Berg v. State Bd. of Agriculture

• Citation: 919 P.2d 254
• Decision Date: 01 July 1996
• Docket Number: No. 94SC629,94SC629
• Parties: Roger D. BERG, Petitioner/Cross-Respondent, v. STATE BOARD OF AGRICULTURE and Public Employees' Retirement Association of Colorado, Respondents/Cross-Petitioners.
• Court: Supreme Court of Colorado

Page 254

919 P.2d 254

Roger D. BERG, Petitioner/Cross-Respondent, v. STATE BOARD OF AGRICULTURE and Public Employees' Retirement Association of Colorado, Respondents/Cross-Petitioners.

No. 94SC629.

Supreme Court of Colorado En Banc.

July 1, 1996.

Rehearing Denied July 29, 1996.

Morrisard, Rossi, Cox, Kiker & Inderwish, Professional Corporation, Marc J. Kaplan, Aurora, Law Offices of Bennett S. Aisenberg, P.C., Bennett S. Aisenberg, Denver, for Petitioner/Cross-Respondent.

Gale A. Norton, Attorney General, Stephen K. ErkenBrack, Chief Deputy Attorney General, Timothy M. Tymkovich, Solicitor General, Timothy R. Arnold, Deputy Attorney General, Jane R. Christman, First Assistant Attorney General, Tort Litigation Section, Denver, for Respondent/Cross-Petitioner State Board of Agriculture.

Hamilton and Faatz, A Professional Corporation, John T. Willson, Gregory W. Smith, Denver, for Respondent/Cross-Petitioner Public Employees' Retirement Association of Colorado.

Justice MULLARKEY delivered the Opinion of the Court.

We granted certiorari to review Berg v. State Board of Agriculture and Public Employees' Retirement Association of Colorado, No. 92CA1760 slip op. (Colo.App. July 14, 1994) (not selected for official publication), in which the court of appeals affirmed the denial of the defendants' motion for summary judgment on the basis of sovereign immunity, but upheld the granting of the motion on the basis of the statute of limitations. Four grounds are before us for certiorari review:

(1) Whether the court of appeals erred in determining that the statute of limitations for a claim of nonpayment of medical services begins to run as of the date upon which the policy failed to provide coverage rather than when the claim for such expenses was denied;

(2) Whether the statute of limitations, section 13-80-101(1)(a), 6A C.R.S. (1987), is triggered by breach of contract by a self-insurer if the self-insurer did not provide adequate notice of any policy change as required by section 24-51-1202(4), 10B C.R.S. (1988), and any other court of appeals decisions;

(3) whether the trial court erred in determining that the deletion of an endorsement to an insurance policy resurrects prior language of that policy; and

(4) Whether the court of appeals erred in concluding that plaintiff's claims labeled "promissory estoppel" and "breach of contract" were not barred by the Colorado Governmental Immunity Act, sections 24-10-106, -108, 10A C.R.S. (1988), because they were not claims which lie in tort or could lie in tort.

We affirm the judgment of the court of appeals.

I.

Petitioner, Roger D. Berg (Berg), a former employee of Colorado State University (CSU), initiated this action against the State Board of Agriculture (SBA), the governing board of CSU, and the Public Employees' Retirement Association of Colorado (PERA) (collectively defendants), to recover unpaid medical expenses related to two heart transplant surgeries performed on him in July and August of 1988.

Berg was employed by CSU from 1970 until he took medical disability retirement in June of 1984. His early retirement resulted from cardio myopathy, a heart disease with which he was diagnosed in 1978. From the time of his diagnosis, Berg knew that a heart transplant might be required. Berg's health insurance was provided through a group policy issued to CSU by the Prudential Insurance Company of America (Prudential group policy) from 1970 through 1986. As of the time of his retirement, the Prudential group policy provided coverage for heart transplant surgery.

Effective July 1, 1986, PERA was authorized by statute to provide health insurance to retirees, and CSU ceased providing its own insurance. Berg selected a group health plan offered by PERA and administered by American Medical International (AmiCare). This plan also covered heart transplants. A memorandum issued in April of 1986 by the CSU benefits officer stated that coverage under the PERA sponsored plan was comparable to or more favorable than coverage under the Prudential plan. ¹ In a memorandum dated June 1986, the officer stated that no coverage other than the PERA sponsored plan was necessary to maintain a retiree's "current level of benefits." The memorandum also advised that an "umbrella" insurance plan was not offered to the retirees under the age of 65, including Berg, because "the PERA plan reimbursements are equal to or greater than your current coverage." ² CSU continued to pay Berg's health insurance premium to PERA as part of his retirement benefits package.

In the fall of 1986, after AmiCare abruptly announced it would no longer offer a health insurance plan, PERA selected Blue Cross and Blue Shield of Colorado (Blue Cross) as its new plan administrator. Berg, along with the other covered retirees in the AmiCare plan, received two letters dated August 22, 1986, and October 17, 1986, from the Executive Director of PERA, which assured them that their health care coverage would continue and that their benefits would remain the same. ³

Berg also received a document that described the various plans offered by PERA including the Blue Cross plan. The description of the Blue Cross plan contained a disclaimer stating that the actual policy would be negotiated between Blue Cross and PERA. The booklet listed the general limitations and exclusions to the policy; heart transplant surgery was not mentioned. Berg alleges that in reliance on the information contained in the PERA letters and the descriptive document, he enrolled in the Blue Cross administered plan. Other HMOs were available to him and, for purposes of this appeal, the parties agree that Berg could have selected an HMO which provided coverage of heart transplants.

The Blue Cross administered plan took effect January 1, 1987, and included the following applicable provision under "Limitations and Exclusions":

Organ Transplants

If you or your Dependent is a recipient of an organ transplant, and is charged for the services furnished the donor, covered charges are allowed. Only the following transplant procedures will be covered:

a. Corneal (eye) transplant.

b. Kidney (renal) transplant.

c. Bone marrow transplant.

(emphasis in original). Berg at no time received a copy of the actual policy, but in the first half of 1987 he did receive a document summarizing the Blue Cross plan which clearly described the policy's exclusion of heart transplants in the language quoted above.

In June of 1987, endorsement number 5 was added to the Blue Cross policy. This endorsement deleted the section entitled "Organ Transplants" in the original policy, and provided the following substitution:

Organ Transplants:

Coverage for organ transplants is limited to the following procedures:

a. Corneal (eye) transplant.

b. Kidney (renal) transplant.

c. Bone marrow transplant.

If the participant or Dependent is a recipient of an organ transplant stated above, and is charged for services furnished to the donor, covered charges are allowed.

Berg renewed his insurance policy with Blue Cross effective January 1988. On March 9, 1988, endorsement number 6 was added to the Blue Cross policy. It provided: "Endorsement Number 5 is deleted and is no longer applicable to the contract." In July 1988, Blue Cross published a new medical plan summary which was provided to Berg. The statement regarding organ transplants was identical to the statement in the 1987 policy summary quoted above.

In July and August of 1988, Berg underwent two heart transplant surgeries. Blue Cross' representatives denied Berg's claims for medical expenses on the basis of the organ transplant exclusion. PERA representatives reviewed the claims and affirmed the denial of coverage on September 12, 1989.

On September 6, 1990, Berg filed suit against SBA and PERA for breach of contract, promissory estoppel, and negligent misrepresentation, and against Blue Cross for breach of contract. SBA and PERA filed separate motions to dismiss, contending that because the cause of action was or could be based in tort, it was barred by the Governmental Immunity Act, section 24-10-108, 10A C.R.S. (1988), or alternatively that the complaint failed to state a claim upon which relief could be granted.

Defendants' motions were granted only with respect to the negligent misrepresentation claims. SBA and PERA then filed answers asserting, among other defenses, that plaintiff's claims were barred by the applicable statutes of limitations. Their subsequent motions for summary judgment on that basis were granted; plaintiff's motion for reconsideration was denied. ⁴

The court of appeals affirmed the judgments of the trial court. It held that Berg's claims for promissory estoppel and breach of contract were not barred by sovereign immunity, and it affirmed the award of summary judgment although its reasoning differed from that of the trial court. The court of appeals found that plaintiff failed to establish a genuine factual controversy regarding the running of the statute of limitations, and that defendants had not engaged in the type of affirmative conduct that would justify application of estoppel.

For the reasons stated below, we affirm the decision of the court of appeals.

II.

Because of the jurisdictional implications, we will address the fourth certiorari issue first. On cross-petition, the defendants questioned whether the court of appeals erred in concluding that Berg's claims labeled "promissory estoppel" and "breach of contract" were not barred by the Colorado Governmental Immunity Act, section 24-10-108, 10A C.R.S. (1988). We agree with the court of appeals, and find that the claims asserted here do not and cannot lie in tort, and thus are not barred by the Colorado Governmental Immunity Act (CGIA).

The CGIA provides that a public entity shall be immune from liability in all claims for injury which lie in tort or could lie in tort unless the injury is among those for which immunity has been expressly...