Pearce v. American Defender Life Ins. Co., 8210SC851

• Decision Date: 21 June 1983
• Docket Number: No. 8210SC851,8210SC851
• Court: North Carolina Court of Appeals
• Parties: Leta PEARCE v. AMERICAN DEFENDER LIFE INSURANCE COMPANY.

Page 608

303 S.E.2d 608

62 N.C.App. 661

Leta PEARCE v. AMERICAN DEFENDER LIFE INSURANCE COMPANY.

No. 8210SC851.

Court of Appeals of North Carolina.

June 21, 1983.

Akins, Mann, Pike & Mercer by Jerome J. Hartzell, Raleigh, for plaintiff-appellant.

Reynolds & Howard by Ted R. Reynolds, Raleigh, for defendant-appellee.

HILL, Judge.

In their briefs, the parties state the following versions of the question presented on appeal:

Plaintiff: [W]hether, assuming the accuracy of plaintiff's allegations, defendant has acted wrongfully.

Defendant: [W]hether such action [referring to the May, 1971 exchange of letters] can be construed as placing within the coverage of a life insurance policy risks not originally insured against.

There is no dispute about the facts of this case. The sole issue in the case is whether the insured's death is covered under certain terms of a life insurance policy, issued by defendant, which provide for the payment of $40,000 to the beneficiary in the event of the insured's accidental death. The resolution of this issue depends upon the construction and effect given to the letters, set out above, exchanged by the insured, through an agent, and defendant.

The case presents a factual situation of first impression in this jurisdiction. We cannot say which of the constructions urged upon us by the parties is correct. Our review is limited to a consideration of whether it was error for the trial court to dismiss plaintiff's Complaint for failure to state a claim upon which relief could be granted. We hold that it was.

In ruling on a motion to dismiss a complaint for failure to state a claim upon which relief can be granted, the test to be applied by the court is whether the complaint alleges a set of facts which would entitle the plaintiff to some relief. Carolina Builders Corp. v. AAA Drywall, Inc., 43 N.C.App. 444, 259 S.E.2d 364 (1979); Yates v. City of Raleigh, 46 N.C.App. 221, 264 S.E.2d 798 (1980). For purposes of testing the sufficiency of a complaint to withstand a motion to dismiss under 12(b)(6), the allegations contained therein are liberally construed and treated as true. Shoffner Industries, Inc. v. W.B. Lloyd Construction Co., 42 N.C.App. 259, 257 S.E.2d 50, disc. rev. denied, 298 N.C. 296, 259 S.E.2d 301 (1979). A complaint is sufficient to withstand a motion to dismiss when no insurmountable bar to plaintiff's claim appears on the face of the complaint. Shoffner Industries, Inc. v. W.B. Lloyd Construction Co., supra; United Leasing Corp. v. Miller, 45 N.C.App. 400, 263 S.E.2d 313, disc. rev. denied, 300 N.C. 374, 267 S.E.2d 685 (1980). A complaint should not be dismissed unless it appears to a certainty that no state of facts that could be proved in support of plaintiff's claim would entitle him to relief. Yates v. City of Raleigh, supra, 46 N.C.App. at 225, 264 S.E.2d at 800. See generally 2A Moore's Federal Practice § 12.08 (1983).

Both parties expend considerable effort in their respective arguments proceeding from the premise that the exchange of letters in May of 1971 somehow broadens the coverage of the policy, creating attendant problems of agency and contract law. Without passing on the merits of these contentions, our reading of plaintiff's Complaint and the letters therein establishes to our satisfaction that plaintiff has, at the very least, pleaded no insurmountable bar to her claim.

The 4 May 1971 letter, written on behalf of the insured to defendant, states specifically that the insured is in the armed forces, flying as a crew member on an aircraft, and anticipating later assignment to other aircraft. The letter requests defendant, on the basis of these facts, to advise the insured as to the extent of his coverage under the policy. The letter recited the insured's name and policy number. The letter also asks that the requested advice be spelled out over the signature of one of the executives of defendant insurance company.

Defendant responded directly to the insured in a letter dated 12 May 1971. The response letter said unequivocally that "the basic program is in full force and effect regardless of your occupation." The response letter further stated that the Accidental Death Rider in the policy would be payable if the insured's death occurred while in the armed forces. The letter said that the Accidental Death Rider would not be payable if the insured's death was the result of an act of war.

There is no mistaking the nature of the 4 May 1971 letter to defendant and no misunderstanding the question asked. Defendant was notified of the insured's entry into the Air Force and the fact that he would be serving as a crew member on a military aircraft. Nevertheless, the response letter of 12 May 1971 did not say that the policy precluded payment of the Accidental Death Rider should the insured's death occur while he was engaged in his occupation, which involved considerable flying as a crew member on a military aircraft.

Without citing them as controlling, our research has disclosed two cases where accidental death benefits were held to be payable in situations similar to the one now before us. In Schifter v. Commercial Travellers' Mutual Accident Association, 183 Misc. 74, 50 N.Y.S.2d 376, aff'd., 269 App.Div. 706, 54 N.Y.S.2d 408 (1944), the insurance contract contained aviation and military exceptions similar to those in the present case. The Accident Association in Schifter attached an endorsement to the certificate of membership issued to the insured which said that membership in the Association covered military training "regardless of those provisions which except from payment any claims arising...