General Collection Co. v. Leaman

IN THE NEBRASKA COURT OF APPEALS
MEMORANDUM OPINION AND JUDGMENT ON APPEAL
(Memorandum Web Opinion)
GENERAL COLLECTION CO. V. LEAMAN
NOTICE: THIS OPINION IS NOT DESIGNATED FOR PERMANENT PUBLICATION
AND MAY NOT BE CITED EXCEPT AS PROVIDED BY NEB. CT. R. APP. P. § 2-102(E).
GENERAL COLLECTION CO., APPELLEE,
V.
RALISA LEAMAN AND MICHAEL LEAMAN, APPELLANTS,
AND GOLDEN RULE INSURANCE COMPANY, APPELLEE.
Filed June 6, 2023. No. A-22-406.
Appeal from the District Court for Hall County: PATRICK M. LEE, Judge, on appeal thereto
from the County Court for Hall County: ALFRED E. COREY III, Judge. Judgment of District Court
reversed and remanded for further proceedings.
Jared J. Krejci, of Smith, Johnson, Allen, Connick & Hansen, for appellants.
Kalissa A. Kleine, of Stinson Leonard Street, L.L.P. for appellee Golden Rule Insurance
Company.
PIRTLE, Chief Judge, and RIEDMANN and ARTERBURN, Judges.
PIRTLE, Chief Judge.
INTRODUCTION
Ralisa Leaman and Michael Leaman appeal from an order of the district court for Hall
County denying the Leamans’ partial motion for summary judgment and granting Golden Rule
Insurance Company’s motion for summary judgment, finding there was no genuine issue of
material fact as to coverage of the Leamans’ claim under the insurance policy between the parties
and that Golden Rule was entitled to judgment as a matter of law. We conclude that genuine issues
of material fact preclude the entry of summary judgment and therefore reverse the trial court’s
order and remand the cause for further proceedings.
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BACKGROUND
This action began as a collection case filed by General Collection Co. against the Leamans
to collect a debt owed to Surgery Group of GI for medical services provided to Ralisa. Ralisa had
a lump in her breast biopsied in March 2019, which led to a diagnosis of breast cancer. She
subsequently underwent treatment for breast cancer.
The Leamans filed an answer and third-party complaint against Golden Rule in response
to General Collection’s complaint. The Leamans agreed with most of the allegations set forth in
General Collection’s complaint but alleged that Golden Rule was liable for the medical bills owed
to Surgery Group of GI.
Regarding the third-party complaint against Golden Rule, the Leamans alleged the
existence of a medical insurance policy between the Leamans and Golden Rule and that Golden
Rule had improperly denied coverage and benefits for Ralisa’s breast cancer treatments and
expenses on the basis that her breast cancer was a preexisting condition excluded from coverage
under the policy. The Leamans brought three causes of action against Golden Rule: contractual
indemnity under the insurance contract, damages for the bad faith denial of benefits of the
insurance contract, and declaratory judgment that all medical bills and expenses related to Ralisa’s
breast cancer treatments were covered by the insurance contract and Golden Rule.
Golden Rule denied the Leamans’ allegations and alleged affirmative defenses, including
that the insurance contract was “potentially void due to fraud” and “subject to recission for
intentional omissions and/or misstatements made in the application.”
As between General Collection and the Leamans, General Collection was granted summary
judgment and obtained a judgment against the Leamans in the amount of $6,568.13.
Golden Rule subsequently filed a motion for summary judgment regarding the Leamans’
third-party complaint, and the Leamans filed a cross-motion for partial summary judgment. A
hearing on both motions followed. Golden Rule argued that coverage for Ralisa’s breast cancer
treatment did not exist under the policy because of a preexisting condition exclusion. The Leamans
argued that exhibit 5 presented by and relied upon by Golden Rule was inadmissible and that
Golden Rule waived reliance on its preexisting condition argument because it retained the
Leamans’ insurance premiums. The Leamans also argued that they were entitled to partial
summary judgment on the issue of insurance coverage for Ralisa’s breast cancer treatments and
expenses. They further argued that if they were not entitled to partial summary judgment, disputed
issues of fact prevented Golden Rule from being granted summary judgment.
Evidence at the summary judgment hearing established that the Leamans applied for a
short-term medical insurance policy with Golden Rule on December 19, 2018. Coverage under
that policy became effective on December 21 for injuries, and December 26 for illnesses.
The topic of preexisting conditions is addressed throughout the insurance application and
agreement. First, in the “Statement of Understanding” section of the application it states: “No
benefits will be paid for a health condition that exists prior to the date insurance takes effect.”
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Second, the policy provides two specific definitions for “preexisting condition” as follows:
“Preexisting condition” means a condition:
A. For which medical advice, diagnosis, care or treatment was recommended or
received within the 24 months immediately preceding the date the covered person became
insured under the policy; or
B. That had manifested itself in such a manner that would have caused an ordinarily
prudent person to seek medical advice, diagnosis, care or treatment within the 12 months
immediately preceding the date the covered person became insured under the policy.
Finally, the insurance policy has a specific section entitled “Preexisting Conditions” which
states: “Preexisting conditions will not be covered under the policy.”
The evidence also included “Claimant’s Statement and Authorization” which Ralisa
completed and submitted to Golden Rule in April 2019 seeking insurance coverage for her breast
cancer treatment. The form asked Ralisa how the condition began and to set out all symptoms and
describe the condition in detail, from the beginning. Ralisa’s response stated: “Presence of
abnormality in January 2019 which resulted in a biopsy.” The form also states that by signing the
form, Ralisa was authorizing the release of any medical records necessary “to Golden Rule
Insurance Company, a UnitedHealthcare company, or any agent or independent administrator
acting on its behalf” in order to process her claim.
In the Leamans’ responses to requests for admissions they admitted that Ralisa was aware
of a lump in her left breast prior to December 19, 2018, but denied that she had any knowledge
that the lump was cancerous or a reason to be medically concerned prior to December 19, 2018.
They also admitted that Ralisa discussed the lump in her left breast with Katie L. Peters, also
known as Katie L. Peters Settje (Settje), APRN, NP-C, at an August 30, 2018, office visit at Family
Practice of Grand Island.
In the Leamans’ answers to interrogatories, they stated that Ralisa first noticed a lump in
her left breast in October 2014, but at that time there was no indication the lump was cancerous or
needed further medical attention. The answers also state that Settje was one of the medical
providers made aware of the lump in October 2014, and that Ralisa was advised to have a
mammogram and ultrasound, which she did.
Ralisa’s medical records from Family Practice of Grand Island and Saint Francis Cancer
Center were offered into evidence by Golden Rule as exhibit 5. The Leamans objected to the
exhibit based on hearsay, authentication, and foundation. The objection was taken under
advisement.
The first page of exhibit 5 contains a letter from Golden Rule to Family Practice of Grand
Island asking for Ralisa’s medical records in order to complete a review of Ralisa’s insurance
claim. The request states that authorization had been obtained from Ralisa and a copy was on file
with Golden Rule. The remainder of exhibit 5 consists of Ralisa’s medical records.
Ralisa’s medical records contained in exhibit 5 show that she underwent a mammogram
on April 3, 2018. The results were “negative,” but found that “the breasts are extremely dense,
which diminishes the sensitivity of mammography. There are no dominant masses or suspicious
microcalcifications in either breast.” The report from the mammogram also warned that “a
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negative report should not delay a biopsy if a clinically suspicious mass is present. Some cancers
are not identified by x-ray.”
In addition, Ralisa’s medical records show that she discussed the lump in her breast with
Settje during an August 30, 2018, doctor visit for an unrelated issue. Specifically, the patient visit
notes from that day state: “Has also had a small palpable lump, left inframammary area, present
for years, has been imaged in the past, she wonders about having this excised. She does not feel it
has changed.” The notes from that visit further state:
In regards to the inframammary area soft tissue mass, this has not changed for years she is
wondering about having it excised, discussed with her that we could refer to a surgeon to
have this evaluated, she will consider this and let us know [if] she would like to follow up
with us.
Following the hearing, the court found exhibit 5 admissible based on the business records
exception to the hearsay rule and overruled the Leamans’ objections. The court overruled the
Leamans’ motion for partial summary judgment seeking an order that Golden Rule was required
to provide insurance coverage finding that they failed to meet their burden. The court further found
they failed to meet their burden that they are entitled to a judgment as a matter of law as to any of
their causes of action against Golden Rule. The court granted Golden Rule’s motion for summary
judgment finding that the lump biopsied in March 2019 leading to a diagnosis of breast cancer was
a preexisting condition not covered under the insurance policy issued by Golden Rule. It concluded
that there was no genuine issue of material fact as to coverage of the Leamans’ claim and Golden
Rule was entitled to judgment as a matter of law.
ASSIGNMENTS OF ERROR
The Leamans assign that the trial court erred in: (1) granting Golden Rule’s motion for
summary judgment and denying their motion for partial summary judgment, (2) admitting exhibit
5 into evidence over their hearsay, authentication, and lack of foundation objections, (3) failing to
find that the policy provided coverage for Ralisa’s breast cancer treatments based on the
undisputed admissible evidence, (4) determining that the policy did not cover Ralisa’s breast
cancer treatments despite the doctrine of waiver due to Golden Rule’s retention of the Leamans’
premiums, (5) failing to interpret the plan to find coverage for Ralisa’s breast cancer treatments,
and (6) granting Golden Rule’s motion for summary judgment based on an absence of undisputed
facts and inferences, even if exhibit 5 was properly admitted and coverage was not created due to
Golden Rule retaining the Leamans’ premiums.
STANDARD OF REVIEW
A trial court has the discretion to determine the relevancy and admissibility of evidence,
and such determinations will not be disturbed on appeal unless they constitute an abuse of that
discretion. Noah’s Ark Processors v. UniFirst Corp., 310 Neb. 896, 970 N.W.2d 72 (2022). In a
civil case, the admission or exclusion of evidence is not reversible error unless it unfairly
prejudiced a substantial right of the complaining party. Id.Apart from rulings under the residual hearsay exception, an appellate court reviews for
clear error the factual findings underpinning a trial court’s hearsay ruling and reviews de novo the
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court’s ultimate determination to admit evidence over a hearsay objection or exclude evidence on
hearsay grounds. O’Brien v. Cessna Aircraft Co., 298 Neb. 109, 903 N.W.2d 432 (2017).
An appellate court affirms a lower court’s grant of summary judgment if the pleadings and
admitted evidence show that there is no genuine issue as to any material facts or as to the ultimate
inferences that may be drawn from the facts and that the moving party is entitled to judgment as a
matter of law. Evans v. Freedom Healthcare, 311 Neb. 336, 972 N.W.2d 75 (2022). In reviewing
a summary judgment, an appellate court views the evidence in the light most favorable to the party
against whom the judgment was granted and gives that party the benefit of all reasonable
inferences deducible from the evidence. Id.The interpretation of an insurance policy is a question of law, in connection with which an
appellate court has an obligation to reach its own conclusions independently of the determination
made by the lower court. North Star Mut. Ins. Co. v. Miller, 311 Neb. 941, 977 N.W.2d 195 (2022).
ANALYSIS
The Leamans have alleged six assignments of error which we have consolidated into three:
the trial court erred in admitting exhibit 5 into evidence over their hearsay, authentication, and lack
of foundation objections; the trial court erred in determining that the policy did not cover Ralisa’s
breast cancer treatments because Golden Rule had waived its preexisting condition argument by
retaining the Leamans’ premiums; and the trial court erred in granting Golden Rule’s motion for
summary judgment and denying their motion for partial summary judgment.
Admission of Exhibit 5.
The Leamans assign that the trial court erred in admitting exhibit 5, Ralisa’s medical
records, into evidence over their objections based on hearsay, insufficient authentication, and lack
of foundation to establish any exception to the hearsay rule. Golden Rule argued exhibit 5 was
admissible under the hearsay exception for statements made for medical treatment and/or the
exception for business records.
The trial court relied on other admitted evidence in determining the admissibility of exhibit
5 and concluded that exhibit 5 was admissible pursuant to Neb. Rev. Stat. § 27-803(6)(b) (Cum.
Supp. 2022), the business records exception to the hearsay rule. Specifically, the court relied on
exhibit 1, an affidavit of Kimberly K. Moeller, a Legal Services Specialist for United HealthCare
Services, Inc., Golden Rule’s parent company. Moeller’s affidavit states that she handles matters
on behalf of Golden Rule. It further states that as part of Golden Rule’s claims administration
process Golden Rule requests that insureds complete a “Claimant’s Statement and Authorization,”
and that these are kept and maintained by Golden Rule in the ordinary course of business and that
she had reviewed Ralisa’s statement and authorization. The affidavit also states that as part of its
claims administration process, Golden Rule obtains, with the insured’s authorization, records from
healthcare providers or facilities having information as to the care, advice, treatment, diagnosis, or
prognosis of any physical or mental condition of the insured. Moeller’s affidavit identified exhibit
5 as “[a] true and correct copy of [Ralisa’s] medical records from Family Practice of Grand Island
PC regarding a visit on August 30, 2018, which is kept and maintained by Golden Rule in the
ordinary course of business.”
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The Leamans first argue that Moeller’s affidavit did not properly authenticate exhibit 5, as
required by Neb. Rev. Stat. § 27-901 (Reissue 2016). They contend that Moeller was not a qualified
person to authenticate documents created by Ralisa’s medical providers and received by Golden
Rule in the course of litigation.
Authentication or identification of evidence is a condition precedent to its admission and
is satisfied by evidence sufficient to support a finding that the matter in question is what its
proponent claims. AVG Partners I v. Genesis Health Clubs, 307 Neb. 47, 948 N.W.2d 212 (2020),
citing § 27-901(1). A proponent of evidence is not required to conclusively prove the genuineness
of the evidence or to rule out all possibilities inconsistent with authenticity. AVG Partners I v.
Genesis Health Clubs, supra. Section 27-901(2) offers examples of authentication or identification
conforming with the requirements of the rule, including, testimony that a matter is what it is
claimed to be; and appearance, contents, substance, internal patterns, or other distinctive
characteristics, taken in conjunction with circumstances.
Because authentication rulings are necessarily fact specific, a trial court has discretion to
determine whether evidence has been properly authenticated. O’Brien v. Cessna Aircraft Co., 298
Neb. 109, 903 N.W.2d 432 (2017). An appellate court reviews the trial court’s ruling on
authentication for abuse of discretion. Id.The court found that Moeller’s affidavit established that the contents of exhibit 5 were
medical records. We agree that the affidavit satisfied the authentication requirement. It provided
the court with sufficient evidence to show that exhibit 5, specifically the document from August
30, 2018, was what Golden Rule purported it to be – Ralisa’s medical records. In addition, the
appearance, contents, and substance of exhibit 5 taken in conjunction with circumstances clearly
demonstrated that it contained Ralisa’s medical records. Exhibit 5 appears to be medical records.
The relevant circumstances demonstrating that the exhibit contains Ralisa’s medical records
include Moeller’s statement that Golden Rule requests insureds to complete a “Claimant’s
Statement and Authorization” and Ralisa’s signed statement and authorization was entered into
evidence, in which she authorized the release of any medical records to Golden Rule, or any agent
or independent administrator acting on its behalf, in order to process her claim. Further, exhibit 5
was not prepared for purposes of litigation, as the Leamans contend, but rather was information
Golden Rule obtained in the ordinary course of its claims administration process. Thus, the trial
court properly overruled the Leamans’ objection to exhibit 5 based on lack of authentication.
The Leamans next argue that even if exhibit 5 was properly authenticated, it was hearsay
and Golden Rule failed to establish the requisite foundation for its admission as a business record.
Under § 27-803(6), business records are an exception to the general exclusion of hearsay
evidence. Subsection (6)(b), relevant here, allows the admission of records received or acquired in
the regular course of business by an entity from another entity. Specifically, it provides that the
following are not excluded by the hearsay rule:
A memorandum, report, record, or data compilation, in any form, of acts, events, or
conditions, other than opinions or diagnoses, that was received or acquired in the regular
course of business by an entity from another entity and has been incorporated into and kept
in the regular course of business of the receiving or acquiring entity; that the receiving or
acquiring entity typically relies upon the accuracy of the contents of the memorandum,
report, record, or data compilation; and that the circumstances otherwise indicate the
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trustworthiness of the memorandum, report, record, or data compilation, as shown by the
testimony of the custodian or other qualified witness.
(Emphasis supplied.)
The party seeking to admit a business record under the business records exception to the
hearsay rule bears the burden of establishing foundation under a three-part test. First, the proponent
must establish that the activity recorded is of a type that regularly occurs in the course of the
business’ day-to-day activities. Second, the proponent must establish that the record was made as
part of a regular business practice at or near the time of the event recorded. Third, the proponent
must authenticate the record by a custodian or other qualified witness. State v. Walker, 29 Neb.
App. 292, 953 N.W.2d 65 (2020).
The court found that the medical records in exhibit 5 were: (1) received by Golden Rule in
the regular course of its business; (2) were Ralisa’s medical records from Family Practice of Grand
Island that were kept in the normal course of its business; (3) that these medical records obtained
by Golden Rule were incorporated into Golden Rule’s business records in the ordinary course of
its business; (4) that these were the types of records typically relied upon by Golden Rule for its
accuracy regarding determination of claims; and (5) the records were factual in nature. It then
determined that the records in exhibit 5 were admissible pursuant to the business records exception
to the hearsay rule.
We agree that Moeller’s affidavit satisfies the necessary foundation for admitting exhibit
5 as a business record acquired from another entity. Moeller stated that she is a Legal Services
Specialist for United HealthCare Services and handles matters for Golden Rule, including
reviewing records related to the Leamans’ claim for insurance coverage. She stated that as part of
Golden Rule’s claims administration process, with the insured’s authorization it “obtains records
from health care providers or facilities having information as to the care, advice, treatment,
diagnosis, or prognosis of any physical or mental condition of the insured.” Moeller further
identified exhibit 5 as “medical records from Family Practice of Grand Island PC regarding a visit
on August 30, 2018,” a copy of which is “kept and maintained by Golden Rule in the ordinary
course of business.” Moeller’s affidavit established that Golden Rule relies on records from
healthcare providers or facilities in its claims administration process. It obtains medical records
with the insured’s authorization and keeps those records in the regular course of its business and
Ralisa’s records from Family Practice of Grand Island were the type of records typically relied
upon by Golden Rule in considering claims for insurance coverage. The admissibility of the
medical records from Family Practice of Grand Island, specifically the visit on August 30, 2018,
is further bolstered by the Leamans’ own admission that Ralisa had an office visit with Settje on
August 30, 2018, and discussed the lump in her left breast.
The Leamans also argue that exhibit 5 is inadmissible under the business records exception
because it contains opinions and diagnosis. See § 27-803(6)(b). However, Golden Rule relies
primarily on Settje’s notes from Ralisa’s visit on August 30, 2018, in which she recounts her and
Ralisa’s discussion about the lump in Ralisa’s breast and the offer of a surgical referral to have the
lump biopsied. Golden Rule does not rely on any medical opinions or diagnosis in exhibit 5 to
support its position that coverage did not exist under the policy because of a preexisting condition
exclusion. Accordingly, this argument fails.
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We conclude that exhibit 5 was admissible under the business records exception and,
therefore, the trial court did not err in overruling the Leamans’ hearsay objection.
Waiver of Preexisting Condition Argument.
The Leamans also argue that the trial court erred in failing to find they were entitled to a
determination that coverage applied as a matter of law because Golden Rule had waived its
argument that there was no insurance coverage due to a preexisting condition by retaining the
Leamans’ insurance premiums.
The Leamans rely on Dairyland Ins. Co. v. Kammerer, 213 Neb. 108, 327 N.W.2d 618(1982), in support of their position. In that case, following an automobile accident, the insurer sent
the insured notice of cancellation of an automobile insurance policy based on a misrepresentation
made by the insured at the time the policy was issued. The insurer returned the portion of the
premium collected for the period after the date of cancellation. The trial court entered judgment in
favor of the insurer, finding that the insured had fraudulently failed to disclose certain information
to its insurer at the time the insurance policy was issued and therefore, the policy of insurance
provided no coverage to the driver of the principal insured’s car involved in the accident.
On appeal the Nebraska Supreme Court reversed the trial court, holding that the insurer
was precluded from asserting that the insurance policy was void from the beginning where, instead
of cancelling the policy from its inception and returning to insured the entire premium, it declared
the policy cancelled nearly a month after the accident, kept the premium earned to date of
cancellation, and returned only that portion of premium equal to amount collected for period after
date of cancellation. The Supreme Court stated:
When learning of the alleged fraud, [insurer] had two choices. Either it could determine
that, because of the alleged fraudulent statements made to it, it wished to cancel the policy
from its inception and return to [insured] the entire premium, on the theory that the policy
never came into existence, or it could waive the alleged fraud, keep the premium earned to
date of cancellation, and accept responsibility under the policy. If [insurer] elected to
rescind the policy from its inception, it must place [insured] back in the same position
[insured] was in before the policy was issued, including returning to her all of the premium.
But [insurer] chose not to do so. Both by its notice of cancellation and by its retention of a
portion of the premium, [insurer] elected to recognize the existence of the policy from the
date of its issuance on March 5, 1980, until the date of its declared cancellation on April
22, 1980. Having made that choice, [insurer] acknowledged that the policy was in effect
on the date of the accident, March 27, 1980, and it therefore became liable under the policy.
[Insurer] could not, on the one hand, recognize the existence of the policy and retain a
portion of the premium and, on the other hand, deny the coverage afforded by the policy
because of alleged fraudulent misrepresentations.
Dairyland Ins. Co. v. Kammerer, 213 Neb. at 110-11, 327 N.W.2d at 620.
The Leamans argue that based on Dairyland Ins. Co., Golden Rule cannot deny
responsibility under the policy. The Leamans point out that Golden Rule denied coverage for
Ralisa’s claims in May 2019 and since that date, it has not refunded any portion of the premiums
the Leamans had paid. They contend, therefore, that Golden Rule has waived its argument that
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coverage is barred by the preexisting condition provisions and is bound to provide coverage for
the Leamans’ claims.
Golden Rule argues that unlike the facts in Dairyland Ins. Co., it did not affirmatively void
or rescind the policy, nor has it taken the position that the policy was void from inception. Rather,
Golden Rule claims that in accordance with the terms of the policy, it has maintained that the
policy was “voidable and subject to rescission,” and preserved the option to rescind the policy due
to misstatements by the Leamans in their application, but it opted not to rescind or void the policy.
Therefore, it was not required to return the premiums. Likewise, Golden Rule argues that by
retaining the premiums, it did not accept responsibility under the policy and waive its preexisting
condition argument.
We agree with Golden Rule that it did not void or rescind the policy and was not required
to return any premiums. Golden Rule did not notify the Leamans that the policy was cancelled and
has not argued or presented evidence that the policy was void. Rather, Golden Rule has denied the
Leamans’ specific claim for breast cancer related treatment on the ground that the claim is
excluded as a preexisting condition under the terms of the policy. The policy itself remained in
effect and other claims could have been made against the policy. Accordingly, Golden Rule did
not waive its preexisting condition argument by failing to return the premiums paid by the
Leamans, and therefore, the Leamans were not entitled to a determination that coverage applied as
a matter of law. This assignment of error fails.
Summary Judgment.
The Leamans next assign that the trial court erred in granting summary judgment in favor
of Golden Rule and denying their motion for partial summary judgment. Summary judgment is
proper when the pleadings, depositions, admissions, stipulations, and affidavits in the record
disclose that there is no genuine issue as to any material fact or as to the ultimate inferences that
may be drawn from those facts, and that the moving party is entitled to judgment as a matter of
law. North Star Mut. Ins. Co. v. Miller, 311 Neb. 941, 977 N.W.2d 195 (2022). At the summary
judgment stage, the trial court determines whether the parties are disputing a material issue of fact.
It does not resolve the factual issues. Williamson v. Bellevue Med. Ctr., 304 Neb. 312, 934 N.W.2d
186 (2019). Where reasonable minds could draw different conclusions from the facts presented,
there is a triable issue of material fact. Id. Summary judgment is an extreme remedy and should
not be used to deprive a litigant of a formal trial if there is a genuine issue of material fact. Wynne
v. Menard, Inc., 299 Neb. 710, 910 N.W.2d 96 (2018).
The Leamans argue that even with the admission of exhibit 5 into evidence, Golden Rule
is not entitled to summary judgment because there are genuine issues of material fact as to whether
the preexisting condition exclusion applies here. We agree.
The policy defines a “preexisting condition,” in part as “a condition: A. For which medical
advice, diagnosis, care or treatment was recommended or received within the 24 months
immediately preceding the date the covered person became insured under the policy.” In the
Leamans’ responses to requests for admission, they admitted that Ralisa discussed the lump in her
left breast with Settje on August 30, 2018, which was within the 24 months preceding the policy
becoming effective.
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Settje’s notes from Ralisa’s visit on August 30, 2018, state: “[Ralisa] [h]as also had a small
palpable lump, left inframammary area, present for years, has been imaged in the past, she wonders
about having this excised. She does not feel it has changed.” The notes further state that Ralisa
was “wondering about having [the lump] excised, discussed with her that we could refer to a
surgeon to have this evaluated, she will consider this and let us know [if] she would like to follow
up with us.”
Based on Settje’s notes, Ralisa is the one who inquired about the possibility of having the
lump removed. Settje told her if she wanted to have the lump evaluated, she would refer her to a
surgeon if she decided to have it removed. It seems clear that Ralisa did not receive a medical
diagnosis or medical care from Settje on August 30, 2018. However, it is uncertain whether the
conversation Ralisa had with Settje could be considered medical “advice” or a recommendation
for medical “treatment” within the policy definition of a preexisting condition. We conclude
Golden Rule failed to demonstrate that, as a matter of law, Settje provided medical advice or
recommended treatment during the August 30 office visit. Rather, a genuine issue of material fact
exists with respect to whether Settje’s discussion with Ralisa about the lump in her breast was
medical advice or recommended medical treatment. The issue is a question of fact that should be
decided by a jury at trial, not by the court on a motion for summary judgment.
Further, even if Settje’s conversation about the lump was medical advice or recommended
treatment, there is also a question of fact as to whether the advice or recommended treatment was
for breast cancer or for the lump in her breast.
Both state and federal courts have construed preexisting condition exclusions in insurance
contracts differently. It does not appear that Nebraska has specifically addressed the issue. Several
courts in other jurisdictions have held that where a policy defines a “preexisting condition” as a
condition “for which” treatment or care was given before the effective date, the policy is
ambiguous with respect to whether a “preexisting condition” includes a condition treated, but not
yet diagnosed, before the effective date. See, LoCoco v. Medical Sav. Ins. Co., 530 F.3d 442, 447
(6th Cir. 2008), citing Lawson ex rel. Lawson v. Fortis Ins. Co., 301 F.3d 159, 162-67 (3d Cir.
2002); Pitcher v. Principal Mut. Life Ins. Co., 93 F.3d 407, 411-17 (7th Cir. 1996); Hughes v.
Boston Mut. Life Ins. Co., 26 F.3d 264, 269-70 (1st Cir. 1994); Ross v. Western Fidelity Ins. Co.,
881 F.2d 142, 144 (5th Cir. 1989). This is because the word “for” can be read as connoting intent
or purpose regarding the condition, such that treatment cannot be given “for” a specific condition
unless the nature of the condition is known. LoCoco v. Medical Sav. Ins. Co., 530 F.3d at 447.
In dealing with clauses referring to conditions “for which” treatment was provided, these
same courts have concluded that the ultimate condition must have been suspected with a
reasonable degree of likelihood in order to be considered “preexisting.” In other words, treatment
for a condition requires some awareness on the part of the physician or insured that treatment was
being given for the condition itself. See Hughes v. Boston Mut. Life Ins. Co., supra.
In Lawson ex rel. Lawson v. Fortis Ins. Co., supra, the issue was whether receiving
treatment for the symptoms of an unsuspected or misdiagnosed condition prior to the effective date
of coverage made the condition a preexisting one under the terms of the insurance policy. In other
words, the court was asked to determine whether it was possible to receive treatment “for” a
condition without knowing what the condition was. Two days prior to the effective date of the
policy, the insured went to the emergency room for treatment of what was initially diagnosed as a
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respiratory tract infection, but which was discovered to be leukemia one week later, after the
effective date of the policy. The insurer denied coverage of medical expenses related to the
leukemia on the ground that it was a preexisting condition for which she had received treatment
prior to the effective date of the policy. The Third Circuit affirmed the trial court’s granting of
summary judgment in favor of the insured. The court concluded the insured received treatment
“for” what were initially diagnosed as symptoms of a respiratory tract infection; therefore, the
treatment she received prior to the effective date of the policy was not “for” leukemia. It further
held that for the purposes of what constitutes a preexisting condition, a suspected condition without
a confirmatory diagnosis is different from a misdiagnosis or an unsuspected condition manifesting
non-specific symptoms:
When a patient seeks advice for a sickness with a specific concern in mind (e.g., a thyroid
lump, or a breast lump) or when a physician recommends treatment with a specific concern
in mind (e.g., a “likely” case of multiple sclerosis), it can be argued that an intent to seek
or provide treatment or advice “for” a particular disease has been manifested. . . . Here,
there is no evidence that the possibility that Elena’s condition was actually leukemia ever
entered the minds of Elena’s parents or Dr. Parikh. Therefore, it would not make sense to
say that Dr. Parikh offered medical advice or treatment for Elena’s leukemia.
Lawson ex rel. Lawson v. Fortis Ins. Co., 301 F.3d at 166 (citations omitted).
Similarly, in Pitcher v. Principal Mut. Life Ins. Co., 93 F.3d 407 (7th Cir. 1996), the court
held that the insured’s routine physical examination and mammogram prior to effective date of the
policy did not constitute treatment or service for breast cancer. Prior to the policy’s effective date,
the insured was being monitored for a longstanding fibrocystic breast condition. It was not until
after the coverage began that she had a biopsy, which revealed breast cancer. The Seventh Circuit
found that treatment for her breast cancer did not commence until after the biopsy procedure had
conclusively identified a cancerous growth in her left breast; until that time, all concerned assumed
that they were dealing with the longstanding fibrocystic breast condition, manifesting itself in the
form of cysts, masses, and formations of fibrous tissue in both breasts. When lumps were detected
at the time of her examination, both claimant and her doctor were of the belief that the lumps were
the result of her fibrocystic breast condition and not cancer. Accordingly, the insured’s breast
cancer was not a preexisting condition excluded from coverage under the policy. See, also, Ross
v. Western Fidelity Ins. Co., 881 F.2d 142 (5th Cir. 1989) (there is at least reasonable argument
that, under preexisting condition exclusion, treatment for specific condition cannot be received
unless specific condition is known); Van Volkenburg v. Continental Cas. Ins. Co., 971 F. Supp.
117, 122 (W.D.N.Y. 1997) (finding reasonable plaintiff’s argument that to obtain advice or
treatment regarding medical “condition,” one must first have some awareness that “condition”
exists). See, also, Ermenc v. American Family Mut. Ins. Co., 221 Wis. 2d 478, 585 N.W.2d 679(Wis. App. 1998) (holding that where claimant’s cancer was not evident as condition before
coverage period began and where symptoms before diagnosis were non-specific, coverage should
not be excluded under preexisting condition clause). All these courts have reasoned that it is not
logical to permit non-specific symptoms, which could be caused by a number of different
sicknesses, to be used later as a retroactive trigger for exclusion as a preexisting condition. See
Lawson ex rel. Lawson v. Fortis Ins. Co., 301 F.3d 159, 162-67 (3d Cir. 2002).
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Other courts have interpreted preexisting condition provisions to not require a diagnosis of
the condition. These courts have held that it is possible to receive treatment “for” a condition
without knowing what the condition is. The reasoning underlying these decisions is that the
preexisting condition language is clear and unambiguous that treatment for a condition does not
require accurate diagnosis of the condition. See Lawson ex rel. Lawson v. Fortis Ins. Co., supra.
For example, in Bullwinkel v. New England Mut. Life Ins. Co., 18 F.3d 429 (7th Cir. 1994), the
court held that discovery of a breast lump before the defendant’s insurance coverage began
triggered the preexisting condition exclusion although the lump was not definitively diagnosed as
cancer until after coverage began. Before the claimant’s insurance coverage began, she visited her
doctor because she had detected a lump in her breast. After performing an ultrasound, her doctor
became concerned about the possibility of cancer and ordered removal and biopsy of the lump,
which occurred after the effective date of the policy, telling her “Let’s be safe and take it out.” The
biopsy revealed the presence of cancer.
The parties agreed that the breast lump was a condition which was diagnosed and treated
before the effective date of the policy. Both sides therefore, essentially conceded that the
post-policy treatment of the lump was not covered under the policy. The issue then was whether
the cancer treatments which took place after the lump was removed were covered. The Seventh
Circuit reasoned that
even though [the claimant] did not know the lump was cancerous in July [before the
effective date of her insurance policy], her visit with the doctor in that month concerning
the lump actually concerned cancer. It follows that [the claimant] was “seen” and “treated”
and incurred medical expenses for her cancer in July.
Id. at 432. Therefore, the court concluded that any post-policy treatment concerning the cancer
was not covered.
Similarly, in Kirk v. Provident Life & Acc. Ins. Co., 942 F.2d 504 (8th Cir. 1991), the
claimant was treated for a number of symptoms, including pain in his right side, night sweats, an
ache in his leg, a lesion on his knee, and swelling, which led his doctor to suspect congenital heart
disease. But a blood culture which might have detected such a disease proved negative.
Subsequently, the claimant obtained an insurance policy which contained a preexisting condition
exclusion. The claimant began once again to display symptoms of congenital heart disease. This
time, a heart specialist diagnosed the disease as bacterial endocarditis, a heart illness. The heart
specialist, as well as a specialist in infectious diseases, both concluded that the disease had been
present before insurance coverage commenced.
The Eighth Circuit determined that the claimant’s insurance did not cover the heart
condition because it predated the policy. The court was unpersuaded by the fact that the condition
was not accurately diagnosed until after the policy became effective. See also Marshall v. UNUM
Life Ins. Co., 13 F.3d 282 (8th Cir. 1994) (court found preexisting condition where claimant was
treated for muscle pain prior to effective date of insurance, which was later diagnosed as chronic
fatigue syndrome).
All of the cases discussed above involve insurance policies with substantially similar
preexisting condition language to that in the Golden Rule policy at issue in this case.
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An insurance policy is a contract and is to be construed as any other contract to give effect
to the parties’ intentions at the time the contract was made. North Star Mut. Ins. Co. v. Miller, 311
Neb. 941, 977 N.W.2d 195 (2022).
Whether a policy is ambiguous is a matter of law for the court to determine. Id. An
insurance policy is ambiguous when a word, phrase, or provision in the contract has, or is
susceptible of, at least two reasonable but conflicting interpretations or meanings. Id. However,
we will not read an ambiguity into policy language which is plain and unambiguous in order to
construe it against the insurer. Id.In the instant case we find the “preexisting condition” clause in the policy to be ambiguous.
There is a question as to whether the preexisting condition clause requires knowledge or reasonable
suspicion of the underlying disease. If it does not, and if Ralisa received medical advice or
recommended treatment, then there is no coverage. But if the clause is interpreted to require
knowledge or reasonable suspicion of the underlying disease, and if Ralisa received medical advice
or recommended treatment for the lump itself, then coverage exists. However, the interpretation
of an ambiguous contract presents an issue of fact not appropriate for determination on summary
judgment. Bierman v. Benjamin, 305 Neb. 860, 943 N.W.2d 269 (2020). When the terms of a
contract are in dispute and the real intentions of the parties cannot be determined from the words
used, the jury, and not the court, should determine the issue from all the facts and circumstances.
Crozier v. Brownell-Talbot School, 25 Neb. App. 1, 901 N.W.2d 341 (2017).
The Leamans admit that they were first aware of the breast lump in October 2014 and that
is when Settje was first made aware of the lump, but claim they had no knowledge that the lump
was cancerous or had any reason to be concerned that it might be cancerous before the policy went
into effect. Ralisa had been monitoring the lump for years with routine mammograms. She also
had an ultrasound at some point prior to the policy taking effect. The most recent pre-policy
mammogram took place in April 2018 and did not detect any cancer. Based on her past medical
tests, a finder of fact could determine that there was no reason to suspect that the lump was
anything to be concerned about. When she saw Settje on August 30, 2018, it was for a reason
unrelated to the lump on her breast. At that visit, she talked with Settje about the lump, telling her
it had not changed in years, but was thinking about having it removed anyway.
Following the April 2018 mammogram, Ralisa was also told that her breasts were
extremely dense, which diminishes the sensitivity of mammography and that a negative report
should not delay a biopsy if a suspicious mass is present as some cancers are not identified by
x ray. Accordingly, a finder of fact could determine that Ralisa had reason to be concerned the
lump could be cancerous despite the negative mammogram results.
Because there are genuine issues of material fact regarding the applicability of the
preexisting condition clause to Ralissa’s claim, summary judgment was improvidently granted in
this case.
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CONCLUSION
Based on the reasons set forth above, we conclude that the trial court erred in granting
summary judgment in favor of Golden Rule. We therefore reverse the order of the trial court and
remand the cause for further proceedings consistent with this opinion.
REVERSED AND REMANDED FOR
FURTHER PROCEEDINGS.
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