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Wisniewski v. Prudential Ins. Corp.

filed: March 4, 1970.

MARY A. WISNIEWSKI, WIDOW OF ROBERT WISNIEWSKI, APPELLANT
v.
PRUDENTIAL INS. CORP. OF AMERICA



Staley, Seitz and Van Dusen, Circuit Judges. Staley, Judge.

Author: Seitz

SEITZ, Circuit Judge:

Mary A. Wisniewski (plaintiff), widow of Robert Wisniewski, appeals from the district court's partial denial of recovery on an insurance policy on the life of her husband. The policy had been issued by defendant, Prudential Insurance Corporation (Prudential), on November 14, 1957, and named plaintiff as beneficiary. After Mr. Wisniewski's death on December 22, 1964, a controversy arose concerning a possible lapse of the policy for nonpayment of premiums. Prudential treated the policy as having lapsed and relied on the provision of the insurance contract dealing with nonforfeiture. This provision, required by law,*fn1 provides that in the event of a default in the payment of premiums, the policy is to be automatically continued as paid - up term insurance. Plaintiff contended that the policy had not lapsed and that she, as beneficiary, was entitled to the full value of the policy. At the conclusion of all of the evidence, both plaintiff and Prudential moved for a directed verdict. The court denied plaintiff's motion and granted Prudential's finding that the evidence presented no disputed issues of fact for the jury to consider. Judgment was entered for plaintiff in the amount of the paid -up term insurance rather than in the amount due had there been no default. Plaintiff's appeal followed.

Plaintiff contends that there were disputed factual issues and that the court thereby erred in not allowing the case to go to the jury. As this court stated in Pritchard v. Liggett & Myers Tobacco Co., 295 F.2d 292 (3rd Cir. 1961)

"* * * [A] directed verdict can be entered only where the facts are such that reasonable men could not draw different conclusions from them. In passing on the motion, a court must view the evidence in the light most favorable to the party opposing it, giving him the benefit of every favorable inference." 295 F.2d at 295.

It must be determined, therefore, whether any of plaintiff's evidence could allow a jury to infer that the policy of insurance had not lapsed at the time of her husband's death.

We first consider plaintiff's contention that the dividends, which had admittedly accrued under this policy, should have been applied by Prudential to pay past-due premiums to prevent a lapse of the policy. Prudential's reply is that Mr. Wisniewski, in his application for the policy, had directed that all dividends were to be retained by it to accumulate at compound interest, and that Prudential was thus prohibited from using them for another purpose such as payment of premiums. Plaintiff's rejoinder is that in March of 1963 she orally instructed a Prudential agent to apply dividends against future default in premium payments to prevent a lapse. It is this assertion which forms one basis for plaintiff's contention that the district court committed error in not allowing the case to go to the jury. We turn to the evidence pertinent to that issue.

The insurance contract provides that upon proper written notice to the Home Office any such declared dividend may be "* * * (2) applied to the reduction of any premium due * * * or, (4) left to accumulate * * *." Wisniewski originally directed in writing that the dividends be left to accumulate. Prudential therefore correctly asserts that it was contractually prevented from applying the dividends in reduction of any premium due absent proper written notice to the home office requesting such application. Prudential conceded, however, that the written notice requirement is fulfilled if a written request is mailed to the Home Office by the regional office after an oral request by the insured.

In the period of December 1962 through March of 1963, the required premiums were not paid. The policy had lapsed but a Prudential agent went to the Wisniewski home in March 1963, to talk about the lapsed policy. Plaintiff testified that when she told the agent that she had no cash to pay the back premiums, he then asked her how long she had had the policy. Upon learning that it had been issued in 1957, the agent told her that it was likely that there were dividends accumulated on the policy. At this point she testified:

"Q. So what happened?

"A. So he called the office from my home and took some numbers, you know, from the policy, and he said that I had dividends built up, and if I wanted it to be paid it could be paid up with my policy to keep it in force. I was real glad; I said sure, so he took -- I got paid up with my dividends then.

"Q. Did you talk to him about paying future premiums with the accumulated dividends?

"A. Yes. He said any time I get in a jam like that, it says you can always pay it with that, with dividends."

Plaintiff argues that her quoted testimony would permit a jury to conclude that she requested that dividends be automatically ...


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