Plaintiff appealed a Superior Court of San Diego County (California) decision that granted the motions of defendants, insurer and its agent, for summary judgment in plaintiff’s action that alleged breach of contract and various tort theories and sought recovery of life insurance proceeds from a policy on the life of her husband.
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Plaintiff’s husband, the insured, purchased life insurance from defendant insurer. The policy contained a grace period providing for policy coverage for up to 31 days if premiums were not promptly paid. The insured notified defendant insurer of his desire to cancel his policy and completed the appropriate paperwork. The insured died within the contractual grace period. Plaintiff sued to recover the policy proceeds, alleging breach of contract and negligent and intentional torts. The trial court granted defendants’ summary judgment motions. The appellate court affirmed, holding that the voluntary cancellation of the life insurance by mutual agreement of defendant insurer and its insured caused forfeiture of the contractual grace period. Cancellation of the policy was subject only to the insured’s unilateral communication of his desire to cancel, and no new or special consideration was necessary to support termination of the policy. The policy was terminated before the commencement of any grace period and plaintiff was not entitled to proceeds.
The court affirmed in part and held that plaintiff was not entitled to insurance proceeds because the contractual grace period was forfeited by the voluntary cancellation of the policy by mutual assent of defendant insurer and the insured. Summary judgment on the intentional tort claim was affirmed. The portion of the judgment dismissing the cause of action for negligence was reversed, and the cause was remanded.
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