Hilda Gradinger v. Washington National Ins. Co. , 250 F. App'x 271 ( 2007 )

WITHDRAWN [DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
OCTOBER 4, 2007
No. 06-16164
THOMAS K. KAHN
________________________
CLERK
D. C. Docket No. 06-60227-CV-JIC
HILDA GRADINGER,
Plaintiff,
EDWARD B. GRADINGER,
CARYLE R. LEVINE,
Plaintiffs-Appellants,
versus
WASHINGTON NATIONAL INSURANCE COMPANY,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(October 4, 2007)
Before ANDERSON and PRYOR, Circuit Judges, and VINING,* District Judge.
__________________
*Honorable Robert L. Vining, Jr., United States District Judge for the Northern District of
Georgia, sitting by designation.
PER CURIAM:
Edward B. Gradinger and Caryle R. Levine, as personal representatives of
the Estate of Hilda Gradinger, appeal the district court’s grant of Washington
National Insurance Company’s motion for final summary judgment and the denial
of Mrs. Gradinger’s1 motion for partial summary judgment. The parties do not
dispute the facts or the applicable law in this case. They simply disagree on how
the law applies to the facts. Because we find that there is more than one reasonable
interpretation of the home health care insurance policy at issue, we must liberally
construe it in favor of the insured. Thus, we reverse the district court’s order.
I. BACKGROUND
In November 1990, Mrs. Gradinger applied for home health care insurance
with Pioneer Life Insurance Company. Pioneer issued a policy to Mrs. Gradinger,
effective December 26, 1990, which included multiple pages: (a) introductory
pages; (b) a one-page Certificate Schedule; (c) five printed pages detailing
information such as policy definitions, benefits, exclusions, and pre-existing
conditions limitations; (d) an endorsement page; (e) amendments to the policy; and
(f) a copy of Mrs. Grandinger’s application for insurance. The introductory pages
1
Mrs. Gradinger died on July 14, 2006. Her personal representatives filed a motion to
substitute, which the district court granted on November 31, 2006. Following the custom of the
district court and the parties, we refer to Mrs. Gradinger as the plaintiff in this action for the
purposes of this opinion.
2
and five pages following the Certificate Schedule comprised a pre-printed,
standard certificate of insurance. The Certificate Schedule, which details the
amounts of coverage, was the only portion of the policy specially prepared for Mrs.
Gradinger.
The schedule appears as follows:
CERTIFICATE SCHEDULE
HOME HEALTH CARE BENEFIT $180/DAY
LIFETIME MAXIMUM BENEFIT AMOUNT $250,000
PER OCCURRENCE MAXIMUM BENEFIT $150,000/ILLNESS
AUTOMATIC BENEFIT INCREASE PERCENTAGE Benefits increase by
8% each year
INSURED: Hilda Gradinger CERTIFICATE NO: PL0855783A
EFFECTIVE DATE: 12-26-90
INITIAL PREMIUM: $1,108.00
Additionally, the pre-printed pages contain the following relevant
provisions:
HOME HEALTH CARE: We will pay 100% of the usual and
customary charges for Home Health Care expenses if the care was
pre-authorized. If the care was not pre-authorized we will pay 75% of
the usual and customary charges for Home Health Care expenses
3
incurred, up to 75% of the Daily Benefit Amount shown in the
schedule. These benefits will be paid up to the Home Health Care
Daily Benefit shown in the schedule. All benefits will be limited to
the Per Occurrence Maximum Benefit for each injury or sickness and
the Lifetime Maximum Benefit Amount for ALL injuries and
sicknesses which are shown in the certificate schedule.
....
AUTOMATIC DAILY BENEFIT INCREASE: On each policy
anniversary, we will increase the Home Health Care Daily Benefit
payable under this policy by the Automatic Benefit Increase
Percentage shown on the schedule page.
....
LIFETIME MAXIMUM BENEFIT: This coverage shall terminate
and no further benefits will be payable when the total sum of Home
Health Care or Adult Day Care benefits paid equals the amount shown
in the schedule for the Lifetime Maximum Benefit Amount. Any
premium paid for a period after termination will be refunded.
After the policy was issued, Pioneer merged with Washington National
Insurance Company. As a result of the merger, Washington National assumed all
obligations under the policy.
In April 1998, Mrs. Gradinger submitted a claim for benefits under the
policy because she was receiving medically necessitated home health care. The
insurer paid home health care benefits on behalf of Mrs. Gradinger for
approximately five years. In April 2003, the insurer ceased paying benefits under
the policy and terminated coverage because it claimed that Mrs. Gradinger had
4
reached the Lifetime Maximum Benefit amount of $250,000.2 Mrs. Gradinger
objected to the termination of her coverage, arguing that the liability limit under
the policy had not been met because the Lifetime Maximum Benefit amount had
increased by 8% each year. Subsequently, Mrs. Gradinger received and paid three
premium bills totaling $2,649.75.
In January 2006, Mrs. Gradinger filed her lawsuit against Washington
National in state court, alleging breach of contract (Count I) and waiver and
estoppel (Count II). Washington National removed the case to federal district
court pursuant to 28 U.S.C. § 1332.
In April 2006, Washington National remitted a check to Mrs. Gradinger for
$669.98. An accompanying letter explained that the check was a refund of
unearned premiums collected plus interest at the rate of 7%, minus an overpayment
of claims in the amount of $1,995.50. Mrs. Gradinger accepted the reimbursement.
In September 2006, Mrs. Gradinger moved for partial summary judgment
only on the liability aspect of the breach of contract claim.3 Washington National
moved for final summary judgment on both the breach of contract claim and the
2
The Per Ocurrence Maximum Benefit amount is not at issue in this case because it is
undisputed that Mrs. Gradinger began suffering from a separate and distinct illness requiring
home health care covered by the policy after she submitted her initial claim under the policy.
3
Mrs. Gradinger did not seek summary judgment as to damages payable if the Court
ruled in her favor.
5
waiver and estoppel claim. The district court entered an order granting final
summary judgment to Washington National and denying partial summary
judgment to Mrs. Gradinger on October 30, 2006. Mrs. Gradinger appeals the
district court’s dismissal of her breach of contract claim only. She does not appeal
the dismissal of her waiver and estoppel claim.
II. STANDARD OF REVIEW
We review the grant or denial of summary judgment de novo. Holloman v.
Mail-Well Corp., 443 F.3d 832, 836 (11th Cir. 2006). “Summary judgment is
appropriate when no genuine issue of material fact exists and the moving party is
entitled to judgment as a matter of law.” Elan Pharm. Research Corp. v.
Employers Ins. of Wasau, 144 F.3d 1372, 1374-75 (11th Cir. 1998) (citing Fed. R.
Civ. P. 56(c)).
III. DISCUSSION
This matter is ripe for summary judgment because it involves a pure
question of law. The parties do not dispute the relevant facts. They only dispute
the proper interpretation of the Maximum Lifetime Benefit amount payable under
the home health care insurance policy. Washington National argues that the policy
caps the allowable Lifetime Benefit at $250,000. Mrs. Gradinger, on the other
hand, asserts that the Maximum Lifetime Benefit should have increased 8% per
6
year from the original $250,000. The district court held that the policy was
unambiguous and the plain meaning supported Washington National’s
interpretation of the of the policy. We disagree.
In this case, Florida law governs the interpretation of the home health care
insurance policy. “Thus, we look at the policy as a whole and give every provision
its full meaning and operative effect.” Hyman v. Nationwide Mut. Fire Ins. Co.,
304 F.3d 1179, 1186 (11th Cir. 2002) (applying Florida law). As we explained in
Hyman:
We start with the plain language of the policy, as bargained for by the
parties. If that language is unambiguous, it governs. Under Florida
law, however, if the “relevant policy language is susceptible to more
than one reasonable interpretation, one providing coverage and the
[]other limiting coverage, the insurance policy is considered
ambiguous,” and must be “interpreted liberally in favor of the insured
and strictly against the drafter who prepared the policy.”
Id. (citations omitted) (alteration in original). Florida law requires that the terms of
the policy “be given their everyday meaning” and be viewed “in light of the skill
and experience of ordinary people.” Lindheimer v. St. Paul Fire and Marine Ins.
Co., 643 So. 2d 636, 638 (Fla. Dist. Ct. App. 1994).
The only question before us is whether Mrs. Gradinger’s interpretation of
the policy is a reasonable one. If a person of ordinary skill and experience
reasonably could conclude that the Automatic Benefit Increase applies not only to
7
the daily Home Health Care Benefit but to the Lifetime Maximum Benefit as well,
then the policy is ambiguous and we must construe its terms liberally in favor of
Mrs. Gradinger and strictly against the insurer.
The Benefits section of the policy expressly states that the insurer “will
increase the Home Health Care Daily Benefit payable under this policy by the
Automatic Benefit Increase Percentage shown on the schedule page.” While this
provision makes it clear that the Automatic Benefit Increase applies to the daily
benefit, nowhere in the policy does it state that the Automatic Benefit Increase
does not apply to either of the maximum benefits. Instead, each time the policy
discusses either maximum benefit, the policy directs the reader to the Certificate
Schedule.
Turning to that section of the policy, we see that the Certificate Schedule lists
three benefits: the Home Health Care Benefit, the Lifetime Maximum Benefit, and
the Per Occurrence Maximum Benefit. After this grouping of three benefits, the
schedule sets out the Automatic Benefit Increase Percentage with some spacing
between the three benefits and the percentage. The schedule states: “Benefits
increase by 8% each year.” Considering the grouping of the benefits and the
alternate uses of the singular and plural forms of the word benefit, nothing in the
schedule indicates that the Automatic Benefit Increase only applies to the first of
8
three benefits listed.
The Automatic Benefit Increase appeals to a prospective insured who seeks
protection against the rising costs of health care. Promising that benefits increase
by 8% each year is a policy selling point; however, if the daily benefit increases
over time, but the Lifetime Maximum Benefit remains fixed at its initial level, the
period of protection will shrink. Thus, an insured who survives until she has
incurred $250,000 in covered costs, will reach the Per Occurrence and Lifetime
Maximum Benefit limits sooner. An ordinary person could reasonably assume that
the Automatic Benefit Increase does not function to reduce the duration of
coverage. In other words, it would be reasonable for an ordinary person to
conclude that all benefits increase by 8% each year.
Washington National asserts that Mrs. Gradinger places too much emphasis
on the schedule and unreasonably reads this portion of the policy in isolation. The
pre-printed, standardized provisions of the policy, however, repeatedly emphasize
the centrality of the schedule to the meaning of the policy. Because the schedule
was the only portion of the policy specially prepared for Mrs. Gradinger, it is not
unreasonable to focus on it, especially considering that none of the policy’s other
provisions contradict Mrs. Gradinger’s interpretation of the schedule.
Reading the Benefits section in conjunction with the Certificate Schedule,
9
there is an ambiguity as to whether the Automatic Benefit Increase applies to the
Lifetime Maximum Benefit. While the insurer may have intended that the
Automatic Benefit Increase apply exclusively to the daily Home Health Care
Benefit, it is not plain that the policy should be construed so narrowly. Because the
policy is ambiguous, we resolve the issue in favor of Mrs. Gradinger and against the
insurer, the drafter of policy. See Hyman, 304 F.3d at 1186.
IV. CONCLUSION
Accordingly, we reverse the district court’s grant of summary judgment in
favor of Washington National and remand the case with instructions to grant Mrs.
Gradinger’s motion for partial summary judgment.
REVERSED and REMANDED.
10