Parks v. American Cas. Co. of Reading, Pa.

• Decision Date: 05 December 1977
• Docket Number: No. 13162,13162
• Citation: 572 P.2d 801,117 Ariz. 339
• Parties: Hyman B. PARKS, Appellant, v. AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA, a Pennsylvania Corporation, Appellee.
• Court: Arizona Supreme Court

Page 801

572 P.2d 801

117 Ariz. 339

Hyman B. PARKS, Appellant, v.AMERICAN CASUALTY COMPANY OF READING, PENNSYLVANIA, a Pennsylvania Corporation, Appellee.

No. 13162.

Supreme Court of Arizona, In Division.

Dec. 5, 1977.

Wolfe & Harris, P.A. by Sidney B. Wolfe, Phoenix, for appellant.

Jennings, Strouss & Salmon by W. Michael Flood, Phoenix, for appellee.

HAYS, Justice.

Hyman B. Parks, hereinafter appellant, appeals from a summary judgment granted in favor of American Casualty Company of Reading, Pennsylvania, hereinafter appellee.We have jurisdiction pursuant to 17A A.R.S. Supreme Court Rules, rule 47(e)(5).

Both sides to this controversy agree that there is no dispute regarding facts.The only issue is whether the trial court properly determined the insurance contract between the parties was unambiguous, dictating a summary judgment for the appellee.

In 1964, when appellant was 57 years old, he purchased disability insurance from appellee through a group policy.The master policy for the group, The B'Nai B'Rith, provided that its members could purchase certain amounts of monthly indemnity, in the event of total disability, ranging from $100 to $600 depending on the age of the applicant.It also provided that insured members would be issued individual certificates which would set forth the insurance protection to which the member was entitled.

Pursuant to the plan, and because he was under 60 years old, appellant was able to purchase a policy for a monthly indemnity of $500.He was thereafter issued the individual certificate which contained the following provision:

"SECTION VI INDIVIDUAL TERMINATION

"The individual coverage with respect to any Insured Member shall immediately terminate on the earliest of the following:

"(c) on the premium due date following attainment of age 75.Indemnities reduce as shown in the schedule for disabilities commencing on or after the premium date at the specified attained ages. . . ."(Emphasis added.)

The schedule, also attached to this certificate, was as follows:

          SCHEDULE OF INDEMNITIES REDUCED FOR SPECIFIED ATTAINED AGES
                                                          MAXIMUM ACCIDENT    MAXIMUM SICKNESS
                                                           PAYMENT PERIOD      PAYMENT PERIOD
                  MONTHLY INDEMNITY LIMITS     MONTHLY    Insured             Insured
                  FOR PERIOD OF DISABILITY    INDEMNITY  Member's     Any    Member's     Any
                                                 FOR
                         COMMENCING           TOTAL DI-  Occupati-  Occupa-  Occupati-  Occupa-
                                               SABILI-      on       tion       on       tion
                                                 TY
                -------------------------------------------------------------------------------
                Prior to Premium Due Date
                following attainment of age
                60                             $500.00   60 months  Lifeti-  60 months  To Age
                                                                      me                  65
                -------------------------------------------------------------------------------
                On or after Premium Due
                Date following attainment of
                age 60 but prior to Premium
                Due Date following
                attainment of age 70           $400.00   60 months  Lifeti-  60 months   None
                                                                      me
                -------------------------------------------------------------------------------
                On or after Premium Due
                Date following attainment of
                age 70 but prior to Premium
                Due Date following
                attainment of age 75           $200.00   60 months   None    24 months   None
                -------------------------------------------------------------------------------
                

At age 62 appellant became totally disabled.From April, 1970 to April, 1974, appellee paid appellant $500 a month.At that point, appellee apparently realized its mistake, informed appellanthe had been entitled to only $400 a month, paid appellant $200 more, making a total of $24,000, and advised appelleethey had completed their obligation to him.Appellee then brought this suit to recover the $6,000 more which he felt was owing him.

Appellant's first argument is that he contracted originally for a $500 a month indemnity for 60 months, that his application form said nothing about a reduction of indemnity payments after age 60, and that the contract in its entirety is ambiguous about such reductions.Since ambiguities in insurance contracts should be resolved in favor of the insured, he reasons, the trial court erred in granting the appellee a summary judgment.We do not agree.

It is true that, in Arizona, where the provisions of an insurance policy are unclear or ambiguous, they will be construed most favorably to the insured.A. J. Bayless Markets, Inc. v. Ohio Casualty Insurance Co., 55 Ariz. 530, 104 P.2d 145(1940);Dairyland Mutual Insurance Co. v. Andersen, 102 Ariz. 515, 433 P.2d 963(1967).It is also true, however, that where such provisions are not ambiguous, they must be construed according to their plain and ordinary meaning.A. J. Bayless Markets, Inc. v. Ohio Casualty Insurance Co., supra;Dairyland Mutual Insurance Co. v. Andersen, supra.The provisions of this contract are not ambiguous, as can be seen from those quoted.Consequen...