Whitney v. Continental Life & Acc. Co.

• Decision Date: 21 June 1965
• Docket Number: No. 9467,9467
• Citation: 403 P.2d 573,89 Idaho 96
• Parties: Anna Jean WHITNEY, Plaintiff-Appellant, v. CONTINENTAL LIFE AND ACCIDENT COMPANY, a corporation, Defendant-Respondent.
• Court: Idaho Supreme Court

Page 573

403 P.2d 573

89 Idaho 96

Anna Jean WHITNEY, Plaintiff-Appellant, v. CONTINENTAL LIFE AND ACCIDENT COMPANY, a corporation, Defendant-Respondent.

No. 9467.

Supreme Court of Idaho.

June 21, 1965.

Hall & Rowett, Mountain Home, for plaintiff-appellant.

Langroise, Clark & Sullivan, Boise, for defendant-respondent.

SMITH, Justice.

This is an appeal from a judgment of involuntary dismissal granted under I.R.C.P. 41(b), in favor of respondent, and against appellant who instituted this action, seeking recovery under an alleged group life insurance contract. The trial court granted respondent's motion for involuntary dismissal at the conclusion of the submission of appellant's case to the court sitting with a jury. The principal issue presented on the appeal is whether certain negotiations between (1) appellant's decedent husband, (2) Idaho Movers and Warehousemen's Conference, and (3) respondent, resulted in group life insurance coverage of appellant's husband.

Appellant in her complaint alleged that she is the beneficiary named in a written application executed by her husband, Wayne E. Whitney, for group life insurance in respondent insurance company, and that by its oral 'binder,' respondent insured her husband's life in the sum of $10,000.

Appellant alleged that respondent about October, 1959, submitted a bid to Stein-McMurray Insurance Agency, insurance brokers, to write group life insurance for owners and executives of members of Idaho Movers and Warehousemen's Conference, which bid the Conference accepted; that Mr. Whitney, prior to his death, was manager of Whitney Transfer and Storage Company, a member of the Conference; that Mr. Kohout, respondent's group insurance manager, verbally assured Stein-McMurray Insurance Agency that the insurance coverage would be binding from December 1, for applications written in December, 1959; that acting solely in reliance upon representations of such coverage Stein-McMurray Insurance Agency commenced writing group insurance applications, and that during December, 1959, appellant's husband, Wayne E. Whitney, executed such an application for $10,000 group life insurance and named appellant his beneficiary; that thereafter about January 20, 1960, Mr. Whitney paid premiums for such insurance as billed by the Conference; that on February 6, 1960, before respondent had issued a master insurance policy Mr. Whitney died, and that appellant filed with respondent proof of death of her husband, and made claim for the insurance which respondent refused to pay.

Appellant in her second cause of action alleged that respondent is estopped from denying the validity of her claim, in that respondent verbally authorized the agent selling the insurance to make membership contracts with each member of the group applying for such insurance, binding and immediately effective upon the signing of an application for insurance by the member. Appellant further alleged that respondent knew or should have known of the agent's statements that the insurance was to be in effect immediately upon signing the application and that Mr. Whitney relied upon such statements. Appellant additionally alleged that Mr. Whitney's application was submitted to respondent about December 27, 1959, but that respondent never notified Mr. Whitney that it had rejected his application for insurance or that the insurance coverage was not in effect or had been discontinued, and that in such a case Mr. Whitney could and would have procured other life insurance prior to his death.

Respondent in its answer denied the material allegations of the complaint. It then alleged that it submitted a proposal to write group life insurance on all the owners and executives of members of Idaho Movers and Warehousemen's Conference, subject to the fulfillment of contingent requirements as conditions precedent to the insurance becoming effective, as follows:

(a) that at least thirty-five applications must be received by respondent in proper form and from qualified applicants, and

(b) that all owners and executives of members of the Conference, who are insured under the group life insurance policy with respondent, must submit proper applications.

Respondent then alleged that no condition was ever met; that no premiums were ever paid to it for such group life insurance nor for any life insurance coverage upon the life of Wayne E. Whitney; that neither Stein-McMurray Insurance Agency nor one Byron Erstad were respondent's agents, and that neither had any authority to bind respondent.

Respondent then alleged that prior to the time of Mr. Whitney's death, respondent cancelled and terminated its proposed offer to write group life insurance for the Conference; that the group life insurance never went into effect; nor were any of the proposed insureds, including Mr. Whitney, ever covered by insurance; and that the purported group life insurance for the owners and executives of members of the Conference is unlawful and void, and in violation of the provisions of I.C., Title 41, ch. 16, as then in force and effect.

A judgment of nonsuit or dismissal is proper only where there is an entire absence of testimony tending to establish the plaintiff's case. Sturgis v. Garrett, 85 Idaho 364, 379 P.2d 658 (1963); Nissula v. Southern Idaho Timber Protective Ass'n, 73 Idaho 37, 245 P.2d 400 (1952). In determining such question, the evidence must be viewed in the light most favorable to the plaintiff, Sturgis v. Garrett, supra; Anderson v. Blackfoot Livestock Commission Co., 85 Idaho 64, 375 P.2d 704 (1962); Bancroft v. Smith, 80 Idaho 63, 323 P.2d 879 (1958).

The facts, considered in the light most favorable to plaintiff, are as follows:

Wayne E. Whitney, prior to his death, was a partner in the moving and transfer business known as Whitney Transfer and Storage, Mountain Home, Idaho. He also was a member and director of Idaho Movers and Warehousemen's Conference, a voluntary association of businesses engaged in the transfer and storage business in Idaho. Sometime before November, 1959, the Conference contacted Byron Erstad, then and employee of Stein-McMurray Insurance Agency, about obtaining additional group life insurance for the owner-executive members of the Conference. Erstad previously had dealt with group life insurance for the Conference. He obtained a list of key executives and owners, complete with their ages, and submitted the list to various insurance companies, including respondent. Mr. Kohout, who at the time was group insurance enrollment manager of respondent, quoted the Conference certain rates for the life insurance, as well as for accidental death and dismemberment. The Conference accepted respondent's quotation and agreed to purchase $10,000.00 life insurance per qualified Conference member. The original effective date was to be November 1, 1959; but only four people were enrolled during November. Subsequently the effective date was changed to December 1, 1959.

Concerning the change of effective date from November 1 to December 1 and whether Mr. Kohout gave Mr. Erstad an oral binder of insurance for the persons enrolled during November, Mr. Erstad, appellant's witness, testified on redirect examination:

'Q. Mr. Sullivan asked you concerning whether or not, Mr. Kohout told you that the group had to be written up in 31 days, when you went to see Mr. Kohout, in December, 1959, and asked him concerning the binding, this coverage, did he at that time tell you that all of the group had to be written up in the 30-day period?

'A. Well, * * * when I got bogged down in November I went to Paul [Kohout] and asked him to extend this binder for another 31 days and he said yes, so I understood this thing was to be done in the 31 days, that was Paul's understanding, and mine together, * * *.'

The foregoing testimony constituted an admission on the part of appellant's witness, Mr. Erstad, that he knew of respondent's requirement that the group insurance enrollment be completed within 31 days of the effective date, whatever that date was. Erstad did, however, testify that Kohout gave him authority to bind the Company. In our consideration of the judgment of dismissal granted by the trial court, we must consider such testimony as true.

December 15, 1959, Erstad obtained a signed application card from Wayne E. Whitney for $10,000.00 of group life insurance. Erstad advised Whitney that the coverage was effective as of December 1, 1959. Appellant was named beneficiary of her husband on the enrollment card. Whitney's application, together with other enrollment cards, was sent to respondent on December 28, 1959. Additional cards were sent respondent during January and February of 1960. Whitney, meanwhile, sent a check for premiums for the months of December, 1959, and January, 1960, covering the personnel of Whitney Transfer and Storage Company, including Whitney, to Idaho Movers and Warehousemen's Conference. The Conference, in turn, was to make permium payment to respondent.

On Friday, February 5, 1960, Robert Cecil, president of respondent company, informed Erstad that respondent did not wish to carry the group insurance on the Conference because the group had never 'qualified.' Erstad then testified to a conversation with Kohout that same day during which Kohout reassured Erstad there would be no problem, at least over the weekend, while 'we were getting this thing ironed out.' Whitney died on February 6, 1960, during the weekend.

Monday, February 8, 1960, Cecil, Kohout, Erstad, and Stein of Stein-McMurray Insurance Agency, who was Erstad's employer, met in conference. At that time Cecil, in a discussion concerning the alleged insurance coverage of the Conference, stated (as testified by Erstad) that 'if this really was the kind of group we wanted to insure we would go ahead and pay the claim and continue the coverage, he said, we don't want it * * *.'

Respondent having declined to pay the amount of the alleged policy on Mr....