Summary
In Smillie v. Travelers Insurance Co., 102 Mich. App. 780, 302 N.W.2d 258 (1980), the court considered a group life insurance policy which conditioned the increase in coverage on an employee being "actively at work performing all of the duties of his employment * * * at his customary place of employment * * *."
Summary of this case from Todd v. Dow Chemical Co.Opinion
Docket No. 48343.
Decided December 18, 1980.
Bacalis Associates, P.C., for plaintiff.
Law Offices of David J. Capriccioso (by Barry M. Kelman), for defendant.
Before: BRONSON, P.J., and J.H. GILLIS and CYNAR, JJ.
Plaintiff, Helen V. Smillie, appeals of right from the October 26, 1979, judgment of no cause of action entered by the trial judge after a bench trial was held in the within case.
Plaintiff is the beneficiary under a group life insurance policy on her late husband, Charles M. Smillie II. Defendant insurer has paid plaintiff $60,000 in benefits based upon Plan V of this group life insurance policy and this sum is not in controversy. Rather, the present lawsuit seeks to compel defendant to pay plaintiff $40,000 increased coverage on decedent. Defendant contends that the insurance plan (Plan 100), which would have been the basis for the increased benefits, never went into effect as to decedent.
This Court has recently addressed the rules of construction to be applied to insurance contracts:
"Insurance policies must be construed in accord with the ordinary and popular sense of the language used therein. Michigan Mutual Liability Co v Mesner, 2 Mich. App. 350, 353; 139 N.W.2d 913 (1966). Insurance policies drafted by the insurer must also be construed in favor of the insured to uphold coverage. Shepard Marine Construction Co v Maryland Casualty Co, 73 Mich. App. 62, 64; 250 N.W.2d 541 (1976). This same rule applies to exclusion provisions in the policy. Kalamazoo Aviation, Inc v Royal Globe Ins Co, 70 Mich. App. 267, 270; 245 N.W.2d 754 (1976). To be given full effect, an insurer has a duty to clearly express the limitations in its policy. Francis v Scheper, 326 Mich. 441, 447-448; 40 N.W.2d 214 (1949), Union Investment Co v Fidelity Deposit Co of Maryland, 549 F.2d 1107, 1110 (CA 6, 1977), and Ornamental Iron Stair Co v General Accident Life Assurance Corp, Ltd, 68 Mich. App. 259, 263; 242 N.W.2d 544 (1976). A technical construction of policy language which would defeat a reasonable expectation of coverage is not favored. Crowell v Federal Life Casualty Co, 397 Mich. 614, 623; 247 N.W.2d 503 (1976)." State Farm Mutual Automobile Ins Co v Ruuska, 90 Mich. App. 767, 777-778; 282 N.W.2d 472 (1979), lv gtd 407 Mich. 948 (1979).
Additionally, in Foremost Life Ins Co v Waters, 88 Mich. App. 599, 604; 278 N.W.2d 688 (1979), this Court stated:
"Any ambiguities are liberally construed in favor of the insured. Kalamazoo Aviation, Inc v Royal Globe Ins Co, 70 Mich. App. 267; 245 N.W.2d 754 (1976), lv den 399 Mich. 871 (1977). The court's duty is to ascertain the meaning which the insured would reasonably expect. Zurich Ins Co v Rombough, 384 Mich. 228, 233; 180 N.W.2d 775 (1970)."
The trial court held controlling the following clause, contained in a rider to the master policy:
"Each eligible Employee is to be insured, subject to the provisions of subparagraph (2) below:
* * *
"II * * *
"(a) provided that no Employee who is not actively at work performing all of the duties of his employment with the Employer at his customary place of employment on the date his insurance is to become effective shall be insured until he returns to active work and the performance of all such duties."
We agree. See MCL 500.4434; MSA 24.14434, Germain v Aetna Life Ins Co, 285 Mich. 318; 280 N.W. 773 (1938). But see, Freeman v Massachusetts Mutual Life Ins Co, 27 Mich. App. 572 ; 183 N.W.2d 832 (1970).
Thus, to be covered by the increase in coverage offered by Plan 100, decedent had to meet two specific requirements set out in the paragraph quoted above. He had to be: (1) "actively at work performing all of the duties of his employment"; and (2) performing his work "at his customary place of employment".
The parties did not cite, nor could we locate, any Michigan cases interpreting similar language in an insurance contract.
However, the Wisconsin Supreme Court in Rabinovitz v Travelers Ins Co, 11 Wis.2d 545; 105 N.W.2d 807 (1960), interpreted almost identical language in a similar factual situation to deny coverage to an employee under a group life insurance policy.
The group life policy in Rabinovitz provided that no employee who was not actively at work at his customary place of employment on the date his coverage was to become effective would be insured until he returned to active work. The group policy in question became effective as of March 1, 1958, and the particular employee was confined to a hospital from February 21, 1958, until April 1, 1958, when he died. Under these facts, the Wisconsin Supreme Court held that there was no coverage for the particular employee (whose job consisted of contacting buyers and sellers and supervising others) even though he was not required to do all his work at any particular place and may have performed his duties while in the hospital. In reaching this conclusion, the Wisconsin Supreme Court stated:
"The clause in this group life insurance policy requiring an employee to be actively at work performing all of the duties of his employment at his customary place of employment in order for the insurance to be in effect as to such employee is a condition of the policy because no medical examination was required. The purpose of the clause is to provide a test to determine the reasonably good health of an employee and to exclude an employee in such a poor state of health that he cannot fully perform all his duties at his customary place of employment on the date the policy is to become effective as to him. This is a reasonable requirement. Among the duties of this employee were contacting sellers and buyers and supervising and advising other employees. It is stated that the employee was not required to perform any specific duties and he performed all his duties while in the hospital. Accepting this as true on the motion, the actual claim of the plaintiff is that the employee had no customary place of employment or that place was wherever he happened to be at the moment — in this case, in a hospital. He happened to be there, not because required by his employment or because it was advantageous to his employer, but because of his state of ill-health. To construe the words of the contract to mean that this employee's customary place of employment was in the hospital, or wherever he happened to be at any given moment, would render the clause in the policy meaningless." 11 Wis.2d 545, 552-553.
We agree with the Rabinovitz analysis and hold that plaintiff is not entitled to the increased benefits; Plan 100 never became effective as to decedent because he was confined to a hospital in Florida from May 20, 1977, until his death on June 4, 1977, and the effective date of the increased coverage was June 1, 1977.
On appeal, plaintiff urges that resolution of the instant case turns on the construction given to the phrase "actively at work" as it is used in the certificates, booklets and renewal forms accompanying the policy. However, even if arguendo we accept plaintiff's argument that the phrase "actively at work" is the only limitation to effective coverage, plaintiff would still not be successful. This is because the trial court specifically found that decedent was not "actively at work" on or after June 1, 1977. Since this finding of fact by the trial court was not clearly erroneous, it must be upheld. GCR 1963, 517.1. See also Tuttle v Dep't of State Highways, 397 Mich. 44, 46; 243 N.W.2d 244 (1976). Finally, plaintiff also makes reference to another portion of the master policy which delineates employees eligible to be insured and maintains that that clause is in conflict with the clause dealing with when coverage becomes "effective". We find this argument to be without merit since the two clauses plaintiff argues are in conflict address two separate subjects and do not create an ambiguity concerning the effective date.
Affirmed.
BRONSON, P.J., concurs in the result only.