Gordon v. Aetna Life Insurance Company

• Citation: 467 F.2d 717
• Decision Date: 12 October 1971
• Docket Number: No. 71-1022.,71-1022.
• Parties: Harvey J. GORDON, Appellant, v. AETNA LIFE INSURANCE COMPANY.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

467 F.2d 717 (1971)

Harvey J. GORDON, Appellant, v. AETNA LIFE INSURANCE COMPANY.

No. 71-1022.

United States Court of Appeals, District of Columbia Circuit.

Argued April 20, 1971.

Decided October 12, 1971.

Mr. Juan A. Del Real, Washington, D. C., with whom Mr. Harlan L. Weiss, Washington, D. C., was on the brief, for appellant.

Mr. James C. Eastman, with whom Messrs. Charles E. Pledger, Jr. and John F. Mahoney, Jr., Washington, D. C., were on the brief, for appellee.

Before ROBB and WILKEY, Circuit Judges, and DAVIES,^* United States

District Judge for the District of North Dakota.

DAVIES, District Judge:

The plaintiff, Harvey J. Gordon, father of a mentally retarded son, is a Government employee and, as such, is insured under a group accident and health policy issued by the defendant Aetna Life Insurance Company, extending coverage for Civil Service employees and their dependents. The policy provides, in part, coverage for:

"Mental and nervous disorders. In addition to other covered services and supplies, charges for the following services, including group therapy and collateral visits with members of the patient\'s immediate family, are allowable expenses when rendered in accordance with specific instructions by a doctor specializing in neurosurgery or psychiatry who has charge of the overall psychiatric care of the patient:

• Day care in a qualified day care center

• Night care in a qualified night care center

• Services of a qualified psychologist

• Services of a psychiatric nurse (R.N.)

• Services of a qualified psychiatric social worker"

but excludes charges for:

"Custodial care. Custodial care is the provision of room and board — with or without routine nursing care, training in personal hygiene and other forms of self-care, or supervisory care by a doctor — for a person who is mentally or physically disabled as a result of retarded development or body infirmity and who is not under specific medical, surgical, or psychiatric treatment to reduce his disability and to enable him to live outside an institution providing custodial care. This exclusion applies even when the custodial care is provided by a hospital. However, if confinement in a hospital is required because of a concurrent condition (whether related or not) which does require medical or surgical treatment by a doctor, the difference between the normally allowable hospital expenses and the customary charge for custodial care will be considered as allowable expenses."

Anticipating the placing of his son under specialized residential care, Gordon inquired of the defendant as to coverage for expenses incurred in connection with possible institutionalization of his son at three designated institutions. The defendant replied, in part, that:

"The Devereaux School is most familiar to us since we pay a substantial amount of claims to them. It has been our experience that half of the monthly charge is covered as medical treatment, and half of the charge is not covered as education and training. Of the half that is covered, we pay 60% of that as room and board and 40% under other hospital services. So, in the final analysis, we pay about 40% of the total monthly charge.

"Each claim from the Woods School is handled separately depending on the treatment rendered each child. However, I would say that generally we pay about 50% of the total monthly charge.

"The Vineland School we know the least about. About the only fact we do know is that it is a covered institution, and that our benefits would be comparable to the Woods and Devereaux schools.

"So you can see from the above, Mr. Gordon, that the amounts we would pay on these three institutions are approximately the same, and I would not allow this factor to affect your decision on where to send your child. The pre-admission evaluations would be covered at all three schools."

Approximately five months later the defendant again contacted Gordon and informed him that:

"We have just received the results of the investigation of Vineland Training School by our Philadelphia office and our Home Office in Hartford. The decision is, unlike the Devereaux Foundation and the Woods School, we will not be able to pay any of the room and board or educational charges. However, all expenses for medical and psychiatric treatment including prescription drugs, lab work, and X-rays would be covered expenses. Therefore, we would need a breakdown of the charges each month in order to determine the covered expenses."

Thereafter Gordon placed his son in Elwyn Institute, Elwyn, Pennsylvania, and filed a claim for all expenses incurred in connection with the services rendered therein to his son. The defendant rejected the claim, indicating that it failed to disclose a need for treatment of a medical or psychiatric nature.

Gordon then commenced an action in the District of Columbia Court of General Sessions (now Superior Court) to recover the expenses incurred as the result of his son's institutionalization, alleging that his son was suffering from a nervous disorder. Discovery proceedings directed to the defendant disclosed that the allegation had been denied upon the grounds that "mental retardation is not a nervous disorder"; that the son was an eligible dependent under the policy; and that certain of the expenses incurred might be allowable upon a proper showing. Relying on the theory that this information revealed a basis for the commencement of a class action on behalf of those Civil Service employees covered under the policy who had eligible dependents that were mentally retarded, the plaintiff secured a stay of the Court of General Sessions' action and instituted a class action, pursuant to Rule 23, Fed.R.Civ.P., in the United States District Court for the District of Columbia seeking, after amending the complaint to include the individual action of the plaintiff to recover $6,000 in expenses allegedly incurred as the result of relying on the defendant's representation and promise that Vineland Training School was a covered institution, a declaratory judgment:

"1. That mental retardation is a mental and nervous disorder, as such term is used within the policy.

"2. That where mental retardation exists, expenses incurred by plaintiff Gordon and other members of the class for treatment rendered to eligible dependents (in accordance with specific instructions by a doctor specializing in neurosurgery or psychiatry, who has charge of the overall psychiatric care of the patient) are allowable expenses under the policy, when:

(a) Such treatment is rendered by a member of the healing arts specializing in such treatment; or

(b) Such treatment is rendered by a member of the healing arts at institutions specializing in such treatment.

"3. Such damages as will fully compensate plaintiff Gordon and other members of the class.

"4. Such other relief as the Court may deem just and proper." (Emphasis added.)

Plaintiff subsequently moved to amend the amended complaint to include as an additional party plaintiff the Pennsylvania Association for Retarded Children, Inc. and the defendant moved to dismiss the amended complaint.

In ruling on the respective motions the District Court (1) denied the motion of the plaintiff to further amend the first amended complaint; (2) granted the defendant's motion to dismiss the first amended complaint only insofar as the complaint sought to allege a class action on the grounds that the class action could not be maintained as the complaint failed to comply with Rule 23, Fed.R. Civ.P.; (3) denied the motion to dismiss insofar as it alleged the individual action of Harvey J. Gordon; and (4) certified the matter to the District of Columbia Court of General Sessions on the grounds that it did not appear the first amended complaint would justify a judgment in excess of $10,000. It is from this order that the plaintiff has appealed.

The principal issue presented is whether the District Court properly dismissed that part of the complaint which sought to commence a class action.

The record discloses (1) that the plaintiff's son is an eligible dependent under the terms of the policy; (2) that plaintiff's son is suffering from mental retardation; (3) that plaintiff's son was placed in Elwyn Institute, an institution specializing in the care and treatment of children suffering from nervous disorders; (4) that the plaintiff submitted a claim to the defendant for the $100.00 admission fee to Elwyn Institute and for the first month's charge of $415.00; (5) (a) that the claim, as such, was denied by the defendant on the basis that mental retardation is not a nervous disorder and (b) that no coverage was afforded under the facts set out in the claim; and (6) that a portion of the claim might be allowable upon a proper showing.

It is plaintiff's contention that denial of his claim would warrant the conclusion that any claim submitted by a Civil Service employee covered under the policy who had eligible dependents who were mentally retarded for expenses allegedly incurred under the mental and nervous disorders portion of the policy would automatically be denied by defendant on the grounds that mental retardation is not a mental and nervous disorder. Such an assumption is not warranted.

The real issue revolves around whether the plaintiff has incurred allowable expenses on behalf of his son in accordance with specific instructions by a doctor specializing in neurosurgery or psychiatry who has charge of the overall psychiatric care of the patient (mental and nervous disorders coverage) or has incurred expenses on behalf of his son for one who is mentally or physically disabled as a result of retarded development or body infirmity and who is not under specific medical, surgical or psychiatric treatment to reduce his disability and to enable him to live outside an institution providing custodial care (custodial care exclusion). This issue is obviously one of an individual nature and must be decided upon a case by...