Aleksich v. Mutual Benefit Health & Accident Ass'n

Action by Alva Aleksich to recover under an insurance policy issued by defendant to her uncle, Jakor Aleksich, in which she is named as beneficiary. The complaint alleges the issuance of the policy, with a copy thereof attached as an exhibit, together with a copy of the application therefor, wherein plaintiff is named as beneficiary. It further alleges the accidental injury of the insured, while the policy was in effect, and his death within one hour after such injury, and that because of such injury and death, "the said insured, Jakor Aleksich, was wholly and continuously disabled and caused thereby permanent and total loss of time." The prayer of the complaint asks damages based on indemnity of $40 for the first month and $80 for each of the succeeding 23 months, "for the time lost by Jakor Aleksich on account of his being injured and killed * * *."

The order of the trial court sustaining defendant's general demurrer to the complaint contains the following: "The court being of the opinion that said complaint cannot be amended so as to state a cause of action in favor of said plaintiff and against said defendant, It Is Ordered that said complaint be, and the same is dismissed at plaintiff's costs." Judgment of dismissal followed.

The policy sued on is headed, on the first page:

"Perfect Income Policy. This Policy Provides benefits for *Page 225 Loss of Limb, Sight or Time, by Accidental Means, or Loss of Time by Sickness as Herein Provided."

The insuring clause provides:

"Mutual Benefit Health and Accident Association, Omaha (herein called the Association) hereby insures Jakor Aleksich (herein called the insured), of the city of Butte, State of Montana, against loss of limb, sight or time, sustained or commencing while this policy is in force, resulting directly and independently of all other causes, from bodily injuries sustained during any term of this policy, through purely accidental means, and against loss of time beginning while this policy is in force and caused by disease contracted during any term of this policy, respectively, subject, however, to all the provisions and limitations hereinafter contained."

Indemnities for specific losses are set out in Part A, which reads as follows:

"Part A.

"If the insured shall sustain bodily injuries, as described in the Insuring Clause, which injuries shall, independently and exclusively of disease and all other causes, continuously and wholly disable the Insured from the date of the accident and result in any of the following specific losses within thirteen weeks, the Association will pay: (Here follows a schedule of cash indemnity payments for specific loss of limb, etc.)

"Loss in every case referred to in the above schedule for dismemberment of hand or hands, or foot or feet, shall mean severance at or above the wrist or about the ankle joint, respectively. The loss of eye or eyes shall mean the total and irrecoverable loss of entire sight thereof. Loss of arm or leg shall mean severance at or above the elbow or the knee joint, respectively. Loss of thumb, finger or toe shall mean severance of at least one entire phalanx. Only one of the amounts named will be paid for injuries resulting from one accident, and shall be in lieu of all other indemnity."

Part B provides:

"If such injuries, as described in the Insuring Clause, do not *Page 226 result in any of the above mentioned specific losses but shall wholly and continuously disable the Insured for one day or more, the Association will pay a monthly indemnity at the rate of Forty ($40.00) Dollars for the first month, and at the rate of Eighty ($80.00) Dollars per month thereafter, but not to exceed twenty-four months."

Other parts of the policy, not here important, provide for partial disability benefits, medical attention, financial aid, and illness and hospital benefits.

The policy contains fifteen provisions designated "Standard Provisions." Those of interest here are as follows:

"4. Written notice of injury or of sickness on which claim may be based must be given to the Association within twenty days after the date of the accident causing such injury or within ten days after the commencement of disability from such sickness. In event of accidental death immediate notice thereof must be given to the Association.

"5. Such notice given by or in behalf of the Insured or beneficiary, as the case may be, to the Association * * *."

"8. The Association shall have the right and opportunity to examine the person of the Insured when and so often as it may reasonably require during the pendency of claim hereunder, and also the right and opportunity to make an autopsy in case of death where it is not forbidden by law.

"11. Indemnity for loss of life of the Insured is payable to the beneficiary if surviving the insured, and otherwise to the estate of the insured. All other indemnities of this policy are payable to the Insured."

Under the heading of "Additional Provisions," is found the following:

"(a) This policy does not cover death, disability, or other loss sustained in any part of the world except the United States and Canada, or while the Insured is engaged in military or naval service in time of war, * * *."

On the back of the policy is the following endorsement:

"This policy provides benefit for loss of limb, sight, or time *Page 227 by accidental means, or loss of time by sickness, as herein provided."

No death benefit is mentioned in or provided by the policy. Plaintiff sues for loss of time resulting from the death of the insured, under Part B of the policy, which provides indemnity for loss of time not exceeding 24 months, resulting from injuries which cause none of the specific losses mentioned in Part A. Thus, the complaint alleges "that because of his said injuries and death, and said insured, Jakor Aleksich, was wholly and continually disabled and caused permanent and total loss of time," and "plaintiff has been damaged by defendant in the sum of One Thousand, Eight Hundred and Eighty ($1,880) Dollars, being monthly indemnity at the rate of Forty ($40) Dollars for loss of time for the first month, and at the rate of Eighty ($80) Dollars per month for loss of time for twenty-three (23) months thereafter." Plaintiff's theory, which she must sustain in order to state a cause of action, is that death is an injury or disability insured against under Part B of the policy.

It is apparent that the insuring clause does not insure against death, nor does the insurer thereby agree to pay any indemnity or benefit by reason of the death of the insured. Therein the contingencies insured against are limited to loss of limb, sight or time resulting from accident or sickness. Neither does any other provision of the contract constitute an agreement to pay indemnity for death of the insured. Plaintiff contends that the standard and additional provisions quoted above constitute, inferentially, an agreement to indemnify, under Part B, against loss of time resulting from death of the insured.

In 29 Am. Jur., sec. 1166, p. 880, the general rule is thus stated: "From the very nature of the insurance involved, it is clear and is generally held that no liability for death arises under a policy provision for indemnity to the insured in case of his permanent or total disability."

In Hill v. Travelers' Ins. Co., 146 Iowa 133, 124 N.W. 898, 28 L.R.A., N.S., 742, which involved a similar policy, it was *Page 228 said: "The entire contract clearly shows that it is not one insuring the life of Craine. It insures against loss on account of temporary and permanent disability, as the terms are ordinarily used and understood. The word `disability' does not express the same meaning as the word `death'; nor is it ordinarily used as signifying the same thing. * * * Where an accident insurance policy provided for a weekly indemnity, not exceeding a certain number of weeks, for total `disability,' and the insured died within 24 hours after the accident, it was held that his estate could not recover for the full period, as death cannot be said to be disability. Rosenberry v. Fidelity Casualty Co., 14 Ind. App. 625, 43 N.E. 317."

See also Paul v. Fidelity Casualty Co., Mo. App.,34 S.W.2d 978, and cases therein cited; and 1 Corpus Juris 466, where it is said: "A provision for the payment of a weekly indemnity during the period of total disability refers to the condition of a living person and no recovery can be had thereunder for the death of the insured." See cases cited under note 54.

Ferguson v. Penn Mut. Life Ins. Co., 305 Ill. App. 537,27 N.E.2d 548, 550, involved a permanent disability policy, with monthly payments during total and permanent disability. The appellate court of Illinois, in affirming a denial of recovery after death of the insured, said: "Proof of the disability of the insured not having been furnished until shortly after his death, it is urged that his `death should be construed as a continuance of disability under the terms of the policy.' This is really the only theory upon which plaintiff could possibly hope to prevail in this action, but it is so opposed to reason and contrary to the manifest intention of the parties to the insurance contract that it hardly merits serious consideration. In our opinion the supplemental agreement clearly contemplated that the benefits thereunder would inure only to the insured during his lifetime and during the continuance of his disability. Disability presupposes life. Death is the antithesis of life." And *Page 229 see Bishop v. Morrison-Knudsen Co., 64 Idaho 806,137 P.2d 963, 968.

Appellant calls to our attention a number of general rules[1] applicable to construction of contracts, among these being that an insurance policy, like any contract, is to be read as a whole, and if possible the several parts should be reconciled and given effect; that a contract includes not only what is expressly stated, but also what is necessarily to be implied from the language used; that an instrument is to be most strictly construed against the party who prepared it; that insurance policies are to be liberally construed in favor of the insured. We agree, but hold that they do not permit us to find as contended for by plaintiff.

Appellant relies on National Life Insurance Co. of United States v. Fleming, 127 Md. 179, 96 A. 281, 284, wherein is found the statement, "There are cases holding that the words `wholly disable' and the words `total disability' do not include death, but these cases all rest upon the particular provisions of the policy under consideration." That case differs from this in that, in the policy there considered, loss of life was one of the specific losses insured against. So also the case of New York Life Ins. Co. v. Hiatt, 9 Cir., 140 F.2d 752, involved facts entirely different from those here involved.

We are convinced that the intention of the parties to the[2] insurance contract was that the only indemnity contemplated was for loss of limb, sight or time and that such is the meaning and effect of the contract, as therein expressed. From a careful consideration of the entire contract we are unable to find any agreement of indemnity against, or promise of reimbursement for death of the insured, or for loss of time resulting from death. We are unable to read into the so-called "standard" or "additional" provisions referred to an undertaking by the insurer to pay compensation for either of such contingencies. The purpose of including that portion of the standard and additional provisions referred to in so far as they mention death of the insured does not appear. But they do not *Page 230 constitute an agreement to pay for death, or loss of time resulting from death, of the insured, and are meaningless so far as this contract is concerned. They are, if given the interpretation urged by appellant, inconsistent with the clear meaning of the contract and the apparent intention of the parties thereto, and will be disregarded.

For another reason the demurrer was well taken. Plaintiff[3] seeks to recover, not for the death of the insured, but for loss of time resulting from his death. Standard provision 11 provides that indemnity for loss of life of the insured is payable to the beneficiary, all other indemnities being payable to the insured. It is thus apparent that even though the policy should be considered broad enough to include indemnity for loss of time resulting from death, the only possible cause of action, under the circumstances, would be in favor of the estate of the insured.

We think it proper to observe that confusion as to the apparent meaning of the policy might have been avoided by elimination therefrom of all so-called "standard" provisions not applicable.

The trial court correctly sustained the demurrer and dismissed the complaint. The judgment is accordingly affirmed.

Mr. Chief Justice Johnson and Associate Justices Morris and Adair concur.