Opinion
No. 77-208
Decided April 12, 1978.
Insurance — Accidental death policy — Time-limitation provision — Not contrary to public policy.
APPEAL from the Court of Appeals for Stark County.
Paul D. Rhoades, husband of appellee, Rose M. Rhoades, was insured by appellant, The Equitable Life Assurance Society of the United States, under a group accidental death and dismemberment policy, which called for the payment of an indemnity in the event that the insured sustained bodily injuries in an accident and as a result of which the insured died within 90 days.
On September 13, 1974, Paul Rhoades suffered severe injuries in an automobile accident. He remained in Timken Mercy Hospital until released on October 11, 1974. On December 21, 1974, Rhoades was readmitted to the hospital, but discharged again on January 5, 1975. Rhoades died two days later, on January 7, 1975, which was 116 days after the accident. His death was caused by "`cardiac arrest; acute myocardial infarction (recent).'"
The facts, as set forth above, have been stipulated by the parties. In addition, the parties stipulated that:
"A substantial question of fact exists as to whether or not Mr. Rhoades' death was the result, directly or independently of all other causes, of injuries caused directly and exclusively by external, violent and purely accidental means."
Equitable refused to pay Mrs. Rhoades the accidental death indemnity.
Appellee then commenced this action against the insurance company claiming breach of contract. Appellant defended upon the grounds that the death of Paul Rhoades was not the direct and independent result of the automobile accident and that Rhoades did not die within 90 days after the accident pursuant to the conditions of the insurance contract.
On July 12, 1976, a motion for summary judgment by appellant was sustained by the trial court on the basis that the indemnity provision of the policy was effective only if the insured died within 90 days of the alleged accident. The trial court also made a preliminary finding "that a substantial question of fact exists as to whether or not Mr. Rhoades' death was the result * * *" of the automobile accident.
In a split decision, the Court of Appeals for Stark County reversed the judgment of the trial court and remanded the cause, holding that the contract provision limiting recovery to situations where death occurs within 90 days of an accident is contrary to public policy, and, therefore, unenforceable.
This cause is now before this court upon the allowance of a motion to certify the record.
Messrs. Mills, Mills, Fiely Lucas and Mr. Frank Lucas, for appellee.
Messrs. Day, Ketterer, Raley, Wright Rybolt, Mr. John F. Buchman and Mr. James R. Blake, for appellant.
It is well-settled in Ohio that insurance policies should be enforced in accordance with their terms as are other written contracts. Where the provisions of the policy are clear and unambiguous, courts cannot enlarge the contract by implication so as to embrace an object distinct from that originally contemplated by the parties. Motorists Mutl. Ins. Co. v. Tomanski (1971), 27 Ohio St.2d 222, 226.
In the instant cause, the time-limitation provision of the accidental death policy was written by the parties in such language. The intent of the parties was that death of the insured occurring within 90 days after an accident was compensable; death occurring thereafter, although accidentally caused, was not compensable. Since it is not the function of this court to rewrite insurance contracts so as to provide coverage which we might consider more equitable, this contract provision must be enforced as written, unless held to be contrary to public policy.
The general rule recognized throughout the country holds time-limitation provisions in insurance contracts valid. See 1A Appleman, Insurance Law Practice, Section 612 (1965), and the cases cited therein. See, also, Annotation 39 A.L.R. 3d 1311.
Appellee proposes that the time limitation is void as contrary to public policy. We cannot agree. "We know of no public policy justification for ignoring the language of a contract in order to impose liability on a defendant insurer for a loss not contemplated by the contract." Shelton v. Equitable Life Assur. Soc. of U.S. (1961), 28 Ill. App.2d 461, 469, 171 N.E.2d 787.
The test as to whether an insurance contract provision is void as against public policy is whether its purpose is "`injurious to the public or contravenes some established interest of society.'" L'Orange v. Medical Protective Co. (C.A. 6, 1968), 394 F.2d 57, 60. The acknowledged purpose of the 90-day time limitation in such policies is to eliminate disputes concerning the proximate cause of an insured's death. This purpose is neither "injurious to the public" nor does it "contravene some established interest of society." Such a time limitation, in fact, serves a legitimate societal function.
See Brown v. United States Cas. Co. (N.D. Cal. 1899), 95 F. 935, 937, in which the court states:
"The clause limiting liabilities of insurance companies to indemnity when death occurs from accidental means within 90 days from the date of the accident appears to be incorporated in the standard policies of accident and casualty insurance companies, but there are few cases upon record showing any contest of this provision. It is to be presumed that insurance companies, in formulating policies, adopt the terms best suited to the purposes of all parties; that in fixing the premium charge it is necessary to limit the liability to a stated period; that from experience and the statistics on the subject 90 days has been decided to be a fair length of time for the final result of an accident; and, this being so, its incorporation into the contract serves to protect the interests of both insurer and insured."
For this court to hold the 90-day time-limitation provision in the insurance contract void as against public policy would constitute an unwarranted infringement upon the right of freedom to contract. Therefore, the judgment of the Court of Appeals must be reversed.
Appellee cites only one Pennsylvania case, Burne v. Franklin Life Ins. Co. (1973), 451 Pa. 218, 301 A.2d 799, which has been followed to date by only Karl v. New York Life Ins. Co. (1976), 139 N.J. Super. 318, 353 A.2d 564, for the proposition that a 90-day time limitation in an accidental death insurance policy is void as contrary to public policy. Those cases need not be distinguished from the instant cause for even if, as there, the insured's death was made inevitable by injuries sustained in an accident and there were no real questions concerning proximate cause, the policy provision as to the outer time limit for effective payment contained in the policy governs and is in our view not against public policy.
Judgment reversed.
O'NEILL, C.J., HERBERT, CELEBREZZE, W. BROWN, P. BROWN, SWEENEY and LOCHER, JJ., concur.