Summary
In Phillips it held that the exclusionary clause in a family hospital policy, which stated that the policy did not provide benefits for an injury covered by any workmen's compensation act, related to the type of injury placing the claimant under workmen's compensation law, rather than to the benefit flowing from such a law.
Summary of this case from S.D. Med. Service v. Minn. Mut. Fire Cas. Co.Opinion
1 Div. 564.
April 2, 1970.
Appeal from the Circuit Court, Mobile County, Dan T. McCall, J.
Collins, Galloway Murphy, James H. Lackey, Mobile, for appellant.
The terms of an insurance policy will be construed most strongly against the insurer and where the words of a policy are ambiguous, or where they are capable of two reasonable interpretations, that favorable to the insured will be adopted. Mercantile Life Ins. Co. v. Johnson, 41 Ala. App. 307, 132 So.2d 248; Id., 272 Ala. 707, 132 So.2d 251; Colonial Life Ins. v. Shotts, 267 Ala. 525, 103 So.2d 181; Volunteer State Life Ins. Co. v. Weaver, 232 Ala. 224, 167 So. 268. Courts must take the words of an insurance policy as they are found in it and a person with usual and ordinary understanding would construe them when used to express the purpose for which they are employed. Ala. Farm Bureau Mut. Cas. Ins. Co. v. Goodman, 279 Ala. 538, 188 So.2d 268. The purpose of an exclusionary clause in a hospitalization insurance policy excluding benefits for any injury or sickness for which compensation is paid by Workmen's Compensation Laws is to avoid making duplicate payments for like benefits, if any, which the insured had received or might receive under any Workmen's Compensation or Employers' Liability Law. Hunt v. Hospital Service Plan of New Jersey, 33 N.J. 98, 162 A.2d 561, 81 A.L.R. 2d 919.
Thornton McGowin, Mobile, for appellee.
Exclusions in family-type hospital insurance of Workmen's Compensation benefits relate to injuries so covered and not benefits received. A. On Principle, B. On Authority; Slomovic v. Tenn. Hospital Service, 46 Tenn. App. 705, 333 S.W.2d 564; Wenthe v. Hospital Service Ins., 251 Iowa 765, 100 N.W.2d 903; Bonney v. Citizens Mut. Auto Ins., 333 Mich. 435, 53 N.W.2d 321; State Farm Mut. Ins. v. Rice, 205 Tenn. 344, 326 S.W.2d 490; Cash v. American Health Ins., 203 Va. 719, 127 S.E.2d 119; cf. Hunt v. Hospital Service Plan, 33 N.J. 98, 162 A.2d 561, 81 A.L.R.2d 919.
The appellant sought recovery under a family hospital insurance policy. Demurrers to the complaint as amended being overruled, the defendant filed a plea and answer setting up an exclusion provision in the policy which appellee-insurer averred would prevent recovery on the policy.
The cause was submitted to the court sitting without a jury on a stipulation of facts. Thereafter, the court rendered a judgment for the defendant and this appeal followed.
The stipulated facts are to the effect that the policy in question was in effect at the time the plaintiff was injured in the due course of his employment. Plaintiff's employer, Linley Construction Company, employed more than ten employees and was duly qualified under the Elective Compensation provisions of the Alabama Workmen's Compensation Act for all its employees. The plaintiff has received medical, surgical, and hospital benefits in the amount of $2,400, being the maximum amounts allowable for such services under the Alabama Workmen's Compensation Act.
Plaintiff has incurred medical expenses of $2,244 over and above the amount of $2,400 received from his employer's workmen's compensation carrier.
It was further stipulated that had the plaintiff not been under the Workmen's Compensation Act, he would have been entitled to hospital and medical payments of $2,360 under the policy in question.
The pleadings and evidence show that the policy herein sued on contained the following provision:
"Exceptions
"This policy does not provide benefits with respect to:
"1. Sickness or injury covered by any workmen's compensation act or occupational disease law; * * *"
In considering an exclusion clause of identical import in Slomovic v. Tennessee Hospital Service Assn., 46 Tenn. App. 705,
333 S.W.2d 564, the Court of Appeals of Tennessee, Middle Section, wrote:
"We think this exclusion clause is not ambiguous. It clearly excludes from the policy's coverage hospital benefits for injuries or diseases for which the insured is entitled to 'any hospital care or for which he receives any award or settlement in any proceeding under Workmen's Compensation laws.' That is, it excludes benefits for injuries covered by the Workmen's Compensation Law, even though the benefits claimed are in excess of those provided by that law.
"It is common for hospital and public liability policies to exclude benefits or liability for injuries covered by the Workmen's Compensation Law; and in a number of cases, language, more or less similar to that in this exclusion clause, has been held to exclude liability or benefits for injuries covered by the Workmen's Compensation Law. State Farm Mutual Auto. Ins. Co. v. Rice, 205 Tenn. 344, 326 S.W.2d 490, 491; Vaughn v. Standard Sur. Cas. Co., 27 Tenn. App. 671, 184 S.W.2d 556; Bonney v. Citizens' Mut. Auto. Ins. Co., 333 Mich. 425, 53 N.W.2d 321; Roop v. Farmers Auto. Management Corp., 15 Ill. App.2d 125, 145 N.E.2d 384; Kosick v. Hospital Service Corp., 12 Ill. App.2d 291, 139 N.E.2d 619."
To the same effect see Wenthe v. Hospital Service Ins., 251 Iowa 765, 100 N.W.2d 903, where it is stated:
"* * * it is the type of disease or injury that calls into play the exclusion rather than the amount of benefits that may be received * * *" (Emphasis ours.)
Counsel for appellant have cited only Hunt v. Hospital Service Plan of New Jersey, 33 N.J. 98, 162 A.2d 561, 81 A.L.R. 2d 919, in support of their argument that appellant was not "covered" by the Workmen's Compensation Act as to medical expenses in excess of the payments received under the compensation act.
In Hunt, supra, the exclusionary clause in the policy excepted from coverage liability for medical expenses:
"For services rendered * * * which * * * are in whole or in part compensable under any State * * * workmen's compensation law."
The Deputy Director of the Division Workmen's Compensation of New Jersey had found that the insured had suffered her injury in the course of her employment, but that her medical expenses were not compensable because such expenses were not incurred upon authorization by the employer.
The New Jersey court concluded that under the language of the exclusionary clause in the policy only those hospital and medical expenses were excluded which were in fact compensable. In other words, the exclusionary clause related to medical benefits compensable under workmen's compensation, and not to whether the injury was of a type covered by the compensation law.
The court pointed out that research had failed to disclose any case throughout the country identical to the one before the court.
The language of the exclusionary clause in Hunt, supra, is entirely different from the one herein considered, and removes the present case from the influence of Hunt, supra.
Where the invocation of an exclusionary clause depends upon whether the type of injury places the injured workman within the provisions of a workmen's compensation law, the cases from other jurisdictions, some of which are cited in the course of our opinion, uniformly hold that effect must be accorded the exclusionary clause.
Diligent counsel for appellee state in brief that they have found no case considering exclusionary clauses of the same import as the one now before us, in which it was not held that such clauses relate to the type of injury placing the claimant under a workmen's compensation law, rather than relating to the benefits flowing from such law. Our research convinces us of the correctness of the result of counsel's assertion.
The judgment of the lower court is due to be affirmed and it is so ordered.
Affirmed.
LIVINGSTON, C. J., and LAWSON, MERRILL and MADDOX, JJ., concur.