Kowalski v. Travelers Ins. Co.

• Decision Date: 19 July 1971
• Citation: 280 A.2d 257,115 N.J. Super. 545
• Parties: , 66 Lab.Cas. P 11,918 Doris KOWALSKI, Plaintiff, v. The TRAVELERS INSURANCE COMPANY, Defendant.
• Court: New Jersey Superior Court

Page 545

115 N.J.Super. 545

280 A.2d 257, 66 Lab.Cas. P 11,918

Doris KOWALSKI, Plaintiff, v.The TRAVELERS INSURANCE COMPANY, Defendant.

Superior Court of New Jersey Law Division.

Decided July 19, 1971.

Michael H. Hochman, Jersey City, for plaintiff(Miller, Hochman, Meyerson & Miller, Jersey City, attorneys).

George P. Moser, Union City, for defendant(Moser, Roveto & McGough, Union City, attorneys).

VERGA, J.C.C.

This is an action by plaintiff to recover from defendantTravelers Insurance Company benefits as a result of her employment with Radio Corporation of America.

An action was originally instituted by plaintiffDoris Kowalski against her employer, Radio Corp. of America, for wrongful discharge, and against Radio Communications Assemblers Union, for breach of a fiduciary obligation to provide her with fair representation in any disputes she may have with her employer, and against Travelers Insurance Company for benefits which she was deprived of as a result of her wrongful discharge.The case against Travelers Insurance Company was severed.The trial against the employer and the union resulted in a money judgment in favor of plaintiff in the amounts of $15,000 and $1,000, respectively, for the illegal discharge by the Radio Corp. of America.

The issue to be decided is: where an employee is illegally discharged by the employer and the insurance company is notified of the discharge, does this terminate the employee's benefits under a group policy.A group insurance policy is, in effect, a contract between the employer and the insurer.A basic rule of contracts was stated in Midland Carpet Corp. v. Franklin Associated Properties, 90 N.J.Super. 42, 216 A.2d 231(App.Div.1966), where it was said 'Where a writing is unambiguous, construction is not warranted.'New Jersey courts have also held that 'When the terms of a contract are clear, it is the function of the court to enforce it as written and not to make a better contract for either party.'U.S. Pipe & Foundry Co. v. American Arbitration Ass'n, 67 N.J.Super. 384, 170 A.2d 505(App.Div.1961).Most recently it was held that the 'contract must be construed as a whole and the language employed must be given its ordinary meaning, in the absence of anything to show that the language was used in a different sense.'McKee v. Harris Seybold Co., 109 N.J.Super. 555, 264 A.2d 98(Law Div.1970).'Such contracts are generally construed as creating a contract of insurance between the employer and the insurer but for the benefit of the insured employees.'44 Am.Jur.2d 1868.An unambiguous insurance policy, like any other contract, must be enforced according to its terms.Larson Construction Co. v. Oregon Automobile Ins. Co., 301 F.Supp. 1112(1969).

In the instant case, the group policy states that coverage is terminated upon notification to the insurer by the employer that the insured employee is no longer employed by the company.

These are the 'terms of the contract' of insurance this court is concerned with.There is no question that the insurance company was notified and that the employee in question was discharged.

New Jersey has no case law on the specific question of the effect of an illegal discharge on a group insurance policy; however, as stated in 68 A.L.R.2d 50, 'the most frequent method used by an employer to sever the relationship with an employee is by discharging or firing him.Here again, regardless of the reasons which may motivate the employer, such act constitutes a termination of employment within the meaning of a termination of employment clause contained in a group policy.'SeeBradley v. Prudential Ins. Co., 70 F.2d 988, (9 Cir.1934);Simsaki v. Equitable Life Assurance Soc., 154 Misc. 533, 277 N.Y.S. 424(Sup.Ct.1935);Nelson v. Aetna Life Assurance Soc., 115 Pa.Super. 15, 174 A. 624(Super.Ct.1934)....