Norby v. Bankers Life Company of Des Moines, Iowa

Hoffman Brothers, Inc. (Hoffman) (defendant) provided its employees and their dependents with accident and sickness insurance through The Bankers Life Company of Des Moines, Iowa (Bankers Life). In September 1970, Hoffman employed Fred G. Norby (plaintiff). Norby applied to receive the insurance coverage and submitted the insurance application to Hoffman. Hoffman, however, failed to submit the application to Bankers Life. On December 31, 1970, Norby completed a second application, which Hoffman submitted. Upon receiving the application, Bankers Life informed Hoffman and Norby that coverage would begin on January 20, 1971. The day before Norby’s coverage was set to start, Norby’s child was injured. The injury resulted in $3,460 worth of medical bills. Norby submitted the claim to Bankers Life. However, Bankers Life denied the claim on the ground that because it had never received Norby’s first application, Norby was not covered by the policy until the second application went into effect on January 20. Norby filed a suit against Bankers Life. Bankers Life then filed a third-party suit against Hoffman for indemnity or contribution. The trial court returned a verdict for Norby on the ground that Bankers Life and Hoffman were in a principal-agent relationship and that Hoffman, as an agent, had accepted Norby’s first application on Bankers Life’s behalf. Therefore, Bankers Life was bound by Hoffman’s actions, and Norby’s coverage began in September 1970, when he first submitted his application.