Betteley v. Fisher Bros.

OPINION

By TERRELL, PJ.

Plaintiffs were the children and the beneficiaries in a life insurance policy, under a group plan issued by The Equitable Life Assurance Company to The Fisher Brothers Company. This insurance policy was for the protection of the employees of said company. A master policy was issued to The Fisher Brothers Copany. A certificate thereunder was issued to Edwin Betteley, the employee, who was the father of these plaintiffs. Upon the death of Edwin Betteley, plaintiffs sought to recover the benefits provided for under the policy.

The present action was instituted against the insurance company' and against The Fisher Brothers Co. The insurance company was dismissed out of the action and it is pending only against The Fisher Brothers Company.

The policy provides, under Section 6, Special Provisions:

“Upon termination of employment as shown by the Employer’s records, the insurance upon the life of any employee terminates automatically unless continued under the individual conversion option.”

The policy further provides that,

“Upon termination of employment for any reason whatsoever, the employee shall be entitled to have issued to him by the Society without further evidence of insurability, and upon application made to. the Society within thirty-one (31) days after such termination, and upon the payment of the premium applicable to the class of risk to which he belongs, and to the form and amount of the policy at his then attained age, a policy of life insurance in any one of the forms customarily issued by the Society * *

Decedent employee worked for a number of years for The Fisher Brothers Company, and was insured gratis under this group form of insurance, The Fisher Brothers Company, the employer, paying all the premiums thereon, the employee paying nothing.

The evidence shows that the insured decedent employee became disabled because of a hernia, and was laid off from his employment to recuperate. This continued for a period of about a year and a half during all of which time the insurance upon him under the group plan policy was kept alive and paid by The Fisher Brothers Company. Finally, having been informed by the plaintiff, Wilton G. Betteley, the son of the decedent employee, that his father would not be able to return to active employment, The Fisher Brothers Company made notations upon its records of employment that said employee had resigned. The Fisher Brothers Company thereupon discontinued the payment of premiums for said employee and had the contract of insurance as to him, cancelled. Said employee died five or six months later.

It is now contended by the plaintiffs that The Fisher Brothers Company was required under the law to notify the decedent employee of the entry of termination of his employment upon its records, so that thereupon he could be advised and enabled to exercise his rights under said group plan policy which provided that within thirty-one (31) days he would have the option of converting said group plan insurance as to him into some other form of insurance policy with the company without the necessity of any further evidence of insurability.

To further substantiate this claim, the plaintiff sets forth his own evidence wherein he contends that The Fisher Brothers Company, through its District Supervisor, Mr. Buchan, stated to him, the plaintiff, Wilton G. Betteley, that The Fisher Brothers Company would keep alive the insurance and pay the premiums thereon “for the time being”.

Upon this condition of facts, plaintiffs contend that there was a legal duty upon The Fisher Brothers Company to so advise its said employee of the entry on its records of employment that he had resigned and that not having so advised him, he and his beneficiaries were caused to lose a valuable right in the exercise of the conversion option, whereby The Fisher Brothers Company should respond to the plaintiffs in the amount of said insurance policy.

The arrangement whereby The Fisher Brothers Company undertook to insure the life of its employee was wholly gratuitous. The employee paid nothing toward it. The contract of insurance could have been discontinued by The Fisher Brothers Company at any time without legal liability to the employee. Of course, if the employee had been notified that upon the records of employment of The Fisher Brothers Company they had shown a discontinuance of his employment, he would have been enabled to exercise this option to convert his insurance, but that does not place upon the employer the legal duty to so notify the employee. The employee had the knowledge first hand that he was not physically able to return to his employment. His son, the plaintiff herein, also knew that his father would not be able to return to active employment. The father and son knew the terms of the insurance policy which provided that the insurance should continue only so long as the employee should continue in the employment of the employer. The notation or information conveyed by The Fisher Brothers Company to the employee that he had severed his employment from the company would add nothing to his own knowledge of the facts.

Under this policy there would probably devolve upon The Fisher Brothers Company the duty to notify the insurance company of the termination of the employment of any employee but in this case for a period of a year and a half The Fisher Brothers Company voluntarily and without cost to the employee, kept alive his insurance policy during a time when he did not engage in employment with the Company. Surely The Fisher Brothers Company should not be condemned by the employee or his beneficiaries, for keeping alive said policy during that period. Under the circumstances in this case we cannot see any legal liability imposed upon The Fisher Brothers Company to notify the employee that he had severed his employment with said company.

Accordingly we are of the opinion that there was no error by the trial court in directing a verdict for the defendant, and the judgment is therefore affirmed.

LIEGHLEY, J., concurs. MORGAN, J., dissents.