Opinion
Argued February 22, 1967
Decided April 18, 1967
Appeal from the Appellate Division of the Supreme Court in the Second Judicial Department, ROSS J. DI LORENZO, J.
Walter C. Reid and Thomas A. Harnett for appellant. Paul L. Klein and Michael H. Wank for respondent.
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 particular 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 G — 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 group 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.
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 G 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, 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 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.)
Two Judges in the Appellate Term constituting a majority granted the plaintiff summary judgment on this policy. The Appellate Division unanimously affirmed.
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, SCILEPPI 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.