Mogil v. California Physicians Corp.

• Decision Date: 14 March 1990
• Docket Number: No. D009638,D009638
• Citation: 267 Cal.Rptr. 487,218 Cal.App.3d 1030
• Court: California Court of Appeals Court of Appeals
• Parties: Blaine MOGIL et al., Plaintiffs and Appellants, v. CALIFORNIA PHYSICIANS CORPORATION et al., Defendants and Respondents.

Page 487

267 Cal.Rptr. 487

218 Cal.App.3d 1030

Blaine MOGIL et al., Plaintiffs and Appellants, v. CALIFORNIA PHYSICIANS CORPORATION et al., Defendants and Respondents.

No. D009638.

Court of Appeal, Fourth District, Division 1, California.

March 14, 1990.

Law Offices of Kussman & Whitehill and Michael H. Whitehill, Los Angeles, for plaintiffs and appellants.

Hassard, Bonnington, Rogers & Huber, Rick C. Zimmerman, J. Richard Johnston, and Reggie Griner, San Francisco, for defendants and respondents.

WORK, Associate Justice.

Blaine and Debbie Mogil appeal a summary judgment in their action against California Physicians' Insurance Corporation (CPIC) and Blue Shield of California seeking compensatory and punitive damages for breach of the covenant of good faith and fair dealing, breach of contract, violation of Insurance Code provisions, intentional and negligent infliction of emotional distress and civil conspiracy. They contend the defendants are not entitled to judgment as a matter of law because there are material triable issues of fact regarding whether the excision of the mole on Debbie's right shoulder constituted treatment for a

preexisting condition excluded by the terms of the CPIC policy and whether the cancer treatment she received after the mole proved malignant was for an excluded preexisting condition. For the following reasons, we conclude Debbie's condition manifested itself to her and her husband with distinct symptoms before the effective date of the policy and, as a matter of law, was a preexisting condition expressly excluded from coverage. Accordingly, we affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

When the Mogils sought medical insurance coverage, agent Daniel Bartel persuaded them to purchase a Blue Cross policy. Because that policy could not provide immediate coverage, interim coverage was obtained from CPIC, a company essentially owned by Blue Shield. The 60-day interim policy provided immediate coverage to prevent a lapse in coverage pending approval of the Blue Cross application. The interim coverage was procured on October 9, 1985.

The application for the CPIC interim policy provided in pertinent part:

"I also understand that no benefits are payable for injury sustained or sickness first manifested before the Effective Date. I agree that this application shall become a part of my policy."

The policy generally excluded coverage for "[a]ny charges made in connection with a Pre-existing Condition," and defines "Pre-existing Condition" as "a Disability which existed prior to the effective date of the person's coverage under this policy." The policy continues:

"A disability shall be considered to have been in existence prior to the effective date of coverage if, during that time,

"i. any professional advice or treatment of a Physician, or any medical supply (including but not limited to prescription drugs or medicines) was obtained for that Disability; or

"ii. the Disability was manifest to the Covered Person."

The policy further defines "disability" as "a bodily injury, or an illness...."

At the time the Mogils applied for medical insurance coverage, Debbie was pregnant, a condition both policies excluded. On October 28, 1985, during a routine pre-natal examination, Dr. Edwards noticed a mole on her right shoulder and referred her to Dr. McCarthy, who removed it. A laboratory analysis revealed it was malignant melanoma and had spread. This finding resulted in further surgery. The objective evidence giving rise to the diagnosis were the growth and change in color of the mole, symptoms of which the Mogils were aware as early as April 1985 when they observed and discussed the growing mole and obtaining medical advice regarding the symptoms. Further, approximately three and one-half years earlier, Debbie went to a dermatologist, Dr. Chester Sidell, and had a mole at the same location on her shoulder and one on her back removed. She was aware both moles were sent out to the laboratory for analysis because of the possibility of malignancy. Fortunately, both earlier moles were benign.

The Mogils' Blue Cross insurance coverage became effective on November 1, 1985. Shortly after Blue Cross denied their claims, the Mogils submitted them to CPIC which denied them because the melanoma preexisted the effective date of the interim policy of October 9, 1985.

THE PARTIES' CONTENTIONS AND STANDARD OF REVIEW

CPIC and Blue Shield contend the trial court properly ruled because the symptoms giving rise to the diagnosis of Debbie's melanoma existed and had come to her attention some six months before the effective date of the CPIC contract. Thus, treatment of the melanoma was for a properly excluded preexisting condition. Consequently, relying on Bower v. Roy-Al Corp. (1973) 33 Cal.App.3d 1027, 1041, 109 Cal.Rptr. 612, they argue Debbie's condition was clearly manifested to her because the general rule in construing such limiting language is to find "a sickness, illness or disease originates for purposes of such a The Mogils contend that because CPIC acknowledges Debbie did not seek professional advice or treatment for the mole or cancer before the policy's inception, the preexisting condition exclusion only applies if it is determined her condition was "manifest" to her. Emphasizing the contract language should be construed according to its plain meaning and consistent with the parties' objective of providing indemnity for loss where the insurance relates (Reserve Insurance Co. v. Pisciotta (1982) 30 Cal.3d 800, 807-808, 180 Cal.Rptr. 628, 640 P.2d 764), they correctly assert our resolution depends on the precise language of the policy and not the general rule defining preexisting conditions in insurance contracts, which failed to do so. Accordingly, not bound by common law construing preexisting condition absent a specific policy definition, our task is to interpret the policy phrase "the Disability was manifest to the Covered Person" consistent with the intent of the parties, their relative bargaining positions and the purpose of the insurance. Only upon doing so, will we be able to determine whether there is a triable issue of fact regarding whether Debbie's condition had manifested itself to her before the policy's effective date.

limiting clause 'when it first becomes manifest or active or when there is a distinctive symptom or condition from which one learned in medicine can with reasonable accuracy diagnose the disease.' "

In determining whether the trial court properly granted the motion for summary judgment, we are mindful summary judgment may be granted only where no material triable issue of fact exists, as the moving parties' affidavits set forth facts entitling them to a judgment as a matter of law. (Lipson v. Superior Court (1982) 31 Cal.3d 362, 374, 182 Cal.Rptr. 629, 644 P.2d 822; Lopez v. McDonald's Corp. (1987) 193 Cal.App.3d 495, 503, 238 Cal.Rptr. 436; Code Civ.Proc., § 437c.) Designed to resolve litigation by avoiding needless trials (Ferrell v. Southern Nevada Off-Road Enthusiasts, Ltd. (1983) 147 Cal.App.3d 309, 313, 195 Cal.Rptr. 90), the purpose for summary judgment "is to penetrate evasive language and adept pleading and to ascertain, by means of affidavits, the presence or absence of triable issues of fact" (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107, 252 Cal.Rptr. 122, 762 P.2d 46). "Accordingly, the function of the trial court in ruling on a motion for summary judgment is merely to determine whether such issues of fact exist, and not to decide the merits of the issues themselves." (Ibid.) Because of its drastic nature when granted of depriving the losing party of a trial on the merits, it should be used with caution so as not to become a substitute for trial determination of the facts and merits of a cause. (Id. at p. 1107, 252 Cal.Rptr. 122, 762 P.2d 46; Corwin v. Los Angeles Newspaper Service Bureau, Inc. (1971) 4 Cal.3d 842, 852, 94 Cal.Rptr. 785, 484 P.2d 953.) " 'In examining the sufficiency of affidavits filed in connection with the motion, the affidavits of the moving party are strictly construed and those of his opponent liberally construed, and doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion.' " (Corwin v. Los Angeles Newspaper Service Bureau, Inc., supra, 4 Cal.3d at pp. 851-852, 94 Cal.Rptr. 785, 484 P.2d 953, quoting Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 417, 42 Cal.Rptr. 449, 398 P.2d 785; Twohig v. Briner (1985) 168 Cal.App.3d 1102, 1105, 214 Cal.Rptr. 729.) To succeed here, CPIC and Blue Shield must conclusively establish as a matter of law Debbie's condition was preexisting within the context of the language of the contract requiring it be manifest to her and that under no hypotheses is there a material issue of fact requiring the process of trial regarding that issue. (See Molko v. Holy Spirit Assn., supra, 46 Cal.3d at p. 1107, 252 Cal.Rptr. 122, 762 P.2d 46.)

THE CPIC POLICY DEFINITION OF PREEXISTING CONDITION GOVERNS, APPLYING AN OBJECTIVE STANDARD OF MANIFESTATION TO THE INSURED

The Mogils contend by the express terms of the policy the disability must become manifest to the insured before the Relying on Bower v. Roy-Al Corp., supra, 33 Cal.App.3d at pages 1033, 1041, 109 Cal.Rptr. 612; Fohl v. Metropolitan Life Ins. Co. (1942) 54 Cal.App.2d 368, 129 P.2d 24; Cimino v. Reserve Life Ins. Co. (1960) 181 Cal.App.2d Supp. 840, 5 Cal.Rptr. 850; and Skroopka v. Royal Indem. Co. (1955) 132 Cal.App.2d [218 Cal.App.3d 1036] Supp. 910, 283 P.2d 111, CPIC and Blue Shield contend a disability is "manifest" within the meaning of a preexisting condition exclusion when there exists distinctive symptoms sufficient to interfere with the insured's regular employment or from which a reasonably accurate diagnosis could be made by a physician. In other words, they rely on common law, derived from cases construing insurance policies failing to...