Strickland v. Gulf Life Insurance
240 Ga. 723, 242 S.E.2d 148, 1978 Ga. LEXIS 815 (1978)
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Rule of Law:
An arbitrary time limitation in an insurance policy for a loss, such as dismemberment within 90 days of an injury, may be unenforceable if a court finds the provision is unreasonable and therefore void as against public policy, especially when modern medicine makes such a limitation force a choice between medical treatment and insurance benefits.
Facts:
- In 1946, Gulf Life Insurance Co. issued a life-accident policy to Strickland.
- The policy provided coverage for the loss of a leg, but only if 'dismemberment by severance' occurred within 90 days of the precipitating injury.
- Strickland suffered a serious injury to his right lower leg.
- Medical professionals engaged in extensive efforts to save Strickland's leg.
- These medical treatments continued for 118 days, at which point the leg was ultimately amputated.
- Gulf Life denied coverage for the loss of the leg, citing the fact that the severance occurred after the 90-day limitation period specified in the policy.
Procedural Posture:
- Strickland sued Gulf Life Insurance Co. in a Georgia trial court after the insurer denied his claim.
- The trial court granted Gulf Life's motion for summary judgment, enforcing the 90-day policy limitation.
- Strickland, as appellant, appealed the decision to the Georgia Court of Appeals.
- The Court of Appeals affirmed the trial court's ruling in favor of Gulf Life, the appellee.
- The Supreme Court of Georgia granted certiorari to review the Court of Appeals' decision.
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Issue:
Is a 90-day time limitation for 'dismemberment by severance' in an accident insurance policy enforceable as a matter of law, thereby precluding a factual inquiry into whether the clause is void as against public policy?
Opinions:
Majority - Undercofler, Presiding Justice
No. A 90-day time limitation for severance in an insurance policy is not enforceable as a matter of law because a court must first consider whether the clause is unreasonable and thus void as against public policy. The court found that such arbitrary time limitations, originating from an earlier era of medicine, may be unreasonable because they force an insured into the 'gruesome choice' between continuing medical treatment to save a limb and amputating it to secure insurance benefits. Citing persuasive authority from other states, the court noted that advancements in medical science can prolong limb viability well beyond such deadlines, making the provisions outdated and potentially contrary to the public good. Medical decisions should be unhampered by financial penalties. Therefore, the case must be sent back to the trial court to conduct a factual inquiry into the reasonableness of the clause.
Dissenting - Bowles, Justice
Yes. The 90-day time limitation is unambiguous and should be enforceable as a matter of law, consistent with the freedom of contract and existing state precedent. The majority's decision unnecessarily requires a trial court to hold an evidentiary hearing on public policy for a clear contract term, a departure from how such issues have historically been decided. This ignores established case law upholding similar provisions and disregards the paramount public policy of enforcing contracts as written. There is no compelling reason to deviate from precedent, and doing so creates uncertainty for citizens, lawyers, and lower courts.
Analysis:
This decision represents a significant departure from the traditional, strict construction of insurance contracts in Georgia, empowering courts to scrutinize policy terms for reasonableness in light of modern societal and scientific realities. By allowing a public policy challenge to a clear and unambiguous time limitation, the court prioritized preventing unconscionable outcomes over rigid adherence to the freedom of contract, particularly in the context of adhesion contracts. The ruling establishes that the enforceability of such clauses is a mixed question of law and fact, requiring trial courts to hear evidence on their justification and impact. This opens the door for similar challenges to other anachronistic clauses in insurance policies that conflict with modern medical capabilities or societal values.
