Opinion
No. 95 CA 1349.
February 23, 1996.
ON APPEAL FROM THE TWENTY-FIRST JUDICIAL DISTRICT COURT NO. 9301457, PARISH OF TANGIPAHOA; STATE OF LOUISIANA, HONORABLE EDWARD B. DUFRECHE, JUDGE.
Iddo Pittman, Jr., Hammond, for Appellee, Henry Lavigne, Jr.
Vincent J. Sotile, Jr., Gonzales, for Appellant, Security Industrial Insurance Company.
Before LOTTINGER, C.J., GONZALES and FITZSIMMONS, JJ.
This is an appeal from a judgment ordering Security Industrial Insurance Company to pay the benefits of a life insurance policy to Doris D. Lavigne, the beneficiary of the policy issued by Security to Lavigne's son, Henry E. Lavigne, Jr.
Henry E. Lavigne, Jr. (the insured) purchased a convertible term life insurance policy from Security Industrial Insurance Company (Security). The policy was issued on June 1, 1988 for a 5 year period and was to expire on June 1, 1993. During the first 4 years of the policy (until June 1, 1992), the policy was convertible to a new policy. The policy contained provisions allowing for a waiver of premiums if the insured became totally disabled.
After contracting AIDS and becoming very ill, the insured moved into his mother's home on September 1, 1990. He was unable to tend to his affairs and was primarily bedridden. The insured's father, Henry E. Lavigne, Sr., applied to Security for a waiver of premiums due to his son's total disability. By letter dated January 6, 1992, Security granted the waiver of premiums through June, 1993, and issued a refund to the insured for overpaid premiums.
On May 20, 1993, the insured filed the instant suit against Security, alleging that Security had failed to give him advance notice that his conversion rights under the life insurance policy expired on June 1, 1992. It was the insured's position that Security had an obligation to provide him such notice since it knew that he was totally disabled, and thus, unable to tend to his affairs.
The insured died on December 26, 1993. By amended petition, his mother, Doris D. Lavigne, who was also the beneficiary of the policy at issue, was substituted as plaintiff in this suit. After a bench trial held on January 5, 1995, the trial court rendered judgment in favor of Mrs. Lavigne and against Security for $28,000.00, the amount of the policy. Security appeals the adverse judgment.
Alter a thorough review and evaluation of the record, this court is convinced that the evidence supports the result reached by the trial court under the circumstances of this case. The judgment of the trial court is AFFIRMED. Costs of the appeal are assessed to Security.
FITZSIMMONS, J., concurs and assigns additional reasons.
Ordinarily, a contract lives and dies by its own terms. Those terms assume that both parties to the contract are competent to continue and perform their obligations or exercise their options. Under the circumstances, the waiver clearly indicates that both the insurance company and the agent were aware that the insured was terminally ill or totally disabled. Upon granting of the waiver, it would have been no burden on the insurance company or its agent to have included a clear and concise statement regarding the exercise of an impending material change in the policy. It is sad that the insurance company, who has an obligation to "pay" does not seem to have an obligation to "notify," and can only hope that the insured through lack of expertise, combined with a terminal illness, would not exercise his option. Thus, the insurance company, which was contractually obligated to "convert" and ultimately "pay" would then just sit and wait for "time to pass." At what point does the acceptance of premiums over a period of time to cover the option of conversion create some, although minimal, obligation to "notify"? A contract of insurance is a unique relationship; it is not one of "here today, gone tomorrow": underlying this relationship is an implied confidence that the insurance company, with its greater understanding of this continuing relationship, has created a corridor of communication not limited to "premium notices." Therefore, I respectfully concur.