Greghun v Mutual of Omaha Insurance
S. Ct Utah [1969]
Author: Sam Biers

Relevant Facts: In 1962 Df United Ins issued a policy to the Pl.  In 1964 Df Mutual issued a policy to the Pl.  Both insured against loss from sickness or accident. PL worked for 20 yrs as a brick mason.  In 1964 while Pl was working a plank fell from beneath him.  He caught himself and held onto the wall until help arrived.  The next day Pl continued to suffer from pain and went to the Dr. The Dr concluded that the Pl had a pre-existing condition which may be congenital or acquired.  The Dr also determined that the Pl had received an injury causing pressure on the nerve roots accounting for numbness and pain. Treatment did not relieve symptoms.  Dfs made payments until 1965 when they notified Pl his ailment would be considered a loss due to illness w/o confinement, and that a payment of $300 would represent final payment.

Legal Issue(s): Whether plaintiff-insured was entitled to award for future disability, under doctrine of anticipatory breach, on ground that insurers had, after period of time, refused to make further payments under policies claiming that loss was due to illness without confinement?

Court’s Holding: No

Procedure: Trial ct entered judgment for Pl; Remanded with directions to modify.

Law or Rule(s): In unilateral Ks for the payment in installments after default of one or more, no repudiation can amount to an anticipatory breach of the rest of the installments not yet due.

Court Rationale: The doctrine of anticipatory breach has not ordinarily been extended to unilateral Ks.  The verdict amounts to a determination that the Pl is entitled to the monthly payments so long as he is totally and permanently disabled.   Dfs are not relieved of the obligation of making the payments UNLESS the Pl should recover or die. Should the Dfs fail in the future to make payment w/o just cause or excuse, the Pl can file another action, and the ct can fashion such relief as will compel performance. The judgment as it pertains to future benefits should be modified.

Plaintiff’s Argument: When the Dfs have stated they will not make any future payments while withholding installment payments under the K, this amounts to a repudiation.

Defendant’s Argument: The contract called for performance in installments and there can be no breach of future installments until that time for performance has passed.

DISSENT : Where there is a repudiation of all K obligations, it is a better policy to allow full recovery under one action. One who abrogates his K is in no position to compel the other party to be bound by the terms of the K. Where there is a failure to pay one installment, coupled with an announcement by the insurer that no future payments will be made, then damages for the partly anticipatory breach should be allowed. If a party to a K makes an outright refusal to comply w/ the terms thereof and so notifies the other party, then there is no reason why the other party may not accept the anticipatory breach and sue for damages.