Voss v. Mutual of Omaha Ins. Co., 14998

• Decision Date: 30 June 1971
• Docket Number: No. 14998,14998
• Citation: 469 S.W.2d 602
• Parties: Robert A. VOSS, Appellant, v. MUTUAL OF OMAHA INSURANCE CO., Appellee.
• Court: Texas Court of Appeals

Page 602

469 S.W.2d 602

Robert A. VOSS, Appellant, v. MUTUAL OF OMAHA INSURANCE CO., Appellee.

No. 14998.

Court of Civil Appeals of Texas San Antonio.

June 30, 1971.

Rehearing Denied July 28, 1971.

Hope, Henderson, Hohman & Georges, San Antonio, for appellant.

George H. Spencer, Clemens, Knight, Weiss & Spencer, San Antonio, for appellee.

BARROW, Chief Justice.

Appellant has perfected his appeal from a take-nothing summary judgment granted in his suit to recover disability benefits under a group policy issued by appellee to appellant's employer, Cudahy Company.

The policy provides in part for payment in the event of the disability of a covered Cudahy employee of a biweekly income benefit equal to 60% Of the basic biweekly earnings in effect immediately prior to the protected person's cessation of active employment because of disability, not to exceed $923.00. It further provides, however, that such benefit shall be reduced by the total amount of benefits or compensation the protected person or any other party on his behalf received or is entitled to receive from the following sources for such disability: (1) Workmen's compensation or similar legislation. (2) Social Security or Railroad Retirement Act.

It was stipulated that appellant was employed by Cudahy, and on May 24, 1968, his weekly earnings were not in excess of $125.00. On this date, he sustained an injury that resulted in a claim for workmen's compensation which was eventually settled, whereby appellant netted the sum of $7,405.00. He began receiving social security disability payments approximately eighteen months after the injury, retroactive to date of injury, in the amount of $310.50 per month which was increased in March, 1969, to $361.80. He received biweekly payments from appellee in the total sum of $1,850.00. In July, 1969, the biweekly payments were terminated by appellee because his social security disability payments were in excess of the biweekly payments he would have been entitled to receive under the terms of the policy based upon his earnings. This action was upheld by the trial court in granting the take-nothing summary judgment.

Appellant urges by his first point that appellee may not claim the benefits of the provision reducing the liability for biweekly disability payments since appellee knew at the inception of coverage that appellant would be entitled to workmen's compensation and social security benefits. The provision of Article 3.70--3(A)(5), Insurance Code, Vernon's Annotated Civil Statutes, ¹ if applicable, supports the position of appellant in this contention; and, therefore, the question before us on this point is whether this subsection has application to this type policy.

Subchapter G., Accident and Sickness Insurance, being Article 3.70--1 et seq., hereinafter referred to as the 'Act,' was not enacted as part of the Insurance Code of 1951, but was added by Acts 1955, 54th Leg., p. 1044, ch. 397. Section 1 thereof includes the scope of the Act as well as certain definitions. Section 2 sets forth the form of policies to be issued thereunder while Section 3 contains the form of various provisions required to be included in such a policy as well as certain optional provisions. Section 4 thereof as revised effective January 1, 1968, provides in part: '(A) No policy provision which is not subject to Section 3 of this Act shall make a policy, or any portion thereof, less favorable in any respect to the insured or the beneficiary than the provisions thereof which are subject to this Act.' Section 8 provides in part: 'Nothing in this Act shall apply to or affect * * * (3) any blanket or group policy of insurance except as provided in Section 2, Subsection B; * * *.' ²

Thus it is seen that under the provisions of Section 8 of this subchapter, the form of the policy and provisions required to be contained therein are inapplicable to a group policy of insurance. The intent to exclude group policies from the provision of this subchapter is also seen in Section 2(A)(3) thereof, wherein it is provided under 'Form of Policy' that such policy must purport to insure only one person or an adult member of a family, together with two or more eligible members of his family, including dependent children or children under 25 years of age. Since it is undisputed that this was a Group policy issued to the employees of Cudahy, the trial court properly concluded that neither Article 3.70--3(A)(5) nor 3.70--4 prohibited appellee from reducing the biweekly disability payments by the amount of social security received by appellant in accordance with the terms of the policy.

Appellant urges by his second and third points that appellee waived its right to reduce said biweekly...