Reynolds v. Mid-South Ins. Co., MID-SOUTH

• Decision Date: 31 August 1992
• Docket Number: MID-SOUTH,No. 12-89-00297-CV,12-89-00297-CV
• Citation: 836 S.W.2d 349
• Parties: Smith P. REYNOLDS, III, Appellant, v.INSURANCE CO., d/b/a Mid-South Insurance Company of North America, Appellee.
• Court: Texas Court of Appeals

Page 349

836 S.W.2d 349

Smith P. REYNOLDS, III, Appellant, v. MID-SOUTH INSURANCE CO., d/b/a Mid-South Insurance Company of North America, Appellee.

No. 12-89-00297-CV.

Court of Appeals of Texas Tyler.

Aug. 31, 1992.

Trey Yarbrough, Tyler, for appellant.

Thomas W. Reardon, Jr., Gregory D. Smith, Tyler, for appellee.

COLLEY, Justice.

This is a summary judgment case. Appellant Smith P. Reynolds, III, brought suit against Appellee Mid-South Insurance Company of North America to recover medical and related expenses he incurred in the treatment of a physical ailment he suffered in 1987.

On February 1, 1987, Appellee issued a group insurance policy to "United Services Association." Appellant, a member of that group, received a certificate of insurance effective the same date, providing him personal coverage under the group policy for "major medical expense benefits." Each member of the group paid the full premium for the coverage he received. The record reveals that Appellant paid his first monthly premium on February 1, 1987, but failed to pay the premium due on March 1, 1987.

The policy contains a provision supplying a "grace period" of thirty-one days for payment of over-due premiums. The policy provision ¹ extends coverage until "the end of the grace period." (Page 18 of Policy, Transcript p. 42.) However, Appellant did not pay the March premium within the grace period, ² nor did he seek medical assistance during such period, but first saw a doctor, Dr. E.W. Claywater, Jr., a urologist on April 7, 1987. From that date forward, he incurred medical expenses for treatment of his ailment, and later timely filed a claim for the incurred expenses with Appellee for a substantial amount. Appellee denied the claim.

Appellee filed its motion for summary judgment on the grounds that the Appellant's coverage "automatically terminated" because Appellant did not pay the March premium within the grace period, and that the claim filed embraced charges he incurred "after the grace period had expired." The motion was supported by the affidavit of Mary Damiani, an official of "First Service Group, Inc.," who was responsible for computing and collecting premiums on the group policy. Damiani testified by affidavit that Appellant's payment for the March and April 1987 premiums were not received in the Houston office of Appellant until April 20, 1987. The policy was attached to the motion, and it provides that premiums for the coverage, "are payable ... on or before ... due date ... at [Appellee's] Group Accident and Health Division, Houston, Texas, or to any authorized agent...." Appellant, in response to the motion, alleges that specific facts exist precluding summary judgment, (1) that the illness for which he incurred medical expense originated within the policy grace period, that his illness originated prior to the effective date of any purported cancellation of the policy; and (2) that he mailed his premium payment for the month of March, 1987 before he received notice of cancellation.

Appellant further alleges by his response, that even if he failed to pay the March 1987 premium within the grace period, nevertheless he was entitled to recover benefits under the policy because the medical testimony conclusively establishes that his "illness for which [he] incurred medical expenses originated during the grace period." He further alleges that his claim for benefits also "originated prior to the effective date of cancellation." On the latter ground, Appellant relies on TEX.INS.CODE ANN. art. 3.70-3(B)(6).

Appellant alleges three points of error. By his first point, he alleges a general point of error claiming that the trial court erred in granting the summary judgment. By his second point, he alleges that the court erred in granting the motion "because a material fact issue [was raised] as to whether [Appellant's] illness originated within the policy grace period." Under his third point of error, Appellant alleges that the court erred in granting summary judgment "because a material fact issue [was raised] as to whether [Appellant's] claim under the insurance policy originated prior to the effective date of cancellation."

Under these points, the Appellant, alluding to the grace period, points out that "if any premium is not paid before the expiration of the ... grace period, the insurance terminates at the end of the grace period." Appellant correctly contends that the summary judgment evidence demonstrates that the kidney stone illness he suffered "originated prior ... to the end of the thirty-one (31) day grace period," and that he "incurred medical expenses for the treatment and care of this illness," and that he filed a timely written claim for such expenses. He also argues that under First Bankers Ins. Co. v. Newell, 463 S.W.2d 745, 747 (Tex.Civ.App.--Amarillo 1971), aff'd, 471 S.W.2d 795 (Tex.), because the ailment for which he was treated and for which he incurred medical...