Gen. Collection Co. v. Leaman

• Docket Number: A-22-406
• Decision Date: 06 June 2023
• Parties: General Collection Co., appellee, v. Ralisa Leaman and Michael Leaman, appellants, and Golden Rule Insurance Company, appellee.
• Court: Nebraska Court of Appeals

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General Collection Co., appellee, v. Ralisa Leaman and Michael Leaman, appellants, and Golden Rule Insurance Company, appellee.

No. A-22-406

Court of Appeals of Nebraska

June 6, 2023

THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).

Appeal from the District Court for Hall County: PATRICK M. LEE Judge, on appeal thereto from the County Court for Hall County: ALFRED E. COREY III, Judge. Judgment of District Court reversed and remanded for further proceedings.

Jared J. Krejci, of Smith, Johnson, Allen, Connick & Hansen for appellants.

Kalissa A. Kleine, of Stinson Leonard Street, L.L.P. for appellee Golden Rule Insurance Company.

PIRTLE, Chief Judge, and RIEDMANN and ARTERBURN, Judges.

MEMORANDUM OPINION AND JUDGMENT ON APPEAL

PIRTLE, Chief Judge.

INTRODUCTION

Ralisa Leaman and Michael Leaman appeal from an order of the district court for Hall County denying the Leamans' partial motion for summary judgment and granting Golden Rule Insurance Company's motion for summary judgment, finding there was no genuine issue of material fact as to coverage of the Leamans' claim under the insurance policy between the parties and that Golden Rule was entitled to judgment as a matter of law. We conclude that genuine issues of material fact preclude the entry of summary judgment and therefore reverse the trial court's order and remand the cause for further proceedings.

BACKGROUND

This action began as a collection case filed by General Collection Co. against the Leamans to collect a debt owed to Surgery Group of GI for medical services provided to Ralisa. Ralisa had a lump in her breast biopsied in March 2019, which led to a diagnosis of breast cancer. She subsequently underwent treatment for breast cancer.

The Leamans filed an answer and third-party complaint against Golden Rule in response to General Collection's complaint. The Leamans agreed with most of the allegations set forth in General Collection's complaint but alleged that Golden Rule was liable for the medical bills owed to Surgery Group of GI.

Regarding the third-party complaint against Golden Rule, the Leamans alleged the existence of a medical insurance policy between the Leamans and Golden Rule and that Golden Rule had improperly denied coverage and benefits for Ralisa's breast cancer treatments and expenses on the basis that her breast cancer was a preexisting condition excluded from coverage under the policy. The Leamans brought three causes of action against Golden Rule: contractual indemnity under the insurance contract, damages for the bad faith denial of benefits of the insurance contract, and declaratory judgment that all medical bills and expenses related to Ralisa's breast cancer treatments were covered by the insurance contract and Golden Rule.

Golden Rule denied the Leamans' allegations and alleged affirmative defenses, including that the insurance contract was "potentially void due to fraud" and "subject to recission for intentional omissions and/or misstatements made in the application."

As between General Collection and the Leamans, General Collection was granted summary judgment and obtained a judgment against the Leamans in the amount of $6,568.13.

Golden Rule subsequently filed a motion for summary judgment regarding the Leamans' third-party complaint, and the Leamans filed a cross-motion for partial summary judgment. A hearing on both motions followed. Golden Rule argued that coverage for Ralisa's breast cancer treatment did not exist under the policy because of a preexisting condition exclusion. The Leamans argued that exhibit 5 presented by and relied upon by Golden Rule was inadmissible and that Golden Rule waived reliance on its preexisting condition argument because it retained the Leamans' insurance premiums. The Leamans also argued that they were entitled to partial summary judgment on the issue of insurance coverage for Ralisa's breast cancer treatments and expenses. They further argued that if they were not entitled to partial summary judgment, disputed issues of fact prevented Golden Rule from being granted summary judgment.

Evidence at the summary judgment hearing established that the Leamans applied for a short-term medical insurance policy with Golden Rule on December 19, 2018. Coverage under that policy became effective on December 21 for injuries, and December 26 for illnesses.

The topic of preexisting conditions is addressed throughout the insurance application and agreement. First, in the "Statement of Understanding" section of the application it states: "No benefits will be paid for a health condition that exists prior to the date insurance takes effect."

Second, the policy provides two specific definitions for

"preexisting condition" as follows "Preexisting condition" means a condition:

A. For which medical advice, diagnosis, care or treatment was recommended or received within the 24 months immediately preceding the date the covered person became insured under the policy; or

B. That had manifested itself in such a manner that would have caused an ordinarily prudent person to seek medical advice, diagnosis, care or treatment within the 12 months immediately preceding the date the covered person became insured under the policy.

Finally, the insurance policy has a specific section entitled "Preexisting Conditions" which states: "Preexisting conditions will not be covered under the policy."

The evidence also included "Claimant's Statement and Authorization" which Ralisa completed and submitted to Golden Rule in April 2019 seeking insurance coverage for her breast cancer treatment. The form asked Ralisa how the condition began and to set out all symptoms and describe the condition in detail, from the beginning. Ralisa's response stated: "Presence of abnormality in January 2019 which resulted in a biopsy." The form also states that by signing the form, Ralisa was authorizing the release of any medical records necessary "to Golden Rule Insurance Company, a UnitedHealthcare company, or any agent or independent administrator acting on its behalf" in order to process her claim.

In the Leamans' responses to requests for admissions they admitted that Ralisa was aware of a lump in her left breast prior to December 19, 2018, but denied that she had any knowledge that the lump was cancerous or a reason to be medically concerned prior to December 19, 2018. They also admitted that Ralisa discussed the lump in her left breast with Katie L. Peters, also known as Katie L. Peters Settje (Settje), APRN, NP-C, at an August 30, 2018, office visit at Family Practice of Grand Island.

In the Leamans' answers to interrogatories, they stated that Ralisa first noticed a lump in her left breast in October 2014, but at that time there was no indication the lump was cancerous or needed further medical attention. The answers also state that Settje was one of the medical providers made aware of the lump in October 2014, and that Ralisa was advised to have a mammogram and ultrasound, which she did.

Ralisa's medical records from Family Practice of Grand Island and Saint Francis Cancer Center were offered into evidence by Golden Rule as exhibit 5. The Leamans objected to the exhibit based on hearsay, authentication, and foundation. The objection was taken under advisement.

The first page of exhibit 5 contains a letter from Golden Rule to Family Practice of Grand Island asking for Ralisa's medical records in order to complete a review of Ralisa's insurance claim. The request states that authorization had been obtained from Ralisa and a copy was on file with Golden Rule. The remainder of exhibit 5 consists of Ralisa's medical records.

Ralisa's medical records contained in exhibit 5 show that she underwent a mammogram on April 3, 2018. The results were "negative," but found that "the breasts are extremely dense, which diminishes the sensitivity of mammography. There are no dominant masses or suspicious microcalcifications in either breast." The report from the mammogram also warned that "a negative report should not delay a biopsy if a clinically suspicious mass is present. Some cancers are not identified by x-ray."

In addition, Ralisa's medical records show that she discussed the lump in her breast with Settje during an August 30, 2018, doctor visit for an unrelated issue. Specifically, the patient visit notes from that day state: "Has also had a small palpable lump, left inframammary area, present for years, has been imaged in the past, she wonders about having this excised. She does not feel it has changed." The notes from that visit further state:

In regards to the inframammary area soft tissue mass, this has not changed for years she is wondering about having it excised, discussed with her that we could refer to a surgeon to have this evaluated, she will consider this and let us know [if] she would like to follow up with us.

Following the hearing, the court found exhibit 5 admissible based on the business records exception to the hearsay rule and overruled the Leamans' objections. The court overruled the Leamans' motion for partial summary judgment seeking an order that Golden Rule was required to provide insurance coverage finding that they failed to meet their burden. The court further found they failed to meet their burden that they are entitled to a judgment as a matter of law as to any of their causes of action against Golden Rule. The court granted Golden Rule's motion for summary judgment finding that the lump biopsied in March 2019 leading to a diagnosis of breast cancer was a preexisting condition not covered under the insurance policy issued by Golden Rule. It concluded that there was no genuine issue of material fact as to...