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Hornaday v. Sun Life Insurance Co.

decided: April 18, 1979.

DARLENE HORNADAY, PLAINTIFF-APPELLANT,
v.
SUN LIFE INSURANCE COMPANY OF AMERICA, DEFENDANT-APPELLEE.



Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP 76-125-C - James E. Noland, Judge

Before Fairchild, Chief Judge, and Swygert, Circuit Judge, and East, District Judge.*fn*

Author: Per Curiam

Appellant Darlene Hornaday appeals the District Court's summary judgment entered on February 6, 1978 in her action to collect $16,000 in proceeds on a life insurance policy issued by the appellee Sun Life Insurance Company of America (Sun Life) on the life of her husband (Hornaday), now deceased.

We note jurisdiction and affirm.

FACTS

On February 19, 1975, Mr. Richard Snow, a salesman for Sun Life, met with the Hornadays. After the meeting, an application was signed for a $16,000 life insurance policy on Hornaday's life, with his wife, the appellant, as the named beneficiary. Pursuant to a computation made by Mr. Snow, the Hornadays tendered $12.16 to Sun Life and in exchange received a conditional receipt for life insurance coverage. On the reverse side of the conditional receipt, the following "CONDITIONS OF THIS RECEIPT" were printed:

"(A) . . . If the amount received was less than the full first premium, the insurance provided will be for (1) a period equal to such proportionate part of the first premium interval as the cash so paid bears to the full first premium or (2) a period of 60 days, whichever is longer. . . .

". . .day

"(C) Except as provided in this conditional receipt, any policy issued by the Company shall not take effect until it is delivered and the full first premium for it is paid during the lifetime and continued insurability, as stated in the agreement contained in the application, of the Proposed Insured."

The policy was issued on March 4, 1975, but was never delivered to Hornaday prior to his death. No further premium was ever tendered by Hornaday or collected by Sun Life.

Snow testified that between February 19 and May 6, he made between five and ten attempts to collect the full premium and issue a life insurance policy. Attempts were made both at Hornaday's place of work and at his residence. On May 6, for example, Snow and his field manager, Mr. Woodard, called upon Hornaday at work. Hornaday was too busy to see them at that time and suggested that they stop by his home later in the afternoon. Snow and Woodard arrived at the scheduled hour, waited for approximately 30 minutes, and when Hornaday did not appear, they left. However, they returned an hour later and found Mrs. Hornaday at home. They emphasized to her the importance of seeing Hornaday so as to collect the premium and deliver the policy. Snow left his business card and asked Mrs. Hornaday to have her husband call to make an appointment. Snow was never contacted by Hornaday. Hornaday died on May 31, 1975.

After the death of Hornaday, Sun Life sent the appellant a check for $12.16 which she returned without endorsement.*fn1 Appellant made a demand upon Sun Life for payment of the proceeds from the policy. When Sun Life refused, this diversity action followed.

The District Court, in a well-reasoned memorandum order, held that the conditional receipt created insurance coverage for Hornaday, but that it had expired by its own terms 60 days from the date of the insurance application, February 19, 1975, and was not in effect when Hornaday ...


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