Witcraft v. Sundstrand Health and Disability Group Ben. Plan

• Decision Date: 16 March 1988
• Docket Number: No. 87-49,87-49
• Citation: 420 N.W.2d 785
• Parties: Thomas J. WITCRAFT and Jill Witcraft, Appellees, v. SUNDSTRAND HEALTH AND DISABILITY GROUP BENEFIT PLAN, Appellant.
• Court: Iowa Supreme Court

Page 785

420 N.W.2d 785

80 A.L.R.4th 1047

Thomas J. WITCRAFT and Jill Witcraft, Appellees, v. SUNDSTRAND HEALTH AND DISABILITY GROUP BENEFIT PLAN, Appellant.

No. 87-49.

Supreme Court of Iowa.

March 16, 1988.

Frank B. Harty of Nyemaster, Goode, McLaughlin, Emery & O'Brien, P.C., Des Moines, for appellant.

Thomas J. Witcraft and Jill Witcraft, pro se.

Considered by HARRIS, P.J., and LARSON, SCHULTZ, LAVORATO, and SNELL, JJ.

LAVORATO, Justice.

In this single-issue appeal we must decide whether the terms of a health insurance plan cover the treatment of a husband and wife for infertility. The district court, disagreeing with the small claims magistrate, held that the broad definition of "illness" in the plan, coupled with the absence of a specific exclusion of infertility treatments, indicated that such treatments are indeed covered. Because we think the district court was correct, we affirm.

The claim in dispute here arose because Thomas and Jill Witcraft had had difficulty conceiving a child. Medical examinations showed that Jill was subject to irregular ovulation and that Thomas had a low sperm count and low sperm motility. The Witcrafts obtained infertility treatment and subsequently had a child.

Desiring another child, the Witcrafts sought further treatment. A simple and inexpensive insemination procedure was performed but was unsuccessful. This and the previous infertility treatments were paid for under the health and disability group benefit plan of Thomas's employer, the Sundstrand Corporation. Both Thomas and Jill were covered by this plan.

Because the last treatment had failed, the Witcrafts' physician suggested a more complex and expensive procedure as their "only option." This procedure, called Protocol I, involved treating Thomas's sperm to improve its motility before performing the insemination on Jill. After undergoing this procedure, the couple submitted a claim to Sundstrand for the cost of it.

Sundstrand denied the claim through its appeal review committee, citing article VI, section 6.7 of its comprehensive care and disability plan, which provides:

If a covered individual incurs outpatient expenses relating to injury or illness, those expenses charged, including but not limited to, office calls and for diagnostic services such as laboratory, x-ray, electrocardiography, therapy or injections, are covered expenses under the provisions of [the plan].

Under section 2.24 of the plan, "illness" is defined as "any sickness occurring to a covered individual which does not arise out of or in the course of employment for wage or profit." Sundstrand's reason for denying the Witcrafts' claim was that "the medical services were not performed because of an illness or injury of the patient Jill Witcraft, as required under article VI, section 6.7 of the plan."

The Witcrafts then brought a small claims action to recover the costs of the sperm treatment and insemination. The magistrate in that proceeding found that the absence of pregnancy is not an "illness" under the plan's coverage and dismissed the case.

On appeal the district court reversed. The court found that the dysfunctioning of the reproductive organs of both Mr. and Mrs. Witcraft came within the plan's definition of an "illness." The court concluded that because infertility treatments are not among the specific exclusions of the plan, the Witcrafts' treatment is covered by the plan as related to an illness. The court awarded Thomas Witcraft eighty percent of the treatment's cost, which was the percentage provided for under the plan, plus interest. ¹

We then granted Sundstrand's application for discretionary review, see Iowa R.App.P. 201, 202, and are now asked to reverse the district court's decision. Sundstrand asserts that the district court incorrectly interpreted "illness" to include nonpregnancy.

In their pro se submission, the Witcrafts contend, in effect, that the district court was correct in characterizing their problem as a coverable "illness" because they, both individually and jointly, have a disorder that could only be treated with the particular procedure they underwent.

I. In an appeal from a small claims action, the district court conducts a de novo review on the record before the magistrate. See Sunset Mobile Home Park v. Parsons, 324 N.W.2d 452, 454 (Iowa 1982); Iowa Code § 631.13(4) (1987). Because the underlying action here is one at law for damages, we review the district court's decision to correct errors of law. Ravreby v. United Airlines, Inc., 293 N.W.2d 260, 262 (Iowa 1980); Iowa R.App.P. 4. The findings of the district court have the force of a jury verdict and are binding if supported by substantial evidence. Ravreby, 293 N.W.2d at 262. Evidence is substantial if a reasonable mind would accept it as adequate to support a conclusion. Id.

II. Simply put, the question here is whether the district court correctly determined that the expense for the Protocol I procedure is covered under the plan. In its letter of denial to the Witcrafts, Sundstrand succinctly stated that "the medical services were not performed because of an illness or injury of the patient, Jill Witcraft" as required by the plan under the previously cited article VI, section 6.7. Sundstrand's representative took this same tack before the magistrate. He testified that the condition of nonpregnancy is not an illness and that, therefore, artificial insemination to change that condition is not treatment of an illness. Thus, the controversy centers on the meaning of the word "illness."

Determining the meaning of words used in an insurance policy is a question for the court to decide, unless the process depends upon extrinsic evidence. Farm Bureau Mut. Ins. Co. v. Sandbulte, 302 N.W.2d 104, 107-08 (Iowa 1981). Because no extrinsic evidence was introduced bearing on the meaning of the word "illness," its meaning was a question of law for the district court. See id. at 108. The district court's determination, however, is not binding on appeal. Id. Thus, we turn to the task of determining what "illness" means in the context of the entire plan. See Central Bearings Co. v. Wolverine Ins. Co., 179 N.W.2d 443, 445 (Iowa 1970).

Article II of the plan contains definitions of words used in it. Section 2.24 of the article broadly defines "illness" as "any sickness occurring to the covered individual which does not arise out of or in the course of employment for wage or profit." It is undisputed that Thomas and Jill are covered individuals. And there is no issue regarding the language "which does not arise out of or in the course of employment for wages or profit."

The terms "illness," "sickness," and "disease" as used in health insurance policies are synonymous. See American Life Ins. Co. v. Stone, 78 Ga.App. 98, 101, 50 S.E.2d 231, 234 (1948). The dictionary likewise considers the three terms to be synonymous. For example, "illness" includes "sickness," Webster's New Collegiate Dictionary 570 (1976), and "sickness" includes "disease," id. at 1077.

In the context of health insurance policies, the word "disease" has been defined as a "morbid condition of the body, a deviation from the healthy or normal condition of any of the functions or tissues of the body." 45 C.J.S. Insurance § 893, at 969 (1946); accord Beggs v. Pacific Mut. Ins. Co., 171 Ga.App. 204, 205, 318 S.E.2d 836, 837 (1984) (congenital defect of insured's child requiring correction by means of soft palate operation was a "disease" within meaning of group health policy); Aetna Life Ins. Co. v. Sanders, 127 Ga.App. 352, 355-56, 193 S.E.2d 173, 175-76 (1972) (obesity requiring operation is a "disease" within meaning of group surgical hospital and major medical expenses); Webster's at 327. See generally, Annotation, What Conditions Constitute "Disease" Within Terms of Life, Accident, Disability, or Hospitalization Insurance Policy, 61 A.L.R.3d 822 (1975).

Given the broad approach the plan takes as to the term "illness," we think it is reasonable to ascribe the above definition of "disease" to it. The district court, utilizing dictionary meanings, likewise concluded that the three terms are synonymous and gave substantially the same meaning to the term "disease" as we have. Our approach to determining the definition of the term "illness" is in accord with our rule that insurance policies are construed in the light most favorable to the insured. See Johnson v. Fireman's Fund Ins. Co., 272 N.W.2d 870, 873 (Iowa 1978).

Apparently Sundstrand and the magistrate have no quarrel with the definition. The magistrate determined that

although improper function of ovaries or testicles may be an illness, the condition of being not pregnant is not an illness. Therefore, any procedure i.e. artificial insemination used to change that condition is not compensable under the terms of the plan.

The court finds then as apparently the defendant also viewed those procedures etc. to induce proper functioning of the reproductive systems of the plaintiff and his wife were generally compensable as diagnostic services or other therapy under Article VI, Section 6.7 out-patient physician services.

However, the artificial insemination process does not encourage healing or reverse the malfunction of the genitalia of the parties. Therefore the insemination process is not, according to the terms of the plan, a covered expense.

(Emphasis added.) Moreover, Sundstrand's representative testified that had corrective surgery or treatment been performed on Thomas, it would have been covered. Likewise, if Jill had been treated for her erratic ovulation, the plan would have paid for such treatment. But, according to the witness, procedures such as artificial insemination performed on a healthy individual are not treatment of an illness.

Thus, the fighting issue, as gleaned from the magistrate's findings stated above, as well as from the parties' contentions, is whether...