Turner v. National Life and Accident Insurance Co., Civ. A. No. 73-303.

• Decision Date: 01 April 1974
• Docket Number: Civ. A. No. 73-303.
• Citation: 372 F. Supp. 1228
• Parties: Rebecca TURNER v. The NATIONAL LIFE AND ACCIDENT INSURANCE CO.
• Court: U.S. District Court — Eastern District of Pennsylvania

372 F. Supp. 1228

Rebecca TURNER v. The NATIONAL LIFE AND ACCIDENT INSURANCE CO.

Civ. A. No. 73-303.

United States District Court, E. D. Pennsylvania.

April 1, 1974.

David C. Harrison, Philadelphia, Pa., for plaintiff.

Murray I. Blackman, Philadelphia, Pa., for defendants.

MEMORANDUM OPINION AND ORDER

EDWARD R. BECKER, District Judge.

This is a suit on a life insurance policy. Before us are cross motions for judgment on the pleadings. Because the facts are indeed not in dispute and are contained entirely within the pleadings, this manner of disposition of the case is appropriate. For the reasons stated below, we will grant judgment for the defendant insurance company.

I. The Facts

The plaintiff, Rebecca Turner, is the widow of Billy J. Turner and the beneficiary of an endowment life insurance policy issued to him by the defendant on December 14, 1967. The policy lapsed on April 15, 1972, as the result of nonpayment of premiums. The insured died in a swimming pool accident on July 23, 1972. About two months later, pursuant to a nonforfeiture feature providing for extended insurance in the event of a policy lapse, the defendant paid the plaintiff the sum of $6,000, the amount of the basic death benefit under the policy. The subject of the present suit is the $6,000 double indemnity benefit of the policy and the $4,040 mortgage insurance benefit under the policy.¹ The plaintiff contends, and the defendant denies, that the extended insurance provision covers the double indemnity benefit and the mortgage insurance as well as the basic death benefit. Both parties have thus asked us to render a ruling based upon our interpretation of the contract.

II. The Contract of Insurance

The insurance contract is 26 pages long. The relevant provisions are found on the ninth, fourteenth, and nineteenth pages. The ninth page of the policy bears the heading, in large letters, NONFORFEITURE PROVISIONS. The pertinent portions are:

1² EXTENDED INSURANCE. If extended insurance periods are shown in the Table of Cash, Loan and Nonforfeiture Values and if this policy lapses, insurance shall be continued automatically in force as term insurance for a level amount equal to the amount of insurance in effect under this policy on the date of premium default, less any indebtedness. . . .

2 BASIS OF COMPUTATION . . .

. . .

. . . Any insurance continued under these nonforfeiture provisions shall not include disability benefits, additional benefits for death by accidental means or other supplementary benefits provided by rider or otherwise. . . .

The double indemnity provisions of the policy are on page fourteen, which is headed in large letters ADDITIONAL INDEMNITY AGREEMENT. The pertinent portions of that agreement are:

3 BENEFIT. Upon receipt at the Home Office of the Company of due proof that the death of the Insured resulted from bodily injuries as defined and limited below, the Company, subject to the terms and conditions of this agreement and the policy, agrees to pay to the Beneficiary, in addition to any amount otherwise payable, the Additional Indemnity amount shown in the Benefit and Premium Schedule on Page 3. This agreement covers only such death which occurs (a) on or after the Insured's first birthday and before the policy anniversary on which the attained age of the Insured is seventy years, and (b) while this policy and this agreement are in force with no premium in default beyond the grace period.

4 TERMINATION. This agreement shall terminate (a) on the policy anniversary on which the attained age of the Insured is seventy years; (b) upon termination of the grace period if any premium for this policy or this agreement is then in default, whether or not a nonforfeiture provision of the policy becomes operative; (c) . . .

The mortgage insurance agreement is page 19 of the policy and is headed in large type: MORTGAGE TERM INSURANCE AGREEMENT. The pertinent passages are:

5 ADDITIONAL INSURANCE. Upon receipt at the Home Office of the Company of due proof that the death of the Insured occurred prior to the Termination Date of this agreement shown in the Benefit and Premium Schedule on Page 3 and while the policy and this agreement were in full force with no premium in default beyond the grace period, the Company, in addition to any other benefits provided by the policy, agrees to pay to the Beneficiary an additional amount determined from the table for this agreement set forth on Page 3A.

6 TERMINATION. This agreement shall terminate (a) upon expiration of the grace period if any premium for the policy or this agreement is then in default, whether or not a nonforfeiture provision of the policy becomes operative; (b) . . .

III. Discussion

If doubt exists as to the meaning of the language used in an insurance policy, that language is to be interpreted favorably to the insured. Nevertheless, where the language of the policy is clear and unambiguous, it cannot be construed to mean otherwise than what it says. It must be given the plain and ordinary meaning of the terms used. Brunner v. McCullough, 216 F.Supp. 496 (E.D.Pa. 1963); Hagarty v. William Akers, Jr., Co., 342 Pa. 236, 20 A.2d 317 (1941).

There is no ambiguity in provisions 2, 3, 4, 5, and 6 quoted above. They specifically and clearly provide that the double indemnity benefit (3 and 4) and the mortgage insurance (5 and 6) are not payable when the policy is in lapse. Plaintiff does not strenuously contend to the contrary, but rather focuses her argument on the alleged ambiguity of provision 1. Indeed nothing in provision 1 indicates that a lapse results in termination of the double indemnity and mortgage insurance benefits. Plaintiff argues that the policy's failure to make this termination plain in the same paragraph which defines extended insurance is an ambiguity not overcome by the appearance of the other quoted clauses placed elsewhere in the policy. She further argues that despite the fact that clause 2 appears on the same page as clause 1, the admonitory effect of clause 2 is muted by its placement under a subheading "Basis of Computation," which begins with a technical discussion of certain actuarial details, thus leading the reader to believe that it contains no important statements of the scope of extended insurance coverage.

We cannot gainsay that contracts of insurance are to be construed strictly against the insurer. To find an ambiguity in this contract, however, we would have to stop reading after clause 1, for once we continue on...