Kirchoff v. Nationwide Mut. Ins. Co.

• Decision Date: 07 June 1962
• Citation: 34 Misc.2d 681,229 N.Y.S.2d 874
• Parties: Thomas J. KIRCHOFF, plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant.
• Court: New York City Court

Page 874

229 N.Y.S.2d 874

34 Misc.2d 681

Thomas J. KIRCHOFF, plaintiff, v. NATIONWIDE MUTUAL INSURANCE COMPANY, Defendant.

City Court of Poughkeepsie.

June 7, 1962.

Reed & Reed, Poughkeepsie (John M. Reed, Poughkeepsie, of counsel), for plaintiff.

McCabe & McCabe, Poughkeepsie (Eugene C. Nicolato, White Plains, of counsel), for defendant.

MILTON M. HAVEN, Judge.

This is an action to recover benefits upon a Family Major Medical Expense Policy, which insured the plaintiff, his wife and children against medical expenses arising from accident and sickness. The policy contained a $250.00 deductible clause and provided that the company would pay 80% of all medical expenses above this amount for the items listed.

The case comes to this Court on a stipulated set of facts. Elizabeth A. Kirchoff, wife of the plaintiff, went to St. Francis Hospital where she had a normal delivery of a child on July 24, 1961 . She remained in the hospital until July 29, 1961, at which time she and the infant were discharged.

The facts further indicate that the child was born with a right congenital hernia. In the best interest of the infant's health, the operation was postponed, however, until Sepember 18, 1961. At that time a herniotomy was performed at Vassar Hospital and the child was discharged on September 20, 1961.

The services of the hospital and doctors during the confinement of Mrs. Kirchoff amounted to $474.90 and the expenses incurred for correcting the hernia amounted to $288.00.

Defendant forwarded the plaintiff two checks, one in the amount of $179.92 and the other for $30.40. These sums were arrived at in the following manner: $474.90 less $250.00, the deductible amount, leaving a balance of $224.90 of which $179.92 or 80% was paid for the confinement; $288.00 less $250.00 the deductible amount, leaving a balance of $38.00 of which $30.40 or 80% was paid on the herniotomy.

Plaintiff rejected both of the checks claiming that under the provisions of the policy there should be but one deductible amount applied to all the charges. Defendant contends, however, that the bills involved two separate charges and it was, therefore, proper to apply the deductible amounts to each one separately.

Certain pertinent provisions of the policy in question must be considered by the Court in its attempt to resolve the conflicting constructions urged by the parties.

Those provisions of the policy of insurance which concern us provide:

'INSURING AGREEMENT

'5. * * * which deductible amount shall apply separately to each Insured Family Member, and to each accident or sickness, except that only one deductible amount shall apply: * * *

'c. to all charges incurred as a result of childbirth, including charges incurred for the infant, until and including the fourteenth day after the date of such birth.

'DATE OF CHARGE

'A charge shall be deemed to be incurred as of the date of the service or purchase giving rise to the charge.'

The law is established that where an insurance policy contains ambiguities, they must resolve against the insurer as the party who drafted the instrument. (Fidelity & Cas. Co. of N. Y. v. Groth, Sup., 53 N.Y.S.2d 623, affd. 270 App.Div. 976, 62 N.Y.S.2d 816, affd. 296 N.Y. 788, 71 N.E.2d 470.) The meaning to be given to a contract of insurance must be the meaning that the ordinary business man must give it (D'Agostino Excavators, Inc. v. Globe Ind. Co., 7 A.D.2d 483, 184 N.Y.S.2d 378; Morgan v. Greater N. Y. Taxpayers Mut. Ins. Ass'n, 305 N.Y. 243, 112 N.E.2d 273; Harris v. Allstate Ins. Co., 309 N.Y. 72, 75, 127 N.E.2d 816, 817.)

'A contract of insurance is to be construed according to the sense and meaning of the terms used, which if clear and unambiguous, are to be understood in their plain, ordinary, and popular sense. Auerbach v. Maryland Casualty Co., 236 N.Y. 247, 140 N.E. 577, 28 A.L.R. 1294. However, if there is any ambiguity the provision will be construed most strongly against the insurer, and in favor of the insured.' (Black v. Hanover Ins. Co., 30 Misc.2d 1081, 1083, 220 N.Y.S.2d 168, 170; See Goldstein v. Standard Acc. Ins. Co., 204 App.Div. 452, 455-456, 197 N.Y.S. 554, 556.)

In the case of Arthur A. Johnson Corp. v. Indemnity Ins. Co., 6 A .D.2d 97, 99, 175 N.Y.S.2d 414, 417, affd. 7 N.Y.2d 222, 196 N.Y.S.2d 678, 164 N.E.2d 704, the court held: 'In seeking to ascertain the scope to be given words or phrases not explicitly defined in an insurance policy, we usually ascribe to them the ordinary and popular meaning, importing the construction that would be given them by the average assured when he purchased the policy (Abrams v. Great American Insurance Co., 269 N.Y. 90, 199 N.E. 15; Johnson v. Travelers Insurance Co., 269 N.Y. 401, 408, 199 N.E. 637, 640). * * *

'When uncertainty and doubt arise from policy language susceptible of more than one meaning, we may adopt the oft-quoted but seldom decisive formula of resolving all ambiguity against the insurer.' (See Kratzenstein v. Western Assur. Co., 116 N.Y. 54, 59, 22 N.E. 221, 223, 5 L.R.A. 799.)

The law is well established, and the cases too numerous to cite sustaining the principle, that if there is any doubt as to the meaning of its terms, the language in the policy of insurance should be given the meaning most favorable to the insured.

It is stated in the case of Salta Knitting Mills, Inc., v. Elegnelle Realty Corp., 16 Misc.2d 198, on pages 200-201, 183 N.Y.S.2d 781, on page 784: 'Where reasonable * * * men on reading the terms of an ambiguous insurance contract would honestly differ as to its meaning, the doubt should be resolved against the company and if the company desires to exclude from its general coverage or limit its liability, it has the responsibility of wording it in clear and unmistakable language so that no average person can be misled (Birnbaum v. Jamestown Mutual Ins. Co., 298 N.Y. 305, 309, 311, 313, 83 N.E.2d 128, 130, 131, 132.)'

The Court of Appeals has held in Mansbacher v. Prudential Ins. Co . of America, 273 N.Y. 140, 143-144, 7 N.E.2d 18, 20, 111 A.L.R. 618, 'We have said more than once that insurance policies upon which the public rely for security in death, sickness, or accident should be plainly written, in understandable English, free from fine distinctions which few can understand until pointed out by lawyers and judges. * * * Contracts are to be interpreted in the light of the language which we commonly use and understand; in other words, our common speech. Such at least should be the rule applied to the interpretation of these policies, and which we sometimes refer to as a liberal construction.'

This litigation is primarily concerned with the proper construction to be placed upon the provisions of the policy set out above.

Research has failed to disclose any cases construing the specific language in a policy of insurance similar to the wording presented to this court. Accordingly, this matter will have to be disposed of on the principles of construction heretofore decided by the courts. The court must be ever mindful of the fact that if an insurance policy 'is fairly susceptible of two interpretations, one of which being that contended for by the insured, it should be most strongly construed against the insurer.' (Ira S. Bushey & Sons v. American Ins. Co., 237 N.Y. 24, 27, 142 N.E. 340, 341.)

In seeking to ascertain the scope and meaning of the provision of the policy, 'A charge shall be deemed to be incurred as of the date of the service or purchase giving rise to the charge,' we ascribe to it the ordinary and popular meaning, importing the construction that would be given it by the...