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Keywords

contractappealtrialsummary judgment
contracttrialsummary judgmentappellantappellee

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Sutton v. Banner Life Ins. Co., 686 A.2d 1045

Facts

Maxine Sutton's husband obtained a whole life insurance policy in 1979, which included a suicide provision. In 1988, Sutton increased the policy's coverage from $35,000 to $50,000, but the new policy included a two-year suicide exclusion. After her husband's suicide, Banner Life denied her claim for the full amount, citing the exclusion. Sutton argued that the 1988 policy was merely an increase in coverage and not a new contract, and that the agent had misrepresented the nature of the policy change.

Appellee Banner Life Insurance Company denied appellant Maxine Sutton's claim for a death benefit under her husband's life insurance policy following his suicide, on the ground that the suicide occurred within two years of the policy date and was therefore barred by the policy's suicide clause. Sutton brought this action, contending that the policy containing the term upon which Banner Life relies was not a new policy, but should be interpreted as only an increase in coverage over an earlier policy containing a similar clause, the terms of which had already been satisfied.

Issue

Did the trial court err in granting summary judgment in favor of Banner Life by determining that the suicide exclusion applied to the 1988 policy, thereby denying Sutton's claim for benefits under the earlier policy?

Did the trial court err in granting summary judgment in favor of Banner Life by determining that the suicide exclusion applied to the 1988 policy, thereby denying Sutton's claim for benefits under the earlier policy?

Rule

In determining whether a form document is integrated, the court may consider circumstances outside the writing to exclude terms of a form contract if the party asserting the term had reason to believe it would not have been agreed to by the other party.

In determining whether a form document is integrated, the court may consider circumstances outside the writing to exclude terms of a form contract if the party asserting the term had reason to believe it would not have been agreed to by the other party.

Analysis

The court analyzed the circumstances surrounding the issuance of the 1988 policy and the discussions between Sutton and the insurance agent. It noted that there were disputed facts regarding whether Sutton understood the 1988 policy as a new contract or merely an increase in coverage. The court emphasized that the reasonable expectations of both parties should be considered, particularly in light of the agent's representations and the lack of clarity regarding the suicide exclusion.

The court noted that there were disputed facts regarding whether Sutton understood the 1988 policy as a new contract or merely an increase in coverage. The court emphasized that the reasonable expectations of both parties should be considered, particularly in light of the agent's representations and the lack of clarity regarding the suicide exclusion.

Conclusion

The court concluded that the trial court erred in granting summary judgment because there were material facts in dispute regarding the terms of the insurance contract. The case was reversed in part and remanded for trial on the contract claim.

The court concluded that the trial court erred in granting summary judgment because there were material facts in dispute regarding the terms of the insurance contract. The case was reversed in part and remanded for trial on the contract claim.

Who won?

Banner Life Insurance Company initially prevailed in the trial court, but the Court of Appeals reversed this decision, indicating that there were unresolved factual issues regarding the contract terms.

We hold that the trial court erred in granting summary judgment because there was a disputed issue of material fact as to what were the terms of the life insurance contract between the parties in 1988, when Mr. Sutton committed suicide.

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