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Teague v. Springfield Life Insurance Co.

Filed: January 19, 1982.


Appeal by defendant from Ferrell, Judge. Judgment entered 17 December 1980 in Superior Court, Gaston County. Heard in the Court of Appeals 11 December 1981.

Martin (Harry C.), Judge. Judges Vaughn and Wells concur.


Defendant contends that those portions of the judgment entitling plaintiff to disability benefits from 22 October 1980 through 17 December 1980 and into the future are not supported by the jury verdict finding that plaintiff was disabled on or prior to 22 October 1980, and are conditional and therefore void. We disagree. Defendant relies heavily upon Green v. Casualty Co., 203 N.C. 767, 167 S.E. 38 (1932). In Green the contract of insurance provided for payments as long as plaintiff was alive and disabled. The jury found plaintiff to be disabled, and the trial court entered judgment that defendant pay the arrearages due under the policy and the sum of $7.50 per month "so long as he shall live." The court failed to limit the future payments to the period that plaintiff continued to be disabled. On appeal, the Supreme Court modified the trial court's judgment to eliminate the future payments. Green is distinguishable from the present case. Here, the trial court did not fall into the error in Green, but limited future payments for the period of plaintiff's continuing disability within the terms of the policy.

We note initially that it would have been error to submit the issue of plaintiff's continuing disability for jury determination. However, under the terms of the contract there is a presumption of continuing total disability as long as the insured person "is completely unable to engage in any gainful occupation in which he

might reasonably be expected to engage with due regard to his education, training and experience." The jury determined that as of 22 October 1980, plaintiff was entitled to disability benefits under the policy. In addition, a presumption of continuance arises when a particular state of things is once proved to exist. Sloan v. Light Co., 248 N.C. 125, 102 S.E.2d 822 (1958). This is true as to insanity, Tomlins v. Cranford, 227 N.C. 323, 42 S.E.2d 100 (1947); Ballew v. Clark, 24 N.C. 23 (1841); malice, State v. Johnson, 23 N.C. 354 (1840); the legal relations created by contract, Robinet v. Hamby, 132 N.C. 353, 43 S.E. 907 (1903); knowledge, State v. Davis and State v. Fish, 284 N.C. 701, 202 S.E.2d 770, cert. denied, 419 U.S. 857 (1974); and other conditions, see generally 2 Stansbury's N.C. Evidence § 237 (Brandis rev. 1973). Once the jury established the fact of plaintiff's disability by its verdict, a presumption arose that this condition would continue.

Defendant has a contractual obligation to continue payments until any one of the three events triggers its contractual right to discontinue payments. These events are the death of the insured, his attainment of age sixty-five, or his return to health. With respect to the last event, the defendant retains "the right and opportunity to examine the insured person or dependent when and as often as it may reasonably require during the pendency of a claim . . .." Moreover, the defendant may at any future time have an evidentiary hearing on the issue of the continuing disability of the plaintiff within the terms of the insurance contract. Under the terms of the contract in this case, plaintiff would have the burden of proof at such hearing. Thus, those portions of the judgment to which defendant takes exception merely reiterate defendant's rights and obligations under the contract. Essentially the trial court has exercised its equity jurisdiction in ordering specific performance of the contract. See Caporali v. Washington Nat. Ins. Co., 102 Wis. 2d 669, 307 N.W. 2d 218 (1981); Moore v. Moore, 297 N.C. 14, 252 S.E.2d 735 (1979); National Old Line Ins. Co. v. Brownlee, 349 So. 2d 513 (Miss. 1977).

Under the facts of this case, plaintiff's remedy at law is inadequate. Defendant's persistent refusal to pay disability benefits under the contract contemplates "successive lawsuits to recover in a piecemeal fashion the sums due," at great hardship to the plaintiff whose livelihood now depends on the performance of the contract. Moore, supra, at 18, 252 S.E.2d at 738. The Court's

reasoning in Moore is persuasive when applied to the present case:

Equity "seeks to reach and do complete justice where courts of law, through the inflexibility of their rules and want of power to adapt their judgments to the special circumstances of the case, are incompetent so to do." Zebulon v. Dawson, 216 N.C. 520, 522, 5 S.E.2d 535, 537 (1939). In Sumner v. Staton, 151 N.C. 198, 201, 65 S.E. 902, 904 (1909), Justice Brown discussed the nature of a court's inquiry into the adequacy of a plaintiff's remedy at law thusly:

"An adequate remedy is not a partial remedy. It is a full and complete remedy, and one that is accommodated to the wrong which is to be redressed by it. It is not enough that there is some remedy at law; it must be as practical and as efficient to the ends of justice and its prompt administration as the remedy in equity." . . .

Thus in McClintock on Equity, § 46, p. 110 (2d ed. 1948) it is observed that "[t]he fact that the remedy which the courts of law would ultimately give if the plaintiff were successful would be an adequate one does not prevent the intervention of equity if the procedures which must be followed at law would ...

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