Mannschreck v. Connecticut General Life Ins. Co.
| Decision Date | 29 March 1978 |
| Docket Number | No. 41345,41345 |
| Citation | 200 Neb. 434,263 N.W.2d 849 |
| Parties | Maxine M. MANNSCHRECK, Appellant, v. CONNECTICUT GENERAL LIFE INSURANCE COMPANY, a corporation, Appellee. |
| Court | Nebraska Supreme Court |
Syllabus by the Court
1. In reviewing the correctness of the granting of a motion for summary judgment, the evidence will be viewed in the light most favorable to the party against whom the motion is directed, giving to that party the benefit of all favorable inferences that may reasonably be drawn therefrom.
2. A moving party is not entitled to summary judgment except where there exists no genuine issue as to any material fact and where under the facts he is entitled to judgment as a matter of law.
3. The knowledge of an insurance agent, to be considered that of the insurer, must be acquired by the agent in the course of his transaction of its business and the insurer is not chargeable with information acquired by an agent in transactions outside the scope of his agency.
Joseph F. Chilen, Fairbury, for appellant.
David R. Buntain of Cline, Williams, Wright, Johnson & Oldfather, Lincoln, for appellee.
Heard before WHITE, C. J., and SPENCER, BOSLAUGH, McCOWN, CLINTON, BRODKEY, and WHITE, JJ.
This is an action by the beneficiary of a group life insurance policy to recover $40,000 in increased benefits. Plaintiff's decedent was denied increased benefits by the defendant on the ground that the decedent failed to satisfy the policy's "active service" clause. Both parties filed motions for summary judgment. The District Court held that the policy was governed by Illinois law and found on the undisputed facts that the plaintiff's decedent did not satisfy the "active service" clause of the policy. The District Court further found that under Illinois law, the doctrine of estoppel and waiver could not be invoked to broaden the policy coverage and that there was no evidence before the court which would give rise to an estoppel or waiver of the "active service" clause. Defendant's motion was granted and plaintiff's second amended petition dismissed. The plaintiff appeals. We affirm the judgment of the District Court.
Plaintiff's decedent, Robert C. Mannschreck, was a farm implement dealer who sold and serviced John Deere products. His business was incorporated in 1973 as the Mannschreck Implement Company, Inc. (the dealership). In 1968 the John Deere Dealer Group Insurance Trust (dealer trust) was established by John Deere dealers to provide insurance programs for their employees on a group basis. The dealer trust at first offered only group life insurance but in 1972 began providing health and accident insurance. Since March 1972, health and accident insurance and weekly indemnity benefits have been underwritten by the John Deere Insurance Company.
On June 2, 1972, the dealer trust obtained group life insurance policy number 35001-01 from the defendant with an effective date of March 1, 1972. On April 27, 1972, the dealer trust received an application for the dealership and an enrollment card for the decedent. The dealership's application was accepted and the decedent was issued a certificate of insurance showing coverage in the amount of $10,000 for life insurance effective May 1, 1972.
On December 1, 1973, the dealer trust announced that a new schedule, schedule D, of increased life benefits was available under this policy to all dealer members. On March 1, 1974, the dealer trust received an enrollment card for schedule D coverage from the dealership. The application was accepted, to be effective on April 1, 1974, and a certificate of insurance was issued to the decedent.
On July 18, 1974, the dealer trust received a proof of death form and a certificate of death for the decedent. The trust administrator, upon review of the death certificate, noted that the decedent had metastasis for 19 months, yet increased his life insurance coverage on April 1, 1974. A check with the records of the John Deere Insurance Company disclosed that the decedent had received a total of $22,710.07 in health and accident benefits and $6,500 in weekly indemnity benefits from January 1973 until his death. The defendant was then informed that the decedent did not satisfy the active service requirement of the policy. The defendant has paid plaintiff the $10,000 due under the original policy but has denied coverage for the $40,000 increased benefits.
In reviewing the correctness of the granting of a motion for summary judgment, the evidence will be viewed in the light most favorable to the party against whom the motion is directed, giving to that party the benefit of all favorable inferences that may reasonably be drawn therefrom. Farmland Service Coop., Inc. v. Klein, 196 Neb. 538, 244 N.W.2d 86 (1976). The moving party is not entitled to summary judgment except where there exists no genuine issue as to any material fact and where under the facts he is entitled to judgment as a matter of law. Barnes v. Milligan, 196 Neb. 50, 241 N.W.2d 508 (1976).
Negotiations for the purchase of the group policy were carried on and the policy delivered to the dealer trust's offices in Illinois. The dealer trust collects the individual premiums from each dealership or employee and makes a monthly lump sum payment from its Illinois office. We must thus look to the law of Illinois in deciding questions raised by this appeal. See Simmons v. Continental Cas. Co., 285 F.Supp. 997 (D.Neb.1968), affirmed 410 F.2d 881 (1969); Exstrum v. Union Cas. & Life Ins. Co., 165 Neb. 554, 86 N.W.2d 568, withdrawn on rehearing, 167 Neb. 150, 91 N.W.2d 632 (1958).
The first issue to decide is the correctness of the District Court's determination that plaintiff's decedent did not meet the active service requirement of the policy. When schedule D coverage was added, the following provisions were stated in connection therewith:
And, "No increase in the amount of life insurance on an Employee not in Active Service on the day a change in his Dealer's Plan becomes effective will be effective until the day the Employee returns to Active Service."
From its initial effective date, "active service" was defined in this manner thusly in the group policy:
From its initial effective date, "employee" was defined thusly in the group policy:
These definitions were repeated verbatim in the certificates of insurance issued to the decedent.
Prior to the discovery in January 1973 that he had cancer, Robert Mannschreck was responsible for the overall operation of the dealership, including sales, and spent about 80 percent of his time at the show room. The amount of time which he spent at the show room changed drastically after discovering the cancer. Prior to Mannschreck's illness, his wife kept the dealership's books, setting aside a room in their home to keep her typewriter, calculators, and adding machines. The family would also meet occasionally at the time to discuss operation of the business. As Mannschreck's condition worsened, he spent less and less time at the show room and by the end of 1973 was there less than 10 percent of the time. A hospital bed was set up at the Mannschreck home in February 1974 and thereafter Mannschreck was either confined there or at a hospital.
The sole property at the Mannschreck home treated as dealership assets was the business equipment used by the plaintiff to keep the books. The Mannschrecks never claimed a business deduction on their personal income tax returns for the office in their home. After the death of her husband, plaintiff became president of the dealership. She now spends about 80 percent of her time at the show room. Mannschreck's son stated that the reason his father conducted business from his home was because of his health.
Subsequent to February 27, 1974, and up until a few weeks prior to his death, Mannschreck devoted more than 50 percent of his time to the operation of the dealership. Plaintiff stated that her husband spent at least 6 hours per day on dealership activities. He kept in contact with the dealership by phone, met with various sales and John Deere representatives, planned the erection of a warehouse, and had daily conferences with his sons.
Our research discloses no Illinois cases construing an "active service" or "active employment" clause identical to or similar to the one before us. Other courts, however, have been called upon to do so. See collected cases at Annotation, 58 A.L.R.3d 993 (1974). Group insurance policies seldom require a medical examination. Therefore, many such policies will contain an active service or employment clause whose purpose is to provide a test to determine the reasonably good health of an employee and...
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