Wyatt v. Security Ben. Life Ins. Co., 39698

• Decision Date: 07 May 1955
• Docket Number: No. 39698,39698
• Citation: 283 P.2d 243,178 Kan. 91
• Parties: Hazel M. WYATT, Appellant, v. SECURITY BENEFIT LIFE INSURANCE COMPANY, Appellee.
• Court: Kansas Supreme Court

Page 243

283 P.2d 243

178 Kan. 91

Hazel M. WYATT, Appellant, v. SECURITY BENEFIT LIFE INSURANCE COMPANY, Appellee.

No. 39698.

Supreme Court of Kansas.

May 7, 1955.

Syllabus by the Court.

1. The defendant insurance company issued its group policy of life insurance to a named employer insuring the lives of its employees. The policy provided that it terminated in the event the employee ceased to work for the employer, and gave the employee 31 days after he quit work for the employer to convert the policy into an individual life insurance policy for himself.

2. An employee quit work for the employer on January 15, 1953; he did not convert the policy into an individual policy for himself, and died February 17, 1953, two days after his right to so convert had expired. About six months later the beneficiary named in the policy wrote the employer stating that the employee had not taken a vacation of one week to which he was entitled while he was employed by the employer, and requested pay therefor. The employer paid the sum claimed. Thereafter the beneficiary sued the insurer contending that the payment made by the employer extended the policy from the time the employee quit work for a period of one week, held: The trial court properly denied the contention.

Robert L. Brock, Topeka, argued the cause, and Edward H. Sondker, Thomas R. Sewell, Ernest J. Rice, and Sidney C. Hunt, Topeka, were with him on the briefs, for appellant.

Clayton E. Kline and O. R. Stites, Jr., Topeka, argued the cause, and M. F. Cogrove, Robert E. Russell, Willard N. Van Slyck, Jr., and William B. McElhenny, Topeka, were with them on the briefs, for appellee.

HARVEY, Chief Justice.

This is an action upon an individual's certificate issued under a group life insurance policy issued by defendant covering the employees of the Security Benefit Clinic and Hospital. A jury was waived and the case was submitted to the court on stipulated facts. Judgment was rendered for defendant and plaintiff has appealed. The 'Stipulation of Facts' reads:

'1. Plaintiff, Hazel M. Wyatt, is a resident of Shawnee County, Kansas; her address is 811 Topeka Boulevard, Topeka, Kansas.

'2. Defendant, Security Benefit Life Insurance Company, is a corporation organized and existing under the laws of the State of Kansas and was at all times hereinafter mentioned authorized to transact business in the State of Kansas as a mutual life insurance company; defendant's home office address is 700 Harrison Street, Topeka, Kansas.

'3. On the 18th day of December, 1950, the defendant executed and delivered to Security Benefit Clinic and Hospital, Topeka, Kansas, hereinafter referred to as the Employer, its Group Policy No. GL 2, thereby insuring the lives of certain employees of the Employer, a true and correct copy of which policy is attached to plaintiff's petition, marked 'Exhibit A', and made a part thereof.

'4. That on the 15th day of March, 1951, the plaintiff's husband, Charles A. Wyatt, was an employee of the Employer and that on said date Certificate No. GL 132 was issued by the defendant to said Charles A. Wyatt evidencing that his life was insured in the amount of $5,000.00 under said Group Policy No. GL 2. That a true and correct copy of said certificate is attached to plaintiff's petition, marked 'Exhibit B', and made a part thereof.

'5. Said Charles A. Wyatt was given two weeks' notice by the Employer that his employment would terminate on January 15, 1953. After January 15, 1953, said Charles A. Wyatt did not at any time physically work or perform any services for the Employer.

'6. Said Charles A. Wyatt died on February 17, 1953.

'7. When said Charles A. Wyatt physically ceased to work for the Employer on January 15, 1953, he had worked for the Employer for more than two years. He was paid by the Employer for each week to and including the week ending January 15, 1953, including three weeks during said period while he was on vacation.

'8. Said Charles A Wyatt did not at any time prior to his decease make application for conversion of his said group insurance coverage to an individual policy; and said Charles A. Wyatt was entitled to convert his group coverage to an individual policy at any time within 31 days after termination of his group insurance.

'9. That said Group Policy No. GL 2 contains the following provision:

"Termination of Individual Insurance.

'The insurance of any Employee insured under this Policy shall terminate immediately upon the happening of any of the following events, whichever shall first occur:

"(a) * * *

"(b) Termination of employment of the Employee; or

"(c) * * *

"If, however, the Employee is entitled to convert all or a part of his insurance to an individual policy but dies during the thirty-one day period following termination of his insurance, the amount of insurance which might otherwise have been converted will be paid as a claim under this Policy, whether or not application for conversion has been made.

"Termination of employment shall, for all purposes of this Policy, be deemed to occur upon cessation of active full-time work in the classes of Employees eligible for insurance; except that an Employee who is disabled, on leave of absence, temporarily laid off, employed on a part-time basis, or retired will nevertheless be considered as still employed on a full-time basis until the Employer, acting in accordance with rules precluding individual selection, terminates the Employee's insurance by notifying the Company to that effect or by discontinuing premium payments for his insurance. Insurance shall not, however, be continued for longer than three months on an Employee who is on leave of absence or temporarily laid off, nor shall insurance be continued in any case on an Employee who is absent from work because of membership in any military, naval or air force of any country at war, declared or undeclared.'

'10. Defendant contracted and agreed in said group policy and said certificate to pay as a claim the amount of insurance which might otherwise have been converted, whether or not such application for conversion was made within 31 days after termination of said Charles A. Wyatt's insurance, if said Charles A. Wyatt died during the 31-day period, in words as follows:

"If, however, the Employee is entitled to convert all or a part of his insurance to an individual policy but dies during the thirty-one day period following termination of his insurance, the amount of insurance which might otherwise have been converted will be paid as a claim under this policy, whether or not application for conversion has been made."

In paragraphs 11 and 14 it is stipulated that plaintiff is the widow of Charles A. Wyatt and is the person designated in the certificate of insurance as beneficiary; that about October 12, 1953, plaintiff submitted proof of death of her husband upon the form furnished by defendant; that on October 29, defendant expressly denied any liability to the plaintiff; and, that no part of the $5,000 mentioned in the certificate had been paid by defendant though payment thereof was demanded by plaintiff.

The above stipulation of facts was entered into at a pretrial conference. It was reduced to writing and filed in the case.

In the petition it was alleged that Charles A. Wyatt ceased active full-time work with the employer on January 22, 1953. That allegation was specifically denied in defendant's answer, and it was there alleged that the employment of Charles A. Wyatt finally terminated on January 15, 1953. In the stipulated facts it is agreed that after January 15, 1953, said Charles A. Wyatt did not at any time physically work or perform any services for his employer. It also fixed the date of his death as February 17, 1953. Under the terms of the policy of insurance in question Charles...