Petition — Bonfoey v. Equitable Life Assurance Society of the United States

Gupreme Court, U.

FILED

79-1808 } MAY 18 1980

WRICHAEL RODAK, JR., CLERA

- a

In The

Supreme Court

of the United States

| OCTOBER TERM, 1979

No. 78-1529

ROBERT VERNE BONFOEY,

Petitioner,

US.

THE EQUITABLE LIFE ASSURANCE

SOCIETY OF THE UNITED STATES,

Respondent.

Petition for Writ of Certiorari

To The United States Court of Appeals

For the Fifth Circuit

G. FRANK BROWN

2001 Bryan Tower

Suite 3120

Dallas, Texas 75201

214/741-7581

Counsel for Petitioner

SOUTHWESTERN LAW PRESS —DALLAS, TEXAS —(214) 742-3985

TABLE OF CONTENTS

Page

Citation to Opinions Below... oo... sc sccscccscccess 1

BN EESEE SEE Pr EOP eer Tames 2

ey eer eer ree rrr ree 2

NE oer 5 Nas Sus GR EDs doa eee 2

I hii ia. 5 iv cae nasa s Pee ee 2

A. Basis of Petitioner’s Cause of Action....... 3

B. The District Court’s Action ................ 3

C. Proceedings in The Court of Appeals....... 4

Reason for Granting the Writ ...................... 5

NIN oc ty whys panos urns ewe eas ee 8

Lk Ta ee Pee 9

Appendix A — Opinion of Court of Appeals....... A-1l

Appendix B — Order Denying Rehearing ......... A-8

Appendix C — Order of United States District Court

mates Pemeneey 1, 10TR .. 6. os vo encc cakes A-9

Appendix D — Statute Involved ................. A-15

il

Index of Authorities

Cases: Page

Bishop vs. Wood, 426 U.S. 341 (1976)............... 7

Blue Cross-Blue Shield of Alabama vs. Thornton,

325 So.2d 187 (Ala.Civ.App. 1975).............. 6

Erie Railroad Co. vs. Thompkins, 304 U.S. 64 (1938) 6

United States Fidelity & Guaranty Co. vs.

McKinnon, 356 So.2d 600 (Ala. Sup. 1978)...... 6

Statutes:

ee sic uw acs eeescsscecvesces 2

Alabama Constitution Article 6, §140(b)(3) ......... 2

In The

Supreme Court

of the United States

OCTOBER TERM, 1979

No. 78-1529

ROBERT VERNE BONFOEY,

Petitioner,

US.

THE EQUITABLE LIFE ASSURANCE

SOCIETY OF THE UNITED STATES,

Respondent.

Petition for Writ of Certiorari

To The United States Court of Appeals

For the Fifth Circuit

Petitioner prays that a writ of certiorari issue to review

the judgment of the United States Court of Appeals for

the Fifth Circuit entered on January 16, 1980.

CITATION TO OPINIONS BELOW

The opinion of the United States District Court for the

Northern District of Texas, Dallas Division, granting

Respondent’s motion for summary judgment is printed in

Appendix C hereto and is not reported. The opinion of the

Court of Appeals for the Fifth Circuit, which affirmed the

judgment of the District Court for the Northern District

2

of Texas, Dallas Division, is printed in Appendix A

hereto, and is not yet reported in the official reports.

JURISDICTION

The judgment of the Court of Appeals for the Fifth

Circuit, printed in Appendix A hereto, was entered on

January 16, 1980. The Court of Appeals for the Fifth

Circuit denied Petitioner’s petition for rehearing by

Order entered on February 13, 1980, which is printed in

Appendix B hereto.

The jurisdiction of this Court is invoked under 28

U.S.C. §1254(1).

THE QUESTION PRESENTED

When state law is to be applied in a federal diversity

case and the federal district court hearing the case is not

a district court in the state or district whose law is to be

applied and the recent decisions from the courts of the

state reflect a developmental trend in the area under

consideration, is it an improper exercise of judicial

federalism for the court of appeals to fail to utilize the

available certification procedure to properly determine

the state’s law on the issue being appealed?

STATUTE INVOLVED

The Alabama statute providing of the certification

procedure to the Alabama Supreme Court is Alabama

Constitution Article 6, §140(b\3). This provision is

printed in Appendix D hereto.

STATEMENT

Petitioner is an individual who filed suit in the United

States District Court for the Northern District of Texas,

3

Dallas Division, against Unionmutual Stock Life

Insurance Company of America (hereinafter called

“Unionmutual”) and the Equitable Life Assurance

Society of the United States, the Respondent herein.

Jurisdiction in the federal courts is predicated on

diversity of citizenship. Petitioner’s lawsuit is an action

for long-term disability insurance benefits under a group

policy which was issued to Petitioner's employer and

which covered Petitioner while he was employed in

Alabama. Alabama’s insurance law governs Petitioner’s

case.

A. Basis of Petitioner’s Cause of Action.

Petitioner contended in his lawsuit that certain

theories of estoppel and waiver were applicable under

Alabama insurance law to bring him within certain

provisions of the insurance policies sued upon. In

particular, Petitioner alleged that his employer in

Alabama had acted as the insurers’ agent with respect to

Petitioner and as a result of the employer’s intentional

conduct, the waiting period condition and the “actively

at work” provisions of the policies were waived and the

insurer was promissorily estopped to assert certain

defenses to Petitioner’s claim. Petitioner presented

competent evidence on these issues to the District Court.

B. The District Court’s Action.

The United States District Court for the Northern

District of Texas, Dallas Division, Judge Robert W.

Porter presiding, granted summary judgment in favor of

Unionmutual on January 26, 1977. Petitioner did not

appeal from that judgment.

The District Court later granted summary judgment in

favor of Respondent on February 1, 1978. In essence, the

District Court’s opinion for summary judgment was not

predicated upon the failure of Petitioner to produce

sufficient evidence on Petitioner’s waiver and estoppel

grounds, but was based upon the District Court’s opinion

that waiver and estoppel theories could not enlarge the

coverage of insurance policies under the District Court’s

interpretation of Alabama insurance law. Petitioner duly

perfected his appeal from that judgment to the Court of

Appeals for the Fifth Circuit.

C. Proceedings in the Court of Appeals.

The Court of Appeals for the Fifth Circuit considered

Petitioner’s appeal, but affirmed the judgment of the

District Court. The Court of Appeals specifically denied

Petitioner’s argument that the actively at work condition

and the waiting period provision of the policy could be

waived. On the same basis as the District Court, it

concluded that Petitioner’s theories of waiver and

estoppel could not apply to these provisions because they

would enlarge the coverage of insurance policies

contrary to its interpretation of Alabama insurance law.

Petitioner filed his petition for rehearing requesting that

the Court of Appeals certify certain legal questions

regarding his estoppel and waiver theories to the

Alabama Supreme Court to obtain a definitive statement

regarding how it would rule on these previously

undetermined issues of Alabama insurance law.

Petitioner’s petition for rehearing was summarily denied

by order dated February 13, 1980.

5

REASON FOR GRANTING THE WRIT

This petition raises an important question of appellate

procedure. Although Petitioner’s basic cause of action is

not constitutionally or publicly significant, his case does

present a significant procedural point which impacts on

most federal diversity actions. The appropriate rule or

appellate standard which Petitioner seeks to establish is

that the Courts of Appeal are duty-bound to freely certify

questions of state law (if such procedure is available to

them) to the appropriate state court especially when the

federal district court from which the appeal arose does

not sit in the state whose law is being applied and

especially in situations where the underlying state law is

in a period of recent development.

In Petitioner’s case the Texas federal district court

applied a much-used, but very vague, quotation from

several Alabama cases to-wit: “waiver and estoppel

cannot enlarge the coverage of insurance policies.” The

Texas federal district court and the Court of Appeals

applied this relatively simple phrase to all of the

provisions of the policy to which Petitioner was asserting

his theories of waiver or estoppel. Neither Court cited any

Alabama decision holding that these specific types of

policy provisions were related to insurance risks or

coverage. In fact, Petitioner presented competent

summary judgment evidence that the waiting period

condition of the policy (in excess of 30 days) was not

premium related but was merely a feature of the policy

which facilitated the employer’s self-administration of

the policy for its employees. Both lower courts

undoubtedly thought they were properly applying the

6

applicable Alabama law, which they had a duty to do

under Erie Railroad Co. vs. Thompkins, 304 U.S. 64

(1938).

Petitioner has filed this writ of certiorari because he

does not believe that the Texas District Court nor the

Court of Appeals applied Alabama law to his case, as the

Alabama Supreme Court would have determined it to be.

Just prior to Petitioner’s appeal there had been two

recent developments in Alabama insurance law which

related to the issues in Petitioner’s cause. First, Alabama

law had just recently addressed the group insurance

agency question and had adopted the minority position

on this point, to the effect that an employer could be the

agent for the insurer in self-administered policy

situations. Blue Cross-Blue Shield of Alabama us.

Thornton, 325 So.2d 187 (Ala. Civ. App. 1975). Second,

Alabama law had just recently recognized the theory of

promissory estoppel to provide coverage in the insurance

field. United States Fidelity & Guaranty Co. v.

McKinnon, 356 So.2d 600 (Ala. Sup. 1978). These were

significant developments in Alabama’s insurance law

and reflected a modern and liberal trend to these issues.

The implications of these decisions significantly dis-

credit the prior Alabama law in this area, which was the

basis of the District Court’s and the Court of Appeal’s

judgments. At a minimum, the state of the Alabama

insurance law in this area was uncertain at this time. In

the face of this uncertain state of the law, the District

Court sitting in Texas and the Court of Appeals sitting in

Louisiana determined what Alabama’s law was, or

should be, on these points, all without the benefit of

7

Alabama’s determination of same and, notwithstanding

the certification procedure available to the Court of

Appeals.

Certainly the certification process which many states

have afforded the federal courts, and in this instance

Alabama’s certification statute, is a plea to the federal

courts to let the states determine their law in a consistent

and dynamic way. Obviously, the states with such

statutes do not consider it to be a burden when called

upon to assist the federal courts in determining their

state law. By utilizing the certification procedure, the

burden of correctly applying relatively uncertain or

rapidly developing state law is alleviated from the

federal courts. A definitive standard for utilizing this

beneficial procedure should be pronounced by this

Supreme Court.

Petitioner’s case was a prime candidate for cer-

tification and yet it was not certified. It is Petitioner’s

opinion that as a result of the Court of Appeal’s failure to

certify issues in his case, at this critical developmental

stage of Alabama’s insurance law, that these federal

courts have applied, and will be applying in the future,

Alabama law which is a step behind the actual trend of

the law on these issues in the State of Alabama.

This Court has previously announced its favor of the

certification procedure in the situation where a federal

district court attempts to apply the law of a state whichis

foreign to the state or district in which the federal court is

sitting. Bishop vs. Wood, 426 U.S. 341, 345-346 (1976).

This Court should now further instruct the Courts of

8

Appeal to freely utilize the certification procedure

available to them when a state’s law has made a recent

change in direction or development, or has entered into a

previously uncharted area of the law in that state. This is

a minimum requirement if the federal courts are to

properly exercise their Erie duties. As state law becomes

more dynamic in these changing times, it is of public

importance that the federal courts be instructed to turn to

the invaluable tool, the certification procedure, to

properly keep pace with the state’s law, and thus to

energize the Erie doctrine to its fullest potential.

CONCLUSION

This petition for certiorari should be granted so that

fundamental justice may be done.

Respectfully submitted,

ee Seer ee

G. Frank Brown

2001 Bryan Tower, Suite 3120

Dallas, Texas 75201

214/741-7581

Counsel for Petitioner

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the

foregoing Petition for Writ of Certiorari to the United

States Court of Appeals for the Fifth Circuit has been

mailed to Mr. Larry M. Lesh, Locke, Purnell, Boren,

Laney and Neely, 3600 Republic National Bank Tower,

Dallas, Texas 75201, this 9th day of May, 1980.

So hr Brown

G. Frank Brown

> al

A-l

APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 78-1529

ROBERT VERNE BONFOEY,

Plaintiff-Appellant,

versus

UNION MUTUAL STOCK LIFE

INSURANCE CO. OF AMERICA,

Defendant,

THE EQUITABLE LIFE ASSURANCE

SOCIETY OF THE UNITED STATES,

Defendant-Appellee

Appeal from the United States District Court

for th~ Northern District of Texas

Before MORGAN, REAVLEY AND HATCHETT,

Circuit Judges. HATCHETT, Circuit Judge:

_ In this diversity case the appeal is from an order of

summary judgment in favor of the appellee-insurer

granted on grounds that the appellant’s disability is

excluded from the coverage of the policy in dispute. We

affirm. | |

Appellant, Robert Bonfoey, began employment with

Jack’s Food Systems (Jack’s) on July 22, 1974. On

September 17, 1974, he was hospitalized because of a

heart ailment. He returned to work at Jack’s on J anuary

6, 1975. His heart ailment subsequently led to his

A-2

disability, which commenced on November 6, 1975.

On July 22, 1974, when appellant began work, Jack’s

held along term disability policy issued by Unionmutual,

covering “all salaried officers, administrative and

managers.” The policy provides for a ninety day waiting

period before it becomes effective. Additionally, it

provides that coverage will not become effective after the

ninety day waiting period unless the employee is actively

at full-time work. Excluded from coverage is any

disability commencing during the first twelve months

the insurance is in force, if the disability is caused by a

disease or ailment contracted or treated during the three

month period prior to the effective date of insurance.

On May 1, 1975, Jack’s terminated the Unionmutual

policy and placed all of its group insurance with

Equitable Life Assurance Society of the United States

(Equitable). The Equitable policy contained a two year

pre-existing condition exclusion for any disability which

manifested itself within twelve months prior to the

effective date of insurance.? Equitable also agreed to

cover any disability which would have been covered by

the Unionmutual policy. This action was brought to

determine appellant’s entitlement to disability insurance

benefits under the policies held by Jack’s.

The trial court found that the appellant’s disability

was not covered by the Unionmutual policy because his

coverage did not become effective until January of 1975,

when he actually returned to the office. The trial court

concluded that the disability, therefore, occurred during

the first twelve months the insurance was in effect; and

A-3

because the disability resulted from an ailment

contracted within the three month waiting period, it was

within the policy’s excluison. The trial court further

concluded that although officers of Jack’s told the

appellant he was covered, this was insufficient to enlarge

the coverage of the policy. Summary judgment was

granted for the appellee. Our task is to review the trial

court’s grant of summary judgment for correctness.

Appellant asserts that the trial court erred in granting

summary judgment in favor of the appellee because

material issues of fact were presented by the pleadings.

The appellant argues that Jack’s, as Unionmutual’s

agent, effectively waived the ninety day eligibility

waiting period of the policy. Appellant also contends that

Jack’s, as Unionmutual’s agent, waived the “actively at

work condition” of the policy based upon Unionmutual’s

retention of premiums during the period he was allegedly

not covered. Appellant further argues that performance

of certain of his regular work created a fact issue as to

when he returned to work within the meaning of the

policies.

A motion for summary judgment should be granted

only if there is no genuine issue as to any material fact

and the moving party, as a matter of law, is entitled to

judgment. Fed.R.Civ.P. 56(c). See. e.g., Aulds v. Foster,

484 F.2d 945 (5th Cir. 1973). This court has cautioned

against use of summary judgment procedure in cases for

which it is not designed. XRT, Inc. v. Krellenstein, 448

F.2d 772 (5th Cir. 1971). ‘Summary judgments are looked

upon with favor” where there are no genuine issues of

A-4

material fact and the moving party is entitled to

judgment as a matter of law. Bruce v. Travelers

Insurance Co., 266 F.2d 781, 786 (&th Cir. 1959); United

States for Use of Edward E. Morgan Co. v. Maryland

Casualty Co., 147 F.2d 423, 425 (5th Cir. 1945).

The pivotal issue involves determining the effective

date of the insurance. If the policy is enforced as written,

it is clear that appellant’s disability is not covered. This is

because the policy expressly excludes any disability

commencing during the first twelve months the

insurance is in effect, if the disability is caused by a

disease contracted or treated during the ninety day

period prior to the effective date of insurance. Under the

policy, there was a ninety day waiting period wherein the

coverage did not become effective unless the employee

was actively at work. The trial court concluded that the

appellant did not return to active work for purposes of the

policy, until January 6, 1975, when he actually returned

to the office at Jack’s. This finding is in accord with

Alabama law. See White v. Massachusetts Mutual Life

Insurance Co., 157 So.2d 6 (Ala. 1963). Thus, the

disability which commenced within twelve months of

appellant’s return to active full- time work was excluded

from the contract as written.

Appellant argues that because Jack’s told him t that he

was covered immediately upon being employed, the

effective date of insurance was July 22, 1974. We find that

the trial court correctly concluded that no genuine issue

of material: facts was presented by this undisputed

allegation. Under Alabama law, Jack’s clearly had no

A5

authority to enlarge or expand the coverage of the

Unionmutual policy. Aetna Insurance Co. v. Pete Wilson

Roofing & Heating Co., Inc., 272 So.2d 232 (Ala. 1972).

The present record is devoid of any evidence showing

that the officers of Jack’s were agents of Unionmutual,

other than for the collection of premiums and

administration of the policies. In Liberty National Life

Insurance Co. v. Staggs, 6 So.2d 432 (Ala. 1942), the

Alabama Supreme Court stated:

We have recognized the general rule that an agent

w ose authority is limited to soliciting insurance,

delivering policies, and collecting premiums has no

power to change stipulations in a contract of

insurance: that to do so he must either be a general

agent or be specially so authorized or his course of

dealing to that extent have been ratified expressly or

impliedly.

6 So.2d at 433.

The court went on to state: “And for like reasons such an

agent cannot make a binding contract of insurance or to

insure.” Jd. Further, the policy contains a provision

stating that no agent has authority to change or waive

the provisions of the policy. This provision is valid and

enforceable under Alabama law. First National Life

Insurance Co. of America v. Rector, 142 So. 392 (Ala.

1932).

Appellant’s contention that Jack’s, as Unionmutual

agent, waived the “actively at work condition” of the

policy based upon Unionmutual’s retention of premiums

during the period he was not covered, is without merit. It

is well-established in Alabama law that theories of

waiver and estoppel cannot extend or enlarge the

A-6

coverage of an insurance policy. Aetna Insurance Co. v.

Peter Wilson Roofing & Heating Co., Inc., 272 So.2d 232

(Ala. 1972).

The appellant nas failed to establish the presence of

factual issues. We hold the grant of summary judgment

to be proper; accordingly, the judgment is affirmed.

AFFIRMED.

7~

A-7

FOOTNOTES

1 The Unionmutual policy provided in pertinent part:

EFFECTIVE DATES OF INSURANCE: ...

The insurance of any eligible employee shall become effective on:

(1) Such employee’s ‘eligibility date’ as hereinafter defined,

providing he makes application for the insurance on or

before such date...

The eligibility date for any employee, as used herein, means the

date upon which the employee first became eligible for insurance

under this Policy in a particular class, as set forth in the

Application herefor....

* * *

Notwithstanding the foregoing, no insurance shall become

effective on a date when an employee is not actively at full-time

work because of a disability resulting from sickness or injury. In

such case, the insurance shall not become effective until the next

following day upon which such employee is actively at work

within his eligible class.

*x* * *

EXCLUSIONS: This policy does not cover:

(a) any disability commencing during the first twelve months

that the insurance is in force with respect to the Employee if the

disability is caused or contributed to by, or is a consequence of, a

disease or injury for which the Employee received medical

treatment, or services, or took prescribed drugs or medicines

during the three month period immediately prior to the effective

date of such insurance... .

The provision for the 90 day waiting period for eligibility was

contained in Jack’s application for the policy. However, the policy

provided that: “ENTIRE CONTRACT-CHANGES: This policy, the

application of the Policyholder and any individual application, a

copy of which has been provided to the individual, constitute the

entire contract between the parties. .. .”

2 The Equitable policy provided in part that:

No benefits shall be payable under this policy . . .

5. for a period of disability commencing within the first two years

after the effective date of the employer's insurance under this

policy if such disability is caused or contributed to by injury

occurring or sickness contracted prior to such effective date or by

any condition related to such injury or sickness and such injury,

sickness or related condition manifested itself within twelve

months prior to such effective date. . . .

A-8

APPENDIX B

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 78-1529

ROBERT VERNE BONFOEY,

Plaintiff-Appellant,

versus

UNION MUTUAL STOCK LIFE

INSURANCE CO. OF AMERICA,

Defendant,

THE EQUITABLE LIFE ASSURANCE

SOCIETY OF THE UNITED STATES,

Defendant-Appellee

Appeal from the United States District Court

for the Northern District of Texas

ON PETITION FOR REHEARING

(February 13, 1980)

Before MORGAN, REAVLEY and HATCHETT, Circuit

Judges.

PER CURIAM:

IT IS ORDERED that the petition for rehearing filed in

the above entitled and numbered cause be and the same is

hereby denied.

ENTERED FOR THE COURT:

Joseph W. Hatchett

United States Circuit Judge

A-9

APPENDIX C

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

No. CA3-76-0920-F

ROBERT VERNE BONFOEY

versus

THE EQUITABLE LIFE ASSURANCE

SOCIETY OF THE UNITED STATES

ORDER

Defendant The Equitable Life Assurance Society of the

United States has moved for summary judgment on the

grounds that the Plaintiff's disability is excluded from

the coverage of the Defendant’s policies and that

coverage cannot be enlarged by waiver or estoppel.

Summary judgment has previously been entered denying

recovery against Union Mutual Life Insurance

Company, originally named as a party defendant.

The uncontroverted facts show the following: On

October 1, 1973, Unionmutual issued policy No. 51072 to

Jack’s Food Systems, Inc. The policy excluded from

coverage:

(a) any disability commencing during the first

twelve months that the issuance is in force with

respect to the Employee if the disability is caused or

contributed to by, or is a consequence of, a disease or

injury for which the Employee received medical

treatment, or services, or took prescribed drugs or

medicines during the three month period

‘A-10

immediately prior to the effective date of such

insurance...

Plaintiff was employed on July 22, 1974. Under the

terms of the Unionmutual policy he would have become

eligible for coverage on October 22, 1974. The Plaintiff,

however, was told by his employer that the long term

disability coverage with Unionmutual was effective

immediately. On September 17, 1974, within the ninety

day waiting period, the Plaintiff was hospitalized for a

heart ailment. The ailment subsequently led to the

Plaintiff's disability which is the basis for this cause of

action. In May of 1975 Jack’s Food Systems, Inc.

terminated prior coverage and placed all! of its group

insurance with Equitable, including policy No. 19794LT

effective May 1, 1975, which provided long term

disability benefits for employees of Jack’s Food Systems,

Inc. The Equitable policy provided that no benefits were

payable thereunder:

[Flor a period of disability commencing within the

first two years after the effective date of the

employee’s insurance under this policy if such

disability is caused or contributed to by injury

occurring or sickness contracted prior to such

effective date or by any condition related to such

injury or sickness and such injury, sickness or

related condition manifested itself within twelve

months prior to such effective date.

Equitable, however, contractually agreed to cover any

disability which would have been covered by the

Unionmutual policy.

The Plaintiff, based on his belief that he was covered

under the Unionmutual policy, and therefore under the

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Equitable policy, filed a claim for benefits with

Equitable. Equitable representatives, predicated upon

the assurances of the Plaintiff that he was covered by the

Unionmutual policy, advised the Plaintiff that his

disability was covered by the Equitable policy. Equitable

subsequently denied coverage and Plaintiff brought this

action.

Plaintiff instituted this action on July 7, 1976 and

established diversity jurisdiction under 28 U.S.C. §1332.

Plaintiff alleges that the Defendant Equitable has

wrongfully denied coverage and refused to pay benefits

under the above mentioned insurance policies. All parties

agree that Alabama law controls this case.

The Plaintiff's claim turns on whether he was covered

under the Unionmutual policy, and therefore under the

Equitable policy. Because the disability was a

consequence of an ailment which was contracted within

the three month waiting period, liability depends on

whether the disability occurred within twelve months

after the effective date of the insurance with respect to the

Plaintiff. This in turn requires a determination of when

the Unionmutual coverage became effective as to the

Plaintiff. Ordinarily the effective date would have been

October 22, 1974, three months from the date of

employment.

The Unionmutual policy, however, provided that:

[N]o insurance shall become effective on a date when

an employee is not actively at full time work because

of a disability resulting from sickness or injury. In

such case, the insurance shall not become effective

until the next following day upon which such

A-12

employee is actively at work...

Plaintiff was not “actively at full time work” on October

22, 1974 and did not return to his office until January of

1975.

Equitable denies coverage under the Unionmutual

policy because the disability arose from an ailment

contracted during the three-month waiting period;

therefore any disability arising from the ailment would

be excluded if the disability commenced within the first

twelve months that the insurance was in force with

respect to the employee. Equitable alleges that under the

terms of the contract the insurance did not become

effective with respect to the Plaintiff until January of

1975 when he returned to the office and was actively at

full-time work. Because the disability occurred before

January, 1976, the disability fell within the exclusion

from coverage provision contained in the Unionmutual

policy. The Plaintiff, however, alleges that Jack’s Food

Systems, Inc. was the agent for the insurer,

Unionmutual, in dealing with Jack’s employees; and

that Jack’s, in that capacity, waived with respect to the

Plaintiff, the waiting period and/or “actively at full-time

work” requirements of the Unionmutual policy.

Alternatively, Plaintiff argues that by working at home

he satisfied the return to work requirement prior to

November 6, 1974, and therefore, his disability, which he

claims occurred on November 6, 1975, did not occur

within twelve months of the effective date of the

insurance, and was covered by the Unionmutual policy.

Plaintiffs arguments fail because his disability does

A-13

not fall within the coverage of either the Equitable policy

or the Unionmutual policy; and that coverage cannot be

enlarged by waiver or estoppel. I find that Plaintiff’s

disability was not covered by the Equitable policy

because it was caused by an ailment which was

contracted within twelve months preceeding May of

1975, the effective date of that policy. I additionally find

that the Plaintiffs disability was not covered by the

Unionmutual policy because his coverage did not become

effective until January of 1975, when he actually

returned to the office. Under Alabama law the Plaintiff's

work at home did not satisfy the return to full time work

requirement for the commencement of insurance

coverage under the Unionmutual policy. White v.

Massachusetts Mutual Life Ins. Co., 157 So.2d 6 (Ala.

1963). The disability, therefore, occurred during the first

twelve months the insurance was in force; and because it

was caused by an ailment contracted within the three

month waiting period, was within the exclusion from

coverage.

Despite the fact that officers of Jack’s Food Systems,

Inc. and employees of Equitable stated that the

Plaintiff's disability was covered, I find that under

Alabama law, waiver and estoppel cannot enlarge the

coverage of insurance policies. Aetna Ins. Co. v. Pete

Wilson Roofing and Heating Co., Inc., 272 So.2d 232 (Ala.

1972); Alabama Farm Bureau Mutual Casualty Ins. Co.

v. Adams, 267 S.2d 151 (Ala. 1972).

Accordingly, on these grounds, the motion for

A-14

summary judgment will be, and hereby is GRANTED as

to the Defendant.

It is so ORDERED.

Robert W. Porter

_ United States District Judge

DATE February 1, 1978 =

A-15

APPENDIX D

Certified questions from federal courts.

(a) When certified. When it shall appear to a court of the

United States that there are involved in any proceeding

before it questions or propositions of law of this state

which are determinative of said cause and that there are

no clear controlling precedents in the decisions of the

supreme court of this state, such federal court may certify

such questions or propositions of law of this state to the

supreme court of Alabama for instructions concerning

such questions or propositions of state law, which

certified question the supreme court of this state, by

written opinion, may answer.

(b) Jurisdiction. Questions or propositions of law

referred to in subdivision (a) hereof shall be certified for

answer to the supreme court.

(c) Method of invoking rule. The provisions of this rule

may be invoked by any of the federal courts upon its own

motion or upon the suggestion or motion of any

interested party when approved by such federal court.

(d) Contents of certificate. The certificate provided for

herein shall contain the style of the case, a statement of

facts showing the nature of the cause and the

circumstances out of which the questions or propositions

of law arise and the question of law to be answered.

(e) Preparation of certificate. The certificate shall be

certified to the supreme court by the clerk of such federal

court and under its official seal. The supreme court may,

in its discreticn, require the original or copies of all or any

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portion of the record before the federal court to be filed

with said certificate where, in its opinion, such record

may be necessary in the determination of said certified

question.

(d) Costs. The costs of the proceedings shall be equally

divided between the parties unless otherwise ordered by

the supreme court.

(g) Briefs and argument. The appellant or moving

party in the federal court shall file and serve upon its

adversary its brief on the question certified within 28

days (four weeks) after the filing of said certificate in the

supreme court. The appellee or responding party in the

federal court shall file and serve upon its adversary its

brief within 21 days (three weeks) after the receipt of the

appellant’s or moving party’s brief and a reply brief may

be filed within seven days (one week) thereafter.

(h) Oral argument. Oral argument may be granted

upon application and, unless for good cause shown the

time be enlarged by special order of the court prior to the

hearing thereon, the parties shall be allowed the same

time as in other causes on the merits.