State Mutual Life Assurance Co. v. Wittenberg, 15564.

• Citation: 239 F.2d 87
• Decision Date: 09 January 1957
• Docket Number: No. 15564.,15564.
• Parties: STATE MUTUAL LIFE ASSURANCE COMPANY, Appellant, v. George H. WITTENBERG, Jr., Executor of the Estate of Minnie G. Wittenberg, Deceased, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

239 F.2d 87 (1956)

STATE MUTUAL LIFE ASSURANCE COMPANY, Appellant, v. George H. WITTENBERG, Jr., Executor of the Estate of Minnie G. Wittenberg, Deceased, Appellee.

No. 15564.

United States Court of Appeals Eighth Circuit.

December 13, 1956.

Rehearing Denied January 9, 1957.

G. Thomas Eisele, Little Rock, Ark. (E. L. McHaney, Jr., John M. Lofton, Jr., James M. McHaney, and Owens, McHaney, Lofton & McHaney, Little Rock, Ark., were with him on the brief), for appellant.

Sam Laser, Little Rock, Ark. (Cockrill, Limerick & Laser, Little Rock, Ark., were with him on the brief), for appellee.

Before WOODROUGH, VOGEL and VAN OOSTERHOUT, Circuit Judges.

VOGEL, Circuit Judge.

Minnie G. Wittenberg, widow of George H. Wittenberg, Sr., sought to recover $10,000 as beneficiary under a group life insurance contract issued by the appellant on April 1, 1953. After trial, and pending appeal to this court, Mrs. Wittenberg died, whereupon George H. Wittenberg, Jr., executor of her estate, was substituted as appellee herein.

On February 1, 1953, the appellant issued to the American Institute of Architects a master life insurance policy agreeing to insure certain employees of employers participating in the policy. George H. Wittenberg, Sr., an employee of a participating architectural firm, Wittenberg, Delony and Davidson, applied for coverage under this group policy in March, 1953, and was issued a certificate of insurance (No. 1714) effective April 1, 1953. The contract carried no requirement for a physical examination prior to issuance. There is no dispute as to Wittenberg being an employee within the meaning of the insurance contract. Appellant does contend, however, that Wittenberg was ineligible to receive benefits due an employee under the following requirement for coverage:

"EMPLOYEES ELIGIBLE. Each employee of a participating Employer shall be eligible for insurance on the date upon which he meets the following requirements:

"(a) he is regularly working for the Employer at least thirty hours a week on a permanent basis;"

The certificate issued to Wittenberg provided:

"This certificate is void if the Employee (1) is not actually at work on the date hereof or (2) is not in a class of employees eligible for insurance under the Group Policies."

On September 4, 1952, prior to the issuance of insurance, (April 1, 1953) Wittenberg suffered a heart attack. In September, 1953, six months after issuance of insurance, Wittenberg filed a claim to recover total and permanent disability benefits from the Union Central Life Insurance Company and Penn Mutual Life Insurance Company under policies issued him years before. Each of these claims stated that Wittenberg became disabled on September 4, 1952. In response to the question, "Have you engaged in any occupation or done any work since your disability began?", Wittenberg answered, "No." If this statement is literally true, it is an apparent contradiction of the representation made to the appellant that Wittenberg was "regularly working" on April 1, 1953, the date of policy issuance. Appellant, however, makes no point of misrepresentation, in fact, asserts it is not relying thereon. Other evidence concerning Wittenberg's business activities subsequent to the heart attack is in conflict. All witnesses agreed he did no work prior to January, 1953. Testimony for appellant tended to establish that Wittenberg himself had stated in his disability claims that he never returned to work after September, 1952. Appellee's testimony attempted to show that Wittenberg did return to his office in January, 1953, and worked until April 30, 1953, at which time it was necessary to amputate one of his legs. All witnesses agreed that Wittenberg thereafter performed no work.

The sole issue of fact at the trial was whether George H. Wittenberg, Sr., was regularly working thirty hours a week on a permanent basis at the time the insurance was issued to him. Deciding the issue affirmatively, the jury returned a verdict for appellee. Judgment upon this verdict was entered and this appeal followed.

There is no question but that there was sufficient evidence from which the jury could support its conclusion that Wittenberg was working on a regular basis of thirty hours per week on April 1, 1953. Appellant's quarrel is with certain instructions given the jury and exclusions of evidence which it asserts were valuable in tending to show Wittenberg was not in fact working as claimed.

Appellant's first charge of error on the part of the trial court was an instruction to the jury that the burden was upon the appellant-defendant to prove (a) that George H. Wittenberg was not working regularly thirty hours a week on a permanent basis on April 1, 1953, the effective date of his certificate; and (b) that George H. Wittenberg was not actually at work on April 1, 1953.

A federal court exercising jurisdiction by virtue of diversity of citizenship must, in determining a burden of proof question, apply the law of the state wherein the court is sitting. Erie R. Co. v. Tompkins, 1939, 304 U.S. 64, 58 S.Ct. 817, 87 L.Ed. 1188; Cities Service Oil Co. v. Dunlap, 1939, 308 U.S. 208, 60 S.Ct. 201, 84 L.Ed. 196; Fort Dodge Hotel Co. of Fort Dodge v. Bartelt, 8 Cir., 1941, 119 F.2d 253. The question to determine then is whether Arkansas considers burden of proof questions procedural or substantive. Appellant asserts that the Arkansas law is uncertain. The trial judge must have been of the opinion that under the law of Arkansas questions concerning burden of proof are essentially procedural and therefore governed by the law of the forum. He is supported in that view by St. Louis & San Francisco R. Co. v. Coy, 1914, 113 Ark. 265, 284, 168 S.W. 1106; Huckaby v. St. Louis, I. M. & S. Ry. Co., 1915, 119 Ark. 179, 177 S.W. 923, as well as by a substantial majority of courts in other states which regard burden of proof questions as purely remedial or procedural, as are most questions of evidence so considered. 11 Am.Jur., Conflicts of Laws, § 203; 78 A.L.R. 883. The only exception to the rule that remedial rights are determined by a local law is when the foreign remedy is inseparably interwoven into the cause of action so that to divorce the remedy from the right would defeat the cause of action. Precourt v. Driscoll, 1931, 85 N.H. 280, 157 A. 525, 78 A.L.R. 874. That situation is not present in the instant case. We hold, then, with the trial court that under the law of Arkansas the question of the burden of proof is determined by the law of the forum.

We must next determine whether or not the trial court correctly applied Arkansas law in placing the burden of proof upon the appellant-insurer to show that George H. Wittenberg was not regularly working thirty hours a week on a permanent basis on April 1, 1953.

In support of the proposition that under Arkansas law in a situation like that with which we are here concerned the burden of proof is not upon the insurer, appellant cites to us New York Life Ins. Co. v. Mason, 1921, 151 Ark. 135, 235 S.W. 422, 19 A.L.R. 618, and Atlas Life Ins. Co. v. Bolling, 1932, 186 Ark. 218, 53 S.W.2d 1. In the Mason case, the sole question was whether or not the policy had been delivered, delivery being essential to its effectiveness. It is not in point. Here the policy was issued and delivered. The Bolling case lends support to appellant's contention that where good health was essential at the time of the delivery of the policy the burden of such proof rested upon the insured. The Bolling case, however, cites the Mason case as authority and does not seem to be in accord with a number of other holdings on Arkansas law. See Woodmen of the World Life Ins. Society v. Reese, 1943, 206 Ark. 530, 176 S.W.2d 708; Aetna Life Ins. Co. v. McAdoo, 8 Cir., 1938, 106 F.2d 618; National Life & Accident Ins. Co. v. Robinson, 1930, 181 Ark. 1, 24 S.W.2d 878; Old American Ins. Co. v. Hartsell, 1928, 176 Ark. 666, 4 S.W. 2d 25; Sovereign Camp, W. O. W. v. Cole, 1936, 192 Ark. 326, 91 S.W.2d 250; Southern National Ins. Co. v. Pillow, 1944, 206 Ark. 769, 177 S.W.2d 763.

In Sovereign Camp, W. O. W. v. Cole, supra, the Arkansas Supreme Court stated, 91 S.W.2d 250:

"The law is well settled in this state that when it is established that a policy of insurance has been duly executed, the premium paid, the policy delivered and proof of death made, a prima facie case is made in behalf of the beneficiary or assignee and the burden then shifts to the insurance company to show that the insured was not in good health at the time of delivery. Old American Insurance Co. v. Hartsell, 176 Ark. 666, 4 S.W. (2d) 25; National Life & Accident Insurance Co. v. Robinson, 181 Ark. 1, 24 S.W.(2d) 878; Knights & Ladies of Security v. Lewellen, 159 Ark. 400, 252 S.W. 585."

Whether the Arkansas Supreme Court intended to overrule Atlas v. Bolling, supra, or simply ignore it we do not know, but in the light of later cited decisions of that court and with regard to the prevailing general law we conclude that the trial court was correct in assuming that the burden of proof is on the insurer. See 46 C.J.S., Insurance, § 1319 b.

In considering these Arkansas cases dealing with "good health" clauses, it should be borne in mind that the question of good health was in no way pertinent to this case and it is by way of analogy that the cases i...