Martin v. Prudential Ins. Co.

• Decision Date: 27 July 1978
• Citation: 389 A.2d 28
• Parties: Carlton E. MARTIN v. The PRUDENTIAL INSURANCE COMPANY.
• Court: Maine Supreme Court

Page 28

389 A.2d 28

Carlton E. MARTIN v. The PRUDENTIAL INSURANCE COMPANY.

Supreme Judicial Court of Maine.

July 27, 1978.

Smith, Elliott, Wood & Nelson, P. A. by Terrence D. Garmey, (orally), Robert J. Foley, Saco, for plaintiff.

Robinson, Hunt & Kriger by Sarah M. Allison, (orally), M. Roberts Hunt, Portland, for defendant.

Before McKUSICK, C. J., and POMEROY, WERNICK, ARCHIBALD and DELAHANTY, JJ.

McKUSICK, Chief Justice.

The questions presented by this appeal are whether the Superior Court erred (1) in its instructions to the jury on the elements of equitable estoppel and (2) in refusing to instruct the jury on the elements of an oral contract of temporary insurance.

I.

In January 1976 plaintiff Carlton E. Martin commenced this action in Superior Court in York County against the defendant, Prudential Insurance Company (Prudential), seeking to recover $10,000 as the beneficiary of alleged insurance on the life of his deceased daughter, Eva L. Martin. The jury returned a verdict for Prudential, ¹ and plaintiff prosecuted this timely appeal from the judgment.

We deny the appeal.

From the evidence introduced at trial in the form of testimony and documentary exhibits, the following facts appear. Plaintiff's daughter, Eva, died on March 6, 1975, at the age of 21, her 21st birthday having been on November 20, 1974. Prior to her death she was insured for $1,000 as a dependent child under each of two family group life insurance policies issued by Prudential, one to plaintiff Carlton Martin and one to his wife Constance G. Martin. Eva's coverage under plaintiff's policy was to expire on the first Policy anniversary after she attained the age of 21, I. e., April 22, 1975. On that date, Eva's insurance was convertible to a policy in her own name for $5,000. Similarly, under Mrs. Martin's policy, Eva could convert her $1,000 of term insurance to a policy for $5,000. That conversion privilege was not, however, available to Eva until the first policy anniversary following her twenty-Fifth birthday, I. e., March 23, 1979.

The present litigation stems from Eva's attempts in the months immediately preceding her death to exercise those conversion privileges, and from a succession of errors on the part of the Prudential agents dealing with her. Eva knew that she suffered from a congenital heart condition which seriously limited her life expectancy. During 1974 she applied for life insurance to at least three major companies, including Prudential. On the basis of her physical condition, however, those companies uniformly rejected her applications. Sometime in the fall of 1974, Eva contacted Prudential concerning the possible conversion of her $1,000 coverage under each of her parents' policies. On November 12, 1974, eight days before her twenty-first birthday, Eva first met with Prudential agent Ronald Libby. At that meeting Libby had Eva complete "new business" applications for two policies of life insurance providing $5,000 coverage each. In exchange for her payment of $175.40, Libby issued to Eva a "prepayment receipt" expressly providing that she was covered by temporary insurance "equal to the amount applied for," namely, $10,000, for a period of at most 60 days.

Within a few days, Libby realized that the "new business" applications were in fact inappropriate to effect Eva's conversion under her parents' policies. Accordingly, Libby again met with Eva on November 18, at which time he had her complete the proper applications for conversion. Prudential retained Eva's previous payment and did not request that she return the prepayment receipt.

Sometime in February 1975 Prudential's agents determined that Eva's applications for conversion would have to be redone because they were completed too far in advance of the applicable conversion dates. Libby, joined this time by his supervisor, Fred Leone, met with Eva on February 28, 1975, and on the instructions of the agents Eva completed a new conversion application pertaining to Mrs. Martin's policy, which was not, however, actually convertible for over four years, that is, not until March 23, 1979. ² Agent Leone further testified that on February 28 Eva also completed a conversion application for Mr. Martin's policy, which was actually convertible in approximately two months, on April 22, 1975. At that same meeting the agents gave Eva a Prudential draft for $175.40 representing a return of her previous November 12 payment. This draft Eva promptly endorsed back to Prudential. Eva had no further contact with Prudential and died a week later on March 6, 1975.

After Eva's death Carlton Martin, as the beneficiary named by Eva in her November and February conversion applications, filed a timely claim with Prudential for $10,000 in insurance proceeds. In response, Prudential returned to Mr. Martin Eva's prior $175.40 payment and denied liability under any converted policies of insurance, taking the position that it was liable to the Martins only to the extent of the $1,000 term insurance provided for Eva in each of their family group policies. Plaintiff subsequently abandoned the contention that Eva had in fact successfully converted either policy and filed the complaint in the present action asserting equitable estoppel and an oral contract of temporary insurance as theories of recovery.

II. Jury Instructions on Equitable Estoppel

At the close of the charge to the jury, plaintiff objected to the court's refusal to instruct in accordance with his previously submitted instruction regarding detriment as an element of equitable estoppel. In pertinent part plaintiff requested the court to instruct the jury that "it is not necessary in order to invoke the doctrine of estoppel that a party must, as a result of the inequitable conduct of the other party, have suffered some detriment or injury without regard to whether or not the estoppel is allowed by only that he will be prejudiced if the estoppel is not given effect." After plaintiff's objection the Superior Court for the second time declined to grant the instruction, indicating it had already covered the point in its principal charge and, in any event, that the instruction requested was an erroneous statement of the law. The court did not err in so ruling.

In the body of its charge, the court stated the following with respect to detrimental reliance:

"(T)he plaintiff must prove by a preponderance of the evidence that, because Miss Martin was misled, if you find that she was, that she did something that she would not have done, or failed to do something that she would otherwise have done had she been aware of the true situation. In other words, it is necessary for Mr. Martin to prove that because his daughter was misled, that she changed her position, she either failed to do something that she otherwise would have done, or she did something which she would not have done had she known the true situation.

"And finally, in order to prevail it is necessary for Mr. Martin to prove by a preponderance of the evidence that because of this change of position, if you find that there was one, that is that Miss Martin did something she would not otherwise have done, or failed to do something she would have done, that Miss Martin or her family have suffered injury, harm, or damage as a result of being misled."

This court has repeatedly held that in order for an estoppel to be made out

"the declarations or acts relied upon must have induced the party seeking to enforce an estoppel to do What resulted to his detriment, and what he...