Kuhn v. Retirement Board
343 P.3d 316
Utah Ct. App.2015Background
- Kuhn underwent gastric bypass in 2006 with a Silastic band, followed by PEHP enrollment in 2008.
- PEHP Master Policy excludes obesity surgeries like gastric bypass and any present or future complications, including complications from non-covered surgeries.
- Kuhn developed constriction of the band in 2008, requiring emergency surgery to remove the band.
- PEHP denied coverage for the emergency surgery and related follow-up as a complication of the non-covered surgery.
- The Board upheld PEHP’s denial after cross-motions for summary judgment; an adjudicative officer’s decision was formally adopted.
- Kuhn challenged the Board’s interpretation and sought attorney fees as consequential damages; the court reviewed contract interpretation and causation concepts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Interpretation of Exclusions governing coverage | Kuhn: Exclusions unambiguously exclude only post-enrollment complications. | Kuhn’s interpretation would render 'as a result of' ambiguous; contract unambiguously excludes complications from non-covered surgeries. | Exclusions are unambiguous; complications from pre-enrollment non-covered surgery are excluded. |
| Award of attorney fees as consequential damages | Damages should flow from denial due to breach; fees allowed as consequential damages. | No breach found since policy excludes the claimed coverage; no damages. | No damages awarded; no breach of contract established. |
Key Cases Cited
- Gee v. Utah State Ret. Bd., 842 P.2d 919 (Utah Ct. App. 1992) (interpreting 'as a result of' in insurance exclusions; no coverage for post-enrollment complications)
- WebBank v. American Gen. Annuity Serv. Corp., 54 P.3d 1139 (Utah 2002) (contract interpretation requires giving effect to all provisions; unambiguous terms are controlling)
- Quaid v. U.S. Healthcare, Inc., 158 P.3d 525 (Utah 2007) (insurance contract interpretation; ambiguity favors coverage only when present)
- Mahmood v. Ross, 990 P.2d 933 (Utah 1999) (consequential damages require a contract breach and foreseeable damages)