payments. Significant in the language of this proviso are the words 'such payments' and 'continued.' The payments referred to are obviously the monthly payments of salary which Botany agrees to pay to Kuhn for consulting services. The hereinabove referred to clause provides that these monthly payments for services shall be continued during Kuhn's lifetime 'but at the reduced rate of $ 15,000 per annum' if Kuhn becomes unable by reason of disability due to illness to perform the consulting services for which he would otherwise be entitled to receive salary at a higher rate ($ 25,000 per annum?. Finally, the critical clause requires that the accrual of the condition of permanent disability must be attested by competent medical evidence. The existence of such disability is amply disclosed by the oral testimony of Doctors Stoltz and Ewing, presented on the trial. That evidence disclosed that Kuhn had been under treatment by Dr. Stoltz for coronary insufficiency since 1949. This diagnosis was confirmed by Dr. Ewing, who, on December 30, 1949 found Kuhn suffering from severe coronary insufficiency, with critical possibilities. The patient was then, in the opinion of Dr. Ewing, definitely disabled and required bed rest. He received periodic treatments extending through April, 1954. As of January 1, 1953, Dr. Ewing reached a final diagnosis of permanent disability.
The foregoing analysis of the contract reviewed discloses that (1) it was not part of a previously established plan by Botany for its employees generally; (2) it was not entered into at the inception of the employer-employee relationship between Botany and Kuhn; (3) there was no oral testimony or resolution of the Board of Directors of Botany from which the purpose or intention of the contracting parties might be ascertained; (4) the payments provided for to follow the accrual of permanent disability were not to be drawn from any special or otherwise segregated fund; (5) there is no evidence that Botany was authorized to make insurance contracts; (6) no consideration in the form of premium payment, salary deduction or prospective services to rendered moved from Kuhn to Botany to support the claimed insurance; and (7) the payments required to be made following the accrual of permanent disability were still salary payments but at a reduced rate, by reason of the inability of the employee to serve for the required 100 days per year in a consulting capacity. If it be argued that the consideration supporting Botany's agreement to pay Kuhn $ 15,000. after accrual of his permanent disability is to be found in his past services, the effect is to provide a pension rather than insurance. Cf., Turner v. United States, 8 Cir., 1956, 237 F.2d 700, 702; Anderson v. United States, 9 Cir., 1953, 205 F.2d 326, 328, 40 A.L.R.2d 639.
In adopting the language of the Act of which Kuhn seeks to avail himself in this litigation, Congress must be presumed to have used the words 'health insurance' in their usual and well-settled sense. United States v. Stewart, supra, citing Old Colony R. Co. v. Commissioner, 284 U.S. 552, 52 S. Ct. 211, 76 L. Ed. 484; Deputy v. DuPont, 308 U.S. 488, 60 S. Ct. 363, 84 L. Ed. 416. I cannot reasonably construe the contract in this case as one for health insurance or as coincident with the definitions in Haynes or in Epmeier, despite Branham v. United States, 6 Cir., 1957, 245 F.2d 235, which reversed D.C., 136 F.Supp. 342 upon the authority of Haynes. I, therefore, cannot enlarge the meaning of the agreement by implication since my doubts are at best 'nicely balanced.'
I am, therefore, compelled to the conclusion that the payments received by Kuhn, upon which he seeks a refund of income taxes paid, were salary or possibly retirement pension payments, and not 'amounts received through accident or health insurance.' Therefore, judgment should be entered in favor of the defendant in this case.
The foregoing shall constitute my findings of fact and conclusions of law, as required by Rule 52 of the Federal Rules of Civil Procedure, 28 U.S.C., and an order may be presented in conformity with the views hereinabove expressed.
© 1992-2004 VersusLaw Inc.