Courts of appeal will often reverse an application for a summary judgment in favor of an insurance company for technical reasons even when the decision taken by the insurer to deny benefits seemed appropriate. In Vanessa Hartwell v. American Fidelity Assurance Company, No. SD36561, Missouri Court of Appeals Southern District Division Two (September 17, 2020) the insurer's grant was granted by the trial court but revoked.
Vanessa Hartwell ("Hartwell") appealed against the judgment of the Court of Justice to grant a summary judgment in favor of the American Fidelity Assurance Company ("AFA") on Hartwell's petition for breach of the insurance contract (Bill I). refusal to pay an insurance claim (invoice II). On three counts, Hartwell argued that the trial court erred in granting a summary judgment.
Hartwell was the holder of and insured under an insurance policy issued by the AFA (the "Policy") which was in full force and effect. Hartwell filed an insurance claim with AFA seeking "Hospital Confinement Benefit" under the policy for a period of hospital stay from June 11, 2018 to July 4, 2018. AFA agreed with Hartwell that she was hospitalized at Saint Francis Medical Center ("SFMC"). ”) From June 11, 2018 through June 19, 2018 and paid the benefits that Hartwell claimed for those dates. However, it denied that she was entitled to the health care benefit for the remainder of the relevant days from 20 June 2018 to 4 July 2018.
AFA's policy stipulates that the right to the health care benefit requires the insured to be limited as a patient in a "hospital" according to the definition in the insurance (the "hospital definition"). In addition, the hospital definition includes language that excludes from the term an institution used by the insured as "a place for rehabilitation" or as "an extended care facility for the care of recovery, rehabilitation or ambulatory patients." As for the part of Hartwell's claim for health care benefits which it denied, the AFA claimed,
Hartwell was closed in hospital from 20 June 2018 to 4 July 2018 at a rehabilitation facility on the SFMC grounds and her stay during this time was used by her as "a place for rehabilitation" and / or "an extended care facility for the care of convalescent, rehabilitative or ambulatory patients."
A court that interprets the terms of an insurance policy must apply meaning that would be attached by an ordinary person with average understanding if one buys insurance, and resolves ambiguities in favor of the insured. An ambiguity exists when there is ambiguity, ambiguity or uncertainty in the meaning of the language of politics. An insured cannot create an ambiguity by only reading part of the insurance and claiming that the part of the insurance, read in isolation, proposes a level of coverage that is higher than the insurance actually provides when read as a whole.
With these principles in view of the hospital definition states:
“ HOSPITAL means a licensed institution which: (a) has its premises: (1) laboratory, X-ray equipment and operating room where major surgical operations may [sic] performed by licensed physicians; (2) permanent and full-time overnight bed care facilities under the supervision of a licensed physician; (3) nurse 24 hours a day by registered nurses; and (4) the patient's written history and medical records; or: (b) is accredited by the Joint Hospital Accreditation Commission. The term hospital shall not include an institution used by you as: (a) a place of rehabilitation; (b) a place for rest or for the elderly; (c) a care or convalescent home; (d) a long-term care unit or geriatric ward, or e) an extended care facility for the care of recovery, rehabilitation or outpatient patients. (Emphasis added by the Court.)
There is no ambiguity, ambiguity or uncertainty between the first and second parts of the hospital definition. When read in its entirety, it requires a licensed institution to meet the first part of the definition to qualify for inclusion in the hospital definition but an institution is exempted from that term if used by the insured. in any way described in the second part of the definition. Thus, for an ordinary person with average understanding, an institution qualifies according to the hospital definition if it (1) meets the first part of the definition and (2) was not used by the insured on a methods provided for in the second part. The same person would also understand that an institution in another context, even if it meets the first part of the hospital definition, does not qualify as a hospital if it was used by an insured in a manner described and is excluded by the second part.
If there is no ambiguity in an insurance policy, a court must enforce the policy as it is in writing.
However, a summary judgment can only be issued if there is no real question. facts and the moving party is entitled to a judgment by law. Hartwell argued that the AFA's summary judgment judgment did not make a prima facie that showed a right to judgment under the hospital definition because its statement of unconverted essential facts ("SUMF") omitted the substantive fact that between June 20, 2018, to with July 4, 2018, she used SFMC as either "a place for rehabilitation" or "an expanded care facility for the care of convalescent, rehabilitative or ambulatory patients."
If a motion for a summary judgment fails to make a prima facie showing a right to a judgment as a matter of law, any further examination of the summary judgment should be terminated and the draft summary judgment should be rejected. In its attempt to disprove the claim that she was hospitalized, AFA could not state as an alleged essential fact in its SUMF that Hartwell used SFMC in a manner prescribed in that definition.
The AFA had to make a prima facie showing a right to a judgment as a matter of law based on its alleged unconverted essential facts. When, and only when, the AFA makes the necessary prima facie display of a right to a judgment as a matter of law based on its SUMF, the burden shifts to Hartwell to show that one or more of the AFA's essential facts are indeed in dispute. In summary, AFA's SUMF does not support a prima facie that shows that AFA has the right to judge according to law according to the hospital definition.
The judgment of the Court of Justice in favor of the AFA was set aside and the case was brought in order to continue the proceedings consistently.
To reformulate Shakespeare: For lack of a nail a horse was lost and for lack of a horse a kingdom was lost. In this case, due to the lack of a statement in the AFA's SUMF that Hartwell was not in a "hospital" but in a care facility, its favorable judgment was reversed. Hartwell's victory is Pyrrhic, as all the AFA needs to do is rewrite its movement and add the language that explains Hartwell's non-hospital stay. Hartwell and AFA should be content with the cost of getting a new exercise.
© 2020 – Barry Zalma
Barry Zalma, Esq., CFE, now limits his practice to working as an insurance consultant specializing in insurance coverage. , handling of insurance claims, unfaithful insurance and insurance fraud almost equally for insurers and policyholders. He also acts as an arbitrator or mediator for insurance-related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims lawyer and more than 52 years in the insurance industry. He is available at http://www.zalma.com and firstname.lastname@example.org.
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