No. 81-1-8, Appeal from the Order of the Superior Court at No. 1045 April Term, 1978, affirming the Order of the Court of Common Pleas of Allegheny County, Civil Division, at No. GD 76-05232.
Joseph M. Maurizi, Arthur Cutruzzula, Balzarini, Carey & Maurizi, Pittsburgh, for appellant.
Robert S. Garrett, Frank J. Micale, Egler & Reinstadtler, Pittsburgh, for appellee.
O'Brien, C. J., and Roberts, Nix, Larsen, Flaherty, Kauffman and Wilkinson, JJ. Roberts, J., filed a dissenting opinion in which O'Brien, C. J., and Wilkinson, J., joined.
Appellant, Dorothy Miller, claimed to be entitled to certain benefits under a policy issued by appellee, the Aetna Life Insurance Company, for the death of her husband, Jesse John Miller, Jr. Appellee, Aetna Life Insurance Company, refused to pay the benefits, and appellant sued in the Court of Common Pleas of Allegheny County. The Court of Common Pleas ruled in favor of Aetna; the Superior Court affirmed, 427 A.2d 246. The petition for allowance of appeal was granted and brings the case before us for our review. The undisputed facts are as follows.
Decedent was a production and maintenance worker at the Indiana, Pennsylvania, plant of Fisher Scientific Company, beginning on February 14, 1966. He was a member of Indiana County Lodge 1582 of the International Association of Machinists and Aerospace Workers, AFL-CIO, which was the bargaining agent for workers at the plant. The union and Fisher had a collective bargaining agreement that expired on July 31, 1975. The union went on strike on August 6 and Jesse Miller, as a member of the union, participated in the work stoppage. On September 17, while the strike was still in progress, decedent Miller was killed in an accident.
Aetna and Fisher had in effect a group policy which provided for accidental death and dismemberment coverage. The policy provided a basic benefit of $4,000.00 and an optional benefit of $14,000.00. The premiums for the basic benefit was paid for the employees by Fisher and the optional coverage, if elected, was contributed by the employee through payroll deductions. There was also a group life insurance policy, with Aetna, which provided a basic death benefit of $4,000.00 and an optional benefit of $14,000.00. The allocation for responsibility for the payment of premiums was the same as in the case of the accidental death and dismemberment coverage. In each instance the decedent had opted for the optional coverage and had named his wife, appellant, as his beneficiary. The payment of premiums for
the optional benefits were transmitted to Aetna by Fisher in a lump sum payment without designation of the individual insured. Premiums were payable on a monthly basis in advance of each month of coverage, and there was a thirty-one-day grace period after each monthly premium was due.
Premiums were paid for August, 1975. On August 20, Fisher informed his employees by letter that it would not pay premiums for September, that employees could continue their coverage by paying the premiums themselves, and that a Fisher representative would be available to accept premium payments at a certain location from August 22-28. Decedent had not paid the premium for September at the time of his death. Aetna paid $18,000 in basic and optional life insurance benefits, but it refused to pay an additional $18,000 in accidental death and dismemberment benefits to which petitioner claimed to be entitled.
Both the Court of Common Pleas and the Superior Court relied upon the premise that the participation by decedent in the strike constituted a cessation of active work by the employee under Article III of the policy causing a termination of coverage thereunder. By relying upon the fact that decedent's participation in the strike provided a basis for termination of the policy under Article III, Section 1(2), the lower courts avoided the consequences of the policy grace ...