Short v. Blue Cross & Blue Shield of Kan., Inc.
Citation | 441 P.3d 1058 |
Decision Date | 12 April 2019 |
Docket Number | No. 118,688,118,688 |
Parties | Zachary SHORT, Appellant, v. BLUE CROSS AND BLUE SHIELD OF KANSAS, INC., Appellee. |
Court | Court of Appeals of Kansas |
Matthew L. Bretz, of Bretz & Young, L.L.C., of Hutchinson, for appellant.
David S. Wooding and Anna C. Ritchie, of Martin, Pringle, Oliver, Wallace & Bauer, L.L.P., of Wichita, for appellee.
Before Arnold-Burger, C.J., Atcheson, J., and Burgess, S.J.
The cardinal rule of contract interpretation is to ascertain the parties' intent. If the contract is unambiguous, we determine the parties' intent by the language of the contract alone. But if a contract has ambiguous language, we may consider extrinsic evidence to construe it.
Zachary Short sued Blue Cross and Blue Shield of Kansas (BCBS) for breach of contract after BCBS refused to cover the full cost of a prosthetic leg called the Ottobock X3. The insurance policy provided that BCBS would cover the cost of a basic (standard) device and that it would not cover charges for deluxe or electrically operated devices beyond the extent allowed for a basic (standard) device. BCBS provided evidence that the X3 was electrically operated and thus subject to the limitations in the insurance policy. The district court agreed and granted BCBS's motion for summary judgment.
Short appeals, arguing that the contract is ambiguous and should be construed in a way that would require BCBS to cover the full cost of the X3. He also asserts that he should have been permitted to conduct more extensive discovery and that he should have been allowed to present expert testimony. However, the language in the contract is not ambiguous and electrically operated prosthetics are clearly subject to the limitations. Because the contract was unambiguous, the district court did not err in refusing to allow Short to seek additional evidence through discovery or introduce extrinsic evidence in the form of expert testimony. The decision of the district court is affirmed.
Short was involved in a catastrophic farming accident in October 2014 which left him severely injured. Short's injuries required him to undergo a bilateral knee amputation, with his left leg amputated above the knee
and his right leg below the knee.
At the time of the accident, Short was insured by Blue Cross Blue Shield of Kansas (BCBS). Short sent a pre-service request to BCBS requesting coverage for multiple prosthetics. One of the prosthetics was an Ottobock X3 Microprocessor leg and knee. The X3 costs about $ 145,000. BCBS declined to cover the full cost of the X3 based on its insurance contract. The relevant portion of the contract provided:
, artificial limbs, artificial eyes, and auditory osseointegrated devices.
Limitations:
....
(3) Benefits are limited to the amount normally available for a basic (standard) appliance which allows necessary function. Basic (standard) medical devices or appliances are those that provide the essential function required for the treatment or amelioration of the medical condition at a Medically Necessary level.
(4) Charges for deluxe or electrically operated orthotic or prosthetic appliances, devices or items are not covered, beyond the extent allowed for basic (standard) appliances. Deluxe describes medical devices or appliances that have enhancements that allow for additional convenience or use beyond that provided by a basic (standard) device or appliance."
The contract defines "medically necessary" as:
BCBS believed that a prosthetic device was medically necessary and thus covered by the insurance contract. However, BCBS considered the X3 to be a deluxe or electrically operated prosthetic appliance subject to the limitations provision in the contract. BCBS determined that a basic (standard) knee would cost $ 2,925.32. It informed Short that it would pay him that amount, and that Short would be responsible for the balance of the cost of the X3. Short disagreed, and he sued BCBS for breach of contract.
During discovery, Short made several inquiries that are now at issue on appeal. In Interrogatory Number 2, Short asked BCBS to "[s]tate all facts and identify all documents you contend support [BCBS]'s refusal to pay the cost of the Ottobock X3 prosthetic knees ...." Short also made several requests for documents, including:
BCBS objected to these requests based on their relevance and scope. BCBS argued that the issue in the case was whether the full cost of the X3 fell within the provisions of Short's insurance, and that the issue could "be determined by the contract language as a matter of law by the Court."
Short filed a motion to compel discovery responses. Short asserted that he was "entitled to know what facts and documents [BCBS] contends supports their denial." He asked the district court to require BCBS to "produce any facts or documents besides the contract upon which [BCBS] relies in denying to provide [Short] the Ottobock X3, if any exists besides the contract." BCBS objected to Short's motion to compel discovery responses. It maintained its argument that this was a straightforward case that the court could decide by the language within the four corners of the contract.
The district court denied Short's motion to compel, finding that the contract language was not ambiguous, deluxe or electrically operated devices were not covered, and the requested discovery would not likely lead to any relevant information regarding the nature of the claim.
Later in the litigation, Short filed an expert witness disclosure. He named only one person—Dr. Todd Cowen. Dr. Cowen prepared a Catastrophic Life Care Plan for Short. An expert develops a Life Care Plan by "applying methodological, expert analysis to determine and quantify the current and future medical care requirements of an individual." Although his report is over 130 pages long, Dr. Cowen only briefly addressed the X3. He stated:
When Dr. Cowen assessed Short, Short was using a borrowed X3. Short reported feeling safe and stable with the device, especially while trying to work on his family farm.
BCBS moved to strike Dr. Cowen as an expert witness in the case. BCBS reiterated its argument that expert testimony was unnecessary because the court could decide the issue solely by the language of the contract. We find no evidence in the record that the district court ever ruled on the motion to strike.
BCBS ultimately moved for summary judgment. BCBS framed the issue as whether it "was correct in determining that it could not cover the balance of the cost for the Ottobock X3 Microprocessor Knee based on the language in the contract excluding coverage for charges for deluxe or electrically operated prosthetic devices." BCBS argued that the district court need only "examine the pertinent contract language, which it has already determined is not ambiguous, to make its decision." BCBS attached screenshots from Ottobock's website related to the X3. The website described the X3 as "[t]he world's most technologically advanced microprocessor prosthetic leg." The website advertises that the X3 has several sensors and a microprocessor which help the knee operate. It is activated by five different activity modes using a small remote. The X3 is also battery operated, with one charge lasting approximately five days.
The district court granted BCBS's motion for summary judgment. In its decision, the district court reiterated its prior holding that the relevant contract provision was not ambiguous. The court noted that the relevant provision "excludes coverage of cost beyond a basic (standard) device for ‘deluxe’ or ‘electrically operated’ prosthetics." The court "interpret[ed] this language to mean that a basic (standard) device cannot be a deluxe or electrically operated device." Because the X3 is a deluxe device and electrically operated, the court held that BCBS correctly determined that it was not covered by the insurance contract.
Short appealed.
The district court did not err by finding that...
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