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Chrobak v. Metropolitan Life Insurance Co.

decided: June 13, 1975.

KATHLEEN M. CHROBAK, PLAINTIFF-APPELLEE,
v.
METROPOLITAN LIFE INSURANCE COMPANY, A FOREIGN CORPORATION, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Northern District of Illinois, Eastern Division - No. 72 C 1851 William J. Bauer, Judge.

Hastie, Senior Circuit Judge,*fn* Swygert and Pell, Circuit Judges. Swygert, Circuit Judge, dissenting.

Author: Pell

PELL, Circuit Judge.

This is an appeal by the Metropolitan Life Insurance Company from a judgment for $23,000 entered on a jury verdict in a suit on a group life insurance policy issued to the United States Civil Service Commission. The disputed question is whether the deceased federal employee, William P. Chrobak, was covered by "optional insurance" which was to become effective on "the first day [he] actually enter[ed] on duty in a pay status on or after April 1, 1970."

While two errors relating to instructions are advanced by Metropolitan, its principal contention is that a directed verdict should have been granted in its favor. Since there was no real disputation as to the facts, we are of the opinion that only a legal question was presented.

Deceased was a computer specialist for the Railroad Retirement Board, which comes under the protection of the United States Civil Service Commission. The Commission is authorized by statute to promulgate regulations to provide life insurance for federal employees. 5 U.S.C. § 8716(b). Pursuant to this purpose, the Commission secured a contract of group insurance with Metropolitan providing for regular and optional insurance. Optional insurance is paid for by covered employees and is the subject of this appeal. Section 2 of the master policy provides that eligibility for optional insurance and the effective dates of this insurance shall be determined by regulations adopted by the Commission. The Commission issued such a regulation, 5 C.F.R. § 871.205(c), which provided:

"An employee who has declined the optional insurance may elect by filing Standard Form 176, completed to show that he wants both optional and regular insurance, with his employing office during the period of March 1 to March 31, 1970. The effective date of the optional insurance in such case is the first day the employee actually enters on duty in a pay status on or after April 1, 1970." (Emphasis added.)

The Civil Service Commission published an informational brochure concerning insurance and distributed it to federal employees informing them of this "open season" (a period in which optional insurance could be obtained without medical examination). The brochure provided that "coverage will become effective on the first day that you are on pay and duty status after March 31, 1970." (Emphasis added.)

Chrobak was eligible for optional insurance and properly filed an application prior to April 1, 1974. He received a Certificate Supplement for the optional insurance. The Certificate does not mention the effective date but clearly states that it is only a summary of the policy, not an insurance contract. He also received a notification of personnel action from the Commission indicating the insurance change; this showed an effective date of April 1, 1974.

Chrobak normally worked about eight hours per day starting at 8:00 A.M. although the computer was operated 24 hours per day. During the period he was not working, he was on call and was required to report to work if an emergency arose; but he was otherwise free to spend his time as he pleased. He worked as usual on March 31, 1974. That evening he had some men from work at his home and left to drive them home about 1:00 A.M. on April 1, 1974. About 2:00 A.M. he was killed in an accident. The Commission sent Mrs. Chrobak a notification of personnel action showing that Mr. Chrobak was covered by regular and optional insurance at the time of his death. Nevertheless when a claim was filed, Metropolitan denied that Mr. Chrobak was covered. This law suit resulted.

It is undisputed that Chrobak was on pay status on April 1, 1974. Hence he met the one condition of coverage. Defendant argues that the decedent was never physically present at work on April 1, 1974, and that therefore he never actually entered on duty. There was no evidence that Chrobak was called into work between the time he left home and the time of the accident, and it is undisputed that he never was physically present at work on April 1, 1974.

Plaintiff argues that physical presence is not the controlling issue and that we should affirm the court below on two bases: First, all that was required for coverage insofar as "duty" was concerned was to be on duty status on April 1. Reliance is placed upon the informational brochure of the Civil Service Commission in which it is stated that coverage becomes effective on the first day one is "on pay and duty status after March 31, 1970." Indeed, it is argued, the Technical Assistant to the Chief of the Legislative Policy Division, Bureau of Retirement, Insurance and Occupational Health for the Commission, a witness for the defendant, in his testimony paraphrased the regulation by referring to duty and pay status. We note, however, at this point that this witness from the Commission also testified that "the phrase 'on duty,' as we have inserted it in the regulations, is specifically to mean actual entrance on duty and performance of duty. Simply being in a pay status is not sufficient."

Being on duty status, according to plaintiff, does not require physical presence on a particular day but only requires the expectation that a person will work when his shift occurs and that he is not on some other status such as sick leave or vacation status. In support of this position, plaintiff cites 5 C.F.R. § 831.1206, a regulation pertaining to disability retirement, in which "duty status" is used in the sense of coming to work on a day-to-day basis. Plaintiff also argues that this interpretation is sufficient to fulfill the purpose of the clause in the regulation -- to prevent persons so ill as to be unable to perform their duties from obtaining insurance thereby avoiding adverse risk selection.

Plaintiff's second basis for affirming is that decedent was on call from midnight on the morning of April 1, 1970, as he always was when off duty, and that this ...


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