Foster v. Group Health Inc.

• Citation: 830 N.E.2d 1061,444 Mass. 668
• Parties: James J. FOSTER v. GROUP HEALTH INCORPORATED & another.<SMALL><SUP>1</SUP></SMALL>
• Decision Date: 15 July 2005
• Court: United States State Supreme Judicial Court of Massachusetts

830 N.E.2d 1061

444 Mass. 668

James J. FOSTER v. GROUP HEALTH INCORPORATED & another.¹

Supreme Judicial Court of Massachusetts, Suffolk.

Argued March 10, 2005.

Decided July 15, 2005.

James J. Foster, Boston, pro se.

Nicholas J. Nesgos, Boston, for the defendants.

Present: MARSHALL, C.J., GREANEY, IRELAND, SPINA, COWIN, SOSMAN, & CORDY, JJ.

MARSHALL, C.J.

We determine in this case the scope of G.L. c. 175, § 110I(a), which mandates that, in certain circumstances the insurer of a group health insurance policy continue to provide coverage to the divorced spouse of a group member.² Prior to his divorce, the plaintiff, James J. Foster, now a resident of Massachusetts, was married to Paula Foster,³ an employee of the New York City Board of Education (New York City) and at all relevant times a resident of New York City. Paula was a member of group health insurance plans offered by New York City, and James received health benefits under those policies as her dependent spouse. Each group insurance plan contained a provision that insurance coverage of a dependent spouse would terminate in the event of divorce from the group member. At some time following the divorce (the record does not say when), the defendants refused to provide continued health insurance coverage to James.

In 2003, James commenced this action in the Superior Court alleging that the provisions of G.L. c. 175, § 110I(a), as amended through St.1986, c. 579, § 5, require that the defendants continue to provide comprehensive health insurance coverage to him. He relies on the last sentence of § 110I(a), which, since 1986, has provided that continued health insurance coverage "shall apply to any policy issued or renewed within or without the commonwealth and which covers residents of the commonwealth." G.L. c. 175, § 110I(a).⁴ For the reasons we discuss below, G.L. c. 175, § 110I(a), is applicable to a divorced dependent spouse if, and only if, the member spouse (here Paula) is a resident of Massachusetts. Because Paula resided in New York at the time of divorce, insured by insurers not subject to Massachusetts regulation, we affirm the summary judgment entered in favor of the defendants.

Facts and procedural history. In 1972, James married Paula, a teacher in the New York City public school system. New York City contracted with Group Health Incorporated (GHI) and Empire Blue Cross Blue Shield (Empire), both New York insurance companies, to provide comprehensive medical and hospital benefits, respectively, to New York City employees and their dependents enrolled in the New York City Employee Benefits Program.⁵ The insurance policies were approved by the New York State Insurance Department, issued in New York, and by their terms were governed by the laws of the State of New York. As a New York City employee, Paula was a covered member of both the GHI and Empire group health insurance plans, and James was entitled, as her dependent spouse, to receive health benefits under those policies for a "nominal" premium. Both policies expressly provided that coverage of a dependent spouse would cease on divorce from the member spouse.⁶

In August, 1987, James became a resident of Massachusetts. He remained married to Paula, who continued to reside in New York City, employed in the public schools.⁷ James and Paula were divorced in Massachusetts in 1992. In 2001, on her retirement from her employment by New York City, Paula changed her coverage under the GHI policy from family to individual coverage.⁸ In sworn statements James has asserted that, after he moved to Massachusetts, both GHI and Empire reimbursed him for claims for medical services provided to him in Massachusetts, but that because of the divorce,⁹ Empire and GHI have now rejected claims for medical services provided to him.¹⁰

In September, 2003, James commenced this action in the Superior Court. He sought an injunction ordering GHI and Empire to comply with G.L. c. 175, § 110I(a), and to "provide benefits to [him] to the same degree and under the same terms as would have existed but for the judgment of divorce."¹¹ After Empire answered the complaint, James moved for summary judgment against it. Empire filed a cross motion for summary judgment. GHI moved to dismiss the complaint for lack of personal jurisdiction, with a supporting affidavit. James countered with a motion for summary judgment against GHI. Both GHI and Empire argued that Massachusetts courts lacked personal jurisdiction over them, and that James's claims failed as a matter of law because the group policies at issue expressly provided no coverage to a former spouse. GHI also argued that application of G.L. c. 175, § 110I(a), would violate the due process clause of the Fourteenth Amendment to the United States Constitution.

Following a single hearing, a Superior Court judge denied James's motions for summary judgment, allowed Empire's motion for summary judgment, and entered summary judgment for GHI pursuant to Mass. R. Civ. P. 56(c), 365 Mass. 824 (1974). The judge ruled that coverage for James had terminated under the terms of the insurance policies; that G.L. c. 175, § 110I(a), was inapplicable because the parties to the group insurance contracts, the defendants and New York City, had agreed to be bound by New York law; that the provisions of the policies terminating James's benefits on divorce were controlling; and that James had suggested "no persuasive reason" why a Massachusetts court should decline to enforce the contracts. She did not directly address James's statutory claim, which is the heart of his case. Final judgment dismissing the complaint entered in August, 2004, from which James appealed. We granted his application for direct appellate review.

Discussion. In reviewing a grant of summary judgment, we view the evidence in its light most favorable to the nonmoving party, and determine whether the moving party is entitled to a judgment as a matter of law. See Beal v. Board of Selectmen of Hingham, 419 Mass. 535, 539, 646 N.E.2d 131 (1995). We may consider any ground supporting the trial judge's ruling. Hawthorne's, Inc. v. Warrenton Realty, Inc., 414 Mass. 200, 210 n. 6, 606 N.E.2d 908 (1993).

In this case, the material facts are not in dispute. Our resolution therefore turns solely on the interpretation of the last sentence of G.L. c. 175, § 110I(a). The defendant insurers point to their respective policies, each providing that group health insurance for a dependent spouse terminates when he is divorced from the member employee.¹² See note 7, supra. James counters that G.L. c. 175, § 110I(a), trumps the express language of any group health insurance contract denying coverage to a former spouse so long as the dependent spouse resides in Massachusetts. We reject any such interpretation of the statute, not only because it strains common sense, Clarke v. Kentucky Fried Chicken of Cal., Inc., 57 F.3d 21, 29 (1st Cir.1995), but because to do otherwise would give rise to grave doubts about the statute's constitutionality, which we presume was contrary to the Legislature's intent. See Providence, Fall River & Newport Steamboat Co. v. Fall River, 183 Mass. 535, 542, 67 N.E. 647 (1903) ("it is [the court's] duty to assume that the Legislature intended to act within its constitutional authority").

A hypothetical example exposes the deficiency of James's argument. Under his interpretation of G.L. c. 175, § 110I(a), a California insurance company regulated by the California Insurance Commissioner, that issued a group health insurance policy to a California employer (policyholder) to cover California employees (members), and which in fact covered only California employees and their dependents, would be subject to G.L. c. 175, § 110I(a), if, at any time prior to divorce, a dependent spouse established Massachusetts residency. Thus, under James's theory, G.L. c. 175, § 110I(a), would mandate postdivorce continuation coverage even if the California insurer had no contacts with Massachusetts, did no business in Massachusetts, had contracted to terminate coverage of former spouses, and even if a dependent spouse relocated to Massachusetts for the sole purpose of obtaining health care continuation benefits following an anticipated divorce. We shall not impute to the Massachusetts Legislature an intent to regulate out-of-State insurance companies that have no contact with Massachusetts, and have never contracted to provide coverage to Massachusetts residents. Rather, we are confident on a review of the statutory history of the 1986 amendment that the Massachusetts Legislature intended merely to clarify that a dependent spouse of a Massachusetts insured (member) would have access to postdivorce coverage regardless whether the insurer of the Massachusetts member was located within or without the Commonwealth.

We begin our discussion by describing G.L. c. 175, § 110I(a), before it was amended in 1986. See Haley v. Commissioner of Pub. Welfare, 394 Mass. 466, 477 n. 9, 476 N.E.2d 572 (1985); Barclay v. DeVeau, 11 Mass.App.Ct. 236, 241, 415 N.E.2d 239, S.C., 384 Mass. 676, 429 N.E.2d 323 (1981), citing 1A C. Sands, Sutherland Statutory Construction § 22.34 (4th ed.1972) (provisions of amendatory act to be considered together with provisions of original act). Section 110I is part of the comprehensive statutory scheme set forth in G.L. c. 175, which contains numerous provisions regulating commercial insurance companies doing business in Massachusetts. That chapter grants to the Massachusetts Commissioner of Insurance broad authority to regulate insurers, transactions among insurers and their policyholders, and the specific content of insurance policies. General Laws c. 175, § 110, in turn, regulates commercial insurance companies that "deliver[] or issue[ ] for delivery [group policies] in the commonwealth."¹³

Initially inserted by St.1981, c. 735, G.L. c. 175, § 110I, provided that the former dependent spouse of a member of a health...