Superior Court of Alameda County

Posted by Anne Tyner on September 15th, 2021

Procedural Posture

Defendant insurer appealed from a judgment of the Superior Court of Alameda County, California, in favor of plaintiff agent, in the agent\'s breach of contract action for the insurer\'s refusal to perform an insurance contract insuring the agent and his family against polio.

Overview

The insurer appointed the agent to sell polio insurance. The agent knew that the insurer issued polio insurance to another customer of polio insurance from the date of application, and the application stated that there was \"immediate first day coverage.\" The agent learned that a child in his neighborhood contracted polio. The agent then sent applications and payments for polio insurance for himself, his family, a neighbor, and his family. The agent failed to answer a question in the application as to whether anyone in his family contracted polio within the last 90 days. The agent\'s son contracted polio, and the insurer refused to pay the agent\'s claim. The trial court found in favor of the agent, and the court affirmed. The court construed the words \"immediate first day coverage\" to afford the greatest measure of protection to the insured and found that its ordinary meaning was for coverage on the date of application. The court held that the agent\'s failure to answer the question about his family\'s recent polio history was not fatal because the answer to the question was less important than whether polio actually existed, and the insurer placed little emphasis on the answer.

Outcome: demand letter breach of contract

The court affirmed the judgment in favor of the agent in his action to recover against the insurer for the insurer\'s refusal to perform a polio insurance contract that the agent applied for, the application for which provided \"immediate first day coverage.\"

Procedural Posture

Appellant elderly home sought review of a judgment of the Superior Court of Los Angeles County (California), which found in favor of respondent, deceased member\'s administratrix, in the administratrix\'s contract action for failure to accept the member\'s requested termination.

Overview

The deceased entered into a written contract to become a life member in the elderly home. In exchange for a deposit, the elderly home agreed to provide for her maintenance and care for the remainder of her life. The contract contained a provision that provided the member with the right to terminate her membership by serving on the management 120 days prior notice. Upon such termination, the member was entitled to a refund of the deposit, minus a monthly charge from the date of admission. The member later filed a 120-day notice of termination. However, she died less then one month later. The administratrix demanded a partial refund of the deposit, but the elderly home refused. The administratrix filed a breach of contract action, and the trial court found in her favor. On appeal, the court reversed, holding that the contract between the member and the elderly home was still in effect at the time of the member\'s death because the notice did not have the legal effect of terminating the contract until the 120-day notice period expired. Thus, because the member died before the notice period expired, the elderly home fully complied with the terms of the contract.

Outcome

The court reversed the judgment in favor of the administratrix in her contract termination action against the elderly home. The court directed the trial court to render judgment that the administratrix take nothing and that the elderly home recover its costs.