Pacific Standard Life Insurance v. Tower Industries, Inc.

I.

Introduction

This action arises out of a dispute over the parties’ respective duties and obligations pursuant to a group life insurance policy (the Policy) issued by piaintiff/respondent Pacific Standard Life Insurance Company (Pacific) to defendants/appellants Tower Industries, Inc., and Tower Mechanical Products, Inc. (collectively referred to herein as Tower) for the benefit of Tower’s employees.

II.

Statement of Facts

Under the terms of the Policy, an employee was covered so long as he worked. In the case of sick leave or leave of absence, those benefits could be extended, subject to two requirements: (1) the leave of absence could be for six months only; and (2) before Tower could grant a leave óf absence, it had to adopt a plan, satisfactory to Pacific, establishing a uniform policy for such leaves.

An employee whose coverage terminated because his leave of absence had ended without his returning to work was entitled to convert from group to individual coverage. Tower was required by the Policy to notify the affected employee that he had such conversion rights.

Howard Johnson was an employee of Tower and was covered by the policy in the principal sum of…