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Carfagnini v. Service Life Insurance Co.

Decided: March 1, 1971.

TITO CARFAGNINI, PLAINTIFF-APPELLANT,
v.
SERVICE LIFE INSURANCE CO. OF OMAHA, AN INSURANCE COMPANY DOING BUSINESS IN THE STATE OF NEW JERSEY, DEFENDANT-RESPONDENT



Conford, Kolovsky and Carton. The opinion of the court was delivered by Carton, J.A.D.

Carton

Plaintiff insured brought this action against defendant Service Life Insurance Company of Omaha to recover benefits claimed to be due under a hospitalization insurance policy. Defendant denied liability on the ground that the policy had lapsed for failure to pay the premium before the expiration of the 31-day grace period specified in the policy, which provides:

A grace period of 31 days will be granted for the payment of every renewal premium during which period this policy shall remain in force and if any such renewal premium be unpaid at the office of the Company in Omaha, Nebraska, or to its duly authorized agent on or before the expiration of the grace period, this policy shall thereupon automatically terminate.

Although admitting nonpayment of the last premium due, plaintiff insists that the insurance company remained liable

because it failed to afford proper notice of the premium due in accordance with its custom of doing so. The policy contained no express provision requiring the giving of such notice.

The court granted defendant's motion for summary judgment and plaintiff appeals.

Certain facts appear undisputed. Plaintiff insured was issued the policy on October 23, 1951. At that time, according to his application, he resided at 237 Monticello Avenue, Jersey City, New Jersey. The receipt issued by the company for the first premium payment recited the same home address. A company notice for a premium due November 24, 1954 and acknowledged by the insured showed he still resided at that address.

Evidently sometime between 1954 and 1965 the insured moved from 237 Monticello Avenue to 543 Mercer Street in Jersey City. The company received notice in some manner of that change of address since another form issued by it setting forth a table of adjusted premiums effective on April 1, 1961 showed 543 Mercer Street as the insured's address.

The affidavit of the company's vice-president in support of the motion for summary judgment is to the following effect: Since 1959 the company mailed "premium due notices" to each of its policyholders about 20 days before the due date of the coming premium. Company records indicate that since 1959 Carfagnini's address had been 543 Mercer Street, Jersey City. No recordation of any notice of change of that address had been made. A "premium due notice" was mailed to the insured at the Mercer Street address on or about February 6, 1968 and was returned by the postoffice bearing the notation "address unknown." No payment was received from Carfagnini. The company maintained the policy in force until February 25, 1968. In accordance with company practice of sending an additional notice to a policyholder neglecting to pay the next due premium, a "courtesy reminder notice" was mailed to the Mercer Street address on or about March 18, 1968. This notice was returned to the insurance

company by the postoffice with the notation "Moved, not forwardable."

In his affidavit in opposition to the motion, Carfagnini stated that when he changed his address from 237 Monticello Avenue to 543 Mercer Street, Jersey City, he did not fill out a change of address form nor did he include any notation "with respect to any change of address." His recollection was that he simply wrote his then new address on "the envelope" and enclosed a check or money order bearing that same address. He stated that he tendered payment of premiums only upon receipt of a notice of premium due. Listing his address as 15 Orchard Street, Jersey City, on the money order and as the return address on the envelope, he paid the premium due for the coming year on February 20, ...


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