Smith v. Idaho Hospital Service, Inc.
| Decision Date | 13 October 1965 |
| Docket Number | No. 9704,9704 |
| Citation | 89 Idaho 499,406 P.2d 696 |
| Parties | I. Whitney SMITH, Plaintiff-Appellant, v. The IDAHO HOSPITAL SERVICE, INC., an Idaho Corporation, d/b/a Blue Cross of Idaho, Defendant-Respondent. |
| Court | Idaho Supreme Court |
Jack G. Voshell, Idaho Falls, for appellant.
Moffatt, Thomas, Barrett & Blanton, Boise, for respondent.
Appellant commenced this action seeking to recover from respondent, a hospital and medical service corporation, benefits allegedly payable under a subcriber's certificate issued by respondent. The basic facts were stipulated by the parties as follows:
Appellant, together with each member of his family living in his household, including his stepdaughter, Linda Gay Fuller, a minor, was on April 16, 1963, a subscriber under a certificate issued by respondent and in force on the date, under which certain benefits for hospitalization, surgery and ambulance service were provided for them. The certificate also contained the following provisions under Article II entitled 'Limitations and Exclusions,' to-wit:
'A. Services and Benefits Not Included
Idaho Blue Cross shall not be required to furnish any services or benefits under this certificate for * * * (5) any injury growing out of a wrongful act or omission of another party for which injury that party or some other party makes settlement or is legally responsible; provided, however, that if the subscriber or family member is unable to recover from the responsible third party after exercising legal rights so to do, the subscriber or family member shall be entitled to the benefits of this Certificate and any endorsements thereto as if no third party liability were involved; * * *'
On April 16, 1963 Linda Gay Fuller was injured as a result of an accident and certain expenses for hospitalization, surgery and ambulance services were incurred as a result thereof. Although the total of such expenses exceeded $2,600.00, it was agreed that the maximum amount payable under the certificate involved was $2,087.05.
Following receipt of notice of notice of the accident and injury, respondent forwarded to appellant a document designated as 'Blue Cross Accidental Injury Questionnaire' which appellant and his attorney completed and returned to respondent. One of the questions contained in the questionnaire was, 'Do you intend to make claim against anyone for damages?' to which appellant answered, 'Yes.' Respondent thereafter denied any obligation to make payment under the certificate until the status of the third party's liability was determined in accordance with the provisions of the foregoing quoted exclusion clause. Respondent did offer to make payment of the benefitis provided under the certificate upon the execution by appellant of an assignment sufficient to cover its liability which was submitted by respondent. Appellant declined to execute such assignment and commenced this action to recover the sum of $2,087.05 together with attorney's fees.
Thereafter and on May 31, 1963 appellant and the guardian ad litem for Linda Gay Fuller filed an action against the Idaho Falls Class A School District No. 91, et al., hereinafter referred to as civil case No. 13139. In said action damages were sought for personal injuries sustained by the minor as a result of the accident which occurred on April 16, 1963 together with hospital and medical expenses necessarily incurred as a result of such injuries. A compromise settlement between the parties to civil case No. 13139 was later effected whereby the defendants therein made payment to the plaintiffs therein of the sum of $28,100.00. In exchange for this payment plaintiffs executed a release of all claims and dismissed the action with prejudice. The settlement became effective and the action was dismissed on February 11, 1965.
In the instant action the parties have stipulated that in the event of a recovery by appellant the sum of $500.00 would be a reasonable allowance as attorney's fees. Respondent denies liability in any amount.
It was stipulated that the only issues presented to the trial court for determination were:
'1. Whether the exclusion contained in Exhibit No. 1 under Article II(5) is valid as the same applies in this case.
The case was submitted to the trial court upon the stipulated facts and the court found the challenged exclusion clause to be valid and that it excluded from coverage under the certificate involved, the amount claimed by appellant. The court also found that appellant's claim for attorney's fees was not allowable. Judgment was entered in favor of respondent and this appeal is taken from said judgment.
Appellant's assignments of error basically present a contention that the trial court erred in finding the exclusion clause, hereinbefore quoted, to be a valid and enforceable provision of the certificate involved.
We shall first consider appellant's contention that the effect of the exclusion clause is contrary to public policy. Appellant cites cases wherein it is held that an insurance company can limit its liability in any reasonable manner but not such as will contravene public policy and that, if a contract is void as against public policy, the court will not enforce it. However, no case is cited wherein it has been held that an exclusion clause comparable to the one here in issue is in contravention of public policy.
These parties have stipulated that respondent is a service corporation organized and doing business under the provisions of title 41 chapter 34, Idaho Code. The Purpose of this chapter and the interpretation to be given it is stated in I.C. § 41-3402 as follows:
'(1) It is the purpose of this chapter to regulate in the public interest the formation and operation of prepaid health care service organizations, in order that such services may be made available upon a basis of fair and equitable contracts through state-licensed nonprofit organizations meeting reasonable standards as to administration, reserves, and financial soundness.
'(2) The provisions of this chapter shall be liberally interpreted to effectuate the purpose hereinabove declared.'
Although appellant comments regarding the method employed by respondent in accomplishing the modification of the certificate to contain the exclusionary clause involved, there is no allegation or supporting proof that it was the result of any overreaching, fraud, or misrepresentation on the part of respondent. Nor is there any contention that respondent was without right to amend the certificate.
It is well settled that contracts of this nature are governed by the statutory and decisional law in force at the time the contract is entered into and the law becomes a part of it. Ford v. City of Caldwell, 79 Idaho 499, 321 P.2d 589; Interinsurance Exch. of Auto. Club v. Ohio Cas. Ins. Co. (1962), 58 Cal.2d 142, 23 Cal.Rptr. 592, 373 P.2d 640. It is clear from the language used in the statute specifying terms and conditions of a subscriber's...
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Hill v. Am. Family Mut. Ins. Co.
...the same general principles may be looked to by the court in arriving at a satisfactory conclusion." Smith v. Idaho Hosp. Serv., 89 Idaho 499, 504, 406 P.2d 696, 699 (1965). American Family is correct in that, as of yet, Idaho case law has only held that "[n]either the Idaho legislature nor......
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Hill v. Am. Family Mut. Ins. Co.
...the same general principles may be looked to by the court in arriving at a satisfactory conclusion." Smith v. Idaho Hosp. Serv., 89 Idaho 499, 504, 406 P.2d 696, 699 (1965). American Family is correct in that, as of yet, Idaho case law has only held that "[n]either the Idaho legislature nor......
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Hill v. Am. Family Mut. Ins. Co., 36311.
...involving the same general principles may be looked to by the court in arriving at a satisfactory conclusion.” Smith v. Idaho Hosp. Serv., 89 Idaho 499, 504, 406 P.2d 696, 699 (1965). American Family is correct in that, as of yet, Idaho case law has only held that “[n]either the Idaho legis......
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Kisling v. MFA Mut. Ins. Co.
...187 S.W.2d 469, 471(5); National Garment Co. v. New York, C. & St. L. R. Co., C.A.Mo., 173 F.2d 32, 37(13); Smith v. Idaho Hospital Service, Inc., Idaho, 406 P.2d 696, 699 (1965); 29 Am.Jur., Insurance, Sec. 227, p. 614. And where, as here, the language of a limitation or restriction is not......