Lazovick v. Sun Life Ins. Co. of America
| Decision Date | 20 June 1984 |
| Docket Number | Civ. A. No. 82-3619. |
| Citation | 586 F. Supp. 918 |
| Parties | David LAZOVICK v. SUN LIFE INSURANCE COMPANY OF AMERICA. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
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Harold Einhorn, Philadelphia, Pa., for plaintiff.
Murray S. Levin, Patricia A. Carpenter, Pepper, Hamilton & Scheetz, Philadelphia, Pa., for defendant.
The plaintiff, David Lazovick, instituted this diversity action for the payment of proceeds of a whole life insurance policy on the life of his deceased son, Bruce Lazovick. The defendant insurer, Sun Life Insurance Company of America (Sun Life), has refused to pay the proceeds of the policy to the plaintiff, the named beneficiary, on the ground that the insured committed suicide within two years of the date of the insurance policy in effect at the time of death, and that pursuant to the terms of that policy's suicide clause the defendant is only liable for a return of premiums. The plaintiff seeks payment of the policy proceeds and damages for intentional infliction of emotional distress resulting from the defendant's alleged bad faith refusal to pay the policy proceeds. The defendant has moved for summary judgment. For the reasons which follow, the motion for summary judgment will be granted and judgment entered in favor of the defendant and against the plaintiff.
Faced with evidentiary material which indicates that there is no genuine issue of material fact, an adverse party has the responsibility to produce significant probative evidence demonstrating that a genuine issue exists in order to avoid entry of judgment against him. Sunshine Books, Ltd. v. Temple University, 697 F.2d 90, 96 (3d Cir.1982); DeLong Corp. v. Raymond International Inc., 622 F.2d 1135, 1139-40 (3d Cir.1980).
In support of its motion for summary judgment, the defendant has provided affidavits from Messrs. James Sidlowski and John Chell, Jr., excerpts from the plaintiff's deposition and the deposition of Sun Life agent Hertzel Freifelder, and facsimile copies of the two life insurance policies purchased by the deceased insured from Sun Life, along with applications for these policies and correspondence relating to the policies both before and after the insured's death. The plaintiff's response in opposition to the defendant's motion relies primarily on legal argument, claimed to be supported factually by inferences from the documentation provided by the defendant and from the death certificate of the insured.
The record in this case shows that there is no genuine issue concerning the following material facts. On or about May 22, 1979, Bruce A. Lazovick, the insured son of the plaintiff, now deceased, applied for a decreasing business term life insurance policy which provided for a 30-year term at an initial face value of $35,000. The insured's wife, Lori Lazovick, was the named beneficiary. Application for the policy was made through Hertzel Freifelder, an independent agent of Sun Life located in Philadelphia, Pennsylvania. On May 25, 1979, Sun Life approved the application and issued Policy No. 7909014 (the "1979 term policy"). This policy contained the following suicide clause:
The 1979 policy was delivered to Bruce Lazovick on or about June 4, 1979. Under the terms of the 1979 policy, payment of the second annual premium was due on May 22, 1980. The second annual premium payment was never made, and the 1979 policy lapsed due to non-payment on June 22, 1980. Sometime in May, 1980, while the 1979 term policy was still in effect, Bruce Lazovick contacted Freifelder and stated that he wished to arrange a meeting to review his insurance program because he was not satisfied with his existing coverage. On June 4, 1980, Bruce Lazovick applied to Sun Life for a $50,000 modified whole life insurance policy. On June 17, 1980, Sun Life approved this application and issued Policy No. 8011361 (). The insured's wife, Lori Lazovick, was again named a primary beneficiary. On or about June 24, 1980, the 1980 policy was delivered to Bruce Lazovick. The 1980 whole life policy contained the same two year suicide clause contained in the 1979 term policy.
On December 18, 1981, within two years of the issue date of the 1980 whole life policy but more than two and one-half years after the issue date of the 1979 term policy, Bruce Lazovick was found dead in his residence. The death certificate stated that the cause of death was hanging, with an indication that an investigation was "pending" as to whether death was caused by homicide, suicide, accident, or other cause. Furthermore, the plaintiff, when asked how his son the insured died, responded at page 16 of his deposition: "Suicide."
Prior to his death, the insured made an effective change in beneficiary from his wife, Lori Lazovick, to his father, the plaintiff in this case. The plaintiff subsequently filed a claim with Sun Life for $50,000, the value of the 1980 whole life policy. Sun Life denied the claim based on the contention that the insured's death was by suicide within two years of the issuance of the 1980 policy, the only policy in force at the time of death. As provided by the terms of the suicide clause, Sun Life tendered to the plaintiff an amount equal to the premiums actually paid, plus interest. The plaintiff refused this payment and instituted the instant action.
The principles which govern this Court's interpretation of a contract of insurance under Pennsylvania law are well settled. The task of interpreting a contract is generally performed by the court rather than by a jury. See Gonzalez v. United States Steel Corp., 484 Pa. 277, 398 A.2d 1378 (1979); Community College of Beaver County v. Society of the Faculty, 473 Pa. 576, 375 A.2d 1267 (1977). The goal is to ascertain the intent of the parties as manifested by the language of the written instrument. See Mohn v. American Casualty Co. of Reading, 458 Pa. 576, 326 A.2d 346 (1974). Where a provision of a policy is ambiguous, the policy provision is to be construed in favor of the insured and against the insurer, the drafter of the agreement. See Mohn, 458 Pa. at 586, 326 A.2d at 351. Where, however, the language of the contract is clear and unambiguous, a court is required to give the words their plain and ordinary meaning. Northbrook Insurance Co. v. Kuljian Corp., 690 F.2d 368, 372 (3d Cir.1982); Pennsylvania Manufacturers' Ass'n Insurance Co. v. Aetna Casualty & Surety Insurance Co., 426 Pa. 453, 233 A.2d 548 (1967). Moreover, "in the absence of proof of fraud, `failure to read the contract is an unavailing excuse or defense and cannot justify an avoidance, modification or nullification of the contract or any provision thereof.'" In re Olson's Estate, 447 Pa. 483, 488, 291 A.2d 95, 98 (1972) (quoting Orner v. T.W. Phillips Gas & Oil Co., 401 Pa. 195, 199, 163 A.2d 880, 883 (1960)). Application of these principles to the insurance contract at issue in this case requires the conclusion that the plaintiff is precluded from recovering the proceeds of the 1980 policy.
It is an uncontested fact that at the time of the insured's death, the 1979 term policy had lapsed for non-payment, and the 1980 whole life policy was the only policy in effect. Pursuant to the language of the suicide clause in the 1980 whole life policy, recovery was limited to the premiums actually paid because the insured committed suicide within two years of the issue date of the policy. To avoid the effect of this suicide clause, the plaintiff contends that the 1980 whole life policy was a conversion of the earlier 1979 term policy and that, as a result, the applicable issue date for purposes of interpreting the suicide clause of the 1980 whole life policy is the issue date of the 1979 term policy. Under the plaintiff's theory, the insured's suicide more than two years after the earlier issue date does not preclude recovery of the proceeds under the 1980 whole life policy. The Court finds the plaintiff's theory unpersuasive because the theory necessarily depends on a finding that the 1980 whole life policy is a conversion of the earlier 1979 term policy. There is simply no basis in this record or in the applicable law for the plaintiff's contention that such a conversion took place or was intended by the parties.
There is no statutory or common law right under Pennsylvania law to convert existing life insurance into another form of coverage. An insurer is not required to include a conversion provision in a term life insurance policy, but "may" do so at its option. See 40 Pa.Cons.Stat.Ann. § 571 (Purdon's 1971). In this case, the 1979 term policy issued to Bruce Lazovick did include a conversion privilege, which stated in pertinent part:
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