Martin v. Prier Brass Mfg. Co., No. WD

CourtCourt of Appeal of Missouri (US)
Writing for the CourtSHANGLER
Citation710 S.W.2d 466
PartiesSteve Alan MARTIN and Leslie Robert Benson, Respondents, v. PRIER BRASS MANUFACTURING CO., Appellant. 36587.
Docket NumberNo. WD
Decision Date13 May 1986

Page 466

710 S.W.2d 466
Steve Alan MARTIN and Leslie Robert Benson, Respondents,
v.
PRIER BRASS MANUFACTURING CO., Appellant.
No. WD 36587.
Missouri Court of Appeals,
Western District.
May 13, 1986.

Page 467

Thomas H. Stahl and Kristin L. Farnen, Gunn, Hall & Stahl, Gladstone, for appellant.

Page 468

Roland V. Heckman, Kansas City, for respondents.

Before SHANGLER, P.J., and TURNAGE and BERREY, JJ.

SHANGLER, Presiding Judge.

The plaintiffs Martin and Benson, employees of Prier Brass Manufacturing Company, each brought a separate suit against Prier Brass to recover major medical benefits under a plan of insurance sponsored and underwritten by the employer company. The suits were consolidated for trial, adjudicated by the court in favor of each plaintiff, and as consolidated appealed by the employer.

Prier Brass sponsored health insurance programs for its employees. One, a red book health care plan, was for hourly rated employees. The other, a gold book health care plan, was for salaried employees. They were both noncontributory. 1 The red book plan required four years of service for an employee to be eligible for major medical benefits. The gold book plan required only six months of service 2 for an employee to be eligible for major medical benefits. Martin and Benson were both salaried, employed for more than six months, and hence covered under the gold book plan. Neither of them had worked at Prier Brass for four years--and hence, neither would have qualified for major medical benefits under the employment terms of the red book plan.

In the summer of 1983 Prier Brass was beset by financial concerns and undertook to reevaluate the health plans then extant. The president of the company, Hodes, appointed three of the company personnel as a committee for that purpose: Benson, comptroller [and a plaintiff here], Turek, labor relations supervisor, and Marshall, chief engineer. That effort culminated in the decision to modify the subsistent health plans so that all coverage would be administered according to the terms of the red book plan. 3 To qualify for major medical benefits--[drugs and medicines under written prescriptions were deemed major medical benefits under the red book]--four years of employment service was required. Neither of the plaintiffs, Martin or Benson [as we note], had worked at Prier Brass for four years.

It was the Benson testimony that, although a member of the revision committee, he never knew of a decision to substitute the red book for the gold book as the health care plan for salaried employees, nor of any notice from Prier Brass that the company had put such a plan into effect. It was the Martin testimony that although there were rumors of a change, he neither knew nor was given notice that the red

Page 469

book was the health plan in effect for all employees until September of 1983, when he presented a major medical expense bill to Turek for payment. It was the Turek testimony that a notice of the change to the red book plan for all employees, dated August 16, 1983, was posted on the bulletin board and a copy of the notice was placed in the mail baskets of those employees with such an amenity.

The wife of plaintiff Martin [then also a Prier Brass employee] was delivered of a child in July of 1983. The expenses of that event [$3,180.77] were covered under the gold book, remain unpaid, but are not in dispute. Thereafter, on August 24, 1983, a gall bladder surgery on Mrs. Martin incurred the cost of $6,168.12, an expense which would have been payable as a major medical benefit under the gold book. The coverage under the red book was $2,091.65, since Martin was not employed for the four years which qualified an employee for major medical coverage under the red book. Prier Brass tendered the red book benefit--$2,091.65--but Martin insists that the major medical coverage of the gold book appertains.

Benson incurred medical costs after August 16, 1983. Trial counsel stipulated that the benefits payable under the gold book were $2,691.00 and under the red book were $355.48.

The trial court posed as the issue for decision:

Whether plaintiff Martin and plaintiff Benson received notice of the change in the plan prior to the date each incurred medical expenses for the recovery of which these suits have been brought.

The court entered a memorandum and order and, after determination of the facts deemed essential to decision, entered a separate judgment for each--Martin and Benson--under the coverage of the gold book plan. The memorandum expresses as the premise of fact essential for judgment that the health insurance coverage was a part of the compensation of employment given each employee--and, presumably, for a salaried worker in continuous employment for six months at Prier Brass--coverage under the gold book plan. The memorandum expresses as the premises of law essential for judgment (1) that the employer could not reduce the health care coverage to an affected employee without a prior notice to the employee of the change, or the shown acquiescence of the employee, and (2) that the burden to prove that an affected employee knew of the change rested on the employer--a burden the Prier Brass evidence failed to acquit.

Prier Brass contends, nevertheless, that the health care coverage the red and gold books provide an employee is an actual group insurance policy, and hence under settled principles, the burden rests on the employee to prove coverage at the time the medical expenses were incurred. Prier Brass argues, accordingly, that a premise of law essential to decision was erroneous and the judgment may not stand.

The term group policy describes, typically, a contract of insurance whereby persons, usually employees of a business enterprise, are insured in consideration of a determined payment per period, so long as the persons remain in employment and the premiums are paid. Legler v. Meriwether, 391 S.W.2d 599, 602[3, 4] (Mo.App.1965). The employer, in such an insurance arrangement, holds the master policy from the insurer, and each employee-participant holds a certificate as evidence of the coverage. The group may vary according to the flux of employees, and the policy drawn to cover the numerous, but undesignated, persons enrolled as employees. In such a usual group policy arrangement, the employer is typically the recordkeeper for the insurer, as well as the remitter of the premiums. Appelman, Insurance Law and Practice § 41, at 83 (1981); White v. Prudential Insurance Co. of America, 235 Mo.App. 156, 127 S.W.2d 98, 99 (1939). The health insurance coverage Prier Brass tendered through the red book plan and the gold book plan was not to employees indeterminate as to numbers or names. Nor was the employer the recordkeeper for the insurer, as in the usual group policy. The

Page 470

employer was the insurer as well as the record keeper, and knew the names and employment status of the person covered at any given time--and that [prior to August 16, 1983], whether under the red book plan or the gold book plan.

The coverage Prier Brass held out to an employee, rather, was a "cost free" emolument of employment, "in appreciation of [the] cooperation and loyalty" of the particular employee, consummated by the performance of conditions: in the case of a salaried employee or hourly-paid supervisors [Martin and Benson], a completed six months employment, and thereafter continued employment. Thus, the Prier Brass gold book plan performance was the quid pro quo for the Martin and Benson employment performances. This transaction between Prier Brass and employee describes a bilateral contract--a bilateral contract of insurance, and not a contract of group insurance--and hence is governed by principles of bilateral contract, and not of a group insurance contract. Transport Indemnity Co. v. Teter, 575 S.W.2d 780, 784[1-3] (Mo.App.1978); Bengimina v. Allen, 375 S.W.2d 199, 202 (Mo.App.1964).

The law fixes upon a plaintiff the burden to prove a cause of action on an insurance policy, as in any other case. Piva v. General American Life Insurance Co., 647 S.W.2d 866, 869[1-4] (Mo.App.1983); State Farm Mutual Automobile Insurance v. St. Louis County, 601 S.W.2d 291, 294[n. 1] (Mo.App.1980). That risk of nonpersuasion attends the proof of the case, and does not vary, whether the contract of insurance is in the form of a group policy or a bilateral policy. Morris v. Travelers Insurance Co., 546 S.W.2d 477, 481 (Mo.App.1976); Stogsdill v. General American Life Insurance Co., 541 S.W.2d 696, 699 (Mo.App.1976). 4 A claimant under a contract of insurance discharges the substantive risk of nonpersuasion by evidence that the loss comes within the coverage of the policy. Missouri Commercial Investment Co. v. Employers Mutual Casualty Co., 680 S.W.2d 397, 400 (Mo.App.1984); White v. Prudential Insurance Co. of America, 127 S.W.2d at 102[1-3]; Couch on Insurance 2d § 79:345 (1983).

A policy of insurance, as any other written contract, is given effect according to its terms. Transport Indemnity Co. v. Teter, 575 S.W.2d at 784[1-3]. In terms of contract coverage, there was no dispute that the gold book plan as written encompassed the Martin and Benson claims. Prier Brass acknowledges by stipulation--and hence concedes--that the $6,168.12 cost of the Martin gall bladder surgery on August 24, 1983 and the Benson medical costs incurred after August 16, 1983 were expenses covered by the terms of the gold book if that plan continued to subsist on those dates.

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12 practice notes
  • Mo. Consol. Health v. Community Health Plan, No. WD 59012.
    • United States
    • Court of Appeal of Missouri (US)
    • 29 Marzo 2002
    ...power conferred by the contract in good faith, and this court found such a duty in Martin v. Prier Brass Manufacturing Company, 710 S.W.2d 466, 473 In Martin, the plaintiffs brought a claim against their employer, Prier Brass, after it modified its employee health plan without notice to its......
  • White v. American Republic Ins. Co., No. 16719
    • United States
    • Court of Appeal of Missouri (US)
    • 25 Octubre 1990
    ...the coverage of the policies, the burden shifted to the defendant to show an excuse for non-payment. Martin v. Prier Brass Mfg. Co., 710 S.W.2d 466, 473 (Mo.App.1986). Thus, the burden was upon defendant to prove that the misrepresentations by plaintiff concerning other coverage were materi......
  • Estate of Carroll, In re, No. WD
    • United States
    • Court of Appeal of Missouri (US)
    • 1 Junio 1993
    ...a passenger in the aircraft at the time of the casualty properly rests on the beneficiaries. See, e.g., Martin v. Prier Brass Mfg. Co., 710 S.W.2d 466, 470[3, 4] (Mo.App.1986). That argument, however, does not explain the necessity, nor the role as a contract term, for the express exclusion......
  • Jennings v. Bd. of Curators of Mo. State Univ., No. SD 31900.
    • United States
    • Court of Appeal of Missouri (US)
    • 18 Septiembre 2012
    ...benefits under the contract.” Morton v. Hearst Corp., 779 S.W.2d 268, 273 (Mo.Ct.App.1989) (citing Martin v. Prier Brass Mfg. Co., 710 S.W.2d 466, 473 (Mo.Ct.App.1986))....Comprehensive Care Corp. v. RehabCare Corp., 98 F.3d 1063, 1066 (8th Cir.1996). That said, it appears that a written em......
  • Request a trial to view additional results
12 cases
  • Mo. Consol. Health v. Community Health Plan, No. WD 59012.
    • United States
    • Court of Appeal of Missouri (US)
    • 29 Marzo 2002
    ...power conferred by the contract in good faith, and this court found such a duty in Martin v. Prier Brass Manufacturing Company, 710 S.W.2d 466, 473 In Martin, the plaintiffs brought a claim against their employer, Prier Brass, after it modified its employee health plan without notice to its......
  • White v. American Republic Ins. Co., No. 16719
    • United States
    • Court of Appeal of Missouri (US)
    • 25 Octubre 1990
    ...the coverage of the policies, the burden shifted to the defendant to show an excuse for non-payment. Martin v. Prier Brass Mfg. Co., 710 S.W.2d 466, 473 (Mo.App.1986). Thus, the burden was upon defendant to prove that the misrepresentations by plaintiff concerning other coverage were materi......
  • Estate of Carroll, In re, No. WD
    • United States
    • Court of Appeal of Missouri (US)
    • 1 Junio 1993
    ...a passenger in the aircraft at the time of the casualty properly rests on the beneficiaries. See, e.g., Martin v. Prier Brass Mfg. Co., 710 S.W.2d 466, 470[3, 4] (Mo.App.1986). That argument, however, does not explain the necessity, nor the role as a contract term, for the express exclusion......
  • Jennings v. Bd. of Curators of Mo. State Univ., No. SD 31900.
    • United States
    • Court of Appeal of Missouri (US)
    • 18 Septiembre 2012
    ...benefits under the contract.” Morton v. Hearst Corp., 779 S.W.2d 268, 273 (Mo.Ct.App.1989) (citing Martin v. Prier Brass Mfg. Co., 710 S.W.2d 466, 473 (Mo.Ct.App.1986))....Comprehensive Care Corp. v. RehabCare Corp., 98 F.3d 1063, 1066 (8th Cir.1996). That said, it appears that a written em......
  • Request a trial to view additional results

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