Yarborough v. Phoenix Mut. Life Ins. Co., No. 20225

• Court: United States State Supreme Court of South Carolina
• Writing for the Court: LITTLEJOHN; LEWIS
• Citation: 266 S.C. 584,225 S.E.2d 344
• Parties: Joyce S. YARBOROUGH, Respondent, v. PHOENIX MUTUAL LIFE INSURANCE COMPANY, Appellant.
• Decision Date: 01 June 1976
• Docket Number: No. 20225

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.

Page 345

[266 S.C. 585] Forrest C. Wilkerson, Roddey, Sumwalt & Carpenter, Rock Hill, for appellant.

[266 S.C. 586] 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,[266 S.C. 587] 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
                

Page 346

[266 S.C. 588] 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.

Page 347

[266 S.C. 589] 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...