Opinion
No. 88-0766.
April 19, 1989.
Appeal from the Circuit Court, Broward County, George A. Shahood, J.
Brian L. Kimber and Arthur N. Razor, Fort Lauderdale, for appellant.
Samuel Tyler Hill, of Hill, Neale and Riley, Fort Lauderdale, for appellee.
On March 1, 1984, appellee issued a joint whole life policy to appellant and her husband. She was twenty-five, he was thirty.
For the first two years, the appellee automatically deducted premiums from the insureds' joint checking account without incident. In May of 1986, a payment was returned for insufficient funds. On June 5, 1986, five days after expiration of the policy's thirty-one day grace period, the appellee wrote the husband informing him of the nonpayment and advising immediate payment was necessary to prevent interruption of the insurance coverage. The letter contained an interoffice memorandum which stated, "If no action is reported, policy(s) will lapse week of 7-14-86."
The husband died July 13, 1986. Appellant (not mentioning her husband's death) telephoned appellee on July 14, 1986, and was told the premium payment was delinquent, but the policy was still effective if the late premium was paid immediately which the appellant did that day. Appellee retained the payment and resumed the automatic premium payments. On August 14, 1986, appellee denied appellant's claim under the policy for her husband's death.
Appellant brought suit on the theory of waiver and estoppel. The trial court granted summary judgment in favor of appellee as to all counts.
The appellant's failure to mention her husband's death, while controversial, did not alter what had transpired. If told of the death, the appellee most likely would have refused to accept the late payment and likewise denied the subsequent claim.
The appellee wanted immediate payment no later than the week of July 14, 1986, to continue coverage for the period which preceded the husband's death and the appellant complied. The appellee should not be allowed to withdraw its offer when the facts changed after commencement of the time period covered by the late premium payment. The appellee should be estopped to deny coverage by its decision to extend the grace period and found to have waived its contractual right to lapse the policy and require compliance with the policy's reinstatement clause before reinsuring. See Prudential Insurance Company of America v. Seabrook, 366 So.2d 482 (Fla. 1st DCA 1979).
Accordingly, we reverse and remand for further proceedings consistent herewith.
WALDEN, J., concurs.
HERSEY, C.J., dissents with opinion.
In Prudential Insurance Company of America v. Seabrook, 366 So.2d 482 (Fla. 1st DCA 1979), the insurance company was held to have waived the right to lapse the policy (as otherwise permitted by its terms) because of having entered into an agreement with the insured to extend credit for a past-due premium. All operative facts occurred prior to the death of the insured and there was consideration for the extension of indebtedness.
In the present case there were no assurances made to the insured nor was there any consideration for an extension of the grace period. On the contrary, the grace period provided by the policy had expired when the beneficiary, long since divorced from the insured and remarried, sought out the insurance company and made an arrangement for reinstatement after the death of the insured. In doing so, she failed to mention the rather relevant fact that the insured was no longer insurable.
Under the circumstances, the interagency memo establishing an ultimate lapse date is not, in my judgment, binding as between these two parties. The momentum provided by any factors supporting estoppel is also in a direction opposite from coverage. Accordingly, I respectfully dissent.