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COLLIER v. METROPOLITAN LIFE INS. CO.

March 3, 1949

COLLIER
v.
METROPOLITAN LIFE INS. CO.



The opinion of the court was delivered by: TAMM

This is an action for money alleged to be due plaintiff under the terms of a group life insurance policy issued by defendant. By it, defendant insured the lives of employees of The Evening Star Newspaper Company, of whom plaintiff was one. Because of the fact that this is a case of first impression in this jurisdiction, it is felt necessary that the facts should be set forth in some detail.

During 1926, The Evening Star Newspaper Company, hereinafter called the employer, and the Metropolitan Life Insurance Company, hereinafter called the insurer, or the defendant, entered into negotiations which culminated in the execution, on December 17, 1926, of a group life insurance policy. According to its specific provisions, this policy provided, inter alia, as follows:

 1. (a) The employer was to be primarily liable for the payment of all premiums (Para. 3, p. 2), though provision was made for proportionate participation therein by the employees; (b) either the employer or insurer could require a recomputation of the premiums due the insurer (Para. 3(d), p. 2); (c) there was granted to the employer the option of renewal of the insurance on any anniversary date, on due notice and under conditions not here relevant (Para. 4, p. 2); (d) the employer had the option of changing the premium payments from annually to semi-annually, etc. (Para. 4(b), p. 2); (e) provision was made for coverage of new employees, discontinuance of insurance on persons no longer in the employ of the newspaper company, together with increases or decreases in the amount of insurance, and the employer was charged with the responsibility of keeping the insurer currently apprized of these facts (Para. 6, 7 and 8, p. 2).

 2. It further provided that 'The Company will issue to the employer for delivery to each employee * * * an individual certificate setting forth a statement as to the insurance protection to which such employee is entitled, the beneficiary to whom payable * * * ' (Para. 10, p. 3).

 3. Prior to his sixtieth birthday, if any employee became totally and permanently disabled, as the result of bodily injury or disease, the insurer agreed to make monthly payments 'to the said Employee or to a person designated by him for the purpose; or, if such disability is due to, or is accompanied by, mental incapacity, to the beneficiary of record of the said Employee * * * ' (Para. 13, p. 3). These disability payments were to be made for a specified period of months which varied with the salary or wage of the Employee and the amount of insurance coverage extended to him.

 5. Unearned premiums (Para 9, p. 2) as well as divisible surplus (Para. 15, p. 3) were to be paid by the insurer to the Employer. *fn1"

 The application for this group insurance was signed at Washington, D.C., December 9, 1926, by the late Fleming Newbold, Business Manager of The Evening Star Newspaper Company.

 Plaintiff, an employee of The Evening Star Newspaper Company, made application, in 1926, for insurance under the group policy naming his then wife as beneficiary, *fn2" and subsequently was issued a certificate which specifically stated that (a) 'Under and subject to the terms and conditions of' the policy issued to the employer, the life of the employee would be insured; (b) 'The said Group Policy provides Total and Permanent Disability Benefits as described on the last page hereof'; (c) 'Should the Beneficiary die before the Employee named herein, the interest of such beneficiary shall vest in such Employee, subject to the provisions of said Group Policy'; and (d) 'Under the terms of the Group Policy mentioned on Page one of this Certificate' in the event of total and permanent disability the insurer will make monthly benefit payments 'to such employee'. It should be noted here that the certificate issued to the employee made no mention of the person of whom payments would be made in the event the employee's permanent and total disability was due to or accompanied by mental incapacity.

 Plaintiff alleges that on or about June 15, 1929, he was injured and later became totally and permanently disabled; that on March 14, 1930, he was adjudged of unsound mind and committed to St. Elizabeth's Hospital from which institution he was discharged on May 16, 1946, as cured. Thereafter his civil rights were restored by Order of this Court. Plaintiff further alleges that on or about January 1, 1931, proof of his total and permanent disability was presented to the insurer by his named beneficiary, his then wife, and that thereafter defendant erroneously and wrongfully paid to the said named beneficiary, sixty monthly instalments of $ 54 each, which payments were retained and used by said beneficiary for her own benefit, plaintiff receiving no part thereof. The sixty monthly payments represented in duration and amount the payments which the insurer was obligated to make by the specific provisions of the policy under the total and permanent disability provisions thereof. Following plaintiff's discharge from St. Elizabeht's Hospital, he made demand upon defendant for payment of these benefits and on refusal thereof this suit was instituted on June 22, 1948 for judgment in the amount of $ 3,240.00 plus interest and costs. The plaintiff contends that the defendant was bound by the insurance contract to make these payments to him under the statement contained in his certificate 'to such Employee' -- while the defendant answers that its payment to plaintiff's designated beneficiary under the terms of the contract between itself and the Employer constituted a full and complete discharge of its obligation.

 The matter is now before the Court on plaintiff's motion for Summary Judgment and defendant's motion to dismiss.

 The District of Columbia Code, Sec. 35 -- 711, provides that no policy of group life insurance shall be issued in the District unless it contains a provision that the policy, the application of the employer, and the individual applications of the employees insured, shall constitute the entire contract between the parties. It is to be noted, however, that this provision of the Code was enacted in 1934, 48 Stat. 1165, ch. 672, Sec. 11, and having no retroactive effect, would not be controlling here where the contract was entered into in 1926.

 As stated in paragraph 4, supra, the group policy itself provides that the policy, the application of the employer and the applications of the employees shall constitute the entire contract between the parties. Plaintiff contends, however, that since the policy also provides for the issuance of Certificates to employees, these certificates constitute a part of the contract of insurance. Defendant contends that the provisions of the group policy govern and plaintiff concedes that if this is so then the payments made by defendant to the beneficiary were proper and the complaint must fail.

 The question presented is whether the plaintiff's rights and the defendant's liability would have been the same if the policy had not provided for the issuance of the certificate. The certificate specifically provided that it was issued 'under and subject to the terms and conditions: of the group policy and in other instances enumerated hereinbefore indicated that the provisions of the group policy would control. Unlike the certificate in the Dorman case *fn3" on which plaintiff relies, there are no provisions in the present certificate which do not appear in the master policy. In fact, the real bases of the present action, is that there was a provision in the master policy which ...


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