## Facts

- Susan Mauroner sought life-insurance proceeds after her husband, Milton Mauroner Jr., died by suicide.
- On November 6, 1981, Milton applied for a $100,000 life-insurance policy with Massachusetts Indemnity and Life Insurance Company (MILICO) through local agent Steve Modica; the first premium was paid and a conditional receipt was issued.
- Modica’s transmittal paperwork incorrectly described the requested coverage structure, prompting MILICO underwriting to seek clarification on November 20, 1981.
- The requested clarification was not effectively provided for several weeks; underwriting received correct clarification in late January 1982, and MILICO issued the policy on February 4, 1982.
- Modica delivered the policy on February 28, 1982 and discussed the two-year suicide exclusion that ran from the policy’s issue date.
- Milton died by suicide on January 13, 1984, within two years of the policy’s issue date.
- MILICO denied the death-benefit claim under the suicide exclusion and refunded premiums.
- The case was submitted on stipulated facts, including that MILICO ordinarily processed similar applications in 4–8 weeks, but this policy took about 92 days to issue (about 36 days longer than normal).
- The trial court awarded Susan the full policy proceeds; MILICO and Modica appealed.

## Issues

1. Whether MILICO’s agents were negligent in failing to timely correct and respond to underwriting’s request for clarification, causing delay in issuance of the policy.
2. Whether the negligent delay was a legal cause of the denial of benefits under the suicide exclusion.
3. Whether the proper measure of recovery, if liability existed, was the full face amount of the policy rather than a lesser amount.

## Decision

- The court affirmed the judgment for the beneficiary.
- The court found the agents’ mishandling of the application and failure to timely address underwriting’s clarification request caused an unreasonable delay in policy issuance.
- The court held the delay was a cause-in-fact and legal cause of the loss because, absent the delay, the policy would have issued earlier and the two-year suicide exclusion would have expired before the insured’s death.
- The court upheld an award of the full policy proceeds despite the policy’s suicide exclusion, treating the exclusion as contractually valid but not a bar to tort damages caused by negligent processing.

## Legal Principles

- Insurance agents owe a duty to use reasonable diligence in procuring requested coverage and completing necessary steps within a reasonable time.
- When negligent delay in issuing coverage causes the insured to lose the protection that would have been available absent the delay, damages may equal the benefits that would have been payable under the policy.
- A contractual suicide exclusion may remain valid as a policy term, but it does not preclude tort liability when an insurer or its agents negligently delay issuance in a way that causes the exclusion to apply when it otherwise would not have.

## Conclusion

The court held MILICO and its agents liable in tort for negligent processing that delayed issuance and effectively extended the suicide-exclusion window, making the insurer responsible for the full policy benefits that would have been owed had the policy been timely issued.


Mauroner v. Massachusetts Indem. & Life Ins. Co., 520 So. 2d 451 (La. Ct. App. 5th Cir. 1988)