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GUARDIAN LIFE INSURANCE COMPANY AMERICA v. FRANCES M. ZERANCE (06/28/84)

decided: June 28, 1984.

GUARDIAN LIFE INSURANCE COMPANY OF AMERICA, APPELLANT,
v.
FRANCES M. ZERANCE, GUARDIAN OF THE ESTATE OF NICHOLAS A. ZERANCE, AN INCOMPETENT, APPELLEE



No. 54 M.D. Appeal Docket 1983, Appeal From The Opinion and Judgment of the Superior Court Dated June 3, 1983 As Amended August 15, 1983, Pa. Super , Nix, C.j., and Larsen, Flaherty, McDermott, Hutchinson, Zappala and Papadakos, JJ.

Author: Larsen

[ 505 Pa. Page 347]

OPINION

This appeal involves a declaratory judgment action filed by appellee, Frances M. Zerance, guardian of the estate of Nicholas A. Zerance (insured), seeking judicial construction of a group medical benefits insurance policy issued pursuant to a group plan by the appellant, Guardian Life Insurance Company of America (Guardian Life). The policy in question provided for, inter alia, medical and health benefits coverage for employees of Middletown East End Warehouse Company (Middletown) who qualified under the group plan. We are asked to construe the group insurance policy to determine whether the appellant properly terminated

[ 505 Pa. Page 348]

    the insured's disability benefit payments as of December 31, 1979. The controversy arose in the following background.

In 1974, Nicholas A. Zerance was an employee of Middletown. He was insured under the group insurance policy issued by Guardian Life. On February 16, 1974, the insured became disabled due to certain after-effects of surgery. As a result of the disability, he has required extensive medical and nursing care on a continuing basis. The medical and nursing expenses necessitated by his disability were covered under the Guardian Life group medical policy from February 16, 1974 until December 31, 1979.

In November, 1978, appellee, Frances M. Zerance, as guardian of the insured,*fn1 was informed by Middletown that the insurance coverage would be terminated on November 30, 1978. On November 30, 1978, Middletown cancelled its group policy with Guardian Life effective December 1, 1978. The appellant continued to pay medical and nursing expenses for the insured until December 31, 1979. At that time, pursuant to the terms of the policy, all benefits were terminated. The policy provisions under which benefit payments were discontinued provide as follows:

"Termination of Your Insurance.

The group policy provides that your insurance will terminate upon the earlier of: (a) The date the group policy terminates or is amended to terminate insurance on the class or classes of employees to which you belong or (b) The date your employment terminates. This means that the date you cease to be actively at work on a full time basis with your employer, except that under certain circumstances specified in the Group Policy, your employment may be deemed, for the purposes of the insurance, to continue for a limited period after such cessation. In addition, if you fail to make the required contribution, when due, for any benefits for which you are required to

[ 505 Pa. Page 349]

    contribute, such benefits will terminate at the end of the period for which you made the last required contribution.

'Coverage after Termination.

If this insurance terminates for any reason (other than for non-payment of premium or because of exhaustion of the total benefit after age 65) and on such date of termination you or your dependent are totally disabled and under the care of a physician, coverage pertaining solely to the injury or sickness which caused the total disability will be extended during the uninterrupted continuance of such total disability subject to all limitations and provisions of this major medical expense coverage. Covered charges which would otherwise be payable for complications of ...


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