The opinion of the court was delivered by: COHEN
In this contract action, plaintiff seeks recovery of accidental death benefits under an insurance policy issued by the defendant Metropolitan Life Insurance Company (Metropolitan) through its agent, defendant Lawrence Duffey, upon the lives of herself and her husband, Robert D. Kramer. Metropolitan has refused to pay the benefits on the grounds that the policy was never delivered nor was the first premium paid in accordance with the terms of the policy.
Trial was held without a jury and this Court, having considered the testimony of all witnesses, the exhibits in evidence and the arguments of counsel, finds that the policy in question was in effect at the time of Robert Kramer's death and, therefore, plaintiff may recover under its double indemnity provision. This opinion is filed in lieu of findings of fact and conclusions of law, pursuant to Fed.R.Civ.P. 52(a).
On March 28 or 29, 1978
, defendant agent Duffey met with the Kramers at their home in Lindenwold, New Jersey for the purpose of discussing life insurance. At that time, the Kramers signed an application to Metropolitan for a family life insurance policy in the amount of $ 10,000.00. (Ex. P-2). The parties decided that their policy would be paid for through Metropolitan's Check-O-Matic system, which provides for the payment of premiums by deductions from the insureds' checking account. To this end, the Kramers signed an "Authorization to Honor Checks", which permitted Heritage Bank to honor checks drawn on their account by, and payable to the order of, Metropolitan. (Ex. P-6). The portion of that document which is pertinent to this litigation states that "(w)hen the policy is delivered, the Initial Check-O-Matic premium must be paid in cash. The Company will draw checks or issue directions, as authorized above, for all other premiums."
Consistent with plaintiff's testimony is a memorandum by Duffey, dated March 29, 1978, which states: "The reason I did not collect the first premium is because I was not sure if (Robert Kramer's) physical condition would put the company at an unfair risk." (Ex. P-20). At trial, Duffey was asked by the Court to explain the inconsistency between his direct testimony and the memorandum. He replied that
(Metropolitan) frowned on business being submitted that does not have accompanying money. After I got back into my office, reviewed the application, I was looking for something to tell the company that would get me off the hook for not having got the money I asked for from the Kramers. After seeing there was something mentioned about his eyes, I jumped on that opportunity to tell the company that's why I didn't get the money.
(By Mr. DuBois (plaintiff's counsel)):
Q. This is not the truth, then; is that correct?
Q. This report to your company was a lie; is that correct?
(Tr. 25-26. Duffey testimony).
This Court is not convinced by Duffey's explanation. Upon weighing his contradictory statements against the testimony of the plaintiff, we find that Robert Kramer offered to pay the first premium, but that Duffey refused to accept it.
Metropolitan eventually issued a family life insurance policy for the Kramers, and it inserted that policy into its Check-O-Matic system on June 1, 1978. The policy bore the issue date of June 5, 1978. On June 3, 1978 Metropolitan mailed to Heritage Bank the ...