Fassio v. Montana Physicians' Service

• Decision Date: 14 September 1976
• Docket Number: No. 13102,13102
• Citation: 33 St.Rep. 457,170 Mont. 320,553 P.2d 998
• Parties: Melvin FASSIO and Marita June Fassio, husband and wife, Plaintiffs and Respondents, v. MONTANA PHYSICIANS' SERVICE, Defendant and Appellant.
• Court: Montana Supreme Court

Page 998

553 P.2d 998

170 Mont. 320

Melvin FASSIO and Marita June Fassio, husband and wife Plaintiffs and Respondents, v. MONTANA PHYSICIANS' SERVICE, Defendant and Appellant.

No. 13102.

Supreme Court of Montana.

Submitted March 3, 1976.

Decided May 11, 1976.

Rehearing Denied Sept. 14, 1976.

Hughes, Bennett & Cain, Alan F. Cain (argued), Helena, for defendant and appellant.

Garnaas, Hall, Riley & Pinsoneault, H. J. Pinsoneault (argued), Missoula, for plaintiffs and respondents.

W. W. LESSLEY, District Judge.^*

The Fassios are the parents of a daughter Marita, who is afflicted by a cytogenetic disorder known as Mongolism; they were members of the Montana Physicians' Service; their membership secured to them and to Marita coverage for enumerated hospital, medical and surgical services.

We are concerned specifically with three health coverage agreements running from April to April for the years 1971, 1972 and 1973. The treatments administered to Marita by the physician Dr. Turkel were on June 18, 1971, January 7, 1972, November 17, 1972 and finally on July 23, 1973. On August 4, 1971 the respondents were informed that the appellant would deny payment of the claim for the above services.

The case was tried to the district court without a jury. Before submission of the proposed facts, the judge issued what he termed 'Opinions' that stated his position and decision; after submission of findings by the attorneys, the judge adopted his 'Opinions' as the court's findings of fact and conclusions of law. The judge concluded that the respondent Fassios should be reimbursed in full for all the medical services performed for their infant daughter by Dr. Henry Turkel, M.D. of Detroit, Michigan.

Montana Physicians' Service appeals. Its appeal is premised on the proposition that the services so performed by Dr. Turkel for Marita were worthless and unnecessary and therefore not covered by the health agreements.

The district court's 'Opinions' describe poignantly the Fassios' odyssey in treatment of their daughter in these words:

'In January, 1970, the Plaintiffs herein suffered one of life's most unfortunate tragedies when their daughter was born with a chromosome deficiency resulting in a condition commonly known as Mongolism. They were immediately advised to commit the girl to the Montana School for the Retarded at Boulder, Montana; within a week they were at that institution talking with Dr. Philip Pallister, one of the country's leading medical experts on Mongolism. Dr. Pallister gave them a prescription which was based on his experience and knowledge, and which would bring about a one hundred per cent improvement in the baby's future. That prescription was: 'Take the baby home and give her lots of love and attention.' The Plaintiffs have followed his advice and their daughter's present physical, emotional and mental state is witness to its effectiveness. After the first year passed the Plaintiffs began more earnestly to search for more help from the medical profession. This search lead them to Dr. Henry Turkel of Detroit, Michigan. * * *'

The record shows that the plaintiffs were referred to Dr. Turkel by Dr. J. M. Law, M.D. of Missoula, Montana; that they made their first visit to Dr. Turkel on June 28, 1971; his charge was $750; and that this claim and his subsequent claims of $3,000 for reimbursement were denied by Montana Physicians' Service. The appellant told the Fassios its denial was justified because the services as performed by Dr. Turkel were at best 'experimental' and 'unacceptable medical practice'.

Chronologically and timewise, Dr. Turkel's treatments of June 28, 1971 and January 7, 1972 are clearly within the ambit of the April, 1971 contract; the treatment of November 17, 1972 is covered by the 1972 agreement and the final treatment of July 23, 1973 is under the time limit of the 1973 agreement.

We will discuss the three contracts separately. Considering the 1971 contract we cut through the verbiage and go directly to the portion entitled 'Group Major Medical Endowment.' We find the controlling definition of the covered medical expenses in Subsection 1 of Section A in the following language:

'* * * usual, customary, and reasonable charges incurred by a Member for necessary services performed or prescribed by a licensed Doctor of Medicine for an illness * * *.'

Section C of the endorsement called Exclusions and Limitations spells out the limiting or nullifying language on the coverage stated. The pertinent language of the exclusion states no benefits shall be provided for 'services and supplies not incidental to or necessary for treatment of illness.'

The provisions of the 1972 contract are identical with the 1971 agreement.

The basic provisions and exclusions limitation of both the 1971 and 1972 agreements limit reimbursement by the carrier, Montana Physicians' Service, to necessary services performed or prescribed by a licensed Doctor of Medicine. Dr. Turkel is a Doctor of Medicine and he, as a Medical Doctor, performed the services for Marita; a more compelling fact is that the Fassios were sent to Dr. Henry Turkel by referral of Dr. J. M. Law, M.D. of Missoula, Montana.

We look at the problem of characterization of the actual services performed by Dr. Turkel for Marita. The appellant describes those services as 'worthless and unnecessary' and further of no real value in treating the conditions for which they were prescribed. It is admitted that the district court's 'Opinions' are not complimentary as to Dr. Turkel's services and his fees shocked the court, but it does state:

'* * * This illness, this birth defect calls for attention from a medical doctor just as much as any other terminal illness. It may even be that the medical attention can do nothing more than to assure the parents that everything is being done that can be done, but even this is important for the proper administration by the parents of Dr. Pallister's original prescription.'

The notice of disallowance from Montana Physicians' Service signed by Dr. James J. McCabe did not call Dr. Turkel's services 'worthless and unnecessary' and of no real value in treating the conditions for which prescribed, rather the services performed under the 1971 and 1972 contracts were described as 'unacceptable medical practice' or 'experimental.'

We consider the word necessary. It is an adjective and therefore is a term of degree. Implicit in the use of the word necessary in the area of medical services, as prescribed by a medical doctor, is the conclusion that such services are necessary and more particularly a necessary expense when so prescribed or performed. An exhaustive search of cases and law review articles fails to give us an exact definition of the word necessary. In this context we might say the word necessary is ambiguous, but we do not so hold as it is used in these contracts in the context of medical services performed or prescribed by a physician. In any event we must liberally construe it for the benefit of the party insured under these agreements. Travelers Ins. Co. v. American Casualty Co., 151 Mont. 198, 441 P.2d 177; Williams v. Ins. Co. of North America, 150 Mont. 292, 434 P.2d 395; St. Paul Fire & Marine Ins. Co. v. Thompson, 150 Mont. 182, 433 P.2d 795, 27 A.L.R.3d 1048; Jones v. Virginia Surety Co., 145 Mont. 440, 401 P.2d 570; Aleksich v. Mutual Acc. Ass'n., 118 Mont. 223, 164 P.2d 372, 162 A.L.R. 263.

The language of these insurance contracts was carefully chosen. This was done in the absence of the Fassios and used to carefully limit and protect the carrier, Montana Physicians' Service, against extended liability. If Montana Physicians' Service wishes to exclude or limit the risk contracted for, then let them do so in words that leave no doubt. The law is clear in this jurisdiction that exclusion clauses are construed narrowly against the insurer. Atcheson v. Safeco Insurance Company, 165 Mont. 239, 527 P.2d 549; State Farm Mutual Automobile Co. v. Partridge, 10 Cal.3d 94, 109 Cal.Rptr. 811, 514 P.2d 123.

We are dealing with group health insurance contracts. The coverage agreements for the years 1971 and 1972 provide reimbursable coverage to the Fassios for necessary medical services. As in the instant case those services...