(485 P.2d 910)
No. 71-136 (Supreme Court No. 24374)Colorado Court of Appeals.
Decided June 2, 1971.
Action seeking disability payments under health and accident policy. In addition to jury verdict amount, court found defendant’s refusal to make payments vexatious and without reasonable cause and awarded attorney’s fees pursuant to statute. Defendant appealed.
Affirmed in Part, Reversed in Part.
1. INSURANCE — Policy Provides Indemnity — “Loss of Business Time” — Within Coverage — Disabled — Specific Occupation. In health and accident policies containing provisions for indemnity for “loss of business time,”
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it is the general rule that one insured under such policy is within policy coverage if he is disabled from working at his specific occupation, regardless of his ability to do other work.
2. Indemnification Provided — “Total Loss of Time” — Conflicting Evidence — Plaintiff Not Able — Continue As Farmer — Correct — Jury Consider Issue. Where policy provided for indemnification for insured for “total loss of time” during which he was disabled and, although there was conflicting evidence, testimony was presented that plaintiff was no longer able to continue in his capacity as a farmer, the trial court was correct in allowing jury to consider issue whether plaintiff was entitled to indemnity for total loss of time for full period of the policy.
3. Disability Policy — Reduced Benefits — More Hazardous Occupation — Clerk — Farmer — Jury Issue. Where plaintiff was a “clerk” at time of purchase of disability policy, which policy provided for reduced benefits should insured enter more hazardous occupation, under the evidence presented, the issue as to whether insured’s present occupation as a farmer was more hazardous than that of a clerk was properly submitted to the jury.
4. ATTORNEY AND CLIENT — Statute — Attorney’s Fees — Assessed Against Insurer — Inapplicable — Policy — Not Issued — Not Delivered In State.
Although C.R.S. 1963, 72-18-4, provides that attorney’s fees, not to exceed 12 1/2 % of the amount of recovery, may be assessed for insuror’s vexatious and unreasonable refusal to pay a claim, this statute does not apply where the policy was neither issued nor delivered in this state.
Error to the District Court of Morgan County, Honorable Earl A. Wolvington, Judge.
Paynter, Paynter and Scull, Kenneth C. Scull, for plaintiff in error.
Robert L. Tognoni, for defendant in error.
Division II.
Opinion by JUDGE PIERCE.
This case was transferred from the Supreme Court pursuant to statute.
This is an appeal from an action for payment under an insurance contract. The parties appear here in reverse of their order of appearance below and will be referred to by their trial court designations or by name.
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In 1944, the defendant, an out-of-state insurance company, issued a health and accident policy to the plaintiff in Kansas. At the time of his application, plaintiff’s occupation was that of a “clerk,” but, he later moved to Colorado and became a farmer. In February 1963, while tending his livestock, plaintiff accidentally tore ligaments in his knee. Notice of this injury was received by defendant in the form of a “Preliminary Statement of Claim” in March 1963.
The complaint alleged that plaintiff was disabled from the performance of gainful occupation for 104 weeks, the full period of coverage under the policy, and that he should be indemnified at the maximum rate allowable under the policy, plus medical expenses incurred by a subsequent operation on his knee.
Upon trial to a jury, verdict for plaintiff was returned assessing damages in the amount of $2,443.75. The court granted plaintiff costs and added 12 1/2% to the judgment as attorney’s fees, under C.R.S. 1963, 72-18-4, on the ground that defendant’s refusal to make payments under the contract was vexatious and without reasonable cause.
I.
Defendant first claims that the trial court erred in allowing plaintiff to recover full policy benefits of $25 per week for the maximum period of indemnity under the policy when the uncontroverted facts indicated that plaintiff was not “totally disabled.”
The pertinent provision of the policy provides as follows:
“* * * whenever a member of this Association shall through accidental means
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receive bodily injuries which shall, independently and exclusively of all other causes, immediately and continuously disable him from the performance of any gainful occupation, he shall be indemnified in the sum of $25.00 per week for total loss of time, not exceeding 104 weeks, and $12.50 per week for partial loss of time, not exceeding 5 weeks, but in no case shall indemnity be paid in excess of 104 weeks.”
Defendant contends that a twisted knee, or even a loss of leg, does not constitute a “total disability” under the terms of this policy. Citin Guardian Life Insurance Co. v. Kortz, 109 Colo. 331, 125 P.2d 640, the defendant argues that a disability would be total only if it wholly prevented one from performing any work or occupation for profit. See Guardian Life Insurance Co. v. McMurry, 105 Colo. 11, 94 P.2d 1086; U.S. Casualty Co. v. Hanson, 20 Colo. App. 393, 79 P. 176; Mutual Benefit Assoc. v. Nancarrow, 18 Colo. App. 274, 71 P. 423.
The cases cited by defendant are inapplicable to the case at bar in that they involved health and accident insurance policies under which a plaintiff was indemnified for “total disability” or “partial disability.” In the policy at hand, however, although the term “disability” appears in the policy, we find that indemnification is based upon total or partial “loss of time” rather than upon the degree of disability. It is clearly the rule in Colorado that where there is ambiguity in the language of an insurance contract the interpretation most favorable to the insured will be adopted. Mutual Benefit Health Accident Assoc. v. McDonald, 73 Colo. 308, 215 P. 135. In the absence of a clear indication to the contrary, the term “loss of time” must refer to a loss of time from the insured’s occupation.
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[1] In health and accident insurance policies containing provisions for indemnity to the insured for “loss of business time,” it is the general rule that one insured under such a policy is within policy coverage if he is disabled from working at his specific occupation, regardless of his ability to do other work. Continental Casualty v. Wagner, 195 F.2d 936 Pennington v. Pacific Mutual Life Insurance Co., 85 Iowa 468, 52 N.W. 482. [2] Although there is conflicting evidence, testimony was presented to the effect that plaintiff was no longer able to continue in his capacity as a farmer. We therefore hold that the trial court was correct in allowing the jury to consider the issue of whether plaintiff was entitled to indemnity for total loss of time for the full period of the policy.II.
Defendant next contends that the court erred in not fully enforcing the actual contract of insurance between defendant and plaintiff. It is argued that, under the uncontroverted terms of the insurance contract, plaintiff in no event should recover more than 75% of the total policy benefits and that the jury should have been so instructed. We point out, however, that nowhere in the record do we find such an instruction was tendered or requested by defendant.
In his application for membership, plaintiff agreed to comply and be bound by all requirements of the “Articles of Incorporation and By-Laws of said Association as they now exist or may hereafter be amended * * *.” Under Article V of the By-Laws entitled “Occupation” the following provisions are found:
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“Section 1. Change of occupation or duties by a member shall not forfeit his membership but if he shall enter one more hazardous than the one represented and described in his application for membership, then he shall be entitled to the rate of benefits fixed and determined by the board of directors.
“Section 2. The rate of benefits in case of occupation or duties shall be based upon the classifications as set out in the Occupational Classification Report of risks compiled by the Underwriting Committee of the Health and Accident Underwriter’s Conference, as adopted and filed by this Association with the Commissioner of Insurance of the State of Iowa.”
There is no indication in the record that the “Occupational Classification Report” referred to in Article V of the By-Laws was either offered or admitted into evidence. The only evidence of the contents of this report was provided by an unverified certificate containing a resolution of the defendant company’s board of directors in which the following provision is found:
“And Be it Further Resolved, that the rate of benefits in case of change of occupation or duties shall be based upon the classifications as set out in the Occupational Classification Report of risks compiled by the Underwriting Committee of the Health and Accident Underwriter’s Conference, dated April 1, 1953, as adopted and filed by this Association with the Commissioner of Insurance of the State of Iowa, as follows:
* * * *
“Class A, three-fourths the amounts provided in the by-laws, * * *.”
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This resolution does not, however, include any reference to the fact that the occupation of a farmer is more hazardous than that of a clerk; nor does it make any statement to the effect that the Occupational Classification Report places the occupations of farmer and clerk in different risk classifications.
[3] Although there was testimony by an assistant vice-president of the defendant company that the occupation of a farmer is more hazardous than that of a clerk, the veracity and weight of such testimony is for the determination of the trier of fact. Book v. Paddock, 129 Colo. 84, 267 P.2d 247. We hold that the trial court was correct in submitting this determination to the jury. III.
Defendant further assigns as error the trial court’s assessment of 12 1/2% of the judgment as attorney’s fees, under the provisions of C.R.S. 1963, 72-18-4, for vexatious and unreasonable refusal to pay a claim.
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Defendant’s other assignments of error are found to be without merit.
Judgment of the trial court is affirmed except insofar as it relates to the assessment of attorney’s fees, and the case is remanded with directions that the award of attorney’s fees be stricken from the judgment.
CHIEF JUDGE SILVERSTEIN and JUDGE DWYER concur.