WARDLOW v KALISPELL GEN HOSP

Annotate this Case

Download PDF

No. 12555 I N THE SUPREME COURT OF THE STATE O M N A A F OTN 1973 BETTY L. IJARDLOTJ, P l a i n t i f f and A p p e l l a n t , KALISPELL GENERAL HOSPITAL and BLUE CROSS O MONTANA, F Defendants and Respondents. Appeal from: D i s t r i c t Court of t h e E l e v e n t h J u d i c i a l D i s t r i c t , Honorable R o b e r t Sykes, Judge p r e s i d i n g . Counsel of Record : For Appellant : Measure, Cumming and S a l a n s k y , Columbia F a l l s , Montana James A . Cumming a r g u e d , Columbia F a l l s , Montana F o r Respondents: . Korn, Warden, W a l t e r s k i r c h e n and C h r i s t i a n s e n , K a l i s p e l l , Montana Church, H a r r i s , Johnson and F?il.liams, G r e a t F a l l s , Montana Donald A. LaBar a r g u e d , G r e a t F a l l s , Montana Submitted: November 26, 1973 Decided : FE8 Filed :FEB 1 5 1974 1 5 1974 M r . J u s t i c e Gene B. Daly d e l i v e r e d t h e Opinion of t h e Court. T h i s i s an a c t i o n wherein p l a i n t i f f B e t t y L. Wardlow s t a t e d a c l a i m a g a i n s t d e f e n d a n t s K a l i s p e l l General H o s p i t a l and Blue Cross of Montana f o r f a i l u r e t o pay claimed medical b e n e f i t s due h e r a s a r e s u l t of an i l l n e s s . P l a i n t i f f a p p e a l s from a summary judgment e n t e r e d by t h e d i s t r i c t c o u r t of F l a t h e a d County d i s missing defendant Blue Cross a s a d e f e n d a n t . Defendant K a l i s p e l l General H o s p i t a l i s n o t a p a r t y i n t h i s a p p e a l . P l a i n t i f f was employed by K a l i s p e l l General H o s p i t a l a s a l i c e n s e d p r a c t i c a l n u r s e on December 6 , 1964. O December 31, n 1964, she a p p l i e d and was a c c e p t e d f o r membership i n t h e h o s p i t a l ' s h e a l t h i n s u r a n c e group, Blue Cross o f Montana. By agreement, Mrs. Wardlow p a i d h e r premiums f o r t h e f i r s t t h r e e months and s u b s e q u e n t l y premiums were p a i d t o Blue Cross by t h e h o s p i t a l w i t h o u t d e d u c t i o n from M r s . ~ a r d l o w ' swages. I n t h e l a s t week of May 1965, Mrs. Wardlow's d o c t o r informed h e r she had c e r v i c a l c a n c e r r e q u i r i n g immediate t r e a t m e n t . O n o r about May 31, 1965, s h e informed h e r employer of t h e emergency and i n q u i r e d about l e a v e and h e r h e a l t h i n s u r a n c e coverage. She t e s t i f i e d by d e p o s i t i o n t h a t a t t h e time she was i n a n e m o t i o n a l l y d i s t r e s s e d and f r i g h t e n e d s t a t e of mind. She s t a t e d she i n q u i r e d of Eleanor Disbrow, t h e h o s p i t a l employee a d m i n i s t e r i n g t h e Blue Cross group h e a l t h p l a n , concerning h e r premium payment due d u r i n g h e r l e a v e o f absence f o r s i c k n e s s , which she understood had been granted t o her. She t e s t i f i e d Mrs. Disbrow t o l d h e r "Ilon't worry about a t h i n g , e v e r y t h i n g i s completely a l l r i g h t , your i n s u r a n c e i s just fine. If The "Hospital Personnel P o l i c y " which was f u r n i s h e d t o a l l new employees provided t h a t s i c k l e a v e w a s a v a i l a b l e o n l y a f t e r s i x months of f u l l time employment and accumulated a t t h e r a t e of one day p e r month up t o a t o t a l of 24 days and t h a t employees on l e a v e of absence must pay t h e i r own Blue Cross premiums t o c o n t i n u e membership. Under the care of a Billings physician, Mrs. Wardlow commenced treatment for her cancer condition on June 1, 1965. She was hospitalized at St. inc cent's Hospital in Billings from June 13 to June 17, 1965, and again from June 24 to July 25, 1965, at which time she was released as cured. The Kalispell General Hospital notified Blue Cross on or about July 2, 1965, that Mrs. Wardlow's employment had been It does not appear that the hospital notified Mrs. terminated. Wardlow. She contends she first learned of her termination in August 1965, when she attempted to resume work. On July 2, 1965, Blue Cross mailed a form notification letter to Mrs. Wardlow at her home address, advising her of nonpayment of premiums and stating that she must pay $37.05 for the period from June 15 to September 15, 1965, to avoid a lapse in coverage. Mrs. Wardlow contends she did not receive the notice. Mrs. Wardlow incurred medical expenses totaling approximately $1,800. Blue Cross paid hospital expenses totaling $170.95. Blue Cross counterclaimed for $46, contending that Mrs. wardlow's coverage ended on June 15, 1965, and the payment made by Blue Cross for hospitalization covered the period from June 13 through June 17, 1965. Plaintiff presents six issues on appeal: 1. Was plaintiff entitled to termination notice from Blue Cross? 2. If so, did Mrs. Wardlow receive termination notice? 3. Was the treatment for the cancer condition commenced prior to termination of her coverage? 4 If the treatment was commenced prior to termination of . coverage, was the entire course of treatment for the same illness covered ? 5, Were the alleged representations made by the hospital to Mrs. Wardlow imputable to Blue Cross? 6. Was summary judgment proper? The i s s u e s contain mixed elements of law and f a c t and a r e such t h a t f i n d i n g of merit i n any one of them would c o n s t i t u t e grounds f o r r e v e r s a l of t h e summary judgment. The record does n o t d i s c l o s e t h e l e g a l r a t i o n a l e applied by t h e d i s t r i c t c o u r t i n g r a n t i n g summary judgment. I n h e r t h i r d , f o u r t h and s i x t h i s s u e s on appeal, p l a i n t i f f contends t h a t her Blue Cross coverage was i n f o r c e a t t h e time her physician informed h e r of t h e cancerconditim and a t t h e time she commenced treatment f o r i t . She contends t h a t occurrence and commencement of t h e p e r i l insured a g a i n s t while t h e c o n t r a c t was i n f o r c e o b l i g a t e s t h e i n s u r e r t o pay d i r e c t l y r e l a t e d and continuing expenses. P l a i n t i f f a s s e r t s no cases have been found d e a l i n g i n t h e h o s p i t a l i z a t i o n insurance a r e a , t h e r e f o r e she c i t e s c a s e s involving accident and d i s a b i l i t y p o l i c i e s which extend t h e i n s u r e r ' s l i a b i l i t y t o f u r n i s h subsequent ensuing medical expenses. Intercoast Mutual L i f e Insurance Co. v. Andersgn, 75 Nev. 457, 345 P.2d 762, 75 ALR2d 870. I n t e r c o a s t Mutual L i f e i s favorable i n many r e s p e c t s , b u t d i f f e r s s u b s t a n t i a l l y i n t h e c o n t r a c t language. There, considerable weight was given t o t h e "ambiguity, i f any" contained i n t h e termination c l a u s e of t h e policy --- "* * * such termination s h a l l be without p r e j u d i c e t o any claim o r i g i n a t i n g p r i o r t h e r e t o . 1I (Emphasis o u r s ) . Blue Cross contends t h a t i f t h i s p r i n c i p l e were applied t o group h e a l t h coverage t h e insured would no longer have t o pay premiums once she became s i c k , and construes p l a i n t i f f ' s argument t o mean she i s e n t i t l e d t o membership i n Blue Cross and r e s u l t i n g b e n e f i t s , b u t n o t r e q u i r e d t o pay premiums a f t e r she became s i c k . Here, we do n o t view t h e problem t o be, a s Blue Cross contends., b u t o f f e r s no supporting a u t h o r i t y , whether o r n o t p l a i n t i f f was e n t i t l e d t o continuing membership without payment of premiums. The i n s t a n t l i t i g a t i o n p r e s e n t s t h e problem of payment of b e n e f i t s under t h e c o n t r a c t a f t e r termination. cern continued membership. It does n o t con- Involved i s a h e a l t h s e r v i c e c o n t r a c t which provides h o s p i t a l and medical b e n e f i t s f o r i t s members. The c o n t r a c t does n o t d i s t i n q u i s h between h e a l t h coverage and a c c i d e n t coverage. The same l i m i t a t i o n s and c o n d i t i o n s , so f a r a s p e r t i n e n t t o t h i s c a s e , apply t o t h e h o s p i t a l and medical coverage. To r e s o l v e t h e i s s u e s h e r e , we look t o t h e terms o f t h e c o n t r a c t and employ t h e r u l e s g e n e r a l l y a p p l i c a b l e t o t h e i n t e r p r e t a t i o n of i n s u r a n c e c o n t r a c t s . W must a l s o r e s o l v e a l l e a m b i g u i t i e s i n a n i n s u r a n c e c o n t r a c t i n t h e l i g h t most f a v o r a b l e t o the insured. The c o n t r a c t p r o v i s i o n involved h e r e which governs e l i g i b i l i t y and b e n e f i t s s t a t e s : "This i s t o c e r t i f y t h a t , i n c o n s i d e r a t i o n of t h e payment of r e q u i r e d membership dues, t h e S u b s c r i b e r whose name appears on t h e membership c a r d , and such e l i g i b l e members of h i s o r h e r family ( i f any) who have been accepted f o r membership, a r e e n t i t l e d t o t h e b e n e f i t s h e r e i n a f t e r d e s c r i b e d s u b j e c t t o t h e terms, c o n d i t i o n s , and l i m i t a t i o n s s e t f o r t h i n t h i s C e r t i f i c a t e . I1 Following t h - i s p r o v i s i o n t h e b e n e f i t s , terms, c o n d i t i o n s and l i m i t a t i o n s a r e s e t f o r t h i n A r t i c l e s I through I X . As s t a t e d h e r e t o f o r e , t h e c o n t r a c t i s s i l e n t a s t o cause of h o s p i t a l i z a t i o n and merely d e a l s i n s e r v i c e s . The c o n t r a c t i s a l s o s i l e n t a s i t p e r t a i n s t o when t h e r i g h t t o r e c e i v e b e n e f i t s w i l l v e s t . There a r e no s p e c i f i c c o n d i t i o n s concerning t h e t e r m i n a t i o n of b e n e f i t s , once v e s t e d under t h e c o n t r a c t . The m a t t e r of dues and t e r m i n a t i o n o f membership i s covered i n A r t i c l e V I I : " V I I . CHANGES I N ME14BERSHIP DUES OR PROVISIONS OF THIS CERTIFICATE AND TEF3IINATION II a . P r o v i s i o n s of t h i s C e r t i f i c a t e o r Membership dues may be changed a t any time by t h e Board of T r u s t e e s of t h e Plan by mailing w r i t t e n n o t i c e s t h i r t y (30) days o r more p r i o r t o t h e d a t e of change t o t h e S u b s c r i b e r o r t h e employer o f t h e o r g a n i z a t i o n i n which t h e Subs c r i b e r p a r t i c i p a t e s i n a group. Payment of t h e f i r s t payment due a f t e r t h e e f f e c t i v e d a t e of t h e change s h a l l b e deemed a s c o n c l u s i v e proof of t h e ~ u b s c r i b e r ' sagreement w i t h t h e change . "b. T h i s C e r t i f i c a t e i s t e r m i n a t e d immedi a t e l y upon non-payment of dues. I n such e v e n t , r e i n s t a t e m e n t o f , t h i s C e r t i f i c a t e s h a l l be a t t h e s o l e d i s c r e t i o n o f , and under such condit i o n s a s may be s p e c i f i e d by t h e Plan. T h i s C e r t i f i c a t e may b e t e r m i n a t e d "c. by t h e Plan by g i v i n g t h e S u b s c r i b e r a t l e a s t t h i r t y (30) days p r i o r w r i t t e n n o t i c e , however, t f a Member i s - r e c e i v i n g h o s p i t a l s e r v i c e on t h e d a t e of t e r m i n a t i o n , b e n e f i t s s h a l l be provided under t h i s C e r t i f i c a t e u n t i l t h e d i s c h a r g e of t h e Member from t h e h o s p i t a l o r u n t i l a l l days of c a r e a v a i l a b l e under t h i s C e r t i f i c a t e a r e used---whichever s h a l l f i r s t occur. "d. T h i s C e r t i f i c a t e may be t e r m i n a t e d by t h e S u b s c r i b e r by g i v i n g t h e Plan a t l e a s t t h i r t y (30) days p r i o r w r i t t e n n o t i c e . Dues, i f any, p a i d by t h e s u b s c r i b e r beyond t h e d a t e of t e r m i n a t i o n w i l l be refunded by t h e Plan." (Emphasis o u r s ) . The o n l y r e f e r e n c e t o b e n e f i t s i s t h e r e f e r e n c e c o n t a i n e d i n subsection If c 11 , which c o n t i n u e s b e n e f i t s when c a n c e l l a t i o n i s a t t h e hand of Blue C r o s s , however t h e r e i s no e x c l u s i o n a r y Language i n t h e s e c t i o n concerned w i t h v o l u n t a r y t e r m i n a t i o n ( s u b s e c t i o n "d"), . t i o n "bff) o r t e r m i n a t i o n f o r nonpayment of dues (subsec- TO t h e c o n t r a r y s u b s e c t i o n "b" seems t o be s u b j e c t t o r e i n s t a t e m e n t a t t h e d i s c r e t i o n of Blue Cross. Testing t h i s c o n t r a c t by any r u l e , we have t o conclude t h a t t h e m a t t e r s and d i s t i n c t i o n s urged by Blue Cross a r e e i t h e r n o t covered by t h e c o n t r a c t o r a t b e s t a r e ambiguous. The problem h e r e i s t r e a t e d from two p o i n t s of view i n a m a j o r i t y o p i n i o n and a c o n c u r r i n g o p i n i o n i n a 1970 Washington c a s e , Myers v. K i t s a p P h y s i c i a n s S e r v i c e , 78 W.2d 286, 474 P.2d 109. There t h e m a j o r i t y o p i n i o n h o l d s t h e c o n t r a c t open t o more t h a n one r e a s o n a b l e i n t e r p r e t a t i o n and because of t h e ambiguity i t was r e s o l v e d i n f a v o r of t h e i n s u r e d , f o l l o w i n g a c o n t i n g e n t e v e n t vested r i g h t theory. The m a j o r i t y o p i n i o n c i t e s 75 ALR2d 876(1961) a s a reasonable application t o a h e a l t h service contract. This i s a c i t a t i o n o b j e c t e d t o i n t h e i n s t a n t c a s e by Blue Cross a s p e r t a i n i n g o n l y t o " a c c i d e n t " coverage and n o t a p p l i c a b l e . The c o n c u r r i n g o p i n i o n i n Myers r e c o g n i z e s t h i s p o s i t i o n b u t because of t h e ambiguous language c o n s t r u e s t h e c o n t r a c t i n f a v o r of t h e employee f o r whose b e n e f i t t h e group c o n t r a c t i s drawn. For the purpose of our consideration of the contract involved here both views are reasonable under the circumstances and we so hold. The factual issue---whether the expenses were incurred in the continuing course of treatment of an illness contracted during the period the coverage was in force and effect---is a disputed material fact. Accordingly, we find the district court erred in granting summary judgment dismissing Blue Cross as a defendant. We need not discuss the remaining issues raised by plaintiff, except to state that under the express terms of the contract existing between the litigants, we find them to be without merit. The order granting summary judgment is reversed and the cause remanded to the district proceedings. Justice We Concur: -----------l----&--------- Chief Justice 1 r Justice Wesley Castles dissenting: 4. I dissent. The facts reveal that Wardlow read the hospital's personnel policy which stated clearly that an employee was not entitled to sick leave until six months of service as a full time employee. She did not qualify. Neither, under the personnel policy, did she establish a leave of absence and at no time did she attempt to pay a premium for the period involved. Appellant Wardlow made various allegations against the hospital, which, if proven, may have merit against the hospital, but these allegations cannot support a claim against respondent Blue Cross. In my view, summary judgment in favor of Blue Cross was proper, and I would affirm. Justice I

Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.