Ohms v. KPS Health Plans
Decision Date | 26 June 2007 |
Docket Number | 34494-7-II |
Court | Washington Court of Appeals |
Parties | EDDIE OHMS and AUDREY OHMS, individually, and their marital community, Appellants, v. KPS HEALTH PLANS, Respondent. |
UNPUBLISHED OPINION
Eddie Ohms, a self-employed long-haul truck driver was injured when a motor vehicle rear-ended his truck in Louisiana while he was driving his empty truck from Florida to his home in Montana.[1] Citing the "occupational illness or injury" exclusion in Ohms's health insurance policy KPS Health Plans (KPS) denied Ohms's claim for payment of the medical treatment he received for his injuries.
Ohms sued KPS for breach of contract, insurance bad faith violating the Consumer Protection Act (CPA),[2] and various other tort claims. Following discovery, Ohms moved for partial summary judgment. KPS cross-moved for summary judgment on all claims. The trial court granted KPS summary judgment. We affirm.
Ohms is a self-employed long-haul truck driver who lives in Darby Montana.[3] Ohms owned his own truck and trailer and leased his truck exclusively to System Transport, Inc. (STI) a company based in Spokane, Washington. In addition to cargo, which Ohms transported for STI, the company generally found other cargo for Ohms to deliver to several destinations enabling Ohms to deliver a load and then work his way back to "home base" in Spokane with a full truck.[4]As the owner and operator of the truck, Ohms had the freedom to accept or reject any prospective jobs offered by STI.
On October 21, 2004, Ohms was delivering a load for STI to Miami, Florida, when another truck side-swiped his truck. Ohms was treated for minor injuries at North Florida Regional Medical Center in Gainesville and released. Ohms's truck was drivable, but it had sustained too much damage to carry any loads. Ohms called STI and told the STI dispatcher that, because he was injured and his truck was unable to take any loads, he was going "off duty." Clerk's Papers (CP) at 249. Ohms transferred his cargo to another STI truck and began to drive his truck back to Montana for repairs.
On October 28, 2004, while Ohms was driving his empty, damaged truck to Montana from Florida, a semi-truck rear-ended Ohms's truck as he drove through Slidell, Louisiana. At that time, Ohms was not carrying a load for STI, was not under dispatch to get a load, and was not being paid for driving the truck. Ohms was severely injured in the second accident. Ohms was treated for these injuries in Louisiana and Montana. Ohms's rehabilitation and medical expenses, including cervical diskectomy and fusion surgery needed to treat a herniated cervical disk, exceeded $50,000.
Ohms settled his personal injury claim against the driver who caused the Louisiana accident, and 100 percent of the medical bills were paid as part of the settlement. Nevertheless, STI submitted claims for Ohms's medical expenses to KPS.[5] In its notice letter, STI indicated that Ohms was not covered by any other type of occupational injury insurance (including workers' compensation) and that, therefore, KPS should cover his injuries.
KPS asked Ohms to fill out a standard Subrogation Inquiry Form (SIF) for both accidents. On both forms, question number 7 asks: "Is this injury/condition job or work related?" CP at 133. Ohms circled "Yes" and signed both forms. CP at 133.
The KPS Benefits Booklet contains a total of 40 limitations and exclusions. Exclusion number 28 excluded coverage for occupational injuries and provided:
Services for any occupational illness or injury arising out of, or in the course of, an activity pertaining to any trade, business, employment (including self-employment) or occupation for wage or profit.
CP at 48. Citing this provision, KPS denied Ohms coverage for both the Florida and Louisiana accidents. Ohms agreed that KPS properly denied STI's claim for the Florida accident but argued that the Louisiana accident was not work related and that KPS must cover his medical expenses.
At his pretrial deposition on August 26, 2005, Ohms testified that circling "Yes" on the form for the Louisiana accident was a mistake and that he was not working at the time the accident occurred. Ohms's deposition was the first time KPS had been informed that Ohms made that mistake on the SIF.[6]
Following KPS's initial denial of coverage for the Louisiana accident, Ohms submitted a letter, dated March 16, 2005, from STI's Risk Manager, Dennis Williams, corroborating his assertion that he was not working at the time of the Louisiana accident. On March 31, 2005, KPS again denied Ohms's coverage based on the occupational injury exclusion as well as the answers contained on the SIF.
On May 16, 2005, Ohms sued KPS for breach of contract, bath faith, and violation of the CPA, chapter 19.86 RCW, and alleged that KPS violated WAC 284-30-310 concerning unfair claims settlement practices applicable to insurers, insurance policies, and insurance contracts. On December 9, 2005, Ohms filed a motion for summary judgment on his breach of contract claim asserting that it was undisputed that he was not working at the time of the Louisiana accident. He also claimed that KPS's occupational injury exclusion was ambiguous and asked the trial court to construe the exclusion strictly in favor of coverage.
On December 23, 2005, KPS moved for summary judgment requesting a finding that KPS's insurance contract did not cover Ohms's injuries from the Louisiana accident. In addition, KPS sought dismissal of Ohms's bad faith CPA claims. KPS also asked the trial court to deny Ohms's summary judgment motion on the breach of contract claim.
In a letter to both parties dated January 20, 2006, the trial court denied Ohms's motion for partial summary judgment on the breach of contract claim and granted KPS's motion to dismiss and its cross-motions for summary judgment. The trial court found that:
It appears to the Court that Exclusion No. 28 is unambiguously broader than only activities in the course of an activity pertaining to any trade. The Court is persuaded that the term "arising out of" is not mere surplusage and should be given meaning. The Court concludes that the defendant is entitled to a judgment as a matter of law that there was no coverage for the plaintiff's claim, and consequently the defendant is not liable for bad faith or for violation of the Consumer Protection Act.
CP at 274. On February 16, 2006, the trial court issued an order denying Ohms's motion for partial summary judgment and granting KPS's cross-motion for summary judgment.
Ohms appeals.
Washington law favors resolution of cases on their merits. Smith v Arnold, 127 Wn. App. 98, 103, 110 P.3d 257 (2005). In reviewing the trial court's denial of summary judgment, the appellate court engages in the same inquiry as the trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004) (citing Kruse v. Hemp, 121 Wn.2d 715, 722, 853 P.2d 1373 (1993)). Summary judgment is appropriate only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). When reviewing a trial court order for summary judgment, we only review evidence and issues brought to the trial court's attention. RAP 9.12. The standard of review is de novo.
In Washington, the criteria for interpreting insurance contracts are well settled. Courts construe insurance policies as contracts. The Quadrant Corp. v. Am. States Ins Co., 154 Wn.2d 165, 171, 110 P.3d 733 (2005). We consider the policy as a whole, and give it a "fair, reasonable, and sensible construction as would be given to the contract by the average person purchasing insurance." The Quadrant Corp., 154 Wn.2d at 171 (quoting Weyerhaeuser Co. v. Commercial Union Ins. Co., 142 Wn.2d 654, 666, 15 P.3d 115 (2000)). If the policy language is clear and unambiguous, we must enforce it as written and may not modify it or create ambiguity where none exists. The Quadrant Corp., 154 Wn.2d at 171.
The KPS contract contains 40 coverage exclusions. KPS denied Ohms's claim based on exclusion number 28:
Services for any occupational illness or injury arising out of, or in the course of, an activity pertaining to any trade, business, employment (including self-employment) or occupation for wage or profit.
CP at 48.
Ohms argues that "[a]t best, the [occupational injury] exclusion is ambiguous," because its language is fairly susceptible to two different, but reasonable, interpretations and that, as the insured, any ambiguity must be interpreted in favor of coverage. Br. of Appellant at 10.
We agree that coverage exclusions are contrary to the fundamental purpose of insurance and are strictly construed against the insurer. City of Bremerton v. Harbor Ins Co., 92 Wn. App. 17, 21, 963 P.2d 194 (1998) ( ). In its brief, KPS cites to several cases[7] interpreting "in the course of" under the workers' compensation statute.[8] Relying on the workers' compensation rules of "going and coming" and "traveling employee," KPS contends that Ohms was "within the course of" his occupation at the time of the Louisiana accident and that he was engaged in the furtherance of his business interests because Ohms was "getting the truck/trailer back home for repairs after delivering a load." Br. of Resp't at 14, 17. Ohms argues that workers'...
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