Ehrke v. North American Life

This action was brought against the North American Life and Casualty Company by the plaintiff claiming indemnity for loss of time occasioned by sickness and for hospital and surgical expenses incurred for an appendectomy operation. Judgment was rendered in favor of the plaintiff for the expenses incurred. Plaintiff appealed claiming that she was also entitled to recover for loss of time occasioned by sickness, and defendant appealed claiming that the expenses incurred were for an operation not included within the terms of the policy.

[1] The error asserted and set forth by defendant is that the evidence is insufficient to support certain findings made by the court. Plaintiff contends that the question is not before us for review because defendant did not properly preserve it. The question of the sufficiency of the evidence to sustain such findings was never presented to the trial court and for this reason cannot be considered on appeal. Chambers v. Wilson,67 S.D. 495, 294 N.W. 180.

The sole question presented by the record in the case at bar is whether the policy provided indemnity for loss of time occasioned by sickness. The court found that the plaintiff because of sickness "suffered loss of time from her regular employment in the sum of one hundred and eight dollars," but concluded that such loss was not within the policy coverage.

The insuring clause of the policy insures "against loss due to Hospital Residence and Surgical Operation Expense caused by accidental bodily injuries * * * referred to as `such injury' and loss necessitated by sickness caused by disease (emphasis supplied) * * * referred to as `such sickness', subject to the provisions and exceptions" contained in the policy. Part I of the policy provides that if "such injury" or "such sickness" shall necessitate hospital treatment the company will reimburse the insured in an amount not to exceed $3.50 per day for the period insured shall necessarily be a resident patient, but not exceeding twenty-eight days and also specifically sets forth the maximum amounts payable to insured for other hospital expenses. In Part III of the policy, the following provisions precede a schedule of maximum amounts payable for surgical services: "If as a result of `such injury' or `such sickness' the Insured shall necessarily undergo a surgical operation named in the Schedule of Surgical Operations appearing in this policy, the Company will pay the Insured in addition to any other benefit provided under this policy, the sum set forth in said schedule; provided, however, that the Company will pay for but one surgical operation for any one sickness or accident. The limit of payment shall be the largest sum specified in the Schedule for any one of the operations performed."

[2] Plaintiff predicates her claim to indemnity for loss of time upon the words in the insuring clause providing indemnity against "loss necessitated by sickness caused by disease." Counsel for plaintiff contends that if there is any uncertainty of ambiguity in the contract of insurance it must be construed most strongly against the insurer and in favor of the insured. This principle of law relied upon by plaintiff is firmly established in this jurisdiction. Miller v. Queen City Fire Insurance Co., 47 S.D. 379, 199 N.W. 455, 35 A.L.R. 263; Hemmer-Miller Dev. Co. v. Hudson Ins. Co., 59 S.D. 129,238 N.W. 342; Thompson v. State Automobile Ins. Ass'n, 70 S.D. 412,18 N.W.2d 286.

[3] It is claimed by defendant that the following statement printed at the top of the page immediately preceding the contract is a summary of the coverage provided: "This Policy Provides Indemnity for Loss Due to Hospital Residence and Surgical Operation Expense, Caused by Accidental Bodily Injuries or Caused by Sickness, All to the Extent Herein Limited and Provided." The same statement appears on the back of the policy and following this statement there also appears in small type the words "Hospital and Surgical Operation Expense Policy." No reference is made to these statements in the policy and they do not constitute a part of the insurance contract. They represent merely a construction which the company has placed upon the terms of the policy and are not binding upon the insured. 29 Am. Jur., Insurance, § 174; Hill v. Travelers' Ins. Co., 146 Iowa 133, 124 N.W. 898, 28 L.R.A., N.S., 742; Burbank v. Pioneer Mutual Ins. Co., 60 Wn. 253, 110 P. 1005, Ann. Cas. 1912B, 762.

[4] We will next consider defendant's contention that when the whole policy is read and considered and particularly when the language of the insuring clause above quoted is construed with Parts I and III the policy is only susceptible of the interpretation that the only loss on account of sickness which the company intended to insure was "loss due to Hospital Residence and Surgical Operation Expense * * * necessitated by sickness caused by disease." The contention is thus stated by defendant: "The policy goes into rather minute and careful detail as to what items of hospital and surgical expense the company will pay. It will be noted, for example, that the company limits its liability to a total of 28 hospital days at not exceeding $3.50 per day. Could anyone possibly suppose, in view of all of these limitations on these items of expense, that the policy was intended to give unlimited coverage for loss of time resulting from sickness, regardless of the amount of wages insured might be earning, and regardless of whether or not that loss of time might extend for weeks or months or years?" Contracts are made to express the intention of the parties. If in the insuring clause the company intended only to indemnify against loss due to hospital and surgical expense why should the word "loss" relating to such expenses caused by accidental injuries be conjoined with the word "loss" relating to disability caused by sickness without reference to hospital and surgical expense? There is no right to interpret this language as meaning something different from what the parties intended as expressed thereby. To say the least, the liability of the insurer is not expressed plainly and without ambiguity. The coverage for hospital and surgical expenses is limited by language found in Parts I and III of the policy, but it cannot be said that because of these limitations the defendant company did not intend to indemnify against loss of time under the broad language contained in the insuring clause.

The judgment is reversed and the cause is remanded with directions to enter conclusions of law and judgment in conformity with this opinion.

WOHLHETER, Circuit Judge, sitting for POLLEY, J.

SMITH and SICKEL, JJ., and WOHLHETER, Circuit Judge concur.