Yarborough v. Phoenix Mut. Life Ins. Co., 20225

• Decision Date: 01 June 1976
• Docket Number: No. 20225,20225
• Court: South Carolina Supreme Court
• Parties: Joyce S. YARBOROUGH, Respondent, v. PHOENIX MUTUAL LIFE INSURANCE COMPANY, Appellant.

Page 344

225 S.E.2d 344

266 S.C. 584

Joyce S. YARBOROUGH, Respondent, v. PHOENIX MUTUAL LIFE INSURANCE COMPANY, Appellant.

No. 20225.

Supreme Court of South Carolina.

June 1, 1976.

Forrest C. Wilkerson, Roddey, Sumwalt & Carpenter, Rock Hill, for appellant.

John C. Hayes and B. D. Hayes, Hayes, Brunson & Gatlin, Rock Hill, for respondent.

LITTLEJOHN, Justice:

This action was commenced to recover benefits allegedly due under a group life and major medical expense benefit contract of insurance. The lower court, ruling without a jury, after a reference, granted a judgment representing hospitalization and other medical expenses in favor of the plaintiff. The defendant, insurer, has appealed. We reverse.

The plaintiff is the manager, in Rock Hill, of one of Raylass' Department Stores. Raylass became a participant in a group policy offered by Phoenix, the insurer, in November of 1971. The master policy of insurance is voluminous and is held by Raylass at the home office in New York, as trustee for the employees covered by the single policy. The brief of counsel indicates that thousands of employees are insured. Each insured person, including the plaintiff herein, received a certificate of insurance sometime in December 1971, evidencing acceptance of the insurance and setting forth not all, but the more important portions of the group policy. The certificate itself specifies that it is not a contract and that it is merely a statement of the insurance provided under the policy. Although the certificate held by the respective employees specifies that it is not a part of the contract, it quotes, verbatim, the relevant portions with which we are concerned in this action.

There was appended to the certificate of the plaintiff (and apparently to that of each of the other insured persons), an information sheet, referred to as a sticker, partly typed and partly printed, setting forth the name of the insured employee and relative information. The sticker sheet reads as follows, the typewritten portions being indicated in italics:

                EMPLOYER MEMBER   RAYLASS DEPT.       ACCOUNT NUMBER M55-0189
                                    STORES INC
                NAME OF EMPLOYEE  J. S. YARBOROUGH    EFFECTIVE DATE     NOV. 15, 1971
                TRUSTEES OF THE RETAIL
                INDUSTRY GROUP INSURANCE FUND
                                  INSURANCE SCHEDULE
                LIFE INSURANCE    $5,000
                ACCIDENTAL DEATH AND
                DISMEMBERMENT INSURANCE               $5,000
                                  MAJOR MEDICAL EXPENSE BENEFITS
                MAXIMUM BENEFIT   DEDUCTIBLE AMOUNT     PRIVATE ROOM     PERCENTAGE OF COVERED
                                                            LIMIT           EXPENSES PAYABLE
                $50,000             $100                 MOST COMMON       80% OF THE FIRST
                                                        SEMI-PRIVATE       $2000 IN A CALENDAR
                                                        RATE k $4.00       YEAR OVER THE
                                                                           DEDUCTIBLE AMOUNT
                                                                           AND 100% OF THE
                                                                           BALANCE
                GCS-1
                

Medicare Major Medical Expense Benefit - Medicare Person

                Maximum Benefit                                  Private Room Limit
                ---------------                                  ------------------
                  $10,000                 Most common semi-private room rate plus $4.00
                

Not more than one Deductible amount shall be deducted from the total Covered Expenses incurred during any one Calendar Year by the employee, the emplyee's spouse and their dependent children, as the result of Injuries sustained in one common accident.

This individual Certificate is not a contract. It is merely a statement of the insurance provided under the group policy. The Group Policy constitutes the only contract, and all rights which may exist arise from and are governed by the group policy. Provisions of the group policy principally affecting the insurance of the employee are shown word for word on the following pages of this Certificate as they appear in the policy.

This policy, as well as the certificate, contained the following provision:

Phoenix Mutual will pay the Coinsured Percentage of the amount by which Covered Expenses incurred on behalf of a Covered Person during any Calendar Year exceed the Deductible Amount, subject to the Maximum Benefit, and all other provisions of this policy.

DEDUCTIBLE AMOUNT: Before any benefits are payable hereunder, the amount to be deducted from the Covered Expenses incurred on behalf of each Covered Person during each Calendar Year shall be the Basic Benefits plus a Cash Deductible of $100, provided that in no event shall the total Cash Decuctible to be applied during any Calendar Year to the total Covered Expenses incurred by all Covered Persons in any one family duirng said Calendar Year exceed $250. The term 'family' as used herein shall include only the employee and his dependents, as defined herein.

The plaintiff went to the hospital, while the policy was in effect, and incurred medical and hospital expenses during 1972 in the amount of $3,177.85. It is her contention that the insurer should pay $2,877.85 under the terms of the policy. It is the contention of the insurer that the amount due is $30.92.

In the lower court it was determined by the special referee, and confirmed by the judge, that no representations relevant to the issues in this case were made to the plaintiff. No issue of estoppel or waiver is involved. Accordingly, the lower court looked, as must this Court, to the four corners of the instruments, including the verbiage of the policy, certificate and sticker, and the arrangement of the same, for a construction of the policy and for a determination of the obligation of the insurer.

The plaintiff did not read the policy, which was retained in the home office of Raylass. She testified that she did not read the certificate until after the medical expenses were incurred, but did look at the sticker on the front and 'that's what I went by.'

The lower court ruled that the language contained upon the sticker, in typewriting, attached to the certificate, as it relates to deductible features of the policy, and the language contained in the interior of the certificate (same as in policy) in printed form, created an ambiguity. It resolved the ambiguity in favor of the plaintiff and granted judgment in the full amount prayed for in the complaint.

The question we are called upon to determine in this appeal may be fairly stated as follows:

Did the trial judge err in holding that the language on the sticker, as relates to the deductible features of the contract, are irreconcilable with the provisions elsewhere in the contract as quoted hereinabove?

Stated another way:

Is there an ambiguity in the policy which must be resolved in favor of the plaintiff?

As indicated by the sticker, quoted hereinabove, the policy afforded the plaintiff life insurance in the amount of $5,000, plus accidental death and dismemberment insurance in the amount of $5,000, as well as major medical expense benefits in the maximum amount of $50,000. Premium paid by the plaintiff was in the amount of $7.42 per month; Raylass paid a supplemental amount not indicated in the record before this Court.

The...