Life Insurance – Date Of Termination – Claims Denial Attorney

Credit Life Insurance is the type of policy at issue in this 1979 opinion from the Fort Worth Court of Appeals.  The opinion is styled, Leach v. Eureka Life Insurance Company of America.

Tommy Leach took out a loan from a bank and as part of the loan agreement, Tommy was required to purchase credit life insurance.  The credit life insurance was for six months which began on March 13, 1977, and ended on September 13, 1977.  Tragically, Tommy was reported killed in an auto accident that is showed a time of death as 12:45 a.m., September 14, 1977, Central Daylight Time.

Tommy’s widow, Mary Leach, made a demand on Eureka to pay the loan balance to the bank.  Eureka refused payment, stating that the policy had terminated on September 13, 1977.  This lawsuit resulted and the trial resulted in a ruling in favor of Eureka.

In the subsequent appeal, the appeals court stated:

Since we must presume the trial court found facts which support its judgment, we presume it found that the termination date of the policy was September 13, 1977.  Upon reviewing the record we find that the promissory note executed by Leach clearly shows a due date of September 13, 1977. The insurance certificate stated on its face that coverage terminated September 13, 1977 and “in no event” shall the c overage be continued past the indebtedness due date.  It also provided that the amount to be paid was the debtor’s “then indebtedness” but that this did not include any past due principal or interest payments.

Without an allegation of accident, mistake, or fraud, the plain and unambiguous statement in the policy of its termination date could not be disregarded.  There were no allegations of fraud, accident or mistake here so the parties are bound by the express terms of the policy.  The evidence supports the trial court’s implied finding that coverage ended September 13, 1977.  Therefore, the date of Leach’s death is not only material but the ultimate fact issue in this case.

We presume the trial court found that Leach died September 14, 1977.  Although Mrs. Leach has no point of error specifically attacking this implied finding, her argument, liberally construed, does complain about the effect given this finding.  She contends the termination date of the insurance certificate and the past due date of the note should be determined by Central Standard Time, the time system in effect when the parties entered into the insurance contract and Leach executed the promissory note.

She reasons that her husband was undeniably dead prior to 1:00 a. m., Central Daylight Time, September 14, 1977.  The time of death would have been prior to 12:00 midnight Central Standard Time, September 13, 1977, had not Daylight Saving Time intervened.  She alleges that the promissory note contemplated 180 full twenty-four hour days and to allow Daylight Saving Time to determine the alleged termination date of the insurance contract means that one hour out of a twenty-four hour day was lost sometime between March 17 and September 13, 1977.  She argues that it is a universal principle of law that when it concerns a legal duty, time must be computed by a certain, unvarying and uniform standard, and to allow Daylight Saving Time to intervene after a contract has been entered into violates this standard.

She requested at trial that the court take judicial notice of 15 U.S.C., section 260a (1966), the federal statute providing for Daylight Saving Time.  The court did so and she now argues that she has established as a matter of law that Central Standard Time is that certain, unvarying and uniform standard which must control the date of termination of the insurance contract and the date on which the note became past due.

We disagree.  The court was free to conclude that the parties contracted in contemplation of existing law.  The federal statute was in existence at the time the parties entered into their contract.  Even though the statute provides that a state might exempt itself, unless the legislature had chosen to pass a new law, section 260a would remain the standard time authority, even though the time period changed twice a year.

There was a fact issue as to the time of Leach’s death and there was evidence in the record enabling the trial judge to decide that question in defendants’ favor.  In addition to the death certificate showing the time of injury and death to be 12:45 a. m., September 14, 1977, the court also had before it the accident report received by the Bowie, Texas, police department about the incident.  It shows that a truck driver advised the department of a major accident at 12:20 a. m., September 14, 1977.

It was stipulated that the clock in Leach’s vehicle stopped at 12:07 a. m.  An engineering report made for plaintiff was entered into evidence by defendants.  It stated that tests showed that the clock lost approximately six minutes in a twenty-four hour period and that it would run an average of 94.2 seconds after removal of power.