King v. Prudential Ins. Co. of America

• Citation: 267 N.E.2d 643,359 Mass. 46
• Parties: Cathleen M. KING v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA.
• Decision Date: 11 March 1971
• Court: United States State Supreme Judicial Court of Massachusetts

Page 643

267 N.E.2d 643

359 Mass. 46

Cathleen M. KING v. The PRUDENTIAL INSURANCE COMPANY OF AMERICA.

Supreme Judicial Court of Massachusetts, Norfolk.

Argued Jan. 6, 1971.

Decided March 11, 1971.

Stephen J. Paris, Boston, for plaintiff.

Douglas G. Moxham, Boston, for defendant.

Before TAURO, C.J., and CUTTER, SPIEGEL, REARDON and QUIRICO, JJ.

SPIEGEL, Justice.

In this action of contract the beneficiary of an insurance policy on the life of her father seeks to recover the proceeds of that policy in the amount of $17,610 with interest. The defendant filed a motion, accompanied by affidavits, for summary judgment under G.L. c. 231, § 59. The plaintiff filed counteraffidavits. The case is before us on the plaintiff's exception to the allowance of the defendant's motion.

We summarize pertinent facts stated in either the affidavits or the exhibits. These facts do not appear to be in dispute. On June 22, 1965, the defendant issued a decreasing term life insurance policy to Timothy A. King, a widower with five minor children. The insured paid all the premiums due on the policy except the one due on September 22, 1966. Prior to September, the health of the insured began to deteriorate. He complained of severe headaches, pain, and shortness of breath. The intensity of the pain and headaches was such that 'he started to drink very heavily,' and to use a pain killer in an attempt to obtain relief. He lost awareness of incoming bills, which he had scrupulously attended to prior to the onset of his illness. In late August or early September, he stopped working as a meatcutter.

About the same time, the insured consulted one Joseph Carella, M.D. On October 22, 1966, he complained of one of the worst headaches he had ever suffered, and on the twenty-third, he lost 'feeling' in his left leg. On October 24, he entered the Quincy City Hospital, and on November 16 was transferred to the Lemuel Shattuck Hospital. On November 29 Dr. Carella informed the defendant, in the insured's application for reinstatement, that the insured had a 'tumor on (the) top of (his) head.' The insured died on December 25, 1966. The immediate cause of death was cerebral edema, due to cerebral metastases and carcinoma of the lung. The former condition existed for three months before the insured's death and the latter condition existed for six months preceding his death.

In March 1967, the plaintiff submitted to the defendant a claim form together with her father's death certificate and the original policy. The certificate stated the immediate and the contributory causes of death and the duration of each condition from its onset to the date of his death. In a letter dated May 3, 1967, the plaintiff's attorney wrote to the defendant that the insured was totally disabled prior to and during the grace period, and therefore that the waiver of the premium provision became effective and relieved the insured of the obligation to pay premiums.

The 'Waiver of Premium Benefit' (the Benefit) in the policy provides in pertinent part as follows: 'Upon receipt at the Home Office of written notice and due proof that the Insured has become totally disabled * * * and has been continuously so disabled for at least 6 months during his or her lifetime (such total disability of such duration being presumed to be permanent only for the purpose of determining the commencement of liability under this Benefit), the Company will, subject to the provisions of this policy, waive the payment of each premium falling due during the uninterrupted continuance of such disability, but no premium falling due more than one year before receipt of such notice shall be waived unless it is shown that such notice was furnished as soon as was reasonably possible. * * * If total disability commences during the grace period of a premium in default, * * * failure to have paid such premium will not of itself invalidate any claim arising from such disability * * *.' Subparagraph (d) of the Benefit provides in pertinent part that '(w) ritten notice and proof of claim must be furnished during the lifetime of the Insured and during the period of total disability. Failure to furnish such notice and proof will not of itself invalidate or diminish any claim under this Benefit if it is shown that notice and proof were furnished as soon as was reasonably possible.' In addition, the policy provides that a 'grace period of 31 days will be allowed for payment of a premium in default, during which period the policy will continue in force.'

The defendant argues that it never became obligated to waive the premium due on September 22, 1966, because it was not furnished proof of the insured's alleged total disability arising or existing during the grace period, which expired on October 23, 1966. In its brief, the defendant admits that the policy does not require 'total disability for six months before a premium can be waived to save a lapse,' but only that written notice and proof of claim must be given during the life of the insured and during the period of total disability or as soon as reasonably possible. However, we note that there is no requirement in the policy that notice be given during the grace period or before default in payment of premiums. In fact, the policy provides that if total disability does commence during the grace period while a premium is in default, 'failure to have paid such premium will not of itself invalidate any claim arising from such disability * * *.'

We are aware of the general rule, that if an insurance contract clearly and unequivocally so provides, the obligation of an insurance company to waive premiums arises only after the claimant submits to it proof of total disability. Sherman v. Metropolitan Life Ins. Co., 297 Mass. 330, 336, 8 N.E.2d 892; Belbas v. New York Life Ins. Co., 300 Mass. 471, 475--476, 15 N.E.2d 806; Woodman v. John Hancock Mut. Life Ins. Co., 300 Mass. 486, 487, 15 N.E.2d 812; Hovhanesian v. New York Life Ins. Co., 310 Mass. 626, 631, 39 N.E.2d 423. However, in construing the provisions of a policy, we favor that interpretation which 'best effectuates the main manifested design of the parties.' Joseph E. Bennett Co. Inc. v. Fireman's Fund Ins. Co., 344 Mass. 99, 103--104, 181 N.E.2d 557, 561. '(N)arrow and unreasonable interpretations of clauses in an insurance policy are not favored. They are prepared by the insurer, and if, with equal reason, (are) open to two constructions, that most favorable to the insured will be adopted.' Stipcich v. Metroplitan Life Ins. Co., 277 U.S. 311, 322, 48 S.Ct. 512, 515, 72 L.Ed. 895. MacArthur v. Massachusetts Hosp. Serv. Inc., 343 Mass. 670, 672, 180 N.E.2d 449.

In the instant case, we are of opinion that the policy is inherently ambiguous and that the ambiguity must be resolved against the defendant, which prepared the policy. Therefore, the general rule requiring notice is inapplicable. The introductory paragraph of the Benefit states that before submitting proof of disability an insured be 'continuously * * * disabled for at least 6 months during his or her lifetime.' In its brief, the defendant relies on subparagraph (d) of the Benefit and asserts that proof of disability is required in all cases whether or not six months have elapsed. Although subparagraph (d) of the Benefit states that '(w)ritten notice and proof of claim must be furnished during the lifetime of the Insured and during the period of total disability,' that provision appears inconsistent with the policy language previously recited. Indeed, this court stated in the case of Hovhanesian v. New York Life Ins. Co., 310 Mass. 626, 630, 39 N.E.2d 423, that submission of proof of disability 'did not comply with the requirements of the policy' if it was submitted before the period stipulated in the policy has elapsed. Even if the two provisions of the policy could be somehow reconciled, they would be subject to two rational interpretations. In that instance, 'If an insurer chooses to use language in a policy which permits two rational interpretations, we choose the one more favorable to the insured.' MacArthur v. Massachusetts Hosp. Serv. Inc., 343 Mass. 670, 672, 180 N.E.2d 449, 451, and cases cited therein.

Assuming that the insured did not have to be 'continuously * * * disabled for at least 6 months during his or her lifetime,' as the defendant admits, we think that a reasonable conclusion to be reached from a reading of the Benefit is that an insured would be led to believe that he must be disabled for at least six months and that his policy would, nevertheless, continue in forceduring the period of disability. In support of this conclusion we refer to the following language in the policy: 'If total disability commences during the grace period of a premium in default, * * * failure to have paid such premium will not of itself invalidate any claim arising from such disability * * *.' The obvious purpose of a disability waiver provision is to waive payment of a premium which the insured and the insurance company contemplate the former will likely be unable to pay due to some disability. In view of the policy language previously quoted, we are of opinion that an insured would be justified in believing that his insurance continued during his disability or until his death, which might occur during the six month period.

We think that the inherent ambiguity in the policy relieved the insured from the obligation of giving notice before his death and...