BELL V. WEINACKER, 1975-NMCA-134, 88
N.M. 557, 543 P.2d 1185 (Ct. App. 1975)
Edgar C. BELL and Steve L. Bell,
Plaintiffs-Appellants,
vs.
Karl WEINACKER and American Family Life Assurance Company
of Columbus, Georgia, Defendants-Appellees.
COURT OF APPEALS OF NEW MEXICO
1975-NMCA-134, 88 N.M. 557, 543 P.2d 1185
Robert K. Patten, William N. Henderson,
Gallagher, Ruud & Casados, Albuquerque, for plaintiffs-appellants.
James P. Houghton, Modrall, Sperling,
Roehl, Harris & Sisk, Albuquerque, for defendants-appellees.
WOOD, C.J., wrote the opinion. SUTIN and
HERNANDEZ, JJ., concur.
{*558} WOOD, Chief
Judge.
{1} Plaintiffs sought relief
against defendants in connection with an insurance policy issued by Assurance
Company (American Family Life Assurance Company). The trial court granted
summary judgment for defendants. Plaintiffs' appeal attacks the propriety of
summary judgment as to each of the four theories stated in the complaint. They
are: (1) recovery on the policy, (2) waiver of a policy provision, (3) estoppel
to prevent reliance on a policy provision, and (4) fraud in selling the policy.
{2} Assurance Company issued
two policies of "cancer care" insurance. One was an individual policy
to Steve. The other was a family policy to Edgar, the father of Steve. Steve
submitted a claim for benefits under his individual cancer care policy.
Assurance Company paid benefits pursuant to this claim. Plaintiffs allege that
Assurance Company has refused to pay benefits (on the basis of Steve's cancer)
under Edgar's family policy. On the record before us, it is a disputed issue of
fact whether Steve was covered under Edgar's family policy. Assuming such
coverage, defendants contend that summary judgment was proper as a matter of
law as to each of plaintiffs' theories. See
Worley v. United States Borax
and Chemical Corp., 78 N.M. 112,
428 P.2d 651 (1967).
{3} Both policies have an
"other insurance" clause. It provides:
"Insurance effective at any one time on the insured
under a like policy or policies in this insurer is limited to the one such
policy elected by the insured, his beneficiary or his estate, as the case may
be, and the insurer will return all premiums paid for all other such
policies."
{4} Section 58-11-5(3),
N.M.S.A. 1953 (Repl. Vol. 8, pt. 2) authorizes the use of such a policy
provision. Apart from statutory authority, such a provision is not against
public policy.
Gibson v. Metropolitan Life Insurance Company, 213 Kan.
764, 518 P.2d 422 (1974).
{5} Plaintiffs do not claim
the policy provision is invalid. They assert there was a difference between the
policies and therefore the "other insurance" clause does not apply.
The only difference in the policies shown in this record is type of coverage.
One was an individual policy and one was a family policy, but the provisions of
the two policies are identical. There is no issue of fact as to whether the two
policies were "like" policies under the "other insurance" provision.
{6} The "other
insurance" provision barred recovery for Steve's cancer under Edgar's
policy. The summary judgment on this issue is affirmed.
Waiver, Estoppel and Fraud
{7} The uncontradicted
showing is that Weinacker is an insurance agent licensed by New Mexico and
authorized by Assurance Company "to sell" cancer care coverage on
behalf of Assurance Company. There is no showing in the record as to the
meaning of "to sell". It is uncontradicted that Weinacker took
Edgar's application for cancer care coverage, processed the applications of
both Edgar and Steve and mailed both applications to Assurance Company. There
is a factual dispute as to whether Weinacker or another insurance agent took
Steve's application for cancer care coverage.
{8} Plaintiffs assert that
Weinacker knew of the "other insurance" provision in the two
policies, that by his actions in selling two
{*559}
policies with a provision allowing Steve to recover only under one policy
the defendants either waived the "other insurance" provision, or were
estopped to rely on it, or committed fraud in selling policies containing the
provision.
{9} We emphasize that each of
these three theories rely on the conduct of Weinacker in selling the policies.
Defendants assert that plaintiffs' showing in connection with these theories is
insufficient to defeat the summary judgment motion. This argument is not
pertinent unless defendants make a prima facie showing that they were entitled
to summary judgment.
Steadman v. Turner, 84 N.M. 738,
507 P.2d 799 (Ct.
App.1973).
{10} An insurance agent can
waive policy provisions.
Pribble v. Aetna Life Insurance Company, 84
N.M. 211,
501 P.2d 255 (1972). An insurance company may be estopped to rely on
policy provisions.
Homestead Invest., Inc. v. Foundation Reserve Ins. Co.,
83 N.M. 242,
490 P.2d 959 (1971). Whether there was a waiver or an estoppel
depends on the facts.
State Farm Mutual Automobile Ins. Co. v. Gonzales,
83 N.M. 296,
491 P.2d 513 (1971). Defendants made a prima facie showing, in its
affidavits, of no waiver and of no estoppel. This showing is based on an
alleged meeting with Edgar four days subsequent to the applications for
insurance. Edgar's affidavit is that no such meeting occurred. The date of this
disputed meeting is prior to the time the applications were mailed to Assurance
Company, and, thus, are pertinent to the "selling" of the insurance.
Since there is an issue of fact as to whether the meeting occurred, defendants
were not entitled to summary judgment on the issues of waiver and estoppel.
Summary judgment as to those issues is reversed.
{11} We do not reach the
question of the sufficiency of defendants' showing on the fraud claim because
that claim is insufficient to state a basis for relief. Section 21-1-1(9)(b),
N.M.S.A. 1953 (Repl. Vol. 4) requires that the circumstances constituting fraud
shall be stated with particularity. This requirement is satisfied if the facts
alleged are facts from which fraud will be necessarily implied.
Romero v.
Sanchez, 83 N.M. 358,
492 P.2d 140 (1971). The requirement is also
satisfied if the allegations leave no doubt in the defendants' minds as to the
claim asserted against them.
Maxey v. Quintana, 84 N.M. 38,
499 P.2d 356
(Ct. App.1972). The claim is that the conduct of Weinacker in selling two policies,
each of which contained an "other insurance" provision, amounted to
fraud. Fraud will not necessarily be implied from such an allegation and the
allegation does not inform defendants of the claim asserted against them. For
the elements of fraud, see
Prudential Insurance Company of America v. Anaya,
78 N.M. 101,
428 P.2d 640 (1967). The claim of fraud is insufficient. Compare
Steadman
v. Turner, supra. Accordingly, we do not reach the issue of the sufficiency
of the facts. Upon remand, plaintiffs are given leave to amend the claim of
fraud.
{12} The cause is remanded
with instructions to enter a new judgment as follows: (a) enter summary
judgment in favor of defendants on the claim based on Edgar's policy; (b) deny
the summary judgment on the claims of waiver and estoppel; and (c) give
plaintiffs leave to amend the claim of fraud.
SUTIN and HERNANDEZ, JJ., concur.