Mutual Life Ins. Co. of New York v. Temple

• Decision Date: 19 September 1944
• Docket Number: Civ. A. No. 1023.
• Citation: 56 F. Supp. 737
• Parties: MUTUAL LIFE INS. CO. OF NEW YORK v. TEMPLE.
• Court: U.S. District Court — Western District of Louisiana

56 F. Supp. 737

MUTUAL LIFE INS. CO. OF NEW YORK v. TEMPLE.

Civ. A. No. 1023.

District Court, W. D. Louisiana, Alexandria Division.

September 19, 1944.

Montgomery, Fenner & Brown, of New Orleans, La., for complainant.

Richard L. Crowell, of Alexandria, La., for defendant.

PORTERIE, District Judge.

The Mutual Life Insurance Company of New York as complainant institutes this action against the defendant, seeking a declaratory judgment adjudging and determining the rights and obligations of the parties with respect to the payment of disability benefits under a life insurance contract. The contract is based on the condition of a twenty-year pay; the twenty annual full premiums (date of last payment, July 26, 1942) have been paid. Since the year 1932 the insured, upon submitted proof, had been accepted as being totally and permanently disabled under the terms and provisions of the policy; disability benefits were paid to May 1, 1944, at which time, the complainant company having allegedly acquired knowledge on or about March 31, 1944, that the insured was not, and had not been, totally and permanently disabled, discontinued payments. Since the disability has been for over ten years, the disability benefit now to be paid under the policy terms is $100 per month.

Accordingly, the complainant entered court in the manner above described and seeks to maintain jurisdiction in that the amount in controversy, exclusive of interest and costs, exceeds the sum of $3000, on two grounds: (a) because the insured under the mortality tables has a life expectancy substantially in excess of twenty-nine months, and (b) that in accordance with the requirements of the law of the state of New York complainant is obligated to establish a reserve in excess of $3000 and that this reserve is actually now maintained.

The complaint was filed and the summons issued on the 30th day of June, 1944; therefore, the defendant claims that there were only two months of disability benefits in arrears, and consequently, the only amount at issue in this suit is $200, and that the alleged reserve of $3000, under the law, is unavailing to give jurisdiction; so, pursuantly, the defendant has filed a motion to dismiss.

After argument, we surmise that the complainant company, knowing full well the status of the law on jurisdiction in this type of case, based its petition on two cases in particular of the Circuit Court of Appeals for this district, to-wit: Mutual Benefit Health & Accident Association v. Fortenberry et al., 5 Cir., 98 F.2d 570, and Ballard et al. v. Mutual Life Insurance Co. of New York, 5 Cir., 109 F.2d 388, this latter case mainly based on Brotherhood of Locomotive Firemen, etc., v. Pinkston, 293 U.S. 96, 55 S.Ct. 1, 79 L.Ed. 219. Counsel said that under the two decisions, supra, complainant was entitled to jurisdiction solely on the one point that the product of the number of years of expected life by the sum of $1200 ($100 per month for a year) will exceed the required amount for jurisdiction.

The presiding judge of this court has to repeat what he said in the case of Mitchell v. Mutual Life Insurance Company of New York, D.C., 31 F.Supp. 441, at page 443: "If the plaintiff be determined by trial to be totally and permanently disabled, he will be entitled to a money judgment for six months at $30 per month, or the sum of $180. We are computing to the date of filing suit, December 7, 1939, which is the date on which jurisdiction is to be ascertained. Payments in the future during total and permanent disability are not to be considered in establishing jurisdiction. Wright v. Mutual Life Ins. Co. of New York, 5 Cir., 19 F.2d 117; Mutual Life Ins. Co. of New York v. Wright, 276 U.S. 602, 48 S.Ct. 323, 72 L.Ed. 726; Town of Elgin v. Marshall, 106 U.S. 578, 1 S.Ct. 484, 27 L.Ed. 249; Small v. New York Life Ins. Co., D.C., 18 F. Supp. 820."

In the same case, 31 F.Supp. at page 444, we said:

"However, the company, in its petition to remove to the federal court, refers to the requirement of the insurance contract that a reserve of $3,000 is to be established, in the case plaintiff be declared totally and permanently disabled. This amount is reached by a consultation of mortality tables in respect to plaintiff's life expectancy.

"We find that such a contingent reserve is no basis to establish jurisdiction. Shabotzky v. Massachusetts Mut. Life Ins. Co., D.C., 21 F.Supp. 166; Wright v. Mutual Life Ins. Co., 5 Cir., 19 F.2d 117; Small v. New York Life Ins. Co., D.C., 18 F. Supp. 820. There are cases holding otherwise, but we adhere to the principles of Town of Elgin v. Marshall, supra, so long and often followed.

"Moreover, the parties litigant in this case are not trying to vitiate the contract of insurance between them; they are merely seeking a court interpretation of one of the clauses of the contract — the one involving monthly payments because of total and permanent disability. So, the face of the policy in this case does not serve to fix jurisdiction. See Mutual Ben. Health & Accident Ass'n v. Fortenberry et al., 5 Cir., 98 F.2d 570; Shabotzky v. Massachusetts Mut. Life Ins. Co., D.C., 21 F.Supp. 166; Equitable Life Assur. Soc. of United States v. Wilson, 9 Cir., 81 F.2d 657; Bell v. Philadelphia Life Ins. Co., 4 Cir., 78 F.2d 322."

We do not rely on our own decision; we are relying on the decisions quoted, particularly the Wright case, affirmed at 276 U.S. 602, 48 S.Ct. 323, 72 L.Ed. 726. Incidentally, it is a Fifth Circuit case.

The other judge of this court approved of the Mitchell case, supra, in Godfrey v. Brown Paper Mill Company, Inc., D.C., 52 F.Supp. 926.

In addition to the above authorities, we should quote from Mutual Life Insurance Co. of New York v. Moyle, et ux., 4 Cir., 116 F.2d 434, at page 435: "We think it clear that all that is in controversy is the right of the insured to the disability payments which had accrued at the time of suit. The company is obligated to make these payments only so long as the condition evidencing total and permanent disability continues; and, as this condition, theoretically at least, may change at any time, it is impossible to say that any controversy exists as to any disability payments except such as have accrued. New York Life Ins. Co. v. Viglas, 297 U.S. 672, 56 S.Ct. 615, 80 L.Ed. 971; New York Life Ins. Co. v. Stoner, 8 Cir., 92 F.2d 845; United States Fidelity & Guaranty Co. v. McCarthy, 8 Cir., 33 F.2d 7, 13, 70 A.L.R. 1447; Metropolitan Life Ins. Co. v. Hobeika, D.C., 23 F.Supp. 1; Small v. New York Life Ins. Co., D.C., 18 F.Supp. 820. Such a case is to be distinguished from one where the controversy relates to the validity of the policy and not merely to liability for benefits accrued; for, in the latter case, the amount involved is necessarily the face of the policy in addition to the amount of such benefits. See Stephenson v. Equitable Life Assur. Soc., 4 Cir., 92 F.2d 406; Bell v. Philadelphia Life Ins. Co., 4 Cir., 78 F.2d 322; Pacific Mutual Life Ins. Co. v. Parker, 4 Cir., 71 F.2d 872."

The Ballard case was declared against in Mutual Life Insurance Co. of New York v. Moyle, supra, in the following language: "Plaintiff relies also upon Ballard v. Mutual Life Ins. Co., 5 Cir., 109 F.2d 388; but, with great respect to the able court that rendered that decision we are unable to follow it, if its holding is that, in a case such as this, where disability payments and waiver of premiums cease upon cessation of disability, the disability payments and the amount of the premiums over the life expectancy of the insured, rather than the disability payments and premiums past due, fix the amount in controversy for purposes of jurisdiction. The decision seems to have proceeded on the theory that the plaintiff was seeking the cancellation of a claim of the value of the policy; and on this basis it was distinguished by Judge Waller in Travelers Ins. Co. v. Wechsler, D.C., 34 F.Supp. 721, 723, a case `on all fours' with the case at bar."

The language of the Ballard case is explicit, is strong, and comes from our own circuit 109 F.2d 389: "This claim (from the asserted liability for which the plaintiff asked to be relieved) was alleged to be in excess of $3,000, and, since the insured is only forty-two years of age, has a reasonable life expectancy of many years, and is alleged to be totally and permanently disabled, it appears to us that the value of his claim is not overstated."

The sentence immediately following the above, especially since it contains the word italicized by us, begins to limit the breadth of meaning of the language: "The amount in controversy is the value of his claim which the company is seeking to have cancelled in the court below, not the amounts sued for in the state courts."

What in our opinion takes away most from the apparent meaning of the first quotation above is the list of cases given to support it: Brotherhood of Locomotive Firemen & Enginemen v. Pinkston, supra; Mutual Ben. Health & Accident Ass'n v. Fortenberry, supra; C. E. Carnes & Co. v. Employers' Liability Assur. Corp., Ltd., 5 Cir., 101 F.2d 739; Rydstrom v. Massachusetts Acc. Co., D.C., 25 F. Supp. 359.

As to the Pinkston case, and its ancestor, Thompson v. Thompson, 226 U.S. 551, 33 S.Ct. 129, 57 L.Ed. 347, Judge Parker in Mutual Life Ins. Co. of New York v. Moyle et ux., says: "In that case, however, the amount involved was the present value of monthly payments fixed by contract and terminable only upon the remarriage of the person entitled to receive them. The court held that the effect of the expectancy of remarriage was capable of actuarial determination, and that the value of the right to receive the payments subject to that contingency was $6,000. Here the right to disability payments and waiver of premiums terminates when disability ceases to exist. There is accordingly no fixed right to the continuance of the payments; and the only justiciable controversy relates to the...