Kuhn v. Ret. Bd.
| Decision Date | 23 January 2015 |
| Docket Number | No. 20130503–CA.,20130503–CA. |
| Citation | 2015 UT App 18,343 P.3d 316 |
| Parties | Heidi KUHN, Petitioner, v. RETIREMENT BOARD, Public Employees' Health Program, Respondent. |
| Court | Utah Court of Appeals |
Barton H. Kunz II, Salt Lake City, for Petitioner.
David B. Hansen, Liza J. Eves, and Erin L. Gill, for Respondent.
1
Opinion
¶ 1 Heidi Kuhn seeks judicial review of the decision by the Retirement Board (the Board) to uphold the denial of her claims for medical coverage by the Public Employees' Health Program (PEHP). Kuhn also contends that the Board erred in denying her request for attorney fees as consequential damages. We decline to disturb the Board's decisions.
¶ 2 In 2006, Kuhn had gastric bypass surgery
, which involved the insertion of a Silastic band around her stomach. In October 2008, Kuhn enrolled in a PEHP medical plan. The plan's Master Policy excludes from coverage “Obesity Surgery such as gastric bypass..., including any present or future Complications” as well as “Complications as a result of non-covered or ineligible Surgery” (the Exclusions). Later that month, Kuhn began experiencing severe abdominal pain and vomiting. Kuhn's treating physician determined that the pain and vomiting resulted from constriction of Kuhn's stomach and intestines caused by a shift in the Silastic band. The physician opined that the band's movement was probably due to a normal shrinkage of the stomach. When her condition worsened, Kuhn underwent emergency surgery to remove the Silastic band.
¶ 3 PEHP subsequently denied coverage for the emergency surgery as well as for Kuhn's follow-up care to the extent those services related to or arose out of the gastric bypass surgery
.2 According to PEHP, removal of the Silastic band constituted a complication of the gastric bypass surgery, a procedure that the medical plan expressly excluded from coverage. Kuhn appealed PEHP's decision to the Board, and after a hearing on the parties' cross-motions for summary judgment, the Board affirmed.3 The Board concluded that “[u]nder the clear and unambiguous language of the [medical plan's] Master Policy, the movement of the Silastic band was a Complication as a result of the ineligible and excluded obesity surgery.” The Board also denied Kuhn's request that she be awarded attorney fees as consequential damages for the denial of her medical claims, concluding that “an award would not be warranted here based on the ... findings and conclusions.” Kuhn seeks judicial review of the Board's decisions.
¶ 4 First, Kuhn challenges the Board's interpretation of the Master Policy Exclusions to deny coverage. “Insurance policies are contracts,” and thus, they must be “interpreted under the same rules governing ordinary contracts.” Gee v. Utah State Ret. Bd., 842 P.2d 919, 920 (Utah Ct.App.1992) ; see also Quaid v. U.S. Healthcare, Inc., 2007 UT 27, ¶ 10, 158 P.3d 525 ().
¶ 5 On this issue, Kuhn asserts that the Board “mistakenly concluded that the [Master] Policy clearly and unambiguously defined the unexplained movement of a Silastic band ... as a Complication” of her 2006 gastric bypass surgery
. Kuhn argues that, according to the Master Policy's plain language, neither the Exclusions nor the definition of the term “Complication(s)” excludes her emergency surgery from coverage. When “the language within the four corners of the contract is unambiguous, ... the contract may be interpreted as a matter of law,” WebBank v. American Gen. Annuity Serv. Corp., 2002 UT 88, ¶ 19, 54 P.3d 1139 (citation and internal quotation marks omitted), and on review, we will afford no deference to the Board's interpretation. Alternatively, Kuhn contends that even if the constriction of her stomach and intestines was a complication of the gastric bypass surgery, she should not be denied coverage because the Master Policy is ambiguous regarding the scope of coverage for complications that occur as a result of a pre-enrollment, non-covered surgery. “[W]hether a contract is ambiguous is a question of law.” Gee, 842 P.2d at 921 (citation and internal quotation marks omitted).
¶ 6 Second, Kuhn contests the Board's decision to deny her request for attorney fees as consequential damages. This claim also depends upon the correctness of the Board's interpretation of the Master Policy. See Mahmood v. Ross, 1999 UT 104, ¶ 20, 990 P.2d 933 ().
¶ 7 Kuhn's first contention is that the Board erroneously interpreted the Master Policy when it denied coverage for the emergency surgery to remove the Silastic band. Kuhn makes two alternative arguments in support of her position. First, she argues that according to the plain language of the Exclusions, specifically the definition of the term “Complication(s),” PEHP ought to have covered the surgery. Second, she asserts that even if the emergency surgery is a complication of the pre-enrollment, non-covered gastric bypass surgery
, it should nevertheless be covered because a reasonable person would not read the Master Policy to exclude complications that do not develop until after enrollment with PEHP. We address each argument in turn.
¶ 8 Kuhn challenges the Board's conclusion that the removal of the Silastic band constituted a complication of the non-covered gastric bypass surgery
. To determine whether Kuhn's medical condition was a complication of the gastric bypass surgery, we first examine the language of the Master Policy. See WebBank, 2002 UT 88, ¶¶ 17–18, 54 P.3d 1139 (). If after “consider[ing] each contract provision ... in relation to all of the others, with a view toward giving effect to all and ignoring none,” we determine that the terms of the contract are unambiguous, id. ¶¶ 18–19 (omission in original) (citation and internal quotation marks omitted), we “interpret those terms in accordance with their plain and ordinary meaning,” Gee, 842 P.2d at 921 (citation and internal quotation marks omitted). “Exclusions from coverage are interpreted no differently when the policy language is clear.” Quaid, 2007 UT 27, ¶ 10, 158 P.3d 525.
¶ 9 Although each party advances a different legal interpretation of the term “Complication(s),” neither contends that it is ambiguous. See Gee v. Utah State Ret. Bd., 842 P.2d 919, 921 (Utah Ct.App.1992) (). Based on our analysis, we conclude that the term is not ambiguous because it is not “capable of more than one reasonable interpretation.” See WebBank, 2002 UT 88, ¶ 20, 54 P.3d 1139 (citation and internal quotation marks omitted). The medical plan excludes “Complications” that occur “as a result of non-covered or ineligible Surgery.” The term “Complication(s)” is defined by the Master Policy to include any “medical condition, illness, or injury related to, or occurring as a result of another medical condition, illness, injury, or Surgical Procedure.”4 Kuhn indisputably developed a “medical condition ... or injury”—constriction
of her stomach and intestines—that required her to undergo emergency surgery to correct it. Thus, the only question is whether Kuhn's medical condition or injury occurred “as a result of” her earlier non-covered and ineligible gastric bypass surgery.
¶ 10 PEHP contends that we have already determined the meaning of the phrase “as a result of” in this context in our decision in Gee v. Utah State Retirement Board, 842 P.2d 919 (Utah Ct.App.1992). In that case, the insured, Gee, sought judicial review of the Retirement Board's conclusion that emergency surgery to remove her silicone breast implants
was a complication of a previous non-covered mastectomy. Id. at 920. As Kuhn did in this case, Gee underwent a non-covered surgery (bilateral mastectomy for a non-cancerous condition and reconstructive insertion of silicone gel implants ) before she enrolled in a PEHP medical plan. Id. After joining PEHP, Gee underwent further surgery to remove the breast implants
, which by then had created a debilitating medical condition. Id. The medical plan had a provision, similar to the one at issue here, excluding coverage for “Complications as a result of [any] ineligible surgery.” Id. PEHP, and later the Board, denied Gee coverage for the surgery to remove the implants on the basis that it was a complication “as a result of” the ineligible mastectomy and implantation. Id. We declined to disturb that decision. Id. at 921.
¶ 11 Although she recognizes the similarities between Gee and her case, Kuhn contends that Gee should not apply here because it is distinguishable in two significant ways.5 First, she argues that her case is factually dissimilar because in Gee the breast implants
failed whereas in her case the medical condition or injury arose from “normal bodily changes.” Second, she asserts that the medical plan at issue in Gee “did not include a provision defining complication as is the case here” and Gee 's plain language approach therefore does not address whether Kuhn's emergency surgery constitutes a complication as a result of the non-covered gastric bypass surgery under her medical plan. We conclude that the distinctions Kuhn identifies are not legally significant.
¶ 12 Kuhn contends that Gee is distinguishable from her case because the medical condition...
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