95-546 La.App. 3 Cir. 1/24/96, Dubois v. Parish Government Risk Management Agency-Group Health

• Decision Date: 24 January 1996
• Citation: 670 So.2d 258
• Parties: 95-546 La.App. 3 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 258

670 So.2d 258

95-546 La.App. 3 Cir. 1/24/96

Succession of Alfred DUBOIS, Plaintiff-Appellee, v. PARISH GOVERNMENT RISK MANAGEMENT AGENCY--GROUP HEALTH Defendant-Appellant.

No. 95-546.

Court of Appeal of Louisiana Third Circuit.

Jan. 24, 1996.

Carrol Lee Spell Jr., Lafayette, Elizabeth Gresham Andrus, Lafayette, for Succession of Alfred Dubois.

Ben Louis Mayeaux, Lafayette, for Parish Government Risk Management Agency.

Before YELVERTON, SULLIVAN and KNIGHT ^*, JJ.

[95-546 La.App. 3 Cir. 1] SULLIVAN, Judge.

Gloria Gail Dubois, as administratrix of the succession of Alfred Dubois, filed suit for the payment of medical expenses incurred during Dubois' hospitalization for alcoholic cirrhosis of the liver. Dubois died from complications associated with that malady on November 17, 1987. Named as defendants were Dubois' health insurer, Parish Government Risk Management Agency (PGRMA), and his former employer, the Vermilion Parish Police Jury. The trial court found that alcoholic cirrhosis was a covered sickness under the PGRMA insurance plan and rendered judgment against [95-546 La.App. 3 Cir. 2] PGRMA only, for medical expenses of $24,380.76 plus legal interest and costs. PGRMA appeals. We affirm.

FACTS

On October 18, 1987, Alfred Dubois was admitted to Abrom Kaplan Memorial Hospital where he remained until his death one month later. Upon admission, Dubois exhibited signs of extreme disorientation and weakness suggestive of early delirium tremens. His social history indicated that he was a chronic alcoholic. The diagnosis upon admission was cirrhosis of the liver with hepatic failure (precomatose state) and peptic ulcer disease. While hospitalized, Dubois was treated for numerous symptoms that subsequently developed, including diarrhea, jaundice, large esophageal varices, and uncontrollable ascites. The damage to his liver from alcoholic cirrhosis brought on these conditions as well as Dubois' death.

PGRMA refused to pay the claims submitted for Dubois' hospitalization, relying upon the following exclusion in its health and accident insurance contract:

SECTION VII, Exclusions and Limitations

Coverage under this contract is subject to the following exclusions and limitations for which no benefits shall be paid:

* * * * * *

2. Services or supplies resulting from drug or alcohol abuse or the consumption and treatment thereof, unless the employer unit subscribes to this optional benefit as outlined in Section V. [Emphasis added.]

It is undisputed that Dubois' employer, the Vermilion Parish Police Jury, did not select the optional benefit offered in Section V of the contract. Nonetheless, the trial court looked to the language of Section V for guidance in interpreting the above exclusion. Section V provides in part:

[95-546 La.App. 3 Cir. 3] SECTION V, Covered Expenses

(g) Alcohol and Drug Abuse Benefits--Benefits for the treatment of alcohol or drug abuse and/or consumption is limited to a lifetime maximum of $10,000.00 per covered individual subject to the deductible and coinsurance stated in the Schedule of Benefits. This is an optional benefit which must be selected by the employer units for all covered employees. [Emphasis added.]

After reading these provisions together, the trial court concluded that the true intent of the parties to this contract was to exclude from coverage only treatment for the chemical dependency of alcohol or drugs. Because Dubois was not treated for his addiction to alcohol, but rather for the life threatening condition of alcoholic cirrhosis, the trial court found that the PGRMA plan provided coverage for the claimed expenses.

OPINION

Where factual findings are pertinent to the interpretation of a contract, those factual findings are not to be disturbed unless manifest error is shown. However, when appellate review is based upon an independent examination of a contract on its face, the manifest error rule does not apply. Louisiana Insurance Guaranty Association v. Interstate Fire and Casualty Co., 93-0911 (La. 1/14/94), 630 So.2d 759. In the instant case, the trial court found that Dubois' death from alcoholic cirrhosis was caused by Dubois' long term consumption of alcohol. This factual finding is not disputed. Whether the PGRMA insurance plan excludes coverage for this illness is a question of law; on appellate review, we, therefore, must determine whether the trial court was legally correct.

It is well settled that an insurance policy is a contract between the parties and should be construed using the general rules of interpretation of contracts as set forth [95-546 La.App. 3 Cir. 4] in the Civil Code. Crabtree v. State Farm Insurance Co., 93-509 (La. 2/28/94); 632 So.2d 736. Interpretation of a contract is the determination of the common intent of the parties. La.Civ.Code art. 2045. If the words of an insurance policy are clear and explicit and lead to no absurd consequences, no further interpretation may be made in search of the party's intent and the agreement must be enforced as written. See La.Civ.Code art. 2046. The policy should be construed as a whole and one portion thereof should not be construed separately at the expense of disregarding another. See La.Civ.Code art. 2050. A doubtful provision must be interpreted in light of the nature of the contract, equity, usages, the conduct of the parties before and after the formation of the contract, and of other contracts of a like nature between the same parties. La.Civ.Code art. 2053.

Regarding the interpretation of an exclusion in an insurance policy, the Louisiana Supreme Court stated in Garcia v. St. Bernard Parish School Board, 576 So.2d 975, 976 (La.1991):

Exclusionary provisions in insurance contracts are strictly construed against the insurer, and any ambiguity is construed in favor of the insured. Capital Bank & Trust Co. v. Equitable Life Assurance Society, 542 So.2d 494 (La.1989); Albritton v. Fireman's Fund Insurance Co., 224 La. 522, 70 So.2d 111 (1953). Equivocal provisions seeking to narrow the insurer's obligation are strictly construed against the insurer, since these are prepared by the insurer and the insured has no voice in the preparation. 13 J. Appleman, Insurance Law and Practice § 7427 (rev. ed. 1976). If the language of the exclusion is subject to two or more reasonable interpretations, the interpretation which favors coverage must be applied. Carney v. American Fire & Indemnity Co., 371 So.2d 815 (La.1979); W. McKenzie & H. Johnson, 15 Louisiana Civil Law Treatise, Insurance Law...