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Zasuly v. Mutual Benefit Health & Accident Ass'n

19 N.Y.2d 385 Court N.Y. Decision date 1967-04-18 English

Decision Majority — Chief Judge Fuijx · Dissent — Keating, J.

Contents

Majority

p. 385
Jacob Zasuly, Respondent, v. Mutual Benefit Health & Accident Association, Appellant.
Argued February 22, 1967;
decided April 18, 1967.
Walter C. Reid and Thomas A. Harnett for appellant.
Although the policy in its schedule provides a 10-year sickness benefit for the general membership, this basic group provision is clearly modified by the explicit language of part G which stipulates that no sickness benefit is payable after an insured’s 72d birthday. (Ritchie v. Standard Sur. & Cas. Co., 257 App. Div. 545 ; First Nat. Bank v. National Sur. Co., 228 N. Y. 469 ; Irwin v. Travelers Ins. Co., 243 App. Div. 377 ; Shannon v. Metropolitan Life Ins. Co., 146 Misc. 903 ; Rhine v. New York Life Ins. Co.,
p. 386
273 N. Y. 1 ; Finery Silk Stocking Co. v. Aetna Ins. Co., 227 App. Div. 39 ; Utica Mut. Ins. Co. v. Hamera, 162 Misc. 169 ; Guarisco v. Massachusetts Bonding S Ins.. Co., 167 Misc. 875 , 258 App. Div. 889 ; Lee v. Guardian Life Ins. Co., 187 Misc. 221 , 267 App. Div. 985 ; Raleigh Assoc, v. Henry, 302 N. Y. 467 ; Harris v. Allstate Ins. Co., 309 N. Y. 72 ; Marcus v. United States Cas. Co., 249 N. Y. 21 ; Hartigan v. Casualty Co. of America, 227 N. Y. 175 ; New York Life Ins. Co. v. Glens Falls Ins. Co., 184 Misc. 846 , 274 App. Div. 1045 , 301 N. Y. 506 .)
Paul L. Klein and Michael H. Wank for respondent.
I. The existence of ambiguity can be demonstrated objectively. (Janneck v. Metropolitan Life Ins. Co., 162 N. Y. 574 .) II. The “ Schedule ” entitled the insured to total sickness benefits- for 10 years. (Hagan v. Scottish Ins. Co., 186 U. S. 423 .) III. Insurance policy ambiguities must be resolved against the insurer. (Mutual Ins. Co. v. Hurni Co., 263 U. S. 167 ; Hartol Prods. Corp. v. Prudential Ins. Co., 290 N. Y. 44 ; Walters v. Great Amer. Ind. Co., 12 N Y 2d 967 ; Sincoff v. Liberty Mut. Fire Ins. Co., 11 N Y 2d 386 ; Bronx Sav. Bank v. Weigandt, 1 N Y 2d 545 ; Tonkin v. California Ins. Co., 294 N. Y. 326 .) IV. Inconsistencies between the printed and typed provisions should be resolved in favor of the typing. (Thomas v. Taggart, 209 U. S. 385 ; Harper v. Albany Mut. Ins. Co., 17 N. Y. 194 ; Benedict v. Ocean Ins. Co., 31 N. Y. 389 ; Reynolds v. Commerce Fire Ins. Co., 47 N. Y. 597 ; Heyn v. New York Life Ins. Co., 192 N. Y. 1 .)

This case concerns a purported “ ambiguity ” between two provisions in a group disability insurance policy—the provision typed on the cover of the policy which indicates that, in the event of sickness, benefits would be paid up to “10 years ” while the other provision printed, in Part G-, which recites that “No [sickness] benefits * * * shall be paid after the Insured’s seventy-second birthday.” The insured was 67 years old when he bought the policy, became disabled a year later and was paid benefits by the defendant insurer only until he reached 72.

If the information on the cover (pertaining to “ 10 years ” as the maximum period of coverage) were peculiar to this insurance policy and had been especially typed in for this par

Dissent

p. 387
ticular insured, the policy would obviously be ambiguous. In order for a 67-year-old man to collect benefits for “ 10 years ”, they would have to be paid—contrary to the provision in Part Gr—beyond his “ seventy-second birthday.” However, this was a group insurance policy and the record establishes that the words “ 10 years ” were typed in on the cover of every policy issued to every member of the group. Reasonably read, the two clauses in question provide that the sickness benefits to which each member of the gr oup was entitled under the policy were limited to 10 years or until he reached the age of 72, whichever eventuated sooner. So read, the claim of ambiguity must fail. Nothing turns on the fact that the insured initially purchased his policy as a member of the group when he was 67, since it is clear from the record that the premium charged to each group policyholder was “based upon the member’s age ” and there is no allegation or proof that the insured was defrauded.

The order of the Appellate Division should be reversed, with costs, and the order of the Civil Court of the City of New York granting summary judgment to the defendant should be reinstated.

(dissenting). With respect to insurance policies, we have stated: “ They should be so plain and unambiguous that men of average intelligence who invest in these contracts may know and understand their meaning and import.” (Janneck v. Metropolitan Life Ins. Co., 162 N. Y. 574 , 578; see, also, Hartol Prods. Corp. v. Prudential Ins. Co., 290 N. Y. 44 , quoting Janneck, supra.)

The law is settled regarding the problems presented by this policy.

First: The typewritten provision on the cover of the policy states that the limit for total sickness is 10 years. This statement is unequivocal. Its clear indication is that the 10-year limitation is the only time limitation on the benefits. There is an inconsistency between this typewritten provision stating only one limitation and the printed provision in Part Gr indicating that there are two limitations, viz., the additional 72-year-age limitation. The fact that the insured was a member of a group in no way affects, or, as the majority appears to imply,

p. 388
cures this obvious inconsistency. Where such an inconsistency exists, the law is clear that the typewritten provision prevails. (See, e.g., Thomas v. Taggart, 209 U. S. 385 ; Heyn v. New York Life Ins. Co., 192 N. Y. 1 .)

Secondly: At the very least, ambiguity exists between the two provisions. Nine Judges[1] have found them ambiguous and confusing. Certainly, then, these provisions could have confused a gentleman, unversed in the complex language of insurance contracts. We have pronounced that insurance policies ‘ ‘ should not be couched in language as to the construction of which lawyers and courts may honestly differ.” (Janneck v. Metropolitan Life Ins. Co., supra, pp. 577-578.) Certainly this policy has presented and does present a construction problem. The United States Supreme Court has held that an insurance company “must accept the consequences resulting from the rule that the doubt for which its own lack of clearness was responsible must be resolved against it.” (Mutual Life Ins. Co. v. Hurni Co., 263 U. S. 167 , 176, italics supplied; see, also, Walters v. Great Amer. Ind. Co., 12 N Y 2d 967 ; Hartol Prods. v. Prudential Ins. Co., supra.)

Since the policy is ambiguous, the ambiguity must and should be resolved against the insurer and not the insured. This rule is sound. An insurance company should not be permitted to have typed on the cover of an insurance policy an unequivocal provision stating only one time limitation on the insurance benefits, and then place a further limitation in the printed body of the policy.

The order of the Appellate Division should be affirmed.

Judges Van Voorhis, Burke, Sgileppi and Bergan concur with Chief Judge Fuld; Judge Keating dissents and votes to affirm in an opinion in which Judge Breitel concurs.

Order of Appellate Division reversed and that of the Civil Court of the City of New York reinstated, with costs in this court and in the Appellate Division.

* Two Judges in the Appellate Term constituting a majority granted the plaintiff summary judgment on this policy. The Appellate Division unanimously affirmed.

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