Case Information
*1
_________________________________________________________
T HE U TAH C OURT OF A PPEALS
H EIDI K UHN , Petitioner, v.
R ETIREMENT B OARD , P UBLIC E MPLOYEES ’ H EALTH P ROGRAM , Respondent.
Opinion No. 20130503-CA Filed January 23, 2015 Original Proceeding in this Court
Barton H. Kunz II, Attorney for Petitioner David B. Hansen, Liza J. Eves, and Erin L. Gill, Attorneys for Respondent J UDGE S TEPHEN L. R OTH authored this Opinion, in which J UDGES
J. F REDERIC V OROS J R . and K ATE A. T OOMEY concurred.
ROTH, Judge: Heidi Kuhn seeks judicial review of the decision by the
Retirement Board (the Board) to uphold the denial of her claims for medical coverage by the Public Employees’ Health Program (PEHP). Kuhn also contends that the Board erred in denying her request for attorney fees as consequential damages. We decline to disturb the Board’s decisions.
1. After the case was submitted for decision without oral argument, see Utah R. App. P. 29(a)(2), Judge James Z. Davis recused himself and Judge Toomey replaced him on the panel.
BACKGROUND
¶2 In 2006, Kuhn had gastric bypass surgery, which involved the insertion of a Silastic band around her stomach. In October 2008, Kuhn enrolled in a PEHP medical plan. The plan’s Master Policy excludes from coverage ‚Obesity Surgery such as gastric bypass . . . , including any present or future Complications‛ as well as ‚Complications as a result of non-covered or ineligible Surgery‛ (the Exclusions). Later that month, Kuhn began experiencing severe abdominal pain and vomiting. Kuhn’s treating physician determined that the pain and vomiting resulted from constriction of Kuhn’s stomach and intestines caused by a shift in the Silastic band. The physician opined that the band’s movement was probably due to a normal shrinkage of the stomach. When her condition worsened, Kuhn underwent emergency surgery to remove the Silastic band. PEHP subsequently denied coverage for the emergency
surgery as well as for Kuhn’s follow-up care to the extent those services related to or arose out of the gastric bypass surgery. [2] According to PEHP, removal of the Silastic band constituted a complication of the gastric bypass surgery, a procedure that the medical plan expressly excluded from coverage. Kuhn appealed PEHP’s decision to the Board, and after a hearing on the parties’ cross-motions for summary judgment, the Board affirmed. The Board concluded that ‚*u+nder the clear and unambiguous 2. PEHP did cover other emergency medical services that were not related to the gastric bypass surgery. This opinion refers only to those services for which coverage was denied.
3. An adjudicative hearing officer initially affirmed PEHP’s decision, and the Board formally adopted his decision two weeks later. We will refer only to the Board’s decision, as it is the subject of judicial review.
language of the *medical plan’s+ Master Policy, the movement of the Silastic band was a Complication as a result of the ineligible and excluded obesity surgery.‛ The Board also denied Kuhn’s request that she be awarded attorney fees as consequential damages for the denial of her medical claims, concluding that ‚an award would not be warranted here based on the . . . findings and conclusions.‛ Kuhn seeks judicial review of the Board’s decisions.
ISSUES AND STANDARDS OF REVIEW
¶4 First, Kuhn challenges the Board’s interpretation of the
Master Policy Exclusions to deny coverage. ‚Insurance policies
are contracts,‛ and thus, they must be ‚interpreted under the
same rules governing ordinary contracts.‛
Gee v. Utah State Ret.
Bd.
,
concluded that the [Master] Policy clearly and unambiguously
defined the unexplained movement of a Silastic band . . . as a
Complication‛ of her 2006 gastric bypass surgery. Kuhn argues
that, according to the Master Policy’s plain language, neither the
Exclusions nor the definition of the term ‚Complication(s)‛
excludes her emergency surgery from coverage. When ‚the
language within
the
four corners of
the contract
is
unambiguous, . . . the contract may be interpreted as a matter of
law,‛
WebBank v. American Gen. Annuity Serv. Corp.
,
¶6 Second, Kuhn contests the Board’s decision to deny her
request for attorney fees as consequential damages. This claim
also depends upon the correctness of the Board’s interpretation
of the Master Policy.
See Mahmood v. Ross
,
ANALYSIS
I. Interpretation of the Master Policy
¶7 Kuhn’s first contention is that the Board erroneously interpreted the Master Policy when it denied coverage for the emergency surgery to remove the Silastic band. Kuhn makes two alternative arguments in support of her position. First, she argues that according to the plain language of the Exclusions, specifically the definition of the term ‚Complication(s),‛ PEHP ought to have covered the surgery. Second, she asserts that even if the emergency surgery is a complication of the pre-enrollment, non-covered gastric bypass surgery, it should nevertheless be covered because a reasonable person would not read the Master Policy to exclude complications that do not develop until after enrollment with PEHP. We address each argument in turn. A. The Board’s interpretation of the policy Exclusions was
correct.
Kuhn challenges the Board’s conclusion that the removal
of the Silastic band constituted a complication of the non-
covered gastric bypass surgery. To determine whether Kuhn’s
medical condition was a complication of the gastric bypass
surgery, we first examine the language of the Master Policy.
See
WebBank
, 2002 UT 88, ¶¶ 17–18 (explaining that because our
purpose in interpreting contracts is to ascertain the parties’
intent, appellate courts begin the process of interpretation by
‚look*ing+ to the writing itself‛ (citation and internal quotation
marks omitted)).
If after ‚consider*ing+ each contract
provision . . . in relation to all of the others, with a view toward
giving effect to all and ignoring none,‛ we determine that the
terms of the contract are unambiguous,
id.
¶¶ 18–19 (omission in
original) (citation and internal quotation marks omitted), we
‚interpret those terms in accordance with their plain and
ordinary meaning,‛ , 842 P.2d at 921 (citation and internal
quotation marks omitted). ‚Exclusions from coverage are
interpreted no differently when the policy language is clear.‛
Quaid
,
interpretation of the term ‚Complication(s),‛ neither contends
that it is ambiguous.
See Gee v. Utah State Ret. Bd.
,
(continued...) condition . . . or injury‛—constriction of her stomach and intestines—that required her to undergo emergency surgery to correct it. Thus, the only question is whether Kuhn’s medical condition or injury occurred ‚as a result of‛ her earlier non- covered and ineligible gastric bypass surgery. PEHP contends that we have already determined the
meaning of the phrase ‚as a result of‛ in this context in our
decision in
Gee v. Utah State Retirement Board
,
by then had created a debilitating medical condition. Id. The medical plan had a provision, similar to the one at issue here, excluding coverage for ‚Complications as a result of [any] ineligible surgery.‛ Id. PEHP, and later the Board, denied Gee coverage for the surgery to remove the implants on the basis that it was a complication ‚as a result of‛ the ineligible mastectomy and implantation. Id. We declined to disturb that decision. Id. at 921.
¶11 Although she recognizes the similarities between Gee and her case, Kuhn contends that Gee should not apply here because it is distinguishable in two significant ways. First, she argues that her case is factually dissimilar because in Gee the breast implants failed whereas in her case the medical condition or injury arose from ‚normal bodily changes.‛ Second, she asserts that the medical plan at issue in Gee ‚did not include a provision defining complication as is the case here‛ and Gee ’s plain language approach therefore does not address whether Kuhn’s emergency surgery constitutes a complication as a result of the non-covered gastric bypass surgery under her medical plan. We conclude that the distinctions Kuhn identifies are not legally significant. Kuhn contends that Gee is distinguishable from her case
because the medical condition requiring surgery in
Gee
was
caused by a ‚failure‛ of the silicone implants,
id.
at 920–21,
whereas Kuhn’s condition arose from ‚normal bodily changes.‛
It is not apparent, however, that our use of the word ‚failure‛ in
5. In her brief, Kuhn asserts a third basis for distinguishing
Gee
: Gee’s attorney conceded that Gee’s post-enrollment surgery was
not covered.
See Gee v. Utah State Retirement Board
,
unlike the policy in that case, the Master Policy here defines the term ‚Complication(s).‛ We disagree that the ‚Complication(s)‛ definition distinguishes this case from in any legally meaningful way. The Master Policy in this case defines ‚Complication(s)‛ to include any ‚medical condition, illness, or injury . . . occurring as a result of another medical condition, illness, injury, or Surgical Procedure.‛ However, the phrase ‚as a result of‛ is not further defined, and thus, we must afford it its ordinary meaning. Id. The plain meaning of ‚as a result‛ is ‚consequently,‛ As a Result , The Free Dictionary, http://legal- dictionary.thefreedictionary.com/as+a+result (last visited January 5, 2015), or ‚something that is caused by something else that happened or was done before,‛ Result , Merriam–Webster Online, http://www.merriam-webster.com/dictionary/result (last visited January 5, 2015). This is essentially the same definition we applied in Gee using the plain language approach to define 6. As we explained in note 4, we have omitted the ‚related to‛ language from the definition of ‚Complication(s).‛ an undefined term. In Gee , we determined that a complication that arises ‚as a result of‛ another medical procedure is an ‚issue often appearing suddenly and unexpectedly‛ ‚ as a consequence , effect, or conclusion‛ of some medical procedure. Gee , 842 P.2d at 921 (emphasis added) (citations and internal quotation marks omitted). Thus, although Gee required us to interpret the medical plan without the benefit of an express definition of ‚complication,‛ our conclusions about the term’s meaning in Gee and in this case are essentially identical because the crucial concept connecting the original excluded surgery with the subsequent procedure is the same—‚as a result of.‛ In other words, in both Gee and this case, for a complication to result from an earlier surgery, it had to occur ‚as a consequence‛ of that earlier surgery, id. , or be the ‚something that is caused by something else that happened or was done before,‛ Result , Merriam–Webster Online. And because our contractual analysis in Gee does not differ in any significant way from our approach here, the fact that ‚Complication(s)‛ is defined in the Master Policy at issue in this case does not distinguish it from . Kuhn nevertheless contends that this interpretation of the contract language is simply wrong, arguing that the phrase ‚as a result of‛ implies a causation standard more stringent than ‚consequently.‛ In this regard, Kuhn is dismissive of the concept of ‚but-for‛ causation, arguing that to qualify as a complication under the Master Policy, the original gastric bypass surgery must have been the ‚mechanism‛ or a ‚proximate cause‛ of the stomach and intestine constriction that led to the emergency surgery to remove the Silastic band and not simply consequentially related to the prior surgery in a ‚but-for‛ sense. 7. In her brief, Kuhn states that she ‚does not dispute the Board’s conclusion that her pre-enrollment [gastric bypass] surgery was a but-for cause of her injury.‛ She contends only that ‚but-for‛ causation is insufficient.
She contends that because the only evidence of the cause of the
Silastic band’s movement was normal bodily changes
after
the
surgery, the surgery itself did not proximately cause her medical
condition in 2008. Kuhn relies on tort cases, including
Raab v.
Utah Railway Co.
,
however, Kuhn is attacking the continued viability of the precedent.
Those asking [appellate courts] to overturn prior precedent have a substantial burden of persuasion. See State v. Hansen , 734 P.2d 421, 427 (Utah 1986). This burden is mandated by the doctrine of stare decisis. In State v. Thurman , 846 P.2d 1256 (Utah 1993), [the Utah Supreme Court] discussed stare decisis in the context of multiple panels of the court of appeals and emphasized the importance of its observance: ‚This doctrine, under which the first decision by a court on a particular question of law governs later decisions by the same court, is a cornerstone of the Anglo-American jurisprudence that is crucial to the predictability of the law and the fairness of adjudication.‛ Id. at 1269.
State v. Menzies
, 889 P.2d 393, 398–99 (Utah 1994). In other
words, once a point of law has been decided, we will not
overturn it lightly; rather, we must be ‚convinced that there has
been a change in the controlling authority, or that our prior
decision was clearly erroneous.‛
State v. Ingleby
, 2004 UT App
447, ¶ 7,
law, and Kuhn has not made a persuasive case for simply importing tort causation principles into the interpretation of a contract provision dealing with events that ‚occur*+ as a result of‛ excluded surgical procedures. Certainly in this case the concept of ‚but-for‛ causation does not trivialize the relationship between the surgery that inserted the Silastic band and the emergency surgery that removed it in the way that the tort cases reject. This is not the kind of circumstance where the antecedent event’s link to an ultimate effect is attenuated, such as where the decision to take one route to work over another results in an accident that would not have occurred ‚but for‛ that otherwise innocuous choice. On the contrary, the band itself was the sine qua non of the subsequent medical condition and emergency operation, not simply a trivial link in an attenuated ‚but-for‛ causation chain.
8. Kuhn alternatively contends that the Master Policy’s definition of ‚Complication(s)‛ commands at least a ‚causal nexus‛ relationship. The ‚causal nexus‛ standard is ‚more than ‘but-for’ causation, but less than legal, proximate cause.‛ Viking Ins. Co. of Wis. v. Coleman , 927 P.2d 661, 664 (Utah Ct. App. 1996). This is the standard we have imposed in an automobile insurance case to determine whether damages for bodily injury or property damage arose out of a car accident so as to be covered by the
(continued...) ¶17 In summary, the constriction of Kuhn’s stomach and intestines was ‚a result of‛ her pre-enrollment gastric bypass surgery and thus amounted to a complication of that non- covered surgery. Such a complication is expressly excluded from coverage by the plain language of the Master Policy’s Exclusions. B. There is no ambiguity regarding the scope of coverage for
complications that result from pre-enrollment, non- covered surgeries. Kuhn contends that even if the medical condition was a
complication of the gastric bypass surgery, she should not have been denied coverage because the Master Policy is ambiguous regarding the scope of coverage for complications from a pre- enrollment, non-covered surgery that developed after enrollment with PEHP. The Exclusions preclude coverage for ‚Obesity Surgery such as gastric bypass . . . , including any present or future Complications‛ as well as ‚Complications as a result of non-covered or ineligible Surgery.‛ According to Kuhn, ‚a person of ordinary intelligence and understanding‛ would not have read these Exclusions to include ‚complications from a surgery that occurred years before enrollment.‛ Rather, she contends, a reasonable person would ‚interpret ‘include*d+’ complications and complications resulting from non-covered or governing automobile policy. Id. at 663–64. In that context, we interpreted the contractual phrase ‚arises out of‛ to require more than ‚but-for‛ causation. Id.
It may be argued that the facts of both and this case
satisfy this intermediate standard. We do not adopt the ‚causal
nexus‛ standard in the instant case, however, because the Master
Policy’s plain language does not appear to require it.
ineligible surgeries as those linked to . . .
post-enrollment
obesity
surgeries.‛ (Alteration in original) (emphasis added). Although Kuhn does not label her argument as such, she
seems to be taking a position akin to the reasonable expectations
doctrine. ‚*T+he reasonable expectations doctrine authorizes a
court confronted with an adhesion contract to enforce the
reasonable expectations of
the parties under certain
circumstances.‛
Alf v. State Farm Fire & Cas. Co.
, 850 P.2d 1272,
1275 (Utah 1993);
Russ v. Woodside Homes, Inc.
,
insured‛). Kuhn contends that because the Exclusions can
plausibly be read to exclude only surgeries (and resulting
complications) performed after enrollment, that interpretation
ought to be adopted under the principle that ambiguities in
insurance contracts are interpreted in favor of coverage, not
against it.
See Mellor
, 2009 UT 5, ¶ 16 (explaining that appellate
courts ‚interpret insurance policies liberally in favor of the
insured‛ and therefore ‚when an ambiguity exists in an
insurance contract, that ambiguity is interpreted in favor of
coverage‛). As an initial matter, we note that the Board could not
have violated the reasonable expectations doctrine because Utah
courts have declined to adopt it.
Kramer v. State Ret. Bd.
, 2008 UT
App 351, ¶ 25,
omits terms, or if its terms used to express the intention of the
parties may be understood to have two or more plausible
meanings.‛
Gee v. Utah State Ret. Bd.
,
II. Attorney Fees Finally, Kuhn argues that the Board erred in denying her
request for attorney fees as consequential damages of the denial
of her claims. To recover consequential damages, a plaintiff must
have demonstrated that there was a contract breach resulting in
foreseeable and ascertainable damages.
Mahmood v. Ross
, 1999
UT 104, ¶ 20,
CONCLUSION We decline to disturb the Board’s decision to uphold
PEHP’s denial of coverage for Kuhn’s emergency surgery and follow-up care because the constriction on Kuhn’s stomach and intestines was a result of a non-covered surgery and therefore constituted an excluded complication. Because the Master Policy clearly excludes coverage for future complications of a non- covered surgical procedure, we also reject Kuhn’s alternative claim that the policy was ambiguous regarding post-enrollment complications occurring as a result of pre-enrollment, non- covered surgeries and that, as a consequence, she could reasonably expect that such a complication would be covered. It follows from our conclusion that the Master Policy excluded coverage for Kuhn’s emergency surgery and follow-up care that she is not entitled to damages for wrongful denial of her claims. Accordingly, we decline to disturb the Board’s decision to deny Kuhn’s request for consequential damages in the form of attorney fees.