Self v. LIFE ASSUR. CO OF CAROLINA

227 S.E.2d 636 (1976)

30 N.C. App. 558

Berry B. SELF, Plaintiff, and Mae I. Self, Intervenor Plaintiff, v. LIFE ASSURANCE COMPANY OF CAROLINA and Provident Life and Accident Insurance Company, Defendants.

No. 7619SC178.

Court of Appeals of North Carolina.

September 1, 1976.

Certiorari Denied November 4, 1976.

*638 Archie L. Smith, Asheboro, for plaintiffs-appellees.

L. P. McLendon, Jr. and E. Norman Graham, Greensboro, for defendant, Provident Life and Accident Ins. Co., appellee.

Womble, Carlyle, Sandridge & Rice by John E. Hodge, Jr., Winston-Salem, for defendant, Life Assurance Co. of Carolina, appellant.

Certiorari Denied by Supreme Court November 4, 1976.

PARKER, Judge.

The question presented is whether plaintiff was "employed on a full-time basis" within the meaning of the eligibility clause in appellant's insurance policy at the time his illness commenced. We hold that he was not.

There is no question that plaintiff was so employed when the policy was issued in 1970 and that he remained so employed, and thus within the "classes of persons eligible for insurance," until 19 April 1974. At that time his job status changed radically. On his request, and by agreement with his employer, his regularly scheduled weekly work hours were reduced from 49 hours spread over 6 days per week, which he had been working and which other employees in his department continued to work, to 16 hours spread over 2 days per week. This was done to serve his purposes, not those of his employer. Work was available for him to perform throughout the entire 6 day work week had he wished to do so. That he recognized a radical change occurred in his status is shown by his written statement, introduced into evidence by consent, in which he stated:

"I retired at 62 years old, and I could only make $2400 a year."

Although this statement, standing alone, would not be determinative of his rights in *639 this case, it is a substantially accurate description of the factual situation which existed after 19 April 1974. In the period of twenty-five weeks which followed his going on the reduced work schedule in April and which ended in October when he ceased work altogether, he worked the reduced schedule during seventeen weeks, during one week he worked only 2 hours, and during the remaining seven weeks he worked no hours at all. We hold that a person, such as the plaintiff in this case, who is scheduled to work only two days a week when other employees work six, and who actually works even less than this limited schedule, cannot reasonably be considered as being "employed on a full-time basis."

In so holding we are, of course, advertent to the rule of construction that any ambiguity or uncertainty as to the meaning of words used in an insurance policy should be resolved against the insurance company, which drafted the contract, and in favor of the policyholder or the beneficiary. "However, ambiguity in the terms of an insurance policy is not established by the mere fact that the plaintiff makes a claim based upon a construction of its language which the company asserts is not its meaning. No ambiguity, calling the above rule of construction into play, exists unless, in the opinion of the court, the language of the policy is fairly and reasonably susceptible to either of the constructions for which the parties contend." Trust Co. v. Insurance Co., 276 N.C. 348, 354, 172 S.E.2d 518, 522 (1970). As above noted, we cannot agree that the key words in the policy now before us, which specified that persons eligible for insurance "shall be all persons directly employed on a full-time basis," are reasonably susceptible to the meaning given them by the trial court and for which the appellees contend. Whatever uncertainty might exist when those words are applied to other factual situations, we perceive no ambiguity and experience no uncertainty in applying them in the factual context of the case now before us.

The policy provided that the policyholder, Wagner should furnish the insurance company with monthly reports of all changes in status, as they occur, of the persons insured thereunder "affecting the amounts of their insurance and all terminations of insurance, together with the date of each such change or termination." Among its findings of fact, the trial court found that "Wagner furnished no such report to Life of Carolina on any change in the employment status of Self." It also found as a fact "that records of scheduled hours of employment for each employee were not required by Life of Carolina, or if required, were not furnished by Wagner, [thus leaving the matter of determining which employees were covered under the policy up to Wagner]." The bracketed portion of this finding is not a finding of fact, but is the the trial court's conclusion of law. As such, we find it to be erroneous. Nothing in the facts found by the court or disclosed in the record in this case supports the conclusion that plaintiff's employer, Wagner, had the power to determine which of its employees were covered under the policy, except as, in its capacity as employer, it might specify their duties and fix their schedules of employment. The language of the policy itself determined which employees were covered, and Wagner had no power to change that language. Certainly, Wagner could acquire no such power to amend the policy or to determine who should and who should not be covered simply by failing to comply fully with the duty imposed on it by the policy to furnish the insurance company with monthly reports. Indeed, the policy in express terms provides directly to the contrary. Under the heading, "Insurance Records," the policy contains the following:

"Failure of the Policyholder to report the names of any persons who have qualified for insurance hereunder in accordance with the prescribed conditions, or failure to report any change in accordance with the provisions hereof, shall not deprive such persons of their insurance nor affect the amounts thereof; nor shall failure to report any termination of insurance of any person be construed as involving or effecting the continuance of such insurance beyond the date of termination *640 determined in accordance with the provisions hereof."

We hold that under the undisputed facts of this case the plaintiff was not, at the time of his illness and hospitalization, a person "employed on a full-time basis" by the Policyholder, and for that reason he was not within the coverage of the policy. The judgment appealed from is

Reversed.

HEDRICK and ARNOLD, JJ., concur.