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MARY GROLL v. SAFECO LIFE INSURANCE COMPANY (11/02/89)

filed: November 2, 1989.

MARY GROLL, APPELLEE,
v.
SAFECO LIFE INSURANCE COMPANY, APPELLANT



Appeal from Order Entered Docketed January 23, 1989, in the Court of Common Pleas of Montgomery County, Civil No. 86-11529.

COUNSEL

Charles Weiner, Philadelphia, for appellant.

John J. Levy, Philadelphia, for appellee.

Olszewski, Del Sole and Johnson, JJ.

Author: Olszewski

[ 388 Pa. Super. Page 557]

Safeco Life Insurance Company ("Safeco") appeals from an order granting summary judgment in favor of appellee Mary Groll. On appeal, Safeco asserts that the incontestability provision in a group life insurance policy does not bar it from asserting the defense that the insured was ineligible for coverage under the policy. We disagree with Safeco's argument; consequently, we affirm.

On November 1, 1982, Safeco Life Insurance Company ("Safeco") issued a policy of group insurance to the Kaplan Company ("Kaplan") on the lives of Kaplan's regular full-time employees working a minimum of thirty hours each week. Michael Groll filled out an enrollment card in which he designated Mary Groll as his beneficiary. On January 1, 1986, Michael Groll was shot and killed in his home during a burglary.

Michael Groll's premiums were paid from November 1, 1982, the date on which the policy became effective, until his death. Safeco had accepted all of these premium payments. Pursuant to the terms of the policy, the amount of basic life insurance coverage on each insured was $10,000. An additional $10,000 of life insurance coverage was provided in the event of an accidental death. As defined under the policy, Michael Groll's death was an accidental one.

Kaplan submitted a notice of claim to Safeco on January 9, 1986, and requested that Safeco pay the $20,000 of insurance proceeds directly to Michael Groll's beneficiary, Mary Groll. Safeco refused to pay the proceeds because Michael Groll was not a regular full-time employee of Kaplan working a minimum of thirty hours each week and

[ 388 Pa. Super. Page 558]

    was therefore ineligible to be an insured under the terms of the policy.

Mary Groll filed suit against Safeco. She did not allege that Michael Groll was an eligible employee; rather, she asserted that she was entitled to collect the proceeds of the policy despite his ineligibility because the policy contained an incontestability clause. She contended that pursuant to said clause, Safeco was barred from asserting Michael Groll's employment status as a defense for non-payment of the proceeds because it failed to contest his eligibility within the two-year time period mandated by the policy's incontestability clause.

After admitting that no material facts were in dispute, both parties filed motions for summary judgment. Following a hearing on said motions before the Honorable William H. Yohn, Jr., Safeco's motion was denied and Mary Groll's ...


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