Ridenhour v. Life Ins. Co. of Virginia

266 S.E.2d 372 (1980)

Thomas L. RIDENHOUR and wife Geraldine H. Ridenhour v. The LIFE INSURANCE COMPANY OF VIRGINIA.

No. 7921DC980.

Court of Appeals of North Carolina.

May 20, 1980.

*373 Pettyjohn & Molitoris by Theodore M. Molitoris, Winston-Salem, for plaintiffs-appellants.

Womble, Carlyle, Sandridge & Rice by Allan R. Gitter, Winston-Salem, for defendant-appellee.

ROBERT M. MARTIN, Judge.

The question presented by this appeal is whether the accidental death provision of the parent and child policy applies to the children insured under that policy. The accidental death provision reads as follows: "The company agrees, subject to the provisions of this policy, to pay an Accidental Death Benefit upon receipt at its National Headquarters of due proof of the accidental death of the Insured." The meaning of the language "the Insured" as used in this policy is a question of law. Trust Co. v. Insurance Co., 276 N.C. 348, 172 S.E.2d 518 (1970).

The plaintiffs contend that the policy contains no qualifying statement as to who the "Insured" is; that the term "Insured" must be read in accordance with the application attached to the policy and that, when so read, the term Insured is reasonably susceptible of several interpretations. We disagree. The interpretation chosen by plaintiff can be arrived at only by ignoring the distinction between Insured and Insured Child which is made throughout both the policy and the application which together constitute the entire contract by the terms of the agreement.

The application has clearly divided sections headed PROPOSED INSURED A, PROPOSED INSURED B, and PROPOSED INSURED CCHILDREN (Family Plan or Parent Child). Under Proposed Insured A is listed Geraline (misspelled in pleadings as Geraldine) H. Ridenhour, Proposed Insured B is left blank and under Proposed Insured CChildren are listed the names of Mrs. Ridenhour's four children. Question 4 on the application refers in the heading to "INSUREDS A & B PART I AND INSURED CHILDREN PART II." Below in question 5 of the application dealing with coverage, premiums and benefits, the following appears with reference to the accidental death benefit and disability benefit:

5(f) Paid     Ins. A(x)     (g) Paid     Ins. A(x)
     ADB      Ins. B( )         Dis.     Ins. B()

Block 5(f) with the words "Paid ADB" (Paid Accidental Death Benefits) shows a check mark in the block for Insured A, who is Geraline H. Ridenhour as shown above. There is no block for Insured CChildren appearing next to either the accidental death or disability benefit. The application indicates that these benefits apply only to Insured A and B and not to Insured Children. Thus, it can readily be seen that the application distinguishes between the classes Insured and Insured Children and between the benefits which apply to each.

The policy also furthers the distinction between the Insured and Insured Child. Page one of the policy lists the Insured as Geraline H. Ridenhour. On page 3, Policy Specifications, the following appears:

*374 OWNER THE INSURED PLAN PARENT AND CHILDREN INSURED GERALINE H. RIDENHOUR 33 AGE NEAREST BIRTHDAY NUMBER 76013589 $5,000 INSURANCE ON INSURED CLASS STANDARD JULY 28, 2028 MATURITY DATE POLICY DATE JULY 28, 1976 INSURANCE ON INSURED CHILD TERM INSURANCE $1,000 SCHEDULE OF BENEFITS SCHEDULE OF PREMIUMS LIFE INSURANCE INCLUDING AMOUNT | PAYABLE For ACCIDENTAL DEATH INSURED | WAIVER OF PREMIUM DISABILITY | INSURED $10.53 | 52 YEARS

Hence, the Insured again clearly refers to Geraline H. Ridenhour on the face of the policy as opposed to the insured children.

Moreover, by definition the language Insured and Insured Child designates two different categories of insured under the policy. "INSURED CHILD. As used in this policy, Insured Child means any child, stepchild, or legally adopted child of the Insured named in the application for this policy. . ." Only several policy provisions need be excerpted in order to show that this distinction is obvious throughout the policy and that Insured and Insured Child are different categories to which different benefits and rules apply. For example,

5. PAID-UP INSURANCE ON CHILDREN. In the event of the death of the Insured. . . any remaining insurance provided by this policy on the life of each Insured Child shall be continued in force.. . . This policy must be surrendered upon death of the Insured and if there is any remaining insurance, a supplementary paid-up policy or policies will be issued. . . on the life of each Insured Child . . . (Emphasis added) 6. PAYMENT OF DEATH BENEFIT. PAYMENT OF PROCEEDS . . . a) The amount payable upon the death of the Insured shall be paid to the Beneficiary, if then alive, otherwise to the estate of the Insured. b) The amount payable upon the death of any Insured Child shall be paid to the Insured, if then alive, otherwise to the Beneficiary, if then alive, otherwise to the estate of the Insured Child. (Emphasis added)

Therefore, it is manifest that when the Accidental Death Benefit Provision, which covers "the accidental death of the Insured," is read in context of the policy as a whole, it is subject to only one interpretation: coverage under accidental death provision extends only to the Insured, in this case, Geraline H. Ridenhour, and not to the Insured Child. Where the language of an insurance policy is plain, unambiguous and susceptible of only one reasonable construction, the courts will enforce the contract according to its terms. Woods v. Insurance Co., 295 N.C. 500, 246 S.E.2d 773 (1978).

Plaintiffs by their second argument contend that summary judgment for defendant was improper because their uncontroverted affidavit shows that the insurance agent interpreted the Accidental Death Benefit Provision to apply to all the individuals listed in the policy. However, this representation, if made, would not establish a reasonable interpretation of the contract; it would directly contradict the written policy. Under long established precedent, this may not be done. Cavin's, Inc. v. Insurance Co., 27 N.C.App. 698, 220 S.E.2d 403 (1975), citing Floars v. Insurance Co., 144 N.C. 232, 56 S.E. 915 (1907). As in Cavin's, the plaintiff has alleged neither fraud nor mutual mistake but only that representations were made by defendant's agent. Not seeking reformation, plaintiffs *375 have brought suit upon the written policy and the rights of the parties must, therefore, be determined by its terms. Cavin's, Inc., supra. Whether plaintiffs have a cause of action in negligence against the insurance agent we do not decide as plaintiffs cannot by their affidavit convert their action in contract against the insurance company into an action for negligent failure to procure insurance against the agent.

Plaintiffs, having sued on the contract, have shown no legal basis for their claim. Summary judgment was properly entered for defendant.

Affirmed.

WEBB and HILL, JJ., concur.