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Karl v. New York Life Insurance Co.

Decided: February 11, 1976.


Stanton, J.c.c., Temporarily Assigned.


This is an action to recover under the accidental death benefit (double indemnity) provisions of two life insurance policies. Defendant insurance company has refused to pay these benefits on the ground that the insured died 11 months after the accident which allegedly caused his death, whereas the two policies in question provided that death must occur within 90 days or 120 days of the accident for accidental death benefits to be payable.

There is no reported New Jersey decision in point. The rule in almost every jurisdiction which has considered the question is that the time limitations set forth in the policy are controlling and that recovery must be denied in a case such as the present one. See Appleman, Insurance Law and Practice (2d ed. 1963), ยง 612. However, a recent decision by the Supreme Court of Pennsylvania has held that such time limitations are unenforceable and has allowed recovery where death by accident occurred well after the period stipulated in the policy. Burne v. Franklin Life Ins. Co. , 451 Pa. 218,

301 A.2d 799 (Sup. Ct. 1973). Although it is presently very much a minority rule, I am persuaded that the rule announced in Burne is the better rule and should be followed. Accordingly, there will be a recovery by plaintiff in this case.

Edward J. Karl suffered severe brain and skull injuries in a criminal assault made upon him in Madison, New Jersey, on January 6, 1969. Without ever having regained anything remotely approaching normal physical or mental functioning, he died in Morristown Memorial Hospital, Morristown, New Jersey on December 6, 1969. At the time of his death Karl was covered by two life insurance policies issued by defendant New York Life Insurance Company which contained accidental death benefits in addition to ordinary death benefits. One of the policies had been issued in 1955, the other in 1963. The insured's wife, plaintiff Rosemary M. Karl, was the beneficiary under each policy. Defendant insurance company has paid the $10,000 face amount of each policy to the beneficiary, but has refused to pay the accidental death benefit. Its refusal is based primarily upon the time limitation for the period between date of accident and date of death in each policy. The limitation is 90 days for the 1955 policy and 120 days for the 1963 policy. The refusal to pay is also grounded upon a secondary factual argument that death was not caused solely by the accident but was also partially the result of an intervening lung infection.

The 1955 policy provided in pertinent part that

The Company will pay to the beneficiary * * * an additional amount (the Double Indemnity Benefit) equal to the face amount of this policy upon receipt of due proof that the Insured's death resulted directly, and independently of all other causes, from accidental bodily injury and that such death occurred within 90 days of such injury * * *.

The 1963 policy provided in pertinent part that

The insured suffered severe brain and skull injuries when he was criminally assaulted in the early evening of January 6, 1969. He was admitted promptly to Morristown Memorial Hospital. Within hours after his admission to the hospital, he underwent drastic brain surgery. Four additional surgical procedures were performed on the insured between the date of his admission and April 22, 1969. Karl remained in Morristown Memorial Hospital until June 13, 1969, when he was transferred to the Morristown Rehabilitation Center, a nursing home. He remained at the Rehabilitation Center until August 13, when he was readmitted to Morristown Memorial Hospital. He died in the Hospital on December 6, 1969.

From the date of the accident to the date of his death Karl was totally paralyzed, except that he occasionally was able to squeeze with one hand in response to command or by way of primitive communication. A tracheotomy was necessary to permit breathing. The insured never was able to speak. He could never feed himself and, indeed, could never eat anything approaching a normal diet. So far as could be observed, the insured never achieved anything approaching full consciousness or normal intellectual functioning. The transfer of the insured from the hospital to the nursing home on June 13, 1969 did not indicate that the insured was headed towards recovery -- it simply indicated that the insured was not in an immediate crisis situation, that his physiological functions had stabilized on a total nursing care but temporarily safe level, and that he had no immediate need of the full range of sophisticated life-supportive equipment and services of a modern hospital. He was at all times from the date of the accident until his death a desperately unwell man.

Throughout the period from the date of the accident until the date of death the insured's ...

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