Talley v. Teamsters, Chauffeurs, Warehousemen, and Helpers, Local No. 377

• Decision Date: 01 December 1976
• Docket Number: No. 76-538,76-538
• Citation: 357 N.E.2d 44,48 Ohio St.2d 142
• Parties: , 2 O.O.3d 297 TALLEY, Appellant, v. TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN, AND HELPERS, LOCAL NO. 377, et al., Appellees.
• Court: Ohio Supreme Court

Page 142

48 Ohio St.2d 142

357 N.E.2d 44, 2 O.O.3d 297

TALLEY, Appellant, v. TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN, AND HELPERS, LOCAL NO. 377, et al., Appellees.

No. 76-538.

Supreme Court of Ohio.

Dec. 1, 1976.

Joanna Talley, appellant herein, is the beneficiary of a life insurance benefit issued to her son Marvin, who died on September 1, 1974. At the time of his death, Marvin Talley was employed by Extendit Company and was a member of Teamsters Local No. 377.

Teamsters Local No. 377, as it did with many other employers, had negotiated a collective bargaining agreement with the Extendit Company effective from May 1, 1972, until May 1, 1975. Within the agreement was a provision whereby the employer promised to make weekly contributions per employee to appellee Teamsters Local No. 377 Health and Welfare Fund (the 'Fund'). Contributions to the Fund were not uniform, and thus the benefits, such as life insurance, varied in accordance with the amount contributed by an employer for a particular plan.

The administrator of the Fund testified by deposition that consistent with the amount contributed by Extendit Company, Marvin Talley was entitled to coverage under Plan VI, which provided for a life insurance benefit of $3,000. However, due to a mistake by the Fund's clerical staff, Talley was mailed Certificate of Coverage No. 11,137, which included a pamphlet stating that his coverage was under Plan VII and the the life insurance benefit was $7,000. No other information as to life insurance benefits was presented to Talley up to the time of his death.

Appellant filed a complaint for declaratory relief in the Court of Common Pleas, alleging that she was entitled to a $7,000 insurance benefit as beneficiary under Plan VII coverage. The trial court held that when the Plan VII pamphlet was mistakenly mailed to Marvin Talley, the Fund, as insurer, was charged absolutely with knowledge of the fact that Talley was covered under Plan VI. The court entered judgment in favor of Joanna Talley, and against the Fund, in the amount of $5B7,000 with interest and costs, reasoning that the Fund was estopped from refusing payment under Plan VII by its unconditional issuance of the certificate of coverage and accompanying descriptive pamphlet.

The Court of Appeals reversed the judgment, finding no detrimental reliance by either Talley or his mother. Because it believed estoppel to be inapplicable the appellate court entered judgment for $3,000, the insurance benefit payable under Plan VI coverage. The court also distinguished from the within cause the case of Carucci v. John Hancock Mutl. Life Ins. Co. (1968), 15 Ohio App.2d 1, 238 N.E.2d 572, which the trial court relied upon in reaching its decision.

Finding its judgment to be in conflict with the determination of the Court of Appeals in the Carucci case, supra, the Court of Appeals certified the record of the case to this court for review and final determination.

Manchester, Bennett, Powers & Ullman and Paul J. Fleming, Youngstown, for appellant.

Green, Schiavoni, Murphy & Haines and Eugene Green, Youngstown, for appellees.

PER CURIAM.

Appellant contends that the Fund is estopped from denying payment on the certificate of coverage as described in the pamphlet. Appellant points out the terms of coverage resulted from the mistake on the part of the Fund, nothing that neither the insured nor his beneficiary contributed in any way to the mistake and that the insured died within the period of coverage.

Appellee argues that appellant is entitled to a $3,000 death benefit, and that the mistake in mailing the wrong pamphlet was at most a harmless error which does not estop the Fund from denying payment under Plan VII coverage.

In the instant cause appellant's life insurance benefit arose from the collective bargaining agreement between Teamsters Local No. 377 and the Extendit Company. Appellee Fund was organized pursuant to Section 302 of the Taft-Hartley Act ¹ and is a non-profit organization whose sole purpose is to administer benefits for members of Teamsters Local No. 377.

The life insurance provided by the Fund is the type commonly denominated 'group insurance.' The master policy is set up in the Fund with certificates of participation being issued to the individual union members. The master or group policy represents the contract made by the union with the employer for the benefit of the employee-union members. It is generally held that the certificate of coverage merely evidences the employee-member's right to participate in the insurance provided under the terms and conditions imposed in the group policy. ² Consequently, the provisions of the group policy are controlling over the provisions of the certificate, and the rights of the parties in a group insurance enterprise are dependent upon the group contract.

It is not disputed that Extendit Company employees were covered under Plan VI on the date of Talley's death. Appellant's demand for judgment is predicated on her claim that the Fund is estopped from refusing to pay the Plan VII benefit which it had erroneously indicated was the coverage in effect.

In support of this proposition appellant cites Carucci v. John Hancock Mutl. Life Ins. Co., su...