Strickland v. Gulf Life Ins. Co.

• Decision Date: 14 February 1978
• Docket Number: No. 32887,32887
• Citation: Strickland v. Gulf Life Ins. Co., 242 S.E.2d 148, 240 Ga. 723 (Ga. 1978)
• Parties: James L. STRICKLAND v. GULF LIFE INSURANCE COMPANY.
• Court: Georgia Supreme Court

Page 148

242 S.E.2d 148

240 Ga. 723

James L. STRICKLAND v. GULF LIFE INSURANCE COMPANY.

No. 32887.

Supreme Court of Georgia.

Feb. 14, 1978.

Kunes, Kunes & Fleming, G. Gerald Kunes, Tifton, for appellant.

Reinhardt, Whitley & Sims, J. Glenn Whitley, Tifton, for appellee.

UNDERCOFLER, Presiding Justice.

This is a certiorari. Strickland v. Gulf Life Ins. Co., 143 Ga.App. 67, 237 S.E.2d 530 (1977). It involves a life-accident policy issued in 1946 which, among other things, insures against the loss of a leg. The policy provides coverage if within 90 days of the injury there is "dismemberment by severance." Strickland injured his right lower leg. Medical efforts to save the leg continued for 118 days. They proved unsuccessful and the leg was amputated. Gulf Life denied coverage because severance of the leg was beyond the 90 day limitation. The trial court granted Gulf Life's motion for summary judgment. The Court of Appeals affirmed. We reverse in order that the trial court may consider in the light of this opinion Strickland's pleadings that the condition requiring severance within 90 days is contrary to public policy.

The Court of Appeals, in considering Strickland's appeal from the trial court's grant of summary judgment in favor of the insurance company, relied on our case of State Farm Mutual Automobile Ins. Co. v. Sewell, 223 Ga. 31, 153 S.E.2d 432 (1967), which it had reluctantly followed earlier in Travelers Ins. Co. v. Pratt, 130 Ga.App. 331, 203 S.E.2d 302 (1973) and Boyes v. Continental Ins. Co., 139 Ga.App. 609, 229 S.E.2d 75 (1976).

In Sewell and Boyes, the issue was whether the loss incurred was the loss covered by the policy. The plaintiff in Sewell had suffered partial loss of his vision; he could make out images and colors and retained some peripheral vision. The Court of Appeals, in State Farm Mutual Ins. Co. v. Sewell, 114 Ga.App. 331, 151 S.E.2d 231 (1966), and in Georgia Life & Health Ins. Co. v. Sewell, 113 Ga.App. 443, 148 S.E.2d 447 (1966), construed the policy language, "the irrecoverable loss of the entire sight," as meaning a loss of sight "for all practical purposes" and affirmed such a charge given in the trial court. This court reversed, holding that the word "entire" had to be construed as meaning entire.

Similarly in Boyes, supra, the Court of Appeals, following Sewell, 223 Ga. 31, 153 S.E.2d 432, supra, held that the total loss of use of the plaintiff's left arm was not covered by an insurance policy covering only a loss of a member by severance. This court denied certiorari.

A time limitation, as is involved in the case now before us, was presented to the Court of Appeals in Pratt, supra. The plaintiff's left foot had been injured in a hunting accident, but was not amputated for eighteen months. During this time he was under constant treatment to avoid the amputation. Although the leg as originally injured was completely useless, there remained the possibility that regeneration might occur. It did not, and amputation was eventually necessary. The policy covered a loss by severance within 90 days of the injury. At that point, the plaintiff's leg was still in a cast. The Court of Appeals, relying on Sewell, 223 Ga. 31, 153 S.E.2d 432, supra, held that, since the policy required severance within 90 days, rather than merely loss of use during that time, the insurance company was not liable for the loss. Certiorari was denied by a divided court.

The plaintiff raised the public policy argument regarding the time limitation now before us in Pratt, but the Court of Appeals denied the challenge on the authority of Randall v. State Mutual Ins. Co., 112 Ga.App. 268, 145 S.E.2d 41 (1965) (death not within 90 days), Metropolitan Life Ins. Co. v. Jackson, 79 Ga.App. 263, 53 S.E.2d 378 (1949) (loss of sight not within 90 days) and Bennett v. Life & Cas. Ins. Co., 60 Ga.App. 228, 3 S.E.2d 794 (1939) (death not within 30 days). In all of these cases, the Court of Appeals had held that time limitations in an insurance policy were "valid." This court has not directly ruled on this issue. However, "(s)tandardized contracts such as insurance policies, drafted by powerful commercial units and put before individuals on the 'accept this or get nothing' basis, are carefully scrutinized by the courts for the purpose of avoiding enforcement of 'unconscionable' clauses." Corbin, Contracts § 1376, p. 21.

Where loss of a limb is involved at an arbitrary point in time, here 90 days, the insured under these cases is confronted with the ugly choice whether to continue treatment and retain hope of regaining the use of his leg or to amputate his leg in order to be eligible for insurance benefits which he would forgo if amputation became necessary at a later time. We find an insurance limitation forcing such a gruesome choice may be unreasonable and thus may be void as against public policy.

Finding such a limitation unreasonable is not without precedent. In Burne v. Franklin Life Ins. Co., 451 Pa. 218, 301 A.2d 799, 801 (1973), a pedestrian had been struck by an automobile and had lain in a vegetative state for 4 1/2 years. The insurance company paid the life policy, but refused to pay the double indemnity accidental death benefits which were "payable only if '. . . such death occurred . . . within ninety days from the date of the accident.' "

As stated in Burne, supra, 301 A.2d at pp. 801-802 (footnote omitted.), "(t) here are strong public policy reasons which militate against the enforceability of the ninety day limitation. The provision has its origins at a much earlier stage of medicine. Accordingly, the leading (Pennsylvania) case construing the provision predates three decades of progress in the field of curative medicine. Advancements made during that period have enabled the medical profession to become startlingly adept at delaying death for indeterminate periods. Physicians and surgeons now stand at the very citadel of death, possessing the awesome responsibility of sometimes deciding whether and what measure should be used to prolong, even though momentarily, an individual's life. The legal and ethical issues attending such deliberations are gravely complex.

"The result reached by the trial court presents a gruesome paradox indeed it would permit double indemnity recovery for the death of an accident victim who dies instantly or within ninety days of an accident, but would deny such recovery for the death of an accident victim who endures the agony of prolonged illness, suffers longer, and necessitates greater expense by his family in hopes of sustaining life even momentarily beyond the ninety day period. To predicate liability under a life insurance policy upon death occurring only on or prior to a specific date, while denying policy recovery if death occurs after that fixed date, offends the basic concepts and fundamental objectives of life insurance and (is) contrary to public policy. Hence, the ninety day limitation is unenforceable.

"All must recognize the mental anguish that quite naturally accompanies these tragic occurrences. Surely that anguish ought not to be aggravated in cases of this kind with concerns of whether the moment of death permits or defeats the double indemnity claim. So too, the decisions as to what medical treatment should be accorded an accident victim should be unhampered by considerations which might have a tendency to encourage something less than the maximum medical care on penalty of financial loss if such care succeeds in extending life beyond the 90th day. All such factors should, wherever possible, be removed from the antiseptic halls of the hospital. Rejection of the arbitrary ninety day provision does exactly that."

The New Jersey court has also found this reasoning persuasive. "The rule in almost every jurisdiction which has considered the question is that the time limitations set forth in the policy are controlling and that recovery must be denied in a case such as the present one. See Appleman, Insurance Law and Practice (2d ed. 1963), § 612. However, a recent decision by the Supreme Court of Pennsylvania has held that such time limitations are unenforceable and has allowed recovery where death by accident occurred well after the period stipulated in the policy. (Cit. omitted.) Although it is presently very much a minority rule, I am persuaded that the rule announced in Burne is the better rule and should be followed." Karl v. New York Life Ins. Co., 139 N.J.Super. 318, 353 A.2d 564, 565 (1976). The court thus allowed the beneficiary of a man who had sustained a skull injury in a criminal assault to recover under the accidental double indemnity provisions in his two policies, which contained 90 and 120 day limitations, even though he died 11 months after the assault.

We note further that in Karl, supra, the court considered the question whether with the minimal cost ¹ of the accidental death benefit, it would be unfair to the insurance company to ignore these time limitations in light of the company's economic risk calculations. It concluded, however, that the real purpose of the time limitation was to limit disputes concerning the causal connection between the death and the accident rather than because of any economic relationship between the premium and the time limitation. Also, the court observed that the reason the cost of accidental death policies was so low was that relatively few deaths occur because of accidents. ²

In INA Insurance Co. v. Commonwealth Ins. Dept., 376 A.2d 670 (Pa.Cmwlth.1977), the insurance company also argued that the causation problem was the main reason for these time limitations. That court rejected the argument, observing that the burden was on the claimant ³ to establish the causative relationship, and held that causation was not a weighty enough problem to deny benefits arbitrarily to those surviving beyond the time limitation set out in the policy, but who had died as a result of the accident. ...