Volis v. Puritan Life Ins. Co.

• Decision Date: 01 February 1977
• Docket Number: No. 75-1960,75-1960
• Citation: 548 F.2d 895
• Parties: Carolyn S. VOLIS, Plaintiff-Appellant, v. PURITAN LIFE INSURANCE COMPANY, Defendant-Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 895

548 F.2d 895

Carolyn S. VOLIS, Plaintiff-Appellant, v. PURITAN LIFE INSURANCE COMPANY, Defendant-Appellee.

No. 75-1960.

United States Court of Appeals Tenth Circuit.

Submitted Nov. 15, 1976.

Decided Feb. 1, 1977.

Edward I. Haligman of Atler, Zall & Haligman, Denver, Colo., for plaintiff-appellant.

Arthur E. Otten, Jr., of Davis, Graham & Stubbs, Denver, Colo., for defendant-appellee.

Before BARRETT and DOYLE, Circuit Judges, and CHILSON, District Judge. ^*

BARRETT, Circuit Judge.

Carolyn S. Volis (Carolyn) appeals the denial of her motion for new trial following trial to the court and judgment in favor of Puritan Life Insurance Company (Puritan). This action was initially filed by Carolyn in a Colorado state district court and thereafter removed by Puritan to federal district court on the basis of diversity. The crux of the action is Carolyn's claim to proceeds by reason of a life insurance policy issued on the life of her deceased husband, Peter T. Volis (Volis).

Carolyn withdrew a request for a jury trial. Upon trial, the court thus became the trier-of-fact. A somewhat detailed recital of the facts, in the light most favorable to appellee Puritan, follows.

Volis was born in Greece in 1930. He immigrated to the United States at age 18. He became a citizen of the United States, apparently while working as a fry cook in Chicago. He later worked as a chef at the Hampshire House Hotel in Denver; then moved to California where he worked as a chef; and then returned to Denver where he worked as a cook at the Oasis Drive-In where he met Carolyn, who also worked there. They were married in Denver, October 25, 1963. Volis then became the head chef at Colorado Music Hall. Volis spoke English with a Greek accent. He could understand most words spoken in English; however, his wife testified that he had difficulty reading English.

Volis decided to commence his own business to be known as the Gracious Greek Restaurant of Englewood, Colorado. In order to obtain the necessary financing from the Century Bank and Trust Company of Denver (Century), Volis, on May 31, 1972, then age 41, acquired a $100,000.00 ten-year decreasing term life insurance policy from Puritan, wherein Century was named as beneficiary. The application signed and submitted by Volis listed his residence address as 908 S. Lima Street, Aurora, Colorado, where he and his family (wife Carolyn and two children) had resided for one year. It listed Volis' employer and business address as Colorado Music Hall, 6100 Smith Road and, significantly, it provided that all communications were to be sent to Volis at the "Business." The blocks opposite the designation of "Owner" and "Residence" were not marked for mailing purposes and the only business address listed was that of the Colorado Music Hall.

Carolyn handled all affairs and accounts having to do with the home after Volis went into the restaurant business on his own. Volis then employed a business manager and accountant who he asked to read and explain all business matters to him, and generally to handle the books and accounts.

For some time prior to June 1, 1973, Volis had been negotiating for the sale of the Gracious Greek Restaurant property. It took more time to effect the sale than Volis had anticipated. He had informed Century when he believed that the sale would be concluded and, in reliance, Century agreed that Volis need not tender the premium due June 1, 1973. However, when the business and property had not been sold and the Puritan policy had lapsed for non-payment of the premium during the 31-day grace period, Century told Volis to reinstate the policy in order to secure its loan to him. (R., Vol. I, pp. 15, 16.) It was this concern which moved Volis to call at Century with the late premium check plus interest.

Volis sold the Gracious Greek Restaurant business about September 14, 1973, for $225,000.00, realizing a profit of about $100,000.00. Century's loan was, of course, repaid from the proceeds of sale. Century then informed Volis that he should change the beneficiary on the policy. (R., Vol. I, p. 18.)

When the annual premium fell due on June 1, 1973, Volis, as heretofore related, failed to tender payment. He received the first Premium Notice from Puritan's Home office prior thereto, addressed to him at Colorado Music Hall, 6100 Smith Road, Denver, Colorado, 80216 (the exact address listed on the application form and the only one designated to the home office of the insurer). Attached to this notice was a mailing change of address form with a notification that premiums not received by Puritan at its home office in Providence, Rhode Island, within the agreed 31-day grace period would render the policy void.

Volis received a second Premium Notice from Puritan (marked as such), addressed just as the first notice, notifying him of the delinquent premium in amount of $413.00, again with a change of address form attached. On July 31, 1973, Puritan wrote Volis at the Colorado Music Hall address with a copy marked to its Denver agent, informing him that "We regret that the policy terminated because the premium due June 1, 1973, was not received within the grace period. The policy can be considered for reinstatement upon receipt of satisfactory evidence of insurability and payment of $414.72 covering past due premiums and interest. Please complete the enclosed form and return it with your payment by August 31, 1973." (R., Vol. V, p. 41, Defendant's Deposition, Exh. 6.)

Puritan and its Denver agent then notified Century of the default. Century wrote August 7, 1973, demanding that he reinstate the policy by payment of the premium and interest in view of the fact that Volis' hope to close a transaction for the sale of the Gracious Greek Restaurant had not then been fulfilled. Century did not then refer to the Statement of Health form which had previously been submitted by Puritan to Volis for execution and return in order for Puritan to consider reinstatement.

On August 15, 1973, Volis mailed a check for the total amount of the premium and accrued interest to Puritan's home office which was deposited by Puritan on August 21, 1973. (R., Vol. I, p. 12.) On September 20, 1973, Puritan wrote Volis at the new address provided it (c/o Gracious Greek Restaurant, Englewood, Colorado) advising him that it had received the check in amount of $414.72 "after your policy lapsed" and that "In order for us to further consider your policy for reinstatement, we must have the enclosed statement of health form completed and promptly returned . . ." which letter was found in Volis' personal effects following his death. (R., Vol. I, p. 12; Vol. V, p. 41, Defendant's Deposition, Exh. 7.)

On September 27, 1973, Volis executed and submitted a Change of Beneficiary form to Puritan designating his wife beneficiary in lieu of Century following sale of the restaurant; however, he did not enclose the statement of health form. (R., Vol. I, p. 126.) That same date Leonard Johnson of Kent Agency, Inc., Denver, agent for Puritan, wrote to Volis at his home residence advising that he had received a copy of Puritan's letter asking Volis to complete the reinstatement health form; that he (Johnson) had been informed that Volis had paid the premium, no longer had an interest in the Gracious Greek Restaurant and that "our main concern is have you received this form and if so have you signed and returned in the envelope provided." (R., Vol. I, pp. 13, 80-86; R., Vol. V, p. 202, Plaintiff's Exh. 11.) Volis received this letter but did not respond thereto.

On November 7, 1973, Puritan wrote to Volis c/o the Gracious Greek Restaurant again advising that the Statement of Health form must be received before reinstatement may be considered. Puritan enclosed an additional health form and a business reply envelope. This letter too, was found in Volis' personal effects following his death. (R., Vol. I, p. 105; R., Vol. V, p. 203, Plaintiff's Exh. 12.) On November 13, 1973, Puritan again wrote to Volis at his home address enclosing a copy of its November 7th letter and requesting that Volis complete the Statement of Health form it enclosed and return it in an enclosed business reply envelope "so that we may proceed with further consideration of reinstatement . . ." (R., Vol. V, p. 204, Plaintiff's Exh. 13.) This letter, too, was found in Volis' personal effects. (R., Vol. I, p. 14; Vol. V, p. 41, Defendant's Deposition, Exh. 10.)

The trial court was generous, in our view, in granting the plaintiff, Carolyn, the benefit of the doubt with respect to receipt by Volis of some of the above related notices and/or letters. The court found that "although the evidence suggests some problems with the forwarding of mail from the restaurant to the Volis home, it is clear that at least one of these letters was found among Volis' papers after his death with the Statement of Health forms. In addition to these notices, the agent of Puritan Life who sold the policy to Volis also sent a letter to the insured at his correct and current home address on September 27, 1973. Although this letter was not found among the Volis papers, it is assumed that he received this notice as well." (R., Vol. V, p. 166.)

Volis suffered a heart attack and died on December 30, 1973. Puritan denied the claim submitted by Carolyn on the ground that the policy had lapsed and had not been reinstated. Puritan contended that it had not waived the reinstatement condition of receipt and approval of the Statement of Health form simply by the receipt and deposit of the late premium plus interest payment and the receipt of the change of beneficiary form. Puritan further contended that it was not otherwise estopped to deny the claim.

The policy provisions relative to Premiums, Grace and Reinstatement applicable here read as follows:

Payment of Premiums. All premiums are due and payable in advance at the Home Office or to an authorized agent of Puritan Life in exchange...