                                                                                                                           Opinions of the United
2000 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


9-27-2000

Guardian Life Ins Co v. Goduti-Moore
Precedential or Non-Precedential:

Docket 99-5165




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Recommended Citation
"Guardian Life Ins Co v. Goduti-Moore" (2000). 2000 Decisions. Paper 207.
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Filed September 27, 2000

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No: 99-5165

GUARDIAN LIFE INSURANCE COMPANY OF AMERICA
       Appellee

v.

DONNA M. GODUTI-MOORE, individually and as

Executrix of the Estate of Kevin H. Moore
       Defendant/Third-Party
       Plaintiff

v.

ROBERT BECKETT, GUARDIAN AGENCY,

NATIONAL PENSION CONSULTANTS,

Donna M. Goduti-Moore, individually and as Executrix
to the Estate of Kevin H. Moore,
       Appellant

On Appeal from the United States District Court

for the District of New Jersey, Trenton
AT NO. 97-1418 (MLC)

District Judge: Honorable Mary L. Cooper

Argued March 8, 2000

BEFORE: ALITO and STAPLETON, Circuit Judges and
POLLAK,* District Judge

(Filed: September 27, 2000)
_________________________________________________________________

* Honorable Louis H. Pollak, United States District Judge for the Eastern
District of Pennsylvania, sitting by designation.
        Steven P. Del Mauro, Esq.
        Robert P. Lesko, Esq. (Argued)
        Del Mauro, Digiamo & Knepper
        8 Headquarters Plaza
        North Tower
        Morristown, NJ 07960

         Counsel for Appellee
        Guardian Life Insurance Company
        of America

        Donald R. Belsole (Argued)
        Belsole & Kurnos
        3 Prospect Street
        Morristown, NJ 07960

         Counsel for Appellant

OPINION OF THE COURT

POLLAK, District Judge:

This appeal concerns a $500,000 life insurance contract
("the policy") between appellee, The Guardian Life
Insurance Company of America ("Guardian"), and Kevin H.
Moore, the deceased husband of appellant, Donna M.
Goduti-Moore. Guardian, a New York corporation, brought
this diversity action against Ms. Goduti-Moore, a citizen of
New Jersey, in New Jersey's federal district court seeking a
declaratory judgment respecting the parties' rights and
obligations under the policy. In particular, Guardian sought
to determine whether the policy had lapsed on the day
before Mr. Moore's death. The District Court granted
Guardian's motion for summary judgment, holding that the
policy had so lapsed, and we review that determination de
novo.

Facts

The policy was signed by Guardian and Mr. Moore on
October 4, 1994, with Ms. Goduti-Moore as its primary
beneficiary. The policy's basic terms specified, inter alia:
that premiums could be paid either yearly or by some
mutually-accepted fraction of a year, that such payments

                                 2
had to be made prior to the applicable coverage period, and
that each payment's "due date" would be followed by a
thirty-one-day "grace period." As discussed infra, this
appeal essentially turns on how the policy's due date and
grace period provisions should be interpreted and applied.

When the policy was issued and delivered, Mr. Moore and
Guardian agreed to change the frequency of payment from
an annual schedule to a monthly one, and Mr. Moore opted
for a "Guard-o-Matic Premium Arrangement," by which
premiums were to be drawn automatically from his
checking account with Growth Bank. Pursuant to this
Guard-o-Matic Premium Arrangement, Guardian made Mr.
Moore aware that, although the policy specified payments
as due on the fourth of each month, all Guard-o-Matic
clients' payments were, as a practical matter, withdrawn on
or about the fifteenth. Consistently with this practice,
Guardian deducted premium payments from Mr. Moore's
designated account each month from January 16, 1995 1
until July 15, 1996. On July 30, 1996, however, Mr. Moore
closed his checking account with Growth Bank, and he did
not arrange for the Guardian premiums to be paid from any
other source. Consequently, on August 15, Guardian's draft
demanding that month's premium was returned unpaid.

On August 21, Guardian notified Mr. Moore that he was
being removed from the Guard-o-Matic program and that
his method of payment was to be "changed to regular
billing." Among other information, the notice contained the
following description of Mr. Moore's payment obligations:

       Premium Due 08/04/96 113.50
       Premium Due 09/04/96 113.50
       Amount Due          $267.00

Mr. Moore never paid his August insurance premium, and
he died on September 5, 1996.

Discussion

Appellee asserts, and the District Court held, that Mr.
Moore died one day too late to collect benefits from the
_________________________________________________________________

1. Mr. Moore apparently paid his first three premiums--for October,
November, and December of 1994--by a check dated October 31, 1994.

                               3
Guardian life insurance policy. Under this approach, Mr.
Moore's due date for August of 1996 was, per the policy's
terms, August 4; the grace period commenced the next day,
on August 5; and the grace period expired thirty-one days
after the due date, on September 4, causing Mr. Moore's
policy to lapse and his coverage to cease. See generally
Appellant App. at 89 ("If the premium is not paid by the
end of the grace period, the policy lapses as of the date of
default. Upon lapse, the policy has no value.").

On the other hand, Ms. Goduti-Moore offers three
reasons that the policy had not lapsed as of September 5.
First, Ms. Goduti-Moore claims that, since the August 4 due
date fell on a Sunday, certain state laws regulating
contractual interpretation required that the due date be
moved to Monday, August 5. Pursuant to this analysis, the
grace period began on August 6, and Mr. Moore's death, on
September 5, occurred during the grace period's last day.
Second, Ms. Goduti-Moore argues that Guardian's notice of
August 21, which described Mr. Moore's payment
obligations, was ambiguous. The notice prescribed $113.50
as due on August 4, 1996; $113.50 as due on September
4, 1996; and an apparently total "Amount Due" of $267, for
which no due date was articulated. Ms. Goduti-Moore
claims that the August 21 notice could reasonably have
meant that Mr. Moore's August premium was, as part of
the undated "Amount Due," due on the later date contained
in the notice, September 4, rather than on the earlier date,
August 4. Thus, Ms. Goduti-Moore claims that the policy's
thirty-one-day grace period expired on October 5. Third, Ms.
Goduti-Moore argues that, by its practice of making
automatic withdrawals on the fifteenth of each month,
Guardian waived its right, provided by the terms of the
contract, to demand payment on the fourth of the month.
Hence, Ms. Goduti-Moore asserts that the policy's due date
was August 15, and the grace period expired on September
15.

For the reasons given in the subsequent portions of this
opinion, we agree with Ms. Goduti-Moore's first argument:
Interpreting the contract's grace period in favor of the
insured, and applying New York's statute regulating
contracts with Sunday due dates, we conclude that Mr.

                               4
Moore's premium was due on Monday, August 5. Thus, the
thirty-one-day policy's grace period provision began on
August 6, and that period did not expire prior to Mr.
Moore's death on September 5. Since this analysis decides
the appeal in Ms. Goduti-Moore's favor, we think it
unnecessary to consider her other arguments.

Premiums Payable on Sunday

Since this diversity case involves the application of state
statutory provisions regulating contractual interpretation, a
natural starting point would be to determine which state's
substantive law applied: New York's or New Jersey's.
However, the District Court found it unnecessary to resolve
the choice-of-law question; instead, it found a false conflict
because the substantive law of New Jersey and the
substantive law of New York seemed to the court to be
materially indistinguishable. See Dist. Ct. Op. at 8.

Neither party disagreed with the District Court's
disposition of the choice-of-law question; moreover, in the
presentation of this appeal, each of the parties has
expressed the belief that the substantive law of New York
(Guardian's place of business and state of incorporation;
the place of negotiation and execution of the insurance
contract; and the place of payment of premiums) and the
substantive law of New Jersey (the decedent's domiciliary
state) would both yield the same result.2

Since the parties are satisfied with the District Court's
determination that the applicable substantive law of New
York and the applicable substantive law of New Jersey are
equivalent, we will not go behind that consensus. To the
contrary, we will assume--arguendo--that the parties'
consensus is soundly based. Since the New York statute
relating to the construction of contracts whose due dates
_________________________________________________________________

2. At oral argument, Ms. Goduti-Moore's counsel, Mr. Belsole, stated,
"The policy couldn't have lapsed on the 4th of August `96 because both
New York and New Jersey law have a provision--a statutory provision--
that when a Sunday is a date of payment you go to Monday." And to this
court's question, "I gather that you're in agreement with Mr. Belsole and,
as I understand it, with the District Court, that this case will be
decided
the same way whether it's a matter of New York or New Jersey law?",
Guardian's counsel replied, "Yes, I am."

                               5
fall on weekends and holidays3 is, textually, more fleshed
out than the New Jersey statute dealing with a portion of
that subject matter,4 we will conduct our analysis within
the framework of the New York statute.5

Of the two New York statutes that regulate due dates
falling on Sundays, the first is General Construction Law
S 25, which governs the interpretation of private contracts:

       S 25. Public holiday, Saturday or Sunday, in
       contractual obligation; extension of time where
       performance of act authorized or required on Saturday,
       Sunday, or public holiday.

       Where a contract by its terms authorizes or requires
       the payment of money or the performance of a
       condition on a Saturday, Sunday, or public holiday, or
       authorizes or requires a payment of money or the
       performance of a condition within or before or after a
       period of time computed from a certain day, and such
       period of time ends on a Saturday, Sunday, or public
       holiday, unless the contract expressly or implicitly
       indicates a different intent, such payment may be
       made or condition performed on the next succeeding
       business day . . . with the same force and effect as if
       made or performed in accordance with the terms of the
       contract.

N.Y. Gen. Constr. Law S 25 (McKinney 1999) (hereinafter
"S 25"). The second is General Construction Law S 25-a,
which concerns public statutes and regulations:

       S 25-a. Public holiday, Saturday or Sunday in statutes;
       extension of time where performance of act is due on
       Saturday, Sunday or public holiday

       1. When any period of time, computed from a certain
       day, within which or after which or before which an act
       is authorized or required to be done, ends on a
       Saturday, Sunday or a public holiday, such act may be
_________________________________________________________________

3. N.Y. Gen. Constr. Law S 25 (McKinney 1999).

4. N.J. Stat. Ann. 36:1-1 (1999).

5. Within their appellate briefs and oral arguments, the litigants have
focused attention almost exclusively on the application of New York law.

                                6
       done on the next succeeding business day . . . except
       that where a period of time specified by contract ends
       on a Saturday, Sunday or a public holiday, the
       extension of such period is governed by section twenty-
       five of this chapter.

N.Y. Gen. Constr. Law S 25-a (McKinney 1999) (hereinafter
"S 25-a").

In briefing this appeal, Goduti-Moore has relied on S 25-
a. The opening words of the caption of S 25 -"Public
holiday, Saturday or Sunday, in contractual obligation" -
strongly imply that S 25 has greater pertinence to the
private contractual dispute presented in the case at bar
than S 25-a, the opening words of whose caption are "Public
holiday, Saturday or Sunday in statutes." This implication
is markedly enhanced by the fact that S 25-a expressly
defers to S 25 when a contract is involved. 6 At oral
argument, Guardian attempted to justify its focus onS 25-
a by contending that S 25-a and S 25 are equivalent. But
appellee's argument on this point seems incomplete for two
reasons. First, the text of S 25 is broader than S 25-a in
potentially relevant ways. Section 25 has two clauses: one,
which deals with specified dates that fall on Sundays, and
another, which concerns periods of time that end on
Sundays. See supra. The terms of S 25-a, however, only
include the latter of these clauses, which regulates time
periods ending on Sunday; S 25-a does not appear to govern
specified dates that fall on Sundays. Thus, even if S 25 and
S 25-a were parallel with respect to periods of time, S 25-a
has little direct relevance to the issue presented here,
namely, treatment of a particular "due date" that falls on
Sunday.

Second, although S 25 and S 25-a were passed
simultaneously and have similar general purposes, their
different legal contexts -- one regulating private contracts
and the other regulating public statutes -- implicate
different norms and consequences, which further support
reading S 25 more broadly than S 25-a. For example,
_________________________________________________________________

6. "[W]here a period of time specified by contract ends on a Saturday,
Sunday or a public holiday, the extension of such a period is governed
by section twenty-five of this chapter."

                               7
Burgess v. Long Island Railroad Authority, 587 N.E.2d 269
(N.Y. 1991) -- a S 25-a case on which Guardian relies --
concerned a statutory "stay" applied to the limitations
period in suits against New York public authorities. Under
New York law, plaintiffs suing such authorities were
required to allege that the defendant had not acted on their
grievance despite thirty days' notice thereof. According to a
separate statute, this thirty-day notice period was excluded
from the one year limitations period, operationally allowing
plaintiffs one year and thirty days to commence their suit.
In his case, Mr. Burgess claimed that the stay should be
extended by three days beyond this year and thirty days,
since his injury occurred on Friday evening, after the Long
Island Railroad Authority had closed for the weekend.
Thus, he was unable to file his grievance immediately after
his injury occurred. Notwithstanding the fact that his suit
accrued on Friday, Mr. Burgess asserted that his
limitations period, including the thirty-day stay, should
have begun on Monday, and he should have been allowed
to file his lawsuit within a year and thirty-three days of his
injury.

The New York Court of Appeals rejected Mr. Burgess's
argument, inter alia, out of respect for "the interests of
uniformity" that arise in applying statutes of limitations to
varied administrative contexts. Id. (disapproving any rule
"whereby the time in which to commence an action against
a public authority would vary case to case"). Because
public regulations tend to regulate broad categories of
actors and activities, providing a uniform standard was one
apparent impetus for the Burgess court's interpretation of
S 25-a. With respect to S 25, however, the affected contracts
govern the actions of particular parties, who sign and have
access to the particular details of said contracts. Thus, the
interests in administrative uniformity and in respecting
general public expectations, which seemed to concern the
court in Burgess, appear substantially reduced in the
context of S 25. Based on the two statutes' distinct
language and their different legal contexts, we conclude
that S 25 and S 25-a are not equivalent. Thus, the New York
statute applicable to the present controversy isS 25, which
regulates private contracts.

                               8
As quoted more fully supra, S 25 provides that "[w]here a
contract by its terms authorizes or requires the payment of
money . . . on . . . Sunday, . . . unless the contract
expressly or implicitly indicates a different intent, such
payment may be made . . . on the next succeeding business
day." N.Y. Gen. Constr. Law S 25. Thus, the vital legal
question is whether the terms of Guardian's insurance
policy could, when read in the light most favorable to Mr.
Moore, as the insured, reasonably be construed as either
"authoriz[ing]" or "requir[ing]" the payment of money on
Sunday, August 4th, for purposes of S 25.

The relevant portions of Guardian's policy read as
follows:

       Premium Payment

       All premiums, including the first, are payable in
       advance. After the first premium, premiums are
       payable annually . . . . Premiums may be paid . . .
       [semi-annually, quarterly, or] in any other manner
       acceptable to Guardian. . . . [A] change [in payment
       frequency] must result in a premium falling due on
       each policy anniversary.

       Due Date and Default

       The premium due date is the date on which the
       premium is payable. Any premium that is not paid on
       its due date is in default; this due date is the date of
       default.

       Grace Period

       Guardian allows a grace period of 31 days after the due
       date for premium payments.

Appellants App. at 89.

In construing S 25, New York's courts apparently have
not yet considered a case such as this, where an insurance
contract's due date is followed by a grace period. 7 Our
_________________________________________________________________

7. Guardian asserts that "New York decisions dealing with [S 25-a] clearly
reject [appellant's] argument." However, cases analyzing S 25-a are not
overly helpful with respect to the present appeal, which concerns a
portion of S 25 that is not contained in S 25-a. Moreover, even if cases
concerning S 25-a were legally pertinent, the three decisions cited by
Guardian have materially distinct facts from the case at bar:

                               9
analysis of this issue of first impression proceeds in two
steps. First, we hold that the policy's ambiguous language
_________________________________________________________________

Desmond-Americana v. Jorling, 153 A.D.2d 4 (N.Y. App. Div. 1989),
applied S 25-a to New York's Administrative Procedure Act. The latter
statute requires agencies to adopt proposed rules within 180 days of the
last public hearing held, unless a continuation notice is filed before
that
time. An agency may file a maximum of two such notices, each of which
would add 90 days to the original 180-day period. In Desmond-
Americana, the Department of Environmental Conservation held its last
hearing on November 9, 1987; two timely continuation notices were filed,
which extended the adoption period through Thursday, November 3,
1988; but the agency did not file its notice of adoption until Friday,
November 4. The agency asserted that its notice was not untimely filed
because the original 180-day adoption period had ended on Saturday,
May 7, 1988. The agency argued that, since, underS 25-a, it could
(counterfactually) have filed its continuation notice on Monday, May 9,
two extra days should be added to the final adoption deadline of
November 3. The Desmond-Americana court agreed that S 25-a would
have allowed a timely extension notice on Monday, May 9. But the court
held that, under the Administrative Procedure Act, the effect of a
hypothetical extension filed on that date would only have been to add 90
days to the 180-day period measured from the last public hearing. Thus,
although the agency could have filed its continuation notice on Monday
without penalty, the total number of days added by such filing, for
purposes of the Administrative Procedure Act, would not have changed;
the agency's notice of adoption still was required within 360 days of the
last public hearing.

Abrams v. Design Works, Inc., 198 A.D.2d 252 (N.Y. App. Div. 1993),
applied S 25-a to N.Y. C.P.L.R. 214(5), which provides a three-year
statute of limitations for personal injury suits, and to N.Y. C.P.L.R.
203(b)(5), which allows a 60-day extension if a summons is delivered to
the sheriff. In Abrams, the plaintiff 's action accrued on March 3, 1987;
he forwarded the summons and complaint to the sheriff on February 28,
1990, which extended the limitations period until Wednesday, May 2,
1990; but the corporate defendant was not served until Friday, May 4,
1990. Mr. Abrams argued that, since the initial three-year limitations
period ended on Saturday, March 3, 1990, two days should be added to
the end of the extension period. The Abrams court disagreed, holding
that the effect of the statutory extension, which added sixty days to the
ordinary three-year limitations period, was unchanged by the fact that
the last day for obtaining such an extension fell on Saturday. The
extension statute did not grant sixty days from the time said extension
was filed; rather, it granted an extra sixty days from the date of
accrual.
Thus, regardless of S 25-a, the maximum total time available to Mr.
Abrams, under N.Y. C.P.L.R. 203 and 214(5), was three years and sixty
days from March 3, 1987.
10
defining the term "due date" could reasonably be construed
as "authoriz[ing]" or as "requir[ing]" payment on Sunday,
August 4; either interpretation would suffice to justify
applying S 25 to the policy's due date. Second, we hold that,
by virtue of S 25, Mr. Moore could have paid his insurance
premium on August 5 without being in default; therefore,
the due date (per the contractual provisions quoted supra)
_________________________________________________________________

Burgess v. Long Island Railroad Authority, 587 N.E.2d at 269, applied
S 25-a to Pub. Auth. 1276(1) and (2), which provide a one-year
limitations period for suits against public authorities and which require
that grievances be presented directly to such authorities for thirty days
before a lawsuit may be filed, and to N.Y. C.P.L.R. 204(a), which excludes
this thirty-day "stay" from limitations period calculations. The Burgess
plaintiff was allegedly injured on the tracks of the Long Island Railroad
on Friday, September 2, 1988, after business hours. He did not serve the
defendant with a summons and complaint until Tuesday, October 3,
1989, which was one year and thirty-one days after his accident. The
plaintiff claimed that his limitations period should be extended by three
days because he could not have presented his grievance to the
defendant, for purposes of Pub. Auth. 1276(2), until Monday, September
5, 1988. The court rejected Mr. Burgess's argument because he had not
been required, under any statute, to present his grievance to the agency
on the very day of his accident. On the contrary, Mr. Burgess could have
satisfied Pub. Auth. 1276(2) by presenting his grievance to the authority
on any day within the statutorily allotted year. Thus, the court
interpreted N.Y. C.P.L.R. 204(a)'s "stay" as merely having extended the
ordinary one-year limitations period to one year and thirty days; and the
court held that this extended period, measured from the accrual date,
should have the same total duration, regardless of whether the action
accrued on a Saturday.

Each of the above cases involves a procedure for extending a statutory
period of time, pursuant to which the lengthened period is measured by
the event marking the original period's beginning. Thus, the fact that
S 25-a grants such plaintiffs an "extra" day to seek their extension does
not affect the date of the final, extended deadline; for, whether an
extension were obtained with or without the aid ofS 25-a, the total
duration allotted was simply the sum of the original period and the
extension. In contrast, the grace period in Ms. Goduti-Moore's case is
explicitly measured by the due date, i.e., the end of the standard
payment period. Therefore, if S 25 granted Mr. Moore one additional day
to pay his premium before going into default, that"extra" day would
delay both the date on which the grace period began and the date on
which the policy would have lapsed.

                               11
also could be reasonably construed as August 5. Since the
grace period began the day after the due date, i.e., on
August 6, Mr. Moore's death on September 5 occurred
during the last day he was entitled to benefits under the
policy.

A. Mr. Moore's Payment Was "[A]uthorize[d]" on Sunday

As the District Court correctly noted, the above-quoted
terms of the policy are not ambiguous with respect to the
numerical date they purport to specify. In Mr. Moore's case,
the "policy anniversary" was October 4, and he had
arranged for a monthly payment schedule; thus, premium
payments would ordinarily be due on the fourth of any
given month. Pursuant to S 25, however, if the terms of Mr.
Moore's policy "authorize[d]" payment of money on a
Sunday, that payment could be made on the succeeding
business day "with the same force and effect," unless the
contract indicated some specific, contrary intent. 8

We find that Guardian's policy is at least ambiguous as
to whether the term "due date," as the "date on which the
premium is payable," can be read as "authoriz[ing]" a
premium payment on August 4 sufficiently for purposes of
S 25. It might be argued on Guardian's behalf that the
policy "authorize[d]" premium payments during the grace
period, but not on the due date itself. Support for such an
interpretation might arise from Guardian's practice, per the
Guard-o-matic Premium Arrangement, of drawing payments
on the fifteenth of each month, even though such
withdrawals would occur during the policy grace period
with respect to almost all of Guardian's clients. 9 Under this
interpretation, the "due date," despite its apparently
exhortative title, would be construed as a pure formality,
which marks the beginning of the grace period, but which
is not a date of any substantive significance in terms of
"authoriz[ing]" payments. Thus, S 25 would not have
applied to the policy's due date provision; the premium
_________________________________________________________________

8. Guardian has not argued that such contrary intent is indicated here.
Indeed, Mr. Moore's policy does not appear to have contemplated issues
surrounding Sunday due dates at all.

9. The exception being any Guardian clients whose"policy anniversary"
happens to fall on the fifteenth.

                               12
would have remained due on August 4, per the policy's
explicit terms; and the thirty-one-day grace period would
have commenced on August 5 and terminated on
September 4.

But the language and operation of Guardian's policy also
admits of another reasonable interpretation, pursuant to
which the due date provision did "authorize[ ]" payment for
purposes of S 25. The policy's definition of due date as the
"date on which the premium is payable" seems explicitly to
contemplate premiums' payment as being permitted and
appropriate on that day. Indeed, it is difficult to understand
a "date" on which when premiums are "payable" might be,
if it were not a date on which such payments were
"authorize[d]."

The idea that premium payments were authorized on the
policy's due date finds further support in the policy's
requirement that payments must be rendered on the due
date if an insured wishes to avoid default. Guardian
suggests that the above interpretation of the policy's due
date is inconsistent with the policy's grace period provision,
which protects from financial burden any insureds who pay
premiums after the due date, provided that such payments
are made within thirty-one days. But it does not seem
unreasonable, much less illogical, to suggest that both the
due date and the grace period serve to "authorize[ ]"
premium payments. Thus, interpreting the terms of the
contract in favor of the insured, we conclude that the
language and structure of the policy show that Guardian's
insurance contract could reasonably be interpreted as
"authoriz[ing]" payment on Sunday, August 4. And that fact
alone is sufficient to bring the policy's due date provision
within the scope of S 25.

B. Mr. Moore's Premium Payment Was "[R]equire[d]" on
       Sunday

Parallel logic suggests that the policy also could be
construed as "requir[ing]" payment on August 4 for
purposes of S 25. By its terms, the "date on which
premiums are payable" seems to "require[ ]" payment on the
designated due date, and so does the contractual
declaration that those who do not pay on that date are in
"default."

                                13
In response, it could be argued, on Guardian's behalf,
that Mr. Moore's payment was not actually "require[d]" on
August 4, since no financial penalty for non-payment could
be imposed until after the grace period had expired. The
interesting issue of statutory construction, however, is
whether any such financial penalty is necessary for a due
date to "require[ ] payment" underS 25. For two reasons, we
hold that it is not. First, by placing the word"require" and
"authorize" together, and by focusing on what a contract
prescribes "by its terms," the statutory text suggests that
any explicit, formal designation of a "require[d]" payment--
such as the designation in Mr. Moore's policy--is properly
within the province of S 25.

Second, a contrary interpretation of S 25, which would
define the term "requires" as necessarily including a
financial penalty of some kind, would demand that courts
decide what form of penalty would be sufficient. One
possible interpretation following this approach would hold
that only a "substantial" penalty, relative to the total value
of the contract, could truly "require" payment on a certain
date. Presumably, under such analysis, if Mr. Moore were
charged x percent of his premium for nonpayment on the
due date, that due date would be deemed to have
"require[d] . . . payment" for S 25 purposes, but if his
penalty were some lesser percent, y, the due date would not
have done so. Discerning what degree of financial burden
would constitute a requirement under such a reading of
S 25 would pose a formidable task for New York courts to
undertake. Nothing in S 25's text, history, structure, or
purpose appears to mandate that such delicate lines be
drawn, however, and we further find no basis to conclude
that such a task is implicit in the statute.

Another possible interpretation of S 25 would demand
only a de minimis financial penalty before a payment were
deemed "require[d]." The necessity of some formal marker of
the parties' intent--in the form of a de minimis penalty or
otherwise--before invoking S 25 would seem curious,
however, since S 25 itself seems intended tofill contractual
"gaps," where contractual intent has not been clearly
expressed. Also the text, history, structure, and purpose of
S 25 provide no indication that such an anomalous result is
statutorily necessary.

                               14
On the contrary, S 25's broad text--which seems to apply
to all "require[d]" payments, not only to those whose default
is financially penalized--is confirmed by the statute's
general legislative purpose: protecting contracting parties
from having to make payments on Sunday. A more urgent
case for statutory protection would no doubt arise in cases
where financial hardships followed from default, but we
find no reason to believe that New York's statute was
intended to apply only to such cases. Especially when the
policy's terms are construed in the insured party's favor,
Mr. Moore's contract with Guardian appears formally to
have "require[d]" payment of his insurance premium on
Sunday, August 4. And we find that New York law protects
contracting parties from any "require[d]" payment on
Sunday, even when no direct financial burden falls on
those who fail to pay.

C. Mr. Moore's Grace Period Began on Tuesday

Having concluded that Mr. Moore could have paid his
premium on Monday, August 5 without falling into default,
the final task is to explain how this conclusion affects the
policy's grace period. Guardian's policy provides for "a grace
period of 31 days after the due date for premium
payments," and it further defines the term"due date" as
"the date of default." Since the "date of default," by the
operation of S 25, did not occur until Monday, August 5, it
is reasonable to construe the contractually-defined "due
date" as also having moved to August 5. Hence, by the
policy's terms, the thirty-one day grace period began on
Tuesday, August 6, and Mr. Moore's life insurance coverage
with Guardian had not yet lapsed on September 5, the day
he died.

For the foregoing reasons, the District Court's decision
granting summary judgment to Guardian is reversed, and
the case is remanded for further proceedings consistent
with this opinion.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

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