Pendell v. Westland Life Ins. Co.

• Decision Date: 27 January 1950
• Citation: 95 Cal.App.2d 766,214 P.2d 392
• Parties: PENDELL v. WESTLAND LIFE INS. CO. Civ. 17130.
• Court: California Court of Appeals Court of Appeals

Page 392

214 P.2d 392

95 Cal.App.2d 766

PENDELL v. WESTLAND LIFE INS. CO.

Civ. 17130.

District Court of Appeal, Second District, Division 3, California.

Jan. 27, 1950.

Webb, Webb & Crites, Hester Webb, and Reed Crites, San Francisco, for appellant.

Newell & Chester, Los Angeles, for respondent.

VALLEE, Justice.

Appellant, defendant below, appeals from a judgment for plaintiff in an action for a declaration of his rights under a contract of health and accident insurance.

June 21, 1943, appellant issued a policy of insurance called 'Employees Income Policy (Non-Occupational)' by which it agreed to indemnify respondent for specified losses. In part it read that if respondent, while the policy was in force, should sustain loss resulting directly and independently from all other causes from accidental bodily injury which did not arise out of or was not sustained in the course of employment for compensation, profit or gain, and if such injury within twenty days of the date of the accident totally and continuously disabled respondent, appellant would pay respondent a monthly indemnity of $100 a month, as long as he was so disabled, not exceeding five years. It also indemnified respondent against loss occurring while the policy was in force resulting from bodily disease, the cause of which originated more than thirty days after the date of the policy 'hereinafter referred to as 'such sickness". The amount of the indemnity was set forth in Part 1.

Part 16(C) in part read: 'Under the terms of this policy, lumbago, sprained or lame back, or hernia shall be classified as 'such sickness.' The only indemnity payable for hernia shall be one month's indemnity under Part 10(A) or (B), [$100] and then only in the event of a necessary herniotomy.'

In a 'First Day Coverage Rider,' a part of the policy, appellant agreed that the various indemnities referred to in the policy would be paid as of the first day of injury.

In a 'Surgical Operation Fees Rider,' a part of the policy, appellant agreed to pay the actual expense incurred for 'Hernia--Cutting operation for radical cure of Single hernia . . . 50.00 More than one hernia . . . 75.00'.

February 5, 1946, while the policy was in force, respondent accidentally sustained an 'esophageal hiatus diaphragmatic hernia' (the peritoneal sac covering the stomach slid up into the membranous partition separating the thoracic cavities), nonoccupational in nature. He has been totally disabled since that date. He submitted to an operation. Appellant paid respondent one month's indemnity of $100 and a $50 surgical fee.

The court found that the parties did not intend to include an 'esophageal hiatus diaphragmatic hernia' within the meaning of the word 'hernia' as used in Part 16(C). Judgment was for respondent for $100 a month from one month after the accident to the time of trial.

Appellant's specifications of error are: 1. The word 'hernia' as used in the policy includes an 'esophageal hiatus diaphragmatic hernia' as a matter of law. 2. The court erred in admitting in evidence a specimen of a special 'Surgical Operation Fees Rider' issued by appellant in April, 1946.

If the word 'hernia,' as used in the policy, includes an 'esophageal hiatus diaphragmatic hernia,' respondent was fully paid. If it does not he is entitled to $100 a month for five years.

The first specification of error is, in effect, that the word 'hernia' as used in the policy is unambiguous; and that parol evidence, admitted without objection, to aid the court in construing the contract, may not be considered. The clause in the policy providing that the indemnity payable for 'hernia' shall be for one month is an exception to the general indemnity provided by the policy.

The terms of a contract of insurance constitute the measure of the insurer's liability and should be construed according to the language used therein. Pacific Heating & Ventilating Co. v. Williamsburgh City Fire Ins. Co., 158 Cal. 367, 369, 111 P. 4; Coit v. Jefferson Standard Life Ins. Co., 28 Cal.2d 1, 168 P.2d 163, 168 A.L.R. 673. Language which is clear and unambiguous is to be construed according to its plain meaning. Guidici v. Pacific Automobile Ins. Co., 79 Cal.App.2d 128, 134, 179 P.2d 337.

A contract of insurance, like any other contract, is to be construed so as to give effect to the intention of the parties at the time of contracting so far as it is ascertainable. Civ.Code, sec. 1636. Where the language is susceptible of two constructions, it should be construed most strongly in favor of the insured. Mah See v. North American Acc. Ins. Co., 190 Cal. 421, 424, 213 P. 42, 26 A.L.R. 123; Island v. Fireman's Fund Indemnity Co., 32 Cal.2d 541, 548, 184 P.2d 153, 173 A.L.R. 896. A contract of insurance must be given such construction, if fairly warranted, as will best carry out the object for which the contract was entered into, namely, that of securing indemnity to the insured for the losses to which the insurance relates. Fageol Truck & Coach Co. v. Pacific Indemnity Co., 18 Cal.2d 748, 751, 117 P.2d 669. Indemnification of the insured should be effected rather than defeated. 'To that end the law makes every rational intendment in order to give full protection to the interests of the insured.' Glickman v. New York Life Ins. Co., 16 Cal.2d 626, 635, 107 P.2d 252, 256, 131 A.L.R. 1292.

Exceptions in a contract of insurance which purport to limit the risk assumed by the insurer in the general provisions thereof are to be construed most strongly against the insurer and in favor of the insured and if susceptible of two meanings, the one most favorable to the insured is to be adopted. Mah See v. North American Acc. Ins. Co., 190 Cal. 421, 424, 213 P. 42, 26 A.L.R. 123; Bayley v. Employers' Liability Assur. Corp., 125 Cal. 345, 352, 58 P. 7. The insurer is bound to use such language as to make the exceptions and provisions of the contract clear to the ordinary mind; and in case it fails to do so, any uncertainty or reasonable doubt is to be resolved against it. Pacific Heating & Ventilating Co. v. Williamsburgh City Fire Ins. Co., 158 Cal. 367, 370, 111 P. 4.

Civil Code section 1644 says that 'The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.'

If the language may be understood in more than one sense, it is to be construed against the insurer and in favor of the insured. Bayley v. Employers' Liability Assur. Corp., 125 Cal. 345, 352, 58 P. 7. If there is doubt whether words of a contract of insurance were used in an enlarged or restrictive sense, other things being equal, the construction will be adopted which is most beneficial to the insured. Berliner v. Travelers' Ins. Co., 121 Cal. 458, 461, 53 P. 918, 41 L.R.A. 467, 66 Am.St.Rep. 49. Where language, somewhat technical in character--or if not technical at least colored by the meaning attributed to it by medical men with which laymen are more or less unacquainted--is to be construed, it is far safer to leave the meaning thereof, with all the circumstances in mind, to the trier of fact, than for a reviewing court to lay down a hard and fast rule as to what the language means. Amok Gold Mining Co. v. Canton Ins. Office, 36 Cal.App. 265, 270, 171 P. 1098. Unless it is obvious that a word was used in its technical sense it will be given the meaning that common speech imports. Greenberg v. Continental Casualty Co., 24 Cal.App.2d 506, 510, 75 P.2d 644; Fitzpatrick v. Metropolitan Life Ins. Co., 15 Cal.App.2d 155, 158, 59 P.2d 199.

In discussing the distinction between patent and latent ambiguities and the admissibility of extrinsic evidence as an aid in the construction of a writing, the author of the subject in California Jurisprudence says that there is a third and intermediate class of cases where the words are all sensible and have a settled meaning, but at the same time consistently admit of two interpretations according to the subject matter in the contemplation of the parties. 10 Cal.Jur. 939, sec. 204. Jenny Lind Co. v. Bower & Co., 11 Cal. 194, cited in support of the text, says, page 198: 'The language of every instrument should be so construed, if possible, as to effectuate the intentions of the parties; and to ascertain the meaning attached to particular words, when such words are used in various senses, parol evidence is perfectly legitimate.' The court held that the word 'north' was susceptible of more than one meaning and that parol evidence was admissible to show in what sense the parties used the word. See also Wachs v. Wachs, 11 Cal.2d 322, 79 P.2d 1085; Ferris v. Emmons, 214 Cal. 501, 6 P.2d 950; Pierson v. Bradfield, 43 Cal.App.2d 519, 524, 111 P.2d 460; Norton v. Farmers Automobile Inter-Insurance Exchange, 40 Cal.App.2d 556, 105 P.2d 136.

If 'the language employed be fairly susceptible of either one of the two interpretations contended for, without doing violence to its usual and ordinary import, or some established rule of construction, then an ambiguity arises, which extrinsic evidence may be resorted to for the purpose of explaining. This is not allowing parol evidence for the purpose of varying or altering the contract, or of putting a different sense and construction upon its language from that which it would naturally bear, but for the purpose of showing the circumstances under which the language was used, and applying it according to the intention of the parties. 'The true interpretation of every instrument being manifestly that which will make the instrument speak the intention of the party at the time it was made, it has always been considered an exception, or perhaps a corollary, to the general rule above stated, that when any doubt arises upon the true sense and meaning of the words themselves, or any difficulty as to...