Moore v. Prudential Ins. Co. of America

• Decision Date: 09 September 1937
• Docket Number: 26179.
• Parties: MOORE v. PRUDENTIAL INS. CO. OF AMERICA.
• Court: Georgia Court of Appeals

192 S.E. 731

56 Ga.App. 356

MOORE v. PRUDENTIAL INS. CO. OF AMERICA.

No. 26179.

Court of Appeals of Georgia, First Division

September 9, 1937

Syllabus by the Court.

A suit by an employee against an insurance company for an alleged wrongful cancellation of a certificate of insurance issued to him under a group policy issued to his employer by the defendant will not lie, where it appears that the certificate was canceled because of his discharge from employment, where the policy expressly provided that the insurance would cease and determine upon termination of such employment. The defendant's refusal to consider a claim for benefits for total and permanent disability alleged to have occurred before the cancellation, on the ground that the policy required proofs of loss to be submitted while the policy was in full force and effect (the correctness of which we need not here consider), was not a repudiation of the contract but amounted to merely a refusal to pay under the terms of the contract. Whether or not the defendant is liable for such claim should be adjudicated in a suit to enforce the terms of the policy.

Error from Superior Court, Richmond County; A. L. Franklin, Judge.

Action by Ernest C. Moore against the Prudential Insurance Company of America. To review an adverse judgment, plaintiff brought error, and, his death being suggested, M. F. Moore, his administratrix, was substituted as plaintiff in error.

Affirmed.

A. R Williamson, of Augusta, for plaintiff in error.

Jones Russell & Sparks, of Macon, and Cumming, Harper & Nixon, of Augusta, for defendant in error.

GUERRY Judge.

This is an action by Ernest C. Moore against the Prudential Insurance Company. The plaintiff alleged that on January 12, 1920, the defendant issued to Ballard & Ballard Company a group insurance policy upon its employees, that at that time he was an employee of Ballard & Ballard Company, and that a certificate of insurance was issued to him under this master policy. The pertinent provisions of the master policy issued to Ballard & Ballard Company are as follows: "If any persons insured under this policy shall become totally and permanently disabled, either physically or mentally, from any cause whatever, to such an extent that he (or she) is rendered wholly, continuously, and permanently unable to engage in any occupation or perform any work for any kind of compensation of financial value during the remainder of his (or her) lifetime, and if such disability shall occur at any time after the payment of the first premium on account of such insurance, while this policy is in full force and effect and the said person is less than 60 years of age, the company, upon receipt of due proof of such disability, will grant the following benefits: (1) Waiver of premiums. The company will waive the payment of that portion of each premium under this policy applicable to the insurance on the life of said disabled person, the due date of which, as specified on the first page hereof, shall occur after receipt by the company of said proof of such disability. Total and Permanent Disability. If the said employee, while less than sixty years of age, and while the insurance on the life of said employee under said policy is in full force and effect shall become totally and permanently disabled or physically or mentally incapacitated to such an extent that he or she is unable to perform any work for any kind of compensation of financial value, said amount of insurance will be paid to said employee either in one sum twelve months after the company has received due proof of such disability or incapacity, or in monthly instalments during five years, the first instalment to be payable six months after the company has received due proof of such disability or incapacity; in accordance with the provisions of said policy. Irrespective of any other mode of termination, the insurance upon the life of any person insured hereunder shall cease and determine upon termination of the employment of such person with the employer, upon receipt by the company of written notification to that effect from the employer, except that at the option of the employer employees temporarily disabled shall during such periods be considered as being in the employ of the employer. Such written notification by the employer of any termination of insurance shall be satisfactory evidence that such insurance has terminated, and shall release the company of all claims on account of the insurance so terminated, except as to the right of conversion as herein provided. When the insurance on the life of said employee shall terminate by reason of termination of employment for any reason whatsoever, the company will issue, upon application by said employee within thirty-one days after the date of such termination of employment, without further evidence of insurability, a policy on his or her life on any of the forms customarily issued by the company, except a policy of term insurance, for the same amount for which said employee was insured under said group-insurance policy at the time of the termination of employment, subject to the payment of premium for such policy at then current rates of the company, according to the occupation of and at the age attained by said employee at that time."

The petition alleged that on December 17, 1934, while said policy of insurance was in full force and effect the plaintiff became totally and permanently disabled within the terms of the policy; that at said time he had a vested right in said insurance in the sum of $1000; that on February 5, 1935, the defendant wrongfully canceled the policy of insurance, including the group policy and the certificate issued to plaintiff; that such cancellation was positive and affirmative, both being canceled in toto, without his assent or agreement, "and such cancellation was wrongful, and the sole cause of action herein set out is for the wrongful cancellation of said policy and certificate, and the damages suffered by plaintiff by reason of said wrongful cancellation"; that "the wrongful cancellation was made by the defendant for the purpose of avoiding liability to the plaintiff under the master policy and the certificate of insurance." The defendant filed its answer and admitted the employment, the issuance of the policy and the certificate thereunder, but alleged that if plaintiff became totally and permanently disabled in December, 1934, it had no knowledge thereof until July, 1935. The answer denied that there was any vested interest in said policy in favor of plaintiff by reason of the disability which occurred in December, 1934, denied the alleged wrongful cancellation of the policy, admitted that the certificate issued to the plaintiff thereunder was affirmatively and positively canceled on February 5, 1935, and denied that the group or master policy was canceled on that date. The answer further alleged that by reason of the fact that the employment of plaintiff by Ballard & Ballard Company terminated on February 5, 1935, the insurance issued to plaintiff terminated; that plaintiff made no effort to have the policy converted into other insurance; that the policy was canceled by its own terms; and that any premiums paid were paid by Ballard & Ballard Company and not by plaintiff, and were a gift by Ballard & Ballard Company to the plaintiff.

It appeared from the evidence that the plaintiff became an employee of Ballard & Ballard Company in July, 1919; that because of ill health, in December, 1934, at his request, he was given a leave of absence, with pay, until further notice and that on February 5, 1935, he was formally discharged. On August 4, 1934, he was examined by Dr. John W. Brittingham, who testified that he found the plaintiff with coronary heart disease. In December, 1934, because of repeated attacks, he advised the plaintiff to cease work. "From December, 1934, and from that time right on he was unquestionably totally and permanently disabled from performing any work of any kind for compensation at all." William S. Snyder, clerk for Ballard & Ballard Company, swore that a day or two after the discharge he sent the following letter by U.S. mail, in a regular envelope, with a three-cent stamp on it, properly addressed to the plaintiff: "The Ballard & Ballard Company has been carrying for you, at their expense (while you were employed by them), a life insurance policy for $1000 with the Prudential Insurance Company. Our records now show that your name was taken off of the active-service list, and your insurance therefore terminated on February 5, 1935. According to our regular rule, we will immediately notify the insurance company to this effect. Your group-life insurance certificate has no cash surrender value, and under the terms of our policy is automatically canceled on the day you leave active service of this company. However, you do have the privilege of presenting this old insurance certificate to your local insurance agent, and may purchase from the Prudential Insurance Company without physical examination, the same amount of insurance in any form of policy issued by them, but at regular premium rates at your age. The matter will have to be presented to the insurance company immediately,-after 30 days the conversion privilege is canceled. If you are interested, please see the Prudential Insurance Company, whose address...