Pribble v. Aetna Life Ins. Co.

• Decision Date: 22 September 1972
• Docket Number: No. 9368,9368
• Citation: 1972 NMSC 63,501 P.2d 255,84 N.M. 211
• Parties: Richard L. PRIBBLE, Plaintiff-Appellant, v. AETNA LIFE INSURANCE COMPANY and Jerry L. Gaultney, Defendants-Appellees.
• Court: New Mexico Supreme Court

Page 255

501 P.2d 255

84 N.M. 211

Richard L. PRIBBLE, Plaintiff-Appellant, v. AETNA LIFE INSURANCE COMPANY and Jerry L. Gaultney Defendants-Appellees.

No. 9368.

Supreme Court of New Mexico.

Sept. 22, 1972.

J. Victor Pongetti, Albuquerque, for plaintiff-appellant.

Toulouse & Moore, Larry D. Beall, Albuquerque, for defendants-appellees.

OPINION

STEPHENSON, Justice.

This suit was brought in the District Court of Bernalillo County to recover medical and hospital expenses under a group policy of insurance ("the policy") issued by the appellee insurance company ("Aetna"), or alternatively, to recover against Aetna and its general agent, appellee Gaultney, on the basis of an estoppel. The court granted appellee's motion for summary judgment and appellant appeals.

The complaint alleges that Mr. Pribble was injured in an aircraft accident while covered under the policy which provided reimbursement of medical expenses up to a maximum of $10,000. It alleges that Mr. Pribble is entitled to the maximum. In the alternative, if the policy does not cover the medical expenses, it is alleged that appellees represented that the accident was covered and in reliance on such representations Mr. Pribble incurred medical expenses exhausting the amount payable under the policy, and that appellees are now estopped from denying the coverage.

Appellees, after pleading a general denial, answered that the complaint failed to state a claim upon which relief may be granted and that the policy could not be changed in any material provision after issuance except by an executive officer of the company as therein provided

After some discovery and the filing of various affidavits the court granted appellees' motion for summary judgment. We will summarize the facts disclosed by the pleadings, depositions and affidavits in the light most favorable to Mr. Pribble.

Aetna insured employees of the Dale J. Bellamah Corporation ("Bellamah") under the policy. Appellee Gaultney was the general agent of Aetna for the State of New Mexico. Mr. Pribble, an employee of Bellamah, was insured under the policy. He was injured in an aircraft accident in the course of his employment. He incurred substantial hospital and medical expenses which were defrayed in part by another insurance policy and by reimbursement of medical expenses under a workmen's compensation policy.

The Aetna group policy provides:

"Covered Medical Expenses are the reasonable charges which an Employee is required to pay for the following services and supplies received by a covered family member for the necessary treatment of any non-occupational injury or non-occupational disease:"

Hospital and other medical expenses ate then defined.

Mr. Pribble's injuries were so serious that he could not handle his own affairs and he gave Messrs. Gonzales and Shaw his power of attorney.

Shortly after the accident, Mr. Gaultney met Bellamah executives concerned with determining the medical, hospital, life and other insurance available to Mr. Pribble and the families of the other accident victims for the purposes, among other things, of determining what insurance coverage was available to plaintiff under the policy. During the course of this conversation, Mr. Gaultney said that the $10,000 hospitalization benefit with Aetna would be available to Mr. Pribble but that workmen's compensation medical benefits and other insurance which required no participation by the employee should be used first, saving for last the Aetna policy which covered only 80% of the expense and required the employee to bear 20% Mr. Gaultney's conversation was recounted to Mr. Pribble and Mr. Gonzales.

Prior to the accident, and in early 1967, Mr. Gaultney participated on behalf of Aetna in the negotiations wherein Bellamah obtained the subject insurance from Aetna, canceling an existing policy with another company. The policy contains a $100 deductible provision per family member as did its predecessor. In the negotiations, Mr. Gaultney verbally agreed that employees who had used the $100 deductible under the prior policy would not be faced with another $100 deductible under the Aetna policy for 1967. During 1967, three employees of Bellamah were charged a second $100 deductible under the Aetna policy. Mr. Pribble, who administered the group policy for Bellamah, called Aetna's attention to the verbal agreement of Mr. Gaultney, whereupon Aetna honored the verbal commitment.

In January of 1969, the prognosis of the treating physician was that it was doubtful if Mr. Pribble would walk again. At this time, he had incurred medical bills in an amount in excess of $20,000. When faced with the decision whether or not to continue treatment, Mr. Pribble stated, "I considered the cost and the doctor's doubt about a successful outcome, but decided that since I had the insurance proceeds to cover the operations, I might as well take the chance." "Had I known that the Aetna coverage was not available at that time, . . . I would have checked myself out of the hospital and quit the rehabilitation therapy." Mr. Pribble continued treatment and by July 29, 1969, had incurred medical expenses of over $40,000. On June 24, 1969, one of Aetna's agents wrote Mr. Pribble a letter wherein the occupational injury exclusion was raised. However, this letter was not a formal denial of the claim. The letter acknowledges that Aetna had advised Bernalillo County, Medical Center and Bellamah that the ". . . contract would pick up where Fireman's Fund (your workmen's compensation carrier) leaves off . . ." On July 8, 1969, the Agent wrote a letter to Bernalillo County Medical Center, with a carbon copy to Mr. Pribble wherein Aetna indicates the question was still in doubt. On July 29, 1969, Aetna denied coverage under the group policy.

Bellamah employees did not receive a copy of the insurance contract. They received a certificate which in general terms stated the coverage. The certificate covers twenty-nine printed pages. (The policy covers fifty.) Under a portion of the policy entitled "Group Accident and Health Policy Provisions" the term "non-occupational injury" is defined as:

"* * * an accidental bodily injury which does not arise, and which is not caused or contributed to by, or as a consequence of, any injury which arises, out of or in the course of any employment or occupation for compensation or profit."

Seven pages later, under a caption "Exclusions, Limitations and Provisions Applicable to Title CMEB" it is stated:

"No insurance is afforded under this Title CMEB (1) as to charges in connection with * * * an injury other than a non-occupational injury; * * *"

This verbiage creates little difficulty if read rapidly with the thought firmly in mind that occupational injuries are not covered as all counsel seem to agree. It constitutes, in the aggregate, a triple negative. It is curious that simpler language such as "occupational injuries are excluded" is so rarely used in policies.

Mr. Pribble had no actual knowledge that the policy excluded from coverage occupational injury nor that the master policy contained a provision that no change in the policy was valid unless approved by an executive officer of Aetna.

Mr. Gaultney was sued as an individual. Several distinctions may exist between the legal position which he occupies and the of Aetna, but no basis of liability on his part, distinct from Aetna, is presented. No distinction is drawn between the two appellees, and we will therefore treat Mr. Gaultney as though he stands with Aetna. Similarly no significance is attributed to the fact that the assured was Bellamah which is not a party. We are neither holding nor inferring this is a consideration of significance, but it should be understood that the parties have presented and argued the case as though Mr. Pribble was the assured with no distinction between his position and that of Bellamah. We will do the same.

This being an appeal from a summary judgment, our consideration of the factual material presented is governed by our recent definitive opinion in Goodman v. Brock, 83 N.M. 789, 498 P.2d 676 (1972).

Mr. Pribble first argues that Mr. Gaultney had actual or apparent authority to change or waive the terms of the policy in such a way that the former's injury would be covered. Aetna asserts that, as a matter of law, Mr. Gaultney had neither such actual nor apparent authority.

Considering first the issue of Mr. Gaultney's actual authority, the policy provision relied upon by Aetna provides:

"This policy may be changed at any time or times by written agreement between the Insurance Company and the Policyholder, without the consent of any employee or other person. No change in this policy shall be valid unless approved by an executive officer of the Insurance Company and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions."

(Emphasis added.)

Neither "executive officer" or "agent" are otherwise defined.

Aetna, being a corporation, can function only through its agents and servants. There is nothing before us to indicate whether the term "executive officer" means only those individuals who occupy titled corporate positions, such as president or treasurer or the like, or whether the term is used in more general sense meaning those to whom executive functions have been delegated by the corporate character or by-laws, or by the directors. It could mean those who merely perform executive functions in actual practice. The word "executive" lacks specificity.

A ...