Payne v. Equitable Life Assur. Soc. of U.S.

• Decision Date: 26 October 1961
• Citation: 14 A.D.2d 266,220 N.Y.S.2d 493
• Parties: Gertrude PAYNE, Plaintiff, v. EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Defendant.
• Court: New York Supreme Court — Appellate Division

Page 493

220 N.Y.S.2d 493

14 A.D.2d 266

Gertrude PAYNE, Plaintiff, v. EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, Defendant.

Supreme Court, Appellate Division, First Department.

Oct. 26, 1961.

Julius Siegel, New York City, for plaintiff.

Marshall F. Denenholz, New York City, of counsel ,(Eugene T. O'Neill, New York City), for defendant.

Before BOTEIN, P. J., and BREITEL, RABIN, VALENTE and EAGER, JJ.

PER CURIAM.

This is submission of controversy upon agreed facts, pursuant to §§ 546 to 548 of the Civil Practice Act. The controversy involves the right of plaintiff to recover the death benefit under a certain group life insurance policy issued March 1, 1956, by the defendant to cover employed who were members of a certain trades council and who were employed by contributing employers. As such a member and as so employed, Glenn Payne on March 1, 1956 received from defendant its certificate, duly issued in accordance with the provisions of the policy, and thereby his life was insured in the sum of $5,000 to be paid upon his death to Gertrude Payne, plaintiff herein, as beneficiary. The group policy and the certificate provided that the insurance of any employee under the group policy should terminate automatically on cessation of active work by an employee with a contributing employer. Such provisions, however, were subject to further provisions therein or by law for an 'extended death benefit' and for the privilege of conversion into an individual policy.

As of August 31, 1958, Glenn Payne ceased active work as an employee of a contributing employer, and thereafter, on October 31, 1958, he died. No notice had been given to him of his conversion privileges as required by Subdivision 3 of Section 204 of the Insurance Law. Under these circumstances, we are concluded by the decision of De Ville v. Continental Assurance Co., 10 A.D.2d 386, 199 N.Y.S.2d 876, affirmed, no op. 8 N.Y.2d 1080, 207 N.Y.S.2d 453, 170 N.E.2d 457, and are required to hold that, by virtue of the statutory provisions, coverage of the insured by the policy continued for the 90-day period after termination of employment and that death of the insured during such period entitled plaintiff to the death benefit.

The position of the defendant is that its liability is limited by the particular terms of its policy which merely provide for payment of the death benefit upon due proof of death of the employee 'within 31 days after * * * termination of employment'. Such position, however, is not sustainable in view of the conclusions reached by the court in the De Ville case.

The defendant in the De Ville case also specifically took the position that (quoting from its brief in the Court of Appeals) 'under the terms of the policy coverage exists only for 31 days after termination of eligibility.' In fact, on its face, the Continental policy before the court in the De Ville case did merely provide for payment of the death benefit in case of death of the insured within a 31-day conversion period. The provisions of the said policy were for the payment of the amount of the insurance where the '[i]nsured dies during the period within which he is entitled to have an individual policy issued to him in accordance with (A) or (B) above'; and '(A)' and '(B)' above were provisions giving a conversion privilege for a period of 31 days after termination of eligibility for the group policy coverage.

The fact is that the De Ville Continental policy, as well as the Equitable policy before the court here, in conformity with the standard provision requirements of Insurance Law, § 161, subd. 1(e), merely contained provisions for a 31-day conversion privilege and a 31-day death benefit after termination of eligibility. Neither policy, as written, contained any reference to the statutory obligation to give notice to the insured of the conversion privilege, nor any reference to the continuance of such privilege for 90 days on failure to give notice. Provisions with reference thereto were not required as standard provisions, the reason being that such provisions did not apply to all group life policies, De Ville, supra, 10 A.D.2d page 390, 199 N.Y.S.2d page 880. But a group policy, subject to the provisions of subd. 3 of Section 204, must be interpreted and given effect as if expressly...