binder check for $329.19 which equaled the first premium. He gave these to McDonald, who would then forward them to Travelers. McDonald told Wolkowitz that if the application was signed and the binder check tendered, coverage would be bound as of that date. This statement was corroborated by Inland's outside accountant, who was a witness to the transaction. Also, McDonald testified that Smith was present at this meeting and advised Wolkowitz that Travelers' group insurance coverage was then bound. However, Wolkowitz testified that no one from Travelers was present at the meeting.

The application provided:

It is requested that the insurance be effective from 12.01 a.m. standard time at the applicant's address on (date) . No insurance shall be effective until this application shall have been accepted and the effective date approved by the company at its home office and a binder premium equal to the premium for one month shall have been paid.... This is a preliminary application.

It further states:

No agent can make any insurance effective or make, alter or discharge any insurance policy or extend the time for payments or premiums nor can the terms of any application, receipt or policy be varied or altered or its conditions waived or extended in any respect except by written agreement of the company, signed by its President, one of its Vice Presidents or Secretaries.

Wolkowitz executed the application in the names of 17 Inland employees and sent them beneficiary cards which McDonald had provided. Siteman had assigned the policy ownership to Hyken who named herself as beneficiary upon his death. Siteman was admitted to the hospital on June 15 and died on June 22. McDonald contacted Wolkowitz, on June 22nd, to tell him that Travelers requested a meeting on June 27. Prior to the meeting, Smith told Travelers' home office that Siteman had died. The home office informed Smith that no policy had been written because there was a problem with an insufficient number of employees according to Travelers' underwriting rules. The home office gave general instructions to Smith as to requirements necessary to create a plan to cover Inland. In the meeting on June 27, Smith informed Wolkowitz that the home office did not accept Inland's policy application because an insufficient number of employees were included. He returned the unnegotiated binder check and the application. Smith then proposed a policy which would cover 25 employees at a slightly higher premium. He indicated he did not believe Siteman's death would pose any difficulties. Wolkowitz, believing Siteman would be covered by the policy, agreed to this proposal. A new application was executed on June 27th which Smith backdated to June 14 and an increased binder check was tendered to cover 25 Inland employees. Following the meeting, Wolkowitz received a death claim form for Siteman from I.C.I. which Hyken, as Siteman's beneficiary, completed and returned to Travelers on July 31, 1974. Travelers rejected this claim, refusing to pay the beneficiary because its home office had not approved Inland's policy application. Hyken then filed this action charging Travelers with breach of an oral contract to provide life insurance coverage. At the close of the evidence, Travelers moved for a directed verdict which was denied. The jury then returned a verdict for Hyken and an award of $1.00 in damages. Both parties filed post-trial motions. Hyken moved for entry of judgment of $50,000 plus prejudgment interest, or alternatively, a new trial solely on the damage issue. Travelers moved for a judgment notwithstanding the verdict. The court denied Hyken's motion, but sustained Travelers' on the grounds that:

(1) The court erred in denying Travelers' motion for a directed verdict; (2) there was no evidence that Travelers agreed to issue a group insurance policy; (3) there was no evidence that the application for insurance was accepted by Travelers or by anyone with authority; and (4) there...