Passkowski v. Prudential Insurance Co. of America, Civ. 7174.

• Decision Date: 05 April 1960
• Docket Number: Civ. 7174.
• Citation: 182 F. Supp. 819
• Court: U.S. District Court — District of Connecticut
• Parties: Mary PASSKOWSKI, Plaintiff, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant.

182 F. Supp. 819

Mary PASSKOWSKI, Plaintiff, v. PRUDENTIAL INSURANCE COMPANY OF AMERICA, Defendant.

Civ. 7174.

United States District Court D. Connecticut.

April 5, 1960.

Samuel Gruber, of Gruber & Turkel, Stamford, Conn., for plaintiff.

Bruce W. Manternach, of Robinson, Robinson & Cole, Hartford, Conn., for defendant.

CLARK, Circuit Judge (sitting as District Judge pursuant to statutory designation).

This is an action in the diversity jurisdiction of the court brought by a Connecticut resident against a New Jersey insurance company to recover $5,000 under a group life insurance policy. The defendant had issued the policy, Exhibit 1 herein, on the lives of employees of Columbia Broadcasting System, Inc. (CBS). Plaintiff is the designated beneficiary on certificates of insurance issued under this policy to her husband, Bruno F. Passkowski, now deceased, who was employed from 1942 to 1957 by Columbia Records, Inc., a CBS subsidiary.

Since July 15, 1956, CBS employees have been insured for $4,000, for which amount premiums are paid by the company. Mr. Passkowski also carried an additional $1,000 coverage, Exhibit 2 herein, for which at least a portion of the premium was defrayed through payroll deduction. Thus it is common ground that he was insured for $5,000 while employed. The dispute involves the amount of coverage to which Passkowski, as a retired employee, was entitled at the time of his death. Defendant asserts that its liability under the policy is limited to $500, which amount has been paid.

In addition to the insurance plan, CBS employees were covered by a retirement pension plan which was also insured by the defendant. This plan provided for voluntary retirement between the ages of 65 and 68. Passkowski, who was born August 31, 1891, applied on June 14, 1957, for such retirement, effective June 30, 1957, and signed the "Notice of Retirement Status," Exhibit A. In order to initiate the annuity benefits, to continue during the employee's life, the employer notified the defendant of Passkowski's retirement status by letter of July 22, received July 23, 1957, enclosing the notice, Exhibit A; this notification had no connection with coverage under the group insurance plan. Passkowski died on August 7, 1957, thirty-eight days following his retirement.

Since the issue primarily turns upon the interpretation of the policy, Exhibit 1, pertinent provisions, amended as of July 15, 1956, are as follows:

"Plan of Insurance

"Each Employee shall be eligible for insurance under the Policy from the effective date of the Policy or the completion of two months of continuous service, whichever is later.

                                  Table
                Classification    Amount of Insurance*
                All Employees
                of the Columbia
                Records Division  * * * ...... $4,000
                

*The amount of insurance on each insured Employee retired by the Employer on or after April 1, 1950 shall, on and after the later of June 1, 1954 and his date of retirement and while he remains insured under the Policy, be $500 * *.

* * * * * *

"Should an Employee's insurance be continued during disability, leave of absence, temporary lay-off or retirement, the amount of his insurance shall be the amount for which he was insured on his last day of work, unless otherwise stated above.

* * * * * *

"Termination of Individual Insurance

"The insurance on an Employee shall automatically terminate * * * if his employment with the Employer terminates, or if this Policy terminates. If, however, the Employee is entitled by the terms of this Policy to convert all or part of his insurance to an individual policy but dies during the thirty-one day period following termination of insurance, the amount of insurance which might otherwise have been converted will be paid as a claim under this Policy, whether or not application for conversion has been made.

"Termination of employment shall, for all purposes of this Policy, be deemed to occur upon cessation of active work on a full-time basis with the Employer, except that an Employee who is disabled, on leave of absence, temporarily laid off, employed on a part-time basis, or retired will nevertheless be considered as still employed on a full-time basis until the Employer, acting in accordance with rules precluding individual selection, terminates the Employee's insurance by notifying the Insurance Company to that effect or by discontinuing premium payments for his insurance. * * *"¹

As the notice of termination by the employer to the defendant herein specified had not been given, the deceased remained insured following retirement. Thus the printed form, "Notice of Retirement Status," Exhibit A, refers only to the annuity plan; and both parties base their contentions upon the assumption of continued insurance. Plaintiff urges that, since Passkowski was therefore "considered as still employed on a full-time basis," he was entitled to full coverage. Defendant, however, points to the "Plan of Insurance" clause under which $500 coverage is provided for a retired employee "while he remains insured under the policy." The court finds the latter position the more persuasive.

The group policy initially was issued by defendant to ...