Najor v. Wayne Nat. Life Ins. Co., Docket No. 6279
| Decision Date | 24 April 1970 |
| Docket Number | No. 1,Docket No. 6279,1 |
| Citation | 178 N.W.2d 504,23 Mich.App. 260 |
| Parties | Teresa Hanna NAJOR, Plaintiff-Appellee, v. WAYNE NATIONAL LIFE INSURANCE COMPANY, a Michigan corporation, and Alexander Hamilton Life Insurance Company of America, a Michigan corporation, Defendants-Appellants |
| Court | Court of Appeal of Michigan — District of US |
John L. Vanker, Jr., John B. Weaver, Butzel, Eaman, Long, Gust & Kennedy, Detroit, for defendants-appellants.
Albert A. Miller, Garan, Lucow & Miller, Detroit, for plaintiff-appellee.
Before LESINSKI, C.J., and LEVIN and DANHOF, JJ.
This is an action to recover under a contract of life insurance issued by Wayne National Life Insurance Company (hereinafter referred to as Wayne National) to the named insured, William George Najor. The widow and named beneficiary, Teresa Hanna Najor, is the plaintiff. After issuance of the policy, Alexander Hamilton Life Insurance Company of America (hereinafter referred to as Alexander Hamilton) merged with Wayne National and took over all of its existing obligations under policies previously issued. The essential issue for consideration by the court is whether the contract of insurance issued on the life of William Najor had lapsed for nonpayment of the premium on the date of death.
The issue arises because there is a patent ambiguity between the 'issue date' of 12--28--65 on the application for the life insurance and the 'date of issue' on the policy which is 12--28--64. Only one year's premium of $1500 had been paid prior to William Najor's death on March 6, 1966. If the life insurance policy was in force for one year from the issue date in the application plus the 31 day grace period in the policy the contract of insurance had not lapsed for nonpayment of premium on the date of death, March 6, 1966. The same is true if the policy is considered to have been in force from the date that William Najor passed the medical examination on March 24, 1965. However, if the life insurance policy was in force for one year plus the 31 day grace period from the date of issue typed in the policy, 12--28--64, then the contract of insurance had lapsed in January, 1966, prior to the insured's death in March, 1966.
Plaintiff commenced suit on August 4, 1966 asserting that the date of issue, 12--28--64, on the policy had been placed there by error, mistake or inadvertence by the defendant, by or through its agents and employees, or in the alternative was placed on the policy at the direction of defendant's sales agent who acted without the control, consent, or knowledge of William Najor. Plaintiff prayed for judgment on the policy and that the policy be reformed to show a date of issue of March 24, 1965. On March 21, 1968 plaintiff filed an amendment to the complaint adding a prayer that the policy be reformed to show a date of issue of 12--28--65. Plaintiff filed a second amendment to the complaint on August 7, 1968 asserting that the policy was uncertain, ambiguous and confusing as to the issue date, date of issue, and effective date. Plaintiff asked that the uncertainty, ambiguity and confusion be resolved against the defendant and that judgment be granted plaintiff.
Defendant denied that any error, mistake or ambiguity existed and defended on the basis that the policy had lapsed for nonpayment of premiums.
The jury returned an advisory verdict as allowed under GCR 1963, 509.4 recommending reformation of the contract in favor of the plaintiff. Following the jury verdict the trial judge independently ruled in favor of the plaintiff and specifically found that it was not the intention of the parties that the policy be predated to December 28, 1964, and that recovery on the reformed contract would be allowed on either the basis of the March 24, 1965 medical examination date or the December 28, 1965 date. The trial judge specifically found that there was no evidence that the insured ever said anything to the agent or anyone else acting for or on behalf of the defendant about wanting the policy dated 12--28--64. For the purpose of the record the court did in fact reform the contract of insurance to bear the date of December 28, 1965, and a judgment was entered in favor of plaintiff.
Defendant filed a motion for a new trial or entry of a judgment notwithstanding the verdict. It was denied. A timely claim of appeal was then filed in this Court.
This action for reformation of a contract is equitable in nature and while it is heard De novo on the record by this Court, we give great weight to the findings of the trial judge and will not reverse unless they are clearly erroneous, House v. City of Bloomfield Hills (1969), 18 Mich.App. 184, 171 N.W.2d 36; GCR 1963, 517.1.
At the time of trial, only two witnesses were called to testify. Plaintiff introduced into evidence the policy file of Wayne National and the testimony of John Harris, a second vice-president and senior underwriting man of Alexander Hamilton, who was called by the plaintiff as an adverse witness. Harris was not in the employ of Wayne National at the time of the issuance of the contract of insurance. Wayne National called as its only witness, Edward Najor, its sales agent and brother of the deceased. Their testimony will be discussed later.
Relevant portions of the application for life insurance signed by William Najor on February 20, 1965 are as follows:
In the upper right-hand corner the printed words 'ISSUE DATE' appear. On the printed line following is written '12--28--65.'
Block 4 of the application reads:
"4. Date of Birth and Age
Month 7 Day 3 Year 32
------ ----- ----
Age to nearest Birthday 32 "
-----
Block 7 of the application reads
"7. Sum to be Term
insured $ 28064 Rider $_______ Total $ 28064 "
------- ----------
Block 8 of the application reads
"8. Mode of Payment and
Amount to be paid
(x) An. $ 1500 ( ) Mthly
-------------- ----
( ) S-An. ( ) M.B.D.
-------------- ----
( ) Qrtly ( )
-------------- ----
Cash Herewith $ 150.00 "
---------------------------------------
All of the numbers in the foregoing blocks were inserted in ink on the actual application.
Below the 25 numbered blocks for information and above the signature of the insured appear two paragraphs of printed material. The portion relevant to this appeal reads:
'I also agree as follows: That the policy hereby applied for shall not take effect unless I am in good health at the time of its delivery to me, provided that if this application is approved by the Company and policy issued as applied for, and provided the first premium has been paid, The insurance applied for herein shall be effective from the date of the medical examination * * * and that each statement made herein by whomsoever it may be written, is full, true and complete.' (Emphasis supplied)
On the reverse side of the application under the heading 'Agent's Report' and the subheading 'Additional remarks or instructions' appears the following in ink: 'Issue policy as of 12--28--65.' This is signed at the bottom by Ed Najor, Agent-Representative.
Under the general provisions of the policy appears the following:
'The Contract--This policy is issued in consideration of the application and of the payment of premiums as provided. The policy and the application, a copy of which is attached to and made a part of the policy, constitute the entire contract. All statements made by the Insured or on his behalf shall, in the absence of fraud, be deemed representations and not warranties, and no such statement shall be used in defense of a claim under this policy unless it is contained in the application and a copy of the application is attached to this policy when issued.
Modification of Contract--Only the President or the Secretary of the Company has power to change, modify or waive the provisions of this policy, and then only in writing. The Company shall not be bound by any promise or representation heretofore made by or to any agent or person other than as specified above.'
The policy carries the date of issue of 12--28--64 and a benefit date of 12--28--64.
Two days after the insured's medical examination was completed Wayne National applied for reinsurance. The reinsurance cession states the 'policy date' as 12--28--65. The reinsurance cession has columns for listing the reinsurance amount and life premiums for 5 years. At the top of these columns indicating the policy year has been typed '65,' '66,' '67,' '68,' and '69.' These have been written over with a pen so as to read '64,' '65,' '66,' '67,' and '68.' The work sheet in Wayne National's records relative to this policy reads, 'Date Issued 4--2--65.' Wayne National's premium billing card reads, 'Date Issued 4--2--65.' Additionally, in the lower right-hand corner of this billing card is the following printed block with the dates in ink:
'Ext. Amt. 2--28--66 (three illegible letters)
Ins. To 12--28--65
Reinstated'
On defendant's carbon copy of a form letter regarding nonpayment of premium, addressed to William Najor at the address on the application for insurance, is the following in the upper right-hand corner:
'DATE March 3, 1966
PREMIUM DUE DATE December 28, 1965
TOTAL PREMIUM(S) $1,500.00
BENEFIT ACCUMULATIONS 626.53
NET PREMIUM DUE 873.47'
The first column is printed and the second column is typewritten.
John Harris was qualified as an expert witness. He testified that the terms 'effective date,' 'issue date,' 'date of issue,' 'policy date,' and...
To continue reading
Request your trial
-
Brody v. Deutchman (In re Rhea Brody Living Trust)
...the parties ... as the result of accident, inadvertence, mistake, fraud, or inequitable conduct ...." Najor v. Wayne Int'l Life Ins. Co. , 23 Mich. App. 260, 272, 178 N.W.2d 504 (1970) (quotation marks and citation omitted). See also Holda v. Glick , 312 Mich. 394, 403–404, 20 N.W.2d 248 (1......
-
Frontier Energy, LLC v. Aurora Energy, Ltd. (In re Aurora Oil & Gas Corp.)
...is a matter of equity, and generally involves fraud or mutual mistake of fact not proven here. Najor v. Wayne Nat'l Life Ins. Co., 23 Mich.App. 260, 178 N.W.2d 504, 511 (1970). At most, the testimony of the Nielson Brothers, if credited, would establish that the Agreement did not accurately......
-
Frontier Energy, LLC v. Aurora Energy, Ltd. (In re Aurora Oil & Gas Corp.)
...instruments is a matter of equity, and generally involves fraud or mutual mistake of fact not proven here. Najor v. Wayne Nat'l Life Ins. Co., 178 N.W.2d 504, 511 (Mich. App. 1970). At most, the testimony of the Nielson Brothers, if credited, would establish that the Agreement did not accur......
-
Titan Ins. Co. v. Hyten
...an equitable remedy.” Auto–Owners Ins. Co. v. Elchuk, 103 Mich.App. 542, 545, 303 N.W.2d 35 (1981). In Najor v. Wayne Nat'l Life Ins. Co., 23 Mich.App. 260, 272, 178 N.W.2d 504 (1970), this Court adopted the following description of reformation: “A written instrument may be reformed where i......