Conger v. Travelers Insurance Company

146 S.E.2d 462 (1966)

266 N.C. 496

Mittle S. CONGER v. The TRAVELERS INSURANCE COMPANY and Colonial Stores, Incorporated.

No. 363.

Supreme Court of North Carolina.

February 4, 1966.

*464 Roberts & Wooten and Willis A. Talton, Greenville, for plaintiff appellee.

Taylor, Allen & Warren and John H. Kerr, III, Goldsboro, for Colonial Stores, Inc., defendant appellant.

BOBBITT, Justice.

The judgment does not disclose the ground on which the court adjudged that plaintiff "have and recover nothing" of Insurance Company. Plaintiff did not appeal. *465 Hence, the judgment is a final adjudication as between plaintiff and Insurance Company. Even so, whether plaintiff was entitled to recover from Insurance Company and, if not, the ground of Insurance Company's nonliability, has significance in determining plaintiff's right to recover from Stores. Plaintiff's alternative cause of action against Stores presupposes the nonliability of Insurance Company.

Plaintiff, in her alternative cause of action against Stores, alleges in substance, except when quoted, the following: Under Conger's employment contract with Stores, part of the insurance premium was to be paid by Conger and part by Stores. Stores deducted $1.90 per week, Conger's part, from Conger's salary checks "up to and including the final week of said employment, the period ending the 24th day of April 1961." Conger died May 22, 1961, "within 31 days after the period ended for which" Conger's portion of the premiums had been deducted from Conger's salary. If the Insurance Company is not liable to plaintiff, "because of the failure of * * * Stores * * * to remit the premiums due and deducted from * * * Conger's salary, or because of any other breach of contract by * * * Stores * * *, or for any other reason, then by reason of the wrongful and unlawful breach by * * Stores * * * of the said contract of employment and its position of trust, the plaintiff has been damaged in the amount of $8,000.00."

The policy provides the insurance of an employee under the group policy shall terminate when his employment with the employer shall terminate. It provides the employee, upon application made within thirty-one days after the termination of his employment, may exercise the conversion privilege quoted in our preliminary statement and that the insurance under the group policy continues in force during said 31-day period. In this connection, see GS 58-211, captioned "Group life insurance standard provisions."

This Court has held the word "employment" as used in the phrase "termination of his employment" in a group policy of insurance refers to the status of the employee rather than to a contractual relationship existing between the employer and the employee; and that the word "termination" in said phrase means the end of such status, that is, a complete severance of the relationship of employer and employee. Lineberger v. Security Life & Trust Co., 245 N.C. 166, 170, 95 S.E.2d 501, 68 A.L.R.2d 1, and cases cited; Pearson v. Equitable Life Assurance Society, 212 N.C. 731, 194 S.E. 661; 44 C.J.S. Insurance § 329, p. 1265; 1 Appleman, Insurance Law and Practice § 122, pp. 171-2; Annotation, 68 A.L.R.2d 8, 35 et seq.

It was stipulated that "Conger was discharged from his employment" by Stores on April 3, 1961. When "discharged from his employment," Conger's status as an employee terminated. There was a complete severance of the employer-employee relationship. Although Conger, at the time of his discharge, was entitled under his employment contract and Stores' regulations "to three (3) weeks of accumulated pay for vacation time," he was not, after April 3, 1961, an employee of Stores. There is no merit in the suggestion that Conger was an employee on vacation during the three weeks following his discharge on April 3, 1961. Perry v. Equitable Life Assurance Society of U. S., 139 N.E.2d 489 (Ohio Com.Pl.).

As indicated, the stipulated facts establish that Conger's employment by Stores terminated on April 3, 1961, not on April 24, 1961, as stated in plaintiff's quoted allegation. Since Conger's death occurred more than thirty-one days after April 3, 1961, the date of the termination of his employment, his insurance under the group policy was not in force on May 22, 1961, the date of his death. Hence, the court was correct in adjudicating plaintiff was not entitled to recover from Insurance Company. *466 See Annotation, 68 A.L.R.2d 8, 29 et seq.

The gravamen of plaintiff's alternative cause of action is that Stores, although it deducted the sum of $5.70 from the amount due Conger at the time of his discharge, failed to remit this amount to Insurance Company. Plaintiff's position rests upon the assumption that if Stores had remitted these amounts the insurance coverage applicable to Conger would have been extended three weeks notwithstanding the termination of his employment on April 3, 1961. This assumption is erroneous. Haneline v. Turner White Casket Co., 238 N.C. 127, 76 S.E.2d 372.

In Haneline, the group policy provided: "The insurance of any employee covered hereunder shall terminate at the end of the policy month in which his active employment with the employer shall end." The employee's certificate provided: "This insurance shall terminate whenever the employee shall leave the service of said employer." Under the employment contract, the employer deducted from the employee's wages each quarter the employee's share of the premium and remitted it to the insurance company. Under this arrangement, the employer on March 21, 1951, deducted $3.75 from the employee's wages. The employee was discharged and his employment terminated on March 27, 1951. The employee, from the date of his discharge on March 27, 1951, until his death on May 16, 1951, made no application or request for conversion or for any other benefit under the policy. Since the policy month began March 10, 1951, it was held the insurance terminated at the end of that policy month, to wit, April 10, 1951, notwithstanding the amount of the premium deducted from the employee's wages and remitted to the insurance company had been computed for the entire quarter ending June 10, 1951. It is noted that the insurance company in its answer tendered to the plaintiff the sum of $2.50, to wit, the unearned portion of the premium.

Absent conduct on the part of Insurance Company constituting waiver or estoppel, a tender or remittance of premiums by Stores to Insurance Company for a period subsequent to the termination of Conger's employment would not have altered the unambiguous provisions of the policy as to when Conger's insurance would expire.

A plaintiff must make out his case secundum allegata. His recovery, if any, must be based on the allegations of his complaint. Andrews v. Bruton, 242 N.C. 93, 95, 86 S.E.2d 786, and cases cited; Manley v. Greensboro News Co., 241 N.C. 455, 460, 85 S.E.2d 672, and cases cited. The complaint alleges no cause of action except as stated above.

Plaintiff, in her brief, suggests that Conger was misled by the fact that Stores had erroneously deducted the $5.70 in calculating the amount due him at the time of his discharge. However, the complaint does not purport to allege a cause of action on this ground. Nor do the stipulated facts support such a cause of action. There is nothing in the stipulated facts to the effect Conger relied in any manner on the circumstance that the $5.70 had been deducted. Nor does it appear from the stipulated facts that Conger at any time intended or desired to exercise his rights under the conversion provision.

We have considered each of the decisions cited by appellee. Suffice to say, the facts in each were quite different from the (stipulated) facts herein.

Since the pertinent policy provisions and stipulated facts do not establish plaintiff's right to recover against Stores on the alternative cause of action alleged in the complaint, plaintiff's judgment against Stores is reversed.

Consideration of the demurrer ore tenus to complaint filed by Stores in this Court is unnecessary.

Reversed.