Forsey v. Hale

CROCKETT, Justice.

Plaintiff Lorenzo C. Forsey, surviving husband, sues E. Girard Hale, the son by a prior marriage, beneficiary under the will, and executor of the estate of Mabel Bean Forsey for the reimbursement of $1,205.41 expenses incident to her last illness.

The expenses referred to were paid directly to the doctor and hospital by the Lincoln National Life Insurance Company pursuant to an employee’s group insurance policy issued to the plaintiff covering medical and hospitalization benefits for him and his dependents. Upon the presentation of these facts and the certificate of insurance, both parties moved for summary judgment and the trial court gave judgment for the plaintiff. Defendant appeals.

The basis of the trial court’s conclusion is this: Sec. 75-9-21, U.C.A.1953, requires the executor to pay out of the estate the expenses of last illness and funeral; and that since plaintiff assumed this obligation and caused it to be paid, the estate should reimburse him. Defendant concedes that ordinarily one who pays such expenses would be entitled to such reimbursement.¹ He argues that the plaintiff here is not so entitled, however, because he did not spend his own money to pay these bills but they were paid from the insurance.

This contention poses the question: who is entitled to the benefit of this insurance coverage: the plaintiff or the estate of his wife.

In support of his position the defendant makes the assertion that the insurance coverage was but a gratuity furnished by the employer. This is an unsound and superficial view of the matter. In order to obtain this insurance coverage it was necessary for the employee to take the initiative and sign up both for himself and for his dependents. The insurance program as shown by the brochure, which is the insurance certificate, plainly indicates that it was held out to the employee (plaintiff) as a benefit of his employment. And it is certain that he would not have had this insurance coverage except for his work as an employee. Therefore it is properly regarded as earned by him as part of the compensation for his services.

Plaintiff’s right to reimbursement would not be disputed if he had placed a given amount of money in a bank account each payday to take care of emergencies such as these hospital and doctor bills, and had used the accumulated fund to pay such expenses. Insofar as his right to reimburse-merit is concerned, we do not see any material distinction between taking care of this obligation by that method and the one he chose of procuring insurance and paying premiums in advance to see that the obligation was met when it arose. The means by which he did so should not defeat his right to claim the advantage of the benefit created by his initiative and effort. The important fact is that he did assume the responsibility for those expenses and by his own means caused them to be paid.

It is also to be kept in mind that the payment of the proceeds of insurance is governed by contract: i. e., the provisions of the policy. The certificate of insurance here involved leaves no room for doubt as to whom these proceeds are to be paid. By its terms they must go to either one of two parties: it states that “ * * * in the event of the insured’s death the proceeds shall be paid * *' * to the beneficiary designated by you [his wife] ; all other benefits are payable to you.” (Emphasis added.) The money to cover these expenses was part of the “other benefits.” Therefore it was payable to the plaintiff and belonged to him; not to his wife’s estate. Inasmuch as the insurance company, on his behalf, paid the doctor and hospital, thus relieving the estate of an obligation which is a preferred claim against it,² justice requires that the estate reimburse him.³

We do not see any significance in the fact, much emphasized by the defendant, that the insurance company paid the bills directly rather than to pay it to the plaintiff and have him act as a conduit for delivery of the money to the doctor and hospital. Regardless of the steps taken in making payment it is plain that the insurance company did nothing more nor less than to comply with the terms of its contractual obligation to its insured,⁴ plaintiff Forsey, to pay these bills for him, which obligation was brought about by his initiative in signing up for the insurance and his labor which caused the premiums to be paid.

Accordingly, we are of the opinion that the trial court was correct in ruling that the proceeds of this insurance coverage of the medical and hospital expenses of his wife’s last illness inures to the benefit of the plaintiff and that he is entitled to reimbursement therefor.

Judgment affirmed. Costs to respondent.

WADE, C. J., and PARLEY E. NOR-SETH, District Judge, concur.

1 . See Dunn v. Wallingford, 47 Utah 491, 155 P. 347.

2 . Sec. 75-9-21, U.S.C.1953 charges the executor with the duty of paying certain debts including, “ * * * expenses of the last sickness * * It is a preferred claim: see In re Mower’s Estate, 93 Utah 390, 73 P.2d 967.

3 . See Anderson v. Industrial Comm., 108 Utah 52, 157 P.2d 253.

4 . See Phoenix Ins. Co. v. The Atlas, 93 U.S. 302, 23 L.Ed. 863.