Nagy v. Lumbermens Mut. Cas. Co.

• Decision Date: 13 May 1966
• Docket Number: No. 10813,10813
• Citation: 100 R.I. 734,219 A.2d 396
• Parties: Steven NAGY v. LUMBERMENS MUTUAL CASUALTY COMPANY. Ex.
• Court: Rhode Island Supreme Court

Page 396

219 A.2d 396

100 R.I. 734

Steven NAGY v. LUMBERMENS MUTUAL CASUALTY COMPANY.

Ex. No. 10813.

Supreme Court of Rhode Island.

May 13, 1966.

fergus J. McOsker, Providence, for plaintiff.

Francis V. Reynolds, Leonard A. Kiernan, Jr., Providence, for defendant.

JOSLIN, Justice.

This action of assumpsit brought by the plaintiff on a family automobile policy issued by the defendant is before us for the second time. When the case was first here we overruled the plaintiff's exception to a decision of a justice of the superior court sustaining the defendant's demurrer to the declaration. Nagy v. Lumbermens Mutual Casualty Co., R.I., 210 A.2d 603. We rested our conclusion on the technical ground that the plaifntiff had not included within his declaration the policy provision upon which his claim was predicated. After our opinion in that case the superior court permitted the plaintiff to plead over and he cured the earlier defect by setting out in his amended declaration those terms of the policy upon which his claim is premised. Thereafter a justice of the superior court sustained a demurrer to the declaration so amended. The case is now here on the plaintiff's exception to that decision.

In his amended declaration plaintiff, the named insured, seeks to recover for expenses he alleges he incurred for medical services rendered to his wife in order to effect a cure of the bodily injuries she sustained as the result of an accident while an occupant of his automobile. By demurring to that declaration defendant admitted the truth of those allegations, Reek v. Lutz, 90 R.I. 340, 158 A.2d 145; Eaton Realty Co. v. Petroleum Heat & Power Co., 77 R.I. 345, 75 A.2d 178; Richard v. Industrial Trust Co., 85 R.I. 292, 130 A.2d 549, and, in sustaining, the trial justice found in substance that plaintiff is not entitled to recover under the policy for obligations incurred on behalf of another. We reverse and hold that in the circumstances of this case an insurer is responsible to a named insured for the reasonable medical expenses incurred on behalf of his wife.

The foundation for plaintiff's suit is the medical payments or expenses under the medical-services clause of the automobile liability policy issued to him by defendant. That kind of coverage is frequently included in today's automobile liability policy. Typically under the terms of such a clause the insurer assumes responsibility up to a stipulated amount for the reasonable expenses of providing the medical services rendered to or for the insured or a member of his household who sustains bodily injury as the result of an automobile accident or by reason of being struck by an automobile. 8 Appleman, Insurance Law & Practice § 4896, p. 349. Although the medical-payments coverage is included in the same policy as are the provisions insuring against liability for bodily injury and property damage, recovery is not dependent on the negligence of the insured and the medical-payments clause is in the nature of a separate and distinct third-party beneficiary health insurance contract for which the insurer charges a separable portion of the gross premium. Severson v. Milwaukee Automobile Ins. Co., 265 Wis. 488, 61 N.W.2d 872, 42 A.L.R.2d 976; Sims v. National Casualty Co., La.App., 43 So.2d 26; Johnson v. New Jersey Mfrs. Indemnity Ins. Co., 69 N.J.Super. 184, 174 A.2d 4; Distefano v. Delta Fire & Casualty Co., La.App., 98 So.2d 310. On these settled principles the parties are in agreement. They disagree, however, on whether the policy sued on, properly construed, permits recovery by the named insured for obligations incurred by him to pay for the reasonable expenses of the medical services rendered to his wife.

To resolve their disagreement we apply well-established rules of construction. We examine the entire policy and giving to the words their plain, ordinary and usual meanings, Wolf v. Prudential Ins. Co. of America, 62 R.I. 270, 4 A.2d 897; Princess Ring Co. v. Home Insurance Co., 52 R.I. 481, 161 A. 292, we seek to ascertain the intent of the parties and if we find it we give it effect if practicable. Crook v. Kalamazoo Sales & Service Inc., 82 R.I. 387, 110 A.2d 266; Brady v. Norwich Union Fire Ins. Soc'y, 47 R.I. 416, 133 A. 799; Capuano v. Boghosian, 54 R.I. 489, 175 A. 830.

The pertinent insuring agreement ¹ obligates defendant 'To pay all reasonable expenses incurred' for medical or other related services rendered 'To or for the named insured and each relative * * *.' Elsewhere in the policy 'relative' is defined as a related person who lives with the insured in his household.

There is, in our judgment, no uncertainty in the meaning of the insurer's undertaking or of the word 'incurred.' The undertaking emphasizes and cannot be divorced from the idea of liability. The word 'incurred' means to become liable for and it connotes an assumption of an obligation to pay. Flanagan v. Baltimore & Ohio R. Co., 83 Iowa 639, 50 N.W. 60; Bartlett v. Vanover, 260 Ky. 839, 86 S.W.2d 1020. On the basis of this identification of the word 'incurred' with the concept of 'liability' the court in Gordon v. Fidelity & Casualty Co., 238 S.C. 438, 120 S.E.2d 509, held that a career soldier entitled to free care in an army hospital who sustained injuries while driving an insured motor scooter did not incur expenses and could not within the ambit of the medical-payments provision of his liability insurance policy 'covering a motor scooter' recover for the reasonably estimated cost of his hospitalization and medical treatment. United States v. St. Paul Mercury Indemnity Co. (8 Cir.), 238 F.2d 594; Drearr v. Connecticut General Life Ins. Co., La. App., 119 So.2d 149. The rationale of the cases as well as the plain meaning of the word 'incurred' make it clear that an objective in the medical-payments provision is to provide relief from the obligation to pay for the medical services.

Moreover, the purpose to pay for the expenses incurred is unrelated to whether the person who sustains the liability suffers the bodily injury. The insurer who wrote and selected the language and phraseology of what significantly it calls a 'Family Automobile Policy' could have made its intention abundantly evident by limiting its obligation to reimburse for those expenses incurred by the beneficiary sustaining the injuries. Instead it undertook in the insuring agreement to pay for the expenses incurred for medical services 'To or for' the persons injured and it limited its liability ² to the 'expenses incurred by or on behalf of each person who sustains bodily injury * * *.' The use of the words 'To or for' and 'by or on behalf of' in the particular contexts in which they are found makes it clear that the concern is not with who sustains the bodily injuries but with who incurs or is responsible for the expenses...