Prudence Life Ins. Co. v. Morgan

• Decision Date: 14 February 1966
• Docket Number: No. 20108,No. 2,20108,2
• Citation: 7 Ind.Dec. 555,138 Ind.App. 287,213 N.E.2d 900
• Parties: The PRUDENCE LIFE INSURANCE COMPANY, Appellant, v. Lee Roy MORGAN, Appellee
• Court: Indiana Appellate Court

Page 900

213 N.E.2d 900

138 Ind.App. 287

The PRUDENCE LIFE INSURANCE COMPANY, Appellant, v. Lee Roy MORGAN, Appellee.

No. 20108.

Appellate Court of Indiana, Division No. 2.

Feb. 14, 1966.

[138 INDAPP 288]

Combs & Shrode, Evansville, for appellant.

John H. Jennings and Harold M. Wilson, Jr., Evansville, Steve Bach, Mt. Vernon, for appellee.

SMITH, Presiding Justice.

This is an action predicated upon an alleged breach of a health and accident insurance policy, brought by the appellee against the appellant.

[138 INDAPP 289] The appellee filed an amended complaint in two paragraphs, to which the appellant filed an answer in five (5) paragraphs. Appellee filed a reply in two (2) paragraphs to appellant's second paragraph of answer, and a reply in one (1) paragraph to appellant's fourth paragraph of answer.

The amended complaint, in substance, alleges that the appellant is a duly organized and existing corporation engaged in the business of writing accident, hospital, disability and life insurance throughout the United States and particularly in the Commonwealth of Kentucky and the State of Indiana; that on or about January 30, 1962, appellant issued and delivered to the appellee its contract of insurance, the same being policy number 910643; that by the terms of said insurance policy, the appellant agreed to pay the appellee the sum of one hundred fifty dollars ($150.00) per month for total disability as the result of illness or accident as long as he lived and was so disabled and for waiver of premium during total disability continuing for six months after the policy was in force. That appellee duly paid all premiums required and duly performed every condition under the policy to be performed; that appellee on March 5, 1962, while engaged in moving hay in his barn, was suddenly overcome and suffered an attack of smothering weakness and inability to breathe, and, as a result of this attack, he became permanently and totally disabled and was confined to a hospital; that after being released from the hospital he was confined to his bed and was unable to perform work of any nature; that he was treated continuously and regularly by a legally qualified physician; that his condition was diagnosed as lung, heart trouble, and emphysema; that his ability to breathe, walk, move about or control his faculties was permanently affected and impaired; that appellee gave a written notice to the appellant within the time prescribed in the policy of insurance and furnished the appellant written proof of loss and for his claim for total and permanent benefits within the time prescribed in said policy; that appellant began paying appellee [138 INDAPP 290] total disability benefits at the rate of one hundred fifty dollars ($150.00) per month; that a partial payment was made by the appellants of fifty-five dollars ($55.00) covering the period from March 5, 1962 to March 16, 1962; that appellant made another payment of one hundred fifty dollars ($150.00) covering the period from March 16, 1962 to April 16, 1962; that thereafter appellant refused to pay any further benefits and, on or about July 6, 1962, notified appellee that the policy of insurance was cancelled; that appellant refused to accept further proofs of loss and refused to be bound by the terms of the insurance contract; that appellant wrongfully revoked, repudiated and breached its contract of insurance with appellee; that at said time appellee was fifty-eight (58) years of age with a life expectancy of 18.90 years; that appellee was and is permanently and totally disabled, forever unfit physically to perform any work, and was entitled to be protected by said policy of insurance and to receive the benefits thereunder for the rest of his life; and prayed for judgment in the sum of forty-two thousand nine hundred fifty dollars ($42,950.00).

Upon the issues joined by the complaint, the answer of the appellant, consisting of five (5) paragraphs, the reply of the appellee, consisting of two (2) paragraphs, to appellant's second paragraph of answer, and the reply of the appellee, consisting of one (1) paragraph, to appellant's fourth paragraph of answer, the cause was submitted to a jury for trial. The jury returned a verdict for the appellee and against the appellant, awarding the appellee as damages the sum of nineteen thousand eight hundred dollars ($19,800.00). Judgment was entered in accordance therewith.

Thereafter the appellant filed a motion for a new trial which was overruled. The motion for a new trial contains the following specifications of error:

1. the verdict of the jury is contrary to law;

2. the verdict of the jury is not sustained by sufficient evidence;

[138 INDAPP 291] 3. error of law occurring at the trial, in this, to-wit:

the court erred in refusing to give to the jury at the close of plaintiff's evidence in chief a peremptory instruction numbered 'A' directing a verdict for the defendant;

4. error of law occurring at the trial and excepted to by the defendant, in this, to-wit:

the court erred in refusing to give to the jury at the conclusion of all the evidence peremptory instruction numbered 'B' directing the jury to return a verdict for the defendant;

5. error of law occurring at the trial as follows:

(a) the court erred in giving to the jury at the request of the plaintiff instructions numbered 1, 2, 6, 8, 11, 14 and 15;

(b) the court erred in refusing to give to the jury instructions numbered 9, 11, 12, 13, 15, 17, 18, 19 and 20 requested by the defendant;

6. error of law occurring at the trial, in this, to-wit:

the court erred in admitting into the evidence certain testimony of Dr. W. G. Edds, witness for the plaintiff;

7. error of law occurring at the trial, in this, to-wit:

the court erred in permitting plaintiff's counsel to introduce into evidence the 1937 Standard Mortality Table 8. error of law occurring at the trial, in this, to-wit:

the court erred in refusing to admit into evidence a physician's statement made by Dr. Merrill W. Schell concerning the physical condition of the defendant;

9. irregularity in the trial proceedings of the court by which the defendant was prevented from having a fair trial, in this, to-wit:

the trial court abused his discretion in taking the action as set forth in specifications 6, 7 and 8 of this motion for a new trial; and

10. error in the assessment of the amount of damages. $The sole assignment of error was the overruling of appellant's motion for a new trial.

[138 INDAPP 292] Pursuant to Supreme Court Rule 2-17(e) the appellant has grouped its specifications of error, as set forth in the motion for a new trial, into two main areas. They are as follows:

1. That the decision of the trial court is contrary to law in the following respects:

(A) the appellant maintains that the trial court erred in not applying Kentucky law. To support this argument, the appellant contends that in cases where parties to an insurance contract are in different jurisdictions, the state in which the application is made, the premiums paid and the policy of insurance is delivered is the place where the contract is entered into; and any interpretation of the policy is to be governed by the law of the state in which the policy is delivered and the premiums paid.

The appellee challenges this position of the appellant by stating that the remedy for the repudiation of an insurance policy is controlled by the law of the forum, which in this case is the State of Indiana; and further the appellee maintains that the appellant relied solely upon Indiana law until 'one working-day' prior to the time the case came on for trial, at which time, for the first time since the institution of this action, the appellant petitioned the trial court to apply the law of Kentucky.

The rule of law generally followed is that where a cause of action is brought in a state other than the state in which the action arose, matters of a substantive nature are governed by the lex loci; that procedural and remedial matters are governed by the law of the forum; and that the law of the forum is applied in order to determine what constitutes matters of substantive law and what constitutes matters of remedy and procedure. Slinkard v. Babb (1953), 125 Ind.App. 76, 82, 112 N.E.2d 876; Holtz v. E. J. & E. Ry. (1951), 121 Ind.App. 175, 181, 98 N.E.2d 245; Morely v. Cleveland C. C. & St. L. R. R. (1935), 100 Ind.App. 515, 522, 194 N.E. 806.

It is the specific contention of the appellee that the remedy prescribed for the repudiation of a contract is governed by [138 INDAPP 293] the law of the forum (State of Indiana). To support this contention the appellee has cited the case of Fry Brothers v. Theobold, (1924), 205 Ky. 146, 265 S.W. 498, at page 499. The Supreme Court of Kentucky in this case spoke as follows:

'Proceeding upon the lines of judicial comity, the authorities are uniform in holding that the validity of the contract is to be determined by the laws of the state in which it is made, and that the remedies to be enforced are those provided by the state in which the suit is brought.' (Emphasis supplied)

In further support of the contention the appellee has also cited the following cases: Metropolitan Life Insurance Co. v. Kendall (1955), 235 Ark. 731, 284 S.W.2d 863, at page 864; John Hancock Mutual Life Ins. Co. v. Yates (1936), 182 Ga. 213, 185 S.E. 268.

It is our opinion that there is merit in appellee's contention; and that the remedy provided for the repudiation of an insurance contract is determined by the law of the forum, which in this case is the State of Indiana.

It is further the contention of the appellee that even if it is determined that the law of Kentucky rather than the law of Indiana controls the remedy provided for the repudiation of the insurance contract in question, the appellant in petitioning the trial court to take judicial notice of the law of Kentucky, pursuant to the provisions of Section 2-4804 Burns Indiana...