On appeal from Somerset County District Court.
Conford, Pressler and King. The opinion of the court was delivered by Conford, P.J.A.D.
This is an action to recover the amount of medical expenses incurred by plaintiff because of an accident to his wife asserted to be due from defendant insurer on a group medical insurance policy issued by defendant to plaintiff's former employer, Geerlings Greenhouses ("Geerlings"). Defendant denied liability and filed a counterclaim for recovery of payments previously made by it to plaintiff in respect of earlier expenses incurred by him arising out of the same accident and alleged not to have been due and to have been paid by mistake.
Plaintiff's employment was terminated by Geerlings September 17, 1974. The parties dispute the reason for the termination, plaintiff claiming it was because he was unable to work consequent upon an injury at work in July 1974 and defendant that it was for failure to report to work, for continued absence and for drunkenness. No proofs were taken on the issue at trial, but for purposes of this appeal we
assume plaintiff's hypothesis of discharge on account of illness.*fn1
Shortly after his discharge plaintiff obtained other employment, and soon after, on October 19, 1974, plaintiff's wife suffered serious injuries to her arm. As the group policy covered dependents of employees plaintiff filed a claim for the ensuing medical expenses which resulted in the payment by defendant which is the subject of the counterclaim. Defendant contends the coverage terminated absolutely with the discharge of plaintiff on September 17, 1974 and that its payment of the initial expense claim was under a mistake of fact, the computer not having yet recorded plaintiff's termination. Geerlings included plaintiff in its premium payments for the month of October 1974 but expressly excluded plaintiff on the reporting form for the November payment.
The following provisions of the group policy are determinative of the question of coverage of plaintiff's claim.
Section 4. CESSATION OF INSURANCE. -- All insurance hereunder shall automatically cease upon the discontinuance of this Policy and an Employee's insurance shall cease prior thereto in accordance with the provisions pertaining to cessation of insurance specified in the applicable Exhibit.
1. The * * * Insurance shall automatically cease on the last day of the calendar month in which termination of the Employee's employment occurs. For the purposes of the * * * Insurance, termination of employment means cessation of active work as an Employee as defined in the Group Policy, except that in circumstances specified in the Group Policy the Employer may deem the Employee's employment to continue after such cessation, subject to the terms of the Group Policy.
Section 4A. CONTINUATION OF INSURANCE DURING ABSENCE FROM ACTIVE WORK. -- In the case of absence of an Employee from active work because of ...