Standish v. Business Men's Assurance Co., of America

No. 13527

I N THE SUPREME COURT O F THE STATE O MONTANA
F

1977

MELVIN STANDISH,

P l a i n t i f f and Respondent,

BUSINESS MEN'S ASSURANCE COP'IPANY
O F AMERICA,

D e f e n d a n t and A p p e l l a n t .

Appeal from: D i s t r i c t Court of t h e S i x t h J u d i c i a l D i s t r i c t ,
H o n o r a b l e J a c k D. S h a n s t r o m , J u d g e p r e s i d i n g .

Counsel o f Record:

For Appellant:

B e r g , A n g e l , A n d r i o l o and Morgan, Bozeman, Montana
C h a r l e s F. Angel a r g u e d , Bozeman, Montana

F o r Respondent :

B e n n e t t a n d B e n n e t t , Bozeman, Montana
Lyman H . B e n n e t t , Jr. a r g u e d a n d Lyman H. Bennett, I11
a r g u e d , Bozeman, Montana

Submitted: March 9 , 1977

Decided
' 42 0 r n
;R g
Filed: W 2 2 '7
R '

Clerk
M r . J u s t i c e John Conway Harrison d e l i v e r e d t h e Opinion o f t h e
Court.

Defendant a p p e a l s from d e n i a l of a motion f o r judgment

n o t w i t h s t a n d i n g t h e v e r d i c t by t h e d i s t r i c t c o u r t , Park County.

The j u r y r e t u r n e d a v e r d i c t i n f a v o r of p l a i n t i f f Melvin S t a n d i s h

i n t h e amount of $7,679.32. The p a r t i e s a g r e e t h i s amount i s

due, i f t h e r e was coverage under t h e group h e a l t h i n s u r a n c e p o l i c y

purchased by Brand S o Lumber Company f o r i t s employees from

d e f e n d a n t , Business Men' s Assurance Company of America.

On a p p e a l , t h e s t a n d a r d of review from a d e n i a l of a motion

f o r judgment n o t w i t h s t a n d i n g t h e v e r d i c t made p u r s u a n t t o Rule

5 0 ( b ) , M.R.Civ.P., i s t h e same a s t h a t f o r review of a motion f o r

directed verdict. S h e e k e t s k i v . B o r t o l i , 86 Nev. 704, 475 P.2d

675; 9 Wright & M i l l e r , F e d e r a l P r a c t i c e and Procedure, C i v i l

$2524. A d i r e c t e d v e r d i c t may be g r a n t e d o n l y where i t a p p e a r s

a s a m a t t e r of law t h a t p l a i n t i f f cannot r e c o v e r upon any view of

t h e e v i d e n c e , i n c l u d i n g t h e l e g i t i m a t e i n f e r e n c e s t o be drawn from

ic. P a r r i s h v. W i t t , Mont . , 555 P.2d 741, 742, 33 S t .

Rep. 999,l,000; Slagsvold v. Johnson, Mont . , 544 P. 2d

+42, 443, 32 St.Rep. 1273, 1275, and c a s e s c i t e d t h e r e i n .

Here, t h e b a s i c q u e s t i o n on a p p e a l i s whether p l a i n t i f f was

:overed by t h e group i n s u r a n c e p o l i c y . There a r e two a s p e c t s t o

c h i s q u e s t i o n 1) had p l a i n t i f f met t h e i n i t i a l e l i g i b i l i t y r e -

quirements, 2) had he been t e r m i n a t e d ending p o l i c y coverage p r i o r

t o the injury.

W f i r s t n o t e t h a t because t h e r e was no employee payment o r
e

o r h e r a i ' f i r m a t i v e a c t on t h e p a r t of t h e employee which i n i t i a t e s

coverage, t h e d e t e r m i n a t i o n of when coverage began o r when i t ends

r e q u i r e s i n f e r e n c e s from c i r c u m s t a n t i a l evidence. There a r e a
number of similarities between the instant case and cases involving
the question of coverage under the Worker's Compensation Act or

other social legislation, and while both are for the benefit of

the employee and paid by the employer, there is a major difference

between the two. Worker's Compensation coverage is required by

statute, while the group health insurance policy is not. The

Worker's Compensation statute is construed to prevent avoidance of

the statute. Here the provisions of the insurance

policy which must be interpreted. Those provisions in question

here are:

"An Individual in an eligible class of Individuals
shall be eligible for insurance under this policy as
follows :

" b on the day following the date the Individual
()
completes one calendar month of membership in an eligible
class .I1

The termination provision reads:
" b If an Individual's insurance under this policy
()
is contingent upon employment, the insurance of such
Individual shall terminate upon termination of such
employment. Cessation of active work shall be deemed
termination of employment, except that while an Individual
is absent on account of sickness or injury, employment
shall be deemed to continue until premium payments for such
Individual's insurance are discontinued. At the option of
the Policyowner, the insurance of an Individual may be
continued during a temporary lay-off but not beyond the
end of the policy month following the policy month in
which the lay-off starts, or may be continued during an
authorized leave of absence granted by the policyowner
for reasons other than sickness or injury, but not beyond
the period ending three months after such leave of absence
starts. ' I

The questions to be determined for coverage are ( ) when,
1
if ever, did coverage begin, (2) was the cessation of active work
due to injury, and (3) if it was, when were the premiums discontinued?
 There was testimony t h a t p l a i n t i f f began work on Brand S

Lumber Company p r o j e c t s i n mid-March, 1974. A t t h a t time he

was paid by Norman Kelly, who was a c o n s t r u c t i o n supervisor f o r

Brand S. Kelly was a f u l l - t i m e emplcoyee of Brand S and he was

reimbursed by Brand S f o r wages he paid t o those who worked f o r

him. During t h i s i n i t i a l period no deductions were made f o r

s o c i a l s e c u r i t y o r t a x e s from p l a i n t i f f ' s wages. During the

f i r s t weeks of May, while Kelly was on v a c a t i o n , p l a i n t i f f was

paid d i r e c t l y by Brand S. I n l a t e May, p r i o r t o going t o

Colorado on a Brand S e p r o j e c t , Kelly had p l a i n t i f f placed on t h e

company's computerized p a y r o l l . The crew returned from Colorado

on June 26 and both p l a i n t i f f and a coworker t e s t i f i e d t h a t

p l a i n t i f f worked on June 27. P l a i n t i f f and t h e coworker t e s t i f i e d

t e s t i f i e d they both took t h a t Friday o f f , and t h e e n t i r e next

week a s w e l l a s t h e i r J u l y 4 holiday, intending t o r e t u r n t o work

a f t e r t h e vacation. The coworker d i d r e t u r n , but p l a i n t i f f i n j u r e d

h i s ankle i n an automobile accident and he reported t h a t he could

not r e t u r n u n t i l i t had healed.

O o r about J u l y 30, p l a i n t i f f was i n j u r e d when a .41 magnum
n

gun he was handling f e l l t o t h e ground, discharged, and wounded

p l a i n t i f f i n both l e g s . P l a i n t i f f t e s t i f i e d he was given n o t i c e

of h i s termination i n August, while he was s t i l l i n t h e h o s p i t a l .

Defendant presented evidence t o t h e e f f e c t t h a t t h e checks

paid t o p l a i n t i f f p r i o r t o being put on t h e Brand S. computer pay-

r o l l were j u s t reimbursement checks paid i n d i r e c t l y t o p l a i n t i f f

i n s t e a d of d i r e c t l y . A number of business records were introduced

giving June 26 a s t h e termination d a t e . It i s c l e a r most of those

records were made a f t e r t h e J u l y 30 a c c i d e n t , but t h e r e was t e s t i -

mony t h i s was done without any knowledge of t h e accident. ' , .
'The insurance 5iil from defendant t o Brand S shows t h a t Brand

S had d e l e t e d p l a i n t i f f because he had n o t been employed a s u f f i -

c l e n t p e r i o d of time. T h i s document was a l s o prepared i n e a r l y

Xugus t .
I t i s c l e a r t h e r e were f a c t u a l d i s p u t e s t o be determined t o

f i n d i f t h e r e was coverage under t h e p o l i c y . These f a c t u a l

q u e s t i o n s were decided by t h e j u r y i n f a v o r of p l a i n t i f f . It does

n o t appear from t h e evidence t h a t t h e r e was no coverage a s a

m a t t e r of law and t h e r e f o r e t h e motion f o r a judgment n o t w i t h -

s t a n d i n g t h e v e r d i c t was p r o p e r l y denied.

P l a i n t i f f ' s argument on p u n i t i v e damages based on an a l l e g e d

v i o l a t i o n of t h e d i s a b i l i t y s e c t i o n s of t h e i n s u r a n c e code i s

without m e r i t . D i s a b i l i t y i n s u r a n c e was n o t r a i s e d i n t h e p l e a d i n g s

and throughout h i s p r e t r i a l memorandum p l a i n t i f f speaks o n l y of

rnedical b i l l s under t h e h e a l t h i n s u r a n c e . There was no c l e a r

showing o f t h e e x i s t e n c e of d i s a b i l i t y i n s u r a n c e , n o r i s t h e r e

ally showing of t h e r e q u i s i t e o p p r e s s i o n , f r a u d , o r m a l i c e t o

b r i n g t h i s c a s e under t h e r u l e of S t a t e e x r e l . Larson v . D i s t r i c t

Court, 149 Mont. 131, 423 P.2d 598.

The judgment of t h e d i s t r i c t c o u r t i s a f f i r m e d .

Me Concur;
i I