Cipa v. Metropolitan Life Insurance

Opinion by Mr. Chief Justice Maxey, In this action of assumpsit on a policy of group insurance on the lives of employees of Jones & Laughlin Steel Corporation, the question to be decided is whether or not plaintiff’s deceased husband who died on February 11, 1942, was at the time under the coverage of a group insurance policy executed by the defendant company. Section 5 of the insurance contract provided as follows: “The insurance on any Employee insured hereunder shall cease automatically on the date of the termination of employment of such Employee. Cessation of active wort by an Employee shall be deemed to con *300 stitute the termination of his employment, except as provided in the two paragraphs next following.” Then follows, inter alia, this provision: “In case of the absence of an employee from active work ... for not longer than three months on account of . . . temporary lay-off, the employment of such employee may, for the purposes of the life insurance hereunder, be deemed to continue until terminated by the employer. The life insurance hereunder on such employee shall cease on the date of such termination of employment by the employer, as evidenced to the (defendant) company by the employer, whether by notification or by cessation of premium payment on account of the life insurance hereunder on such employee.” That Cipa, the insured employee, was given only a “temporary lay-off” by his employer, on January 5,1942, and two days later became an employee of the National Tube Company and remained as such until his death on February 11, 1942, is conceded. It was also proved, for the testimony shows that about the middle of December, 1941, the foreman of the employer said to a group, including Cipa: “We are not laying off for good, we are just laying you off for the present and we will try to put you on some place else.” Since Cipa had the status of a temporarily laid off employee between January 5 and February 11th, and since his employment was not “terminated by the employer” it follows that his status as an employee entitled to the protection of the group insurance contract pleaded was not disturbed. Judge Reno of the Superior Court sums up the legal situation concisely and accurately when he says in his opinion: “The argument that Cipa was no longer an employee of Jones and Laughlin in the popular sense after he began to work elsewhere does not meet the issue, because the policy does not require the continuation of the common-law status of employer and employee. It expressly recognized that, notwithstanding the suspension of this relationship dur *301 ing a temporary lay-off of not more than three months’ duration, the status, for insurance purposes, may he deemed to continue nonetheless. The insurance company, has, therefore, by its own contract, created a fictional relationship with a limited life of three months, or less at the option of the employer. . . . The contract of insurance expressly provides that the coverage on employees temporarily laid-off continues until termination by the employer, and makes no provision for any termination occasioned by the voluntary acts of temporarily laid-off employees. . . . An employee who has been laid-off has not ceased to work for his employer at his volition, at least not until he has been offered and has refused work by his old employer. Furthermore, adoption of defendant’s interpretation of the contract would require a person who has been laid-off from his regular employment to remain idle, upon pain of forfeiting his insurance if he sought earnings during the lay-off from any other source. This manifestly unreasonable rule is to be avoided if the language of the policy lends itself, without violence, to any other reasonable construction. [Citing cases.] ... It being conceded deceased’s lay-off was temporary in nature, that it is immaterial whether Cipa’s employment with National Tube Company was part-time or full-time, or whether he intended that employment to be permanent. His employment, in the sense the word is used in the policy, could be terminated only by the expiration of three months from the last day he actively worked for Jones and Laughlin; or by an earlier notice of termination given to,defendant by Jones and Laughlin, or by a refusal by deceased of proffered reemployment at Jones and Laughlin’s plant.” Cipa’s employment was not terminated in any one of the only three ways it could legally be terminated in order to destroy Cipa’s status as an employee subject to the benefits of the group insurance contract. The judgment of the Superior Court is affirmed.