LORRAINE COOPER VS. CNA INSURANCE COMPANY (L-6082-17, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4824-17T4
LORRAINE COOPER,
Plaintiff-Appellant,
v.
CNA INSURANCE COMPANY,
Defendant-Respondent.
_____________________________
Argued October 3, 2019 – Decided November 12, 2019
Before Judges Koblitz, Whipple, and Mawla.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-6082-17.
Stephen F. Pellino argued the cause for appellant
(Basile Birchwale & Pellino, LLP, attorneys; Stephen
F. Pellino, on the briefs).
Evan Yablonsky argued the cause for respondent
(Bressler, Amery & Ross, PC, attorneys; Samuel J.
Thomas, on the brief).
PER CURIAM
Plaintiff Lorraine Cooper appeals from an April 23, 2018 order granting
defendant CNA Insurance Company's motion for summary judgment and a June
8, 2018 order denying her motion for reconsideration. We affirm.
Defendant1 issued a policy of long-term care insurance to plaintiff for an
initial term of December 19, 1997, to December 19, 2012, which plaintiff
renewed and which remained in effect at all times relevant to this matter. At
some point, plaintiff developed dementia; precisely when is not apparent from
the record. Betty Kaunga, who had previously served as an aide to plaintiff's
husband, began to care for plaintiff in plaintiff's home. Ms. Kaunga is not a
licensed health care professional.
On January 20, 2017, defendant sent a copy of the long-term care policy
to plaintiff at plaintiff's request. The first page of the policy contained a
paragraph at the bottom, titled "NOTICE TO BUYER," which indicated that
"[t]his policy may not cover all of the costs associated with long-term care
incurred by [y]ou during the period of coverage. You are advised to review
carefully all policy limitations." Sometime in March 2017, plaintiff applied for
benefits under the policy for the cost of the in-home services of Ms. Kaunga
1
The subsidiary that issued the policy was Continental Casualty Company.
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under the "Home and Community-Based Care" clause.2 Defendant denied
plaintiff's request for benefits because Ms. Kaunga was not licensed and did not
otherwise qualify as a "Home Health Care Agency," as was required under the
"Home and Community-Based Care Benefit." This denial of benefits is not in
dispute. Shortly after this first denial, plaintiff, through her son, requested
coverage for Ms. Kaunga's care under the "Alternate Plan of Care" (APC)
provision in her policy. 3
Under the policy terms, "PLAN OF CARE" is defined under Section One,
"DEFINITIONS OF IMPORTANT TERMS," as "[a] program of care and
treatment: 1. Initiated by and approved in writing by a Licensed Health Care
Practitioner before the start of such care and treatment; and 2. confirmed in
writing at least once every [sixty] days."
Under the section titled "[APC] BENEFIT," the policy states that
If [y]ou would otherwise require a [l]ong-[t]erm [c]are
[f]acility stay under a Plan of Care, [w]e may pay for
alternate services, devices or types of care under a
written [APC], if such plan is medically acceptable.
This [APC]: 1. must be agreed to by [y]ou, [y]our
physician, and [u]s; and 2. will be developed by or with
2
We have not been provided with that correspondence, so we do not know
specifically what she requested.
3
We have not been provided with this request, so we do not know what, if
anything, was submitted to support the request.
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[l]icensed [h]ealth [c]are [p]rofessionals. Any plan,
including the benefit levels to be payable, may be
adopted, as long as it is mutually agreeable to [y]ou,
[y]our physician and [u]s. The [c]ompany is not
obligated to provide benefits for services received prior
to such agreement . . . [t]his plan may specify special
treatments or different sites or levels of care. Some of
the services [y]ou may receive may differ from those
otherwise covered by [y]our policy. In this case,
benefits will be paid at the levels specified and agreed
to in the [APC].
Defendant denied plaintiff's request under the APC, stating that the APC
provision
is generally designed to address unusual and unforeseen
circumstances where an insured requires confinement
in a qualified facility, but for reasons particular to the
insured's situation, an alternative to that confinement
may be necessary. This primarily occurs where covered
services are not available to the policyholder in his or
her area. In those situations, we may consider
providing coverage for a non-qualifying provider in an
area where there are no qualifying home health care
agencies available. Such is not the case here. 4
The letter also noted "pursuant to the plain terms of the APC provision, it
is within our discretion whether to agree to such a plan," that the APC is not a
guaranteed benefit, and pointed plaintiff instead to a provision of her coverage
that includes a "Home and Community-Based Care Benefit" for the services of
4
This explanation is not included anywhere in plaintiff's policy.
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a policy-defined "Home Health Care Agency." The letter also included an
excerpt of the policy explaining the definition of "Home Health Care Agency."
The letter further stated that
[i]f you feel that the information we received is
incorrect or incomplete, you may request a review of
this denial by writing to CNA Insurance Companies.
The written request for review must be sent within
[sixty] days of receipt of this letter. Please state the
reason why you feel your claim should not have been
denied and submit any appropriate data or additional
medical information to support your position. Please
forward your request for a management review to the
following address . . . .
Shortly thereafter, plaintiff engaged an attorney to represent her in
connection with the denial of benefits. Plaintiff's attorney sent a letter to
defendant requesting a review of the denial of benefits, but rather than stating
the reason the claim should not have been denied and submitting "any
appropriate data or additional medical information" to support plaintiff's
position in accordance with the instructions in the denial letter, plaintiff instead
asked permission to submit more information, along with a request for
documents. Plaintiff's letter stated
We believe that you have not been provided with
complete information concerning the request for
benefits and we would like an opportunity to present
further information to you. We verily believe that
[plaintiff] qualifies for the [APC] benefit and are
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requesting the opportunity to present information to
you in support of that claim.
The letter also requested, "[w]hile we begin to gather that further
information to submit to you," that defendant send a copy of the policy issued
to plaintiff, as well as copies of all documents submitted to defendant by plaintiff
and her son in support of the denied claims. Additionally, the letter asked for
copies of "any and all" information compiled by defendant and on which
defendant based its denials, "including the results of any interviews, tests or
other investigations performed by [defendant]." While plaintiff asserts she
never received anything, defendant asserts it sent a letter by UPS, along with
copies of the policy and documents received and considered by defendant prior
to issuing its coverage determination, and that UPS tracking shows the parcel
delivered and signed for.
A little over three months after the denial of benefits under the APC
provision, Dr. Manisha Parulekar wrote a one page letter "To Whom It May
Concern," stating that plaintiff had been diagnosed with dementia, that she
would benefit from around the clock care from Betty Kaunga, that "[t]his is the
preferable plan of care as defined by the conditions of the [APC] benefit
provision" and that "[a]lternatively, she would need to be admitted to a long
term care facility." However, plaintiff never submitted this letter directly to
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defendant, either in support of plaintiff's initial claim or with a request for
review of the claim.
Instead, on September 8, 2017, plaintiff filed a complaint against
defendant in the Law Division, alleging that the denial of benefits constituted a
breach of contract, causing plaintiff damages. Plaintiff also alleged defendant
acted in bad faith and breached its duty to act in good faith toward plaintiff
through its denial of the claim "for false and fallacious reasons, refusal to
acknowledge a request for review of that denial, failure to provide the insured
with a full copy of the policy, failure to otherwise respond to the reasonable
inquiries of the insured, and for denying benefits when they are otherwise
payable," causing plaintiff damages. Defendant filed a motion to dismiss and
for summary judgment pursuant to Rule 4:6-2(e) and 4:46-1, that the court heard
on April 13, 2018.
The trial court granted defendant summary judgment, finding it was clear
that defendant was not required to provide APC benefits for services received
before an agreement was reached among plaintiff, her doctor, and defendant, as
per the terms of the policy, and that the issue concerned the potential coverage
for services received after the denial of the APC claim. The trial court found no
ambiguity in the contract, that the policy was clear the APC must be agreed to
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by the plaintiff, her physician, and defendant, and that the policy was written in
simple prose, in 12-point font using short paragraphs, and was easily
understandable. The trial court further found the APC provision was not illusory
since plaintiff would be entitled to benefits under one of the other prov isions in
the policy. Relying on Dr. Parulekar's letter stating plaintiff did otherwise
require a long-term care facility stay, the trial court found defendant was under
no obligation to enter an APC with plaintiff because it was contingent upon Ms.
Kaunga providing the care, and those services were not pursuant to a "Plan of
Care" as required by the policy either before or after the claim denials.
The trial court also found additional discovery would not alter the
outcome, since there was no agreement nor an obligation for defendant to
consider plaintiff's request, and because the care sought was not covered under
the policy. The trial court also found that the bad faith claim failed under the
"fairly debatable" standard, since plaintiff could not establish the breach of
contract claim as a matter of law.
Shortly thereafter, Dr. Parulekar prepared a certification explaining her
prior letter, stating she intended the letter to be a written plan of care for
plaintiff, opining that Ms. Kaunga was in a unique position to render care to
plaintiff because of their long-term relationship, and that if anyone other than
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Ms. Kaunga were to care for plaintiff, plaintiff would need to be admitted to a
long-term care facility.
Plaintiff then moved for reconsideration of the trial court's order and
opinion granting defendant summary judgment, presenting Dr. Parulekar's
certification in support of the motion. After oral argument, the trial court denied
the motion for reconsideration, clarifying that its decision was not based on the
fact that Ms. Kaunga was not licensed, but was based on the finding that the
APC provision was not illusory, that defendant's denial of the APC was not
arbitrary, unreasonable nor capricious as there were facilities available in the
vicinity, and that plaintiff's situation did not meet the special conditions
necessary for the defendant to agree to an APC. This appeal followed.
In reviewing summary judgment, we use the same standard as the trial
court. Globe Motor Co. v. Igdalev, 225 N.J. 469, 479 (2016) (citations omitted).
Summary judgment must be granted if "the pleadings, depositions, answers to
interrogatories and admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact challenged and that the
moving party is entitled to a judgment or order as a matter of law." R. 4:46-
2(c). The evidence must be viewed in "the light most favorable to the non-
moving party[.]" Mem'l Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 524
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(2012) (citations omitted). Generally, where discovery is not complete,
summary judgment is not appropriate. See Crippen v. Cent. Jersey Concrete
Pipe Co., 176 N.J. 397, 409 (2003) (citations omitted); Laidlow v. Hariton Mach.
Co., 170 N.J. 602, 619 (2002) (citations omitted).
If the case "presents no material factual disputes, the court simply applies
the appropriate law to the facts." Kopin v. Orange Prods., Inc., 297 N.J. Super.
353, 366 (App. Div. 1997) (citation omitted). In reviewing a trial court's
application of the law, "[a] trial court's interpretation of the law and the legal
consequences that flow from established facts are not entitled to any special
deference." Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378
(1995) (citation omitted).
On appeal, plaintiff argues that whether defendant's denial of plaintiff's
APC proffered by Dr. Parulekar was reasonable is a question of fact that requires
further discovery and a determination on the merits. Plaintiff further argues the
trial court ruled she did not meet the terms of the contract based on conditions
not contained in the insurance policy, and that the trial court interpreted the
contract to give defendant "unfettered discretion" to deny plaintiff's claim.
Plaintiff argues these holdings are contrary to New Jersey law, which imposes a
higher, fiduciary standard to insurers as to first-party claims.
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We review the trial court's legal determinations de novo, including its
construction of an insurance contract. Polarome Int'l v. Greenwich Ins. Co., 404
N.J. Super. 241, 259-60 (App. Div. 2008) (citations omitted). An insurance
policy's words should be given "their plain, ordinary meaning." President v.
Jenkins, 180 N.J. 550, 562 (2004) (quoting Zacarias v. Allstate Ins. Co., 168
N.J. 590, 595 (2001)). However, because insurance policies are contracts of
adhesion, ambiguous language in an insurance policy "is often construed in
favor of the insured." Id. at 562-63 (citations omitted). Where an insurance
policy's language "fairly supports two meanings, one that favors the insurer, and
the other that favors the insured, the policy should be construed to sustain
coverage," and where an ambiguity exists, courts should interpret the policy to
meet the reasonable expectations of the insured party. Id. at 563 (citations
omitted). "Language in a policy of insurance is genuinely ambiguous only if the
'phrasing of the policy is so confusing that the average policyholder cannot make
out the boundaries of coverage.'" Argent v. Brady, 386 N.J. Super. 343, 352
(App. Div. 2006) (quoting Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 247
(1979)). Courts may also enforce unambiguous insurance policies according to
reasonable expectations of the insured if a policy is complex, highly technical,
extremely difficult to understand, insufficiently clear, or misleading. Sparks v.
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St. Paul Ins. Co., 100 N.J. 325, 335-36 (1985) (citations omitted); DiOrio v. New
Jersey Mfrs. Ins. Co., 79 N.J. 257, 269 (1979). However, where policy terms
are clear,5 the policy should be interpreted as written, and courts should "avoid
writing a better insurance policy than the one purchased." President, 180 N.J.
at 562 (citing Gibson v. Callaghan, 158 N.J. 662, 670 (1999)).
Here, we do not construe the terms in the policy, either in the definitions
or in the APC provision, as ambiguous or as fairly supporting two meanings,
one favoring defendant and one favoring plaintiff. We also do not construe the
terms in the APC provision as complex, highly technical, extremely difficult to
understand, insufficiently clear, or misleading. Rather, the "Plan of Care"
definition is in simple, non-technical language, and it clearly states that a plan
of care is to be initiated and approved in writing by a "Licensed Health Care
Practitioner" before the start of care and treatment.
The "[APC] Benefit" explanation is also in simple, non-technical
language, and uses the conditional language "may" and "if" regarding
defendant's potential payment of this type of coverage. The mandatory "must"
is used for the requirement that plaintiff, her physician, and defendant all agree,
5
See N.J.S.A. 17B:17-21 for statutory readability requirements for insurance
policies.
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along with forward-looking language stating the plan "will be developed,"
indicating it is meant for impending or future treatment, not past treatment that
has been ongoing for years. There are two requirements: 1) the plan must be
agreed to by plaintiff, her physician, and defendant, and 2) the plan will be
developed by or with licensed health care professionals. The very next sentence
clearly states that defendant is "not obligated to provide benefits for services
received prior to such agreement."
The policy is clearly written in plain language, can be easily read, and
there are no terms that could be read to "fairly support two meanings" or that
could be described as technical, complex, or misleading. Therefore, because it
is clear and unambiguous, the policy here does not warrant looking beyond the
plain meaning to determine the objectively reasonable expectations of plaintiff.
Looking then to the plain language of the policy, as President, 180 N.J. at
562, instructs, it is clear plaintiff was required to obtain a plan of care, initiated
and approved in writing by a licensed health care professional, before the start
of care; that plaintiff had to otherwise require a long-term care facility stay under
a plan of care; that defendant may have paid for an APC if it were determined
to be medically acceptable; and that it must have been agreed to by plaintiff,
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plaintiff's doctor, and defendant, as well as developed by or with licensed health
care professionals.
Here, since plaintiff received a copy of the policy from defendant at her
request, before filing her claims, we presume she or her representative read and
reviewed the policy. We do not know what, if anything, plaintiff submitted in
support of her initial application for coverage under the APC, but she did not
submit the letter or the certification from Dr. Parulekar, which is the only
evidence plaintiff presents in support of APC coverage. Thus, Dr. Parulekar's
letter and certification were not available for defendant to consider when making
the initial decision about whether the plan was medically acceptable for APC
coverage. Neither were they available for defendant to consider along with
plaintiff's later letter, nor were they sent with a request to review the denial of
the APC claim as instructed in defendant's denial letter. Rather, Dr. Parulekar's
letter was only submitted to the court after plaintiff initiated litigation.
Therefore, not only was there no agreement among plaintiff, her doctor, and
defendant before plaintiff began receiving care from Ms. Kaunga as required by
the plain terms of the policy—or when plaintiff submitted her application for
potential future coverage under the APC—but plaintiff cannot demonstrate a
plan of care existed with which defendant could agree, either at the time the
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claim was submitted or when plaintiff disputed the claim denial. Therefore,
plaintiff did not meet the requirements plainly set out in the language of the
contract, and hence we discern no error in the entry of summary judgment.
Plaintiff argues that summary judgment was premature because the
discovery period had not ended, and that whether defendant's denial of plaintiff's
APC proffered by Dr. Parulekar was reasonable is a question of fact that requires
further discovery and a determination on the merits. Plaintiff also argues that
there should have been a "back and forth" between plaintiff and defendant, along
with further discovery, to find whether plaintiff qualifies for the APC based on
Dr. Parulekar's letter. We disagree.
Any discovery related to Dr. Parulekar's plan had no bearing on the
undisputed fact that there was no agreement among plaintiff, her doctor, and
defendant for Ms. Kaunga to provide care at the time of the denial of plaintiff's
APC claim as required by the plain terms of the contract. Moreover, we discern
no reason why plaintiff is foreclosed from further discussions and development
of an APC directly with defendant going forward, if she so chooses.
We also reject plaintiff's argument that the position taken by defendant in
its APC denial letter, that the APC is generally designed to cover instances
where an insured may require confinement in a qualified facility but there are
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no qualifying facilities available, goes beyond the requirements listed in the
policy and that this is contrary to New Jersey law.
In its order denying reconsideration, the trial court explained its decision
was based on the finding the APC provision was not illusory because the
availability of other qualifying facilities in the area demonstrated plaintiff was
never foreclosed from other benefits under the policy. Because these other
benefits were available, the policy was not illusory, and defendant's decision
was not arbitrary, unreasonable, nor capricious. Further, although the reasons
given in the denial letter are not specifically contained in the plain terms of the
policy, the denial letter does not state that these are the actual reasons, specific
to plaintiff, that her claim is being denied. Rather, the letter states that the APC
is "generally" designed to address unusual circumstances and that it "primarily
occurs" when covered services are not available to an insured. And again, at the
time it issued its denial letter to plaintiff, defendant did not have Dr. Parulekar's
letter, or any other plan of care documentation.
Finally, although we agree proper construction of the insurance policy
provision for the APC requires defendant to act reasonably in considering an
APC, plaintiff has not demonstrated that defendant did not act reasonably.
Plaintiff argues it was unreasonable for defendant not to investigate when it
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denied plaintiff's APC claim, and that defendant "turned a deaf ear to Dr.
Parulekar's report that would support the claim of the insured." However,
defendant did not "turn a deaf ear" to Dr. Parulekar's letter when considering
plaintiff's APC claim, as it did not have the letter, only receiving it as a document
in litigation after plaintiff filed suit. Further, plaintiff offered no evidence that
defendant did not act reasonably in denying plaintiff's claim because plaintiff
has not shown what, if anything, was submitted to defendant in support of the
application for APC coverage. The only documents plaintiff has produced in
support of her claim of defendant's unreasonable abuse of discretion are Dr.
Parulekar's letter and certification, which it is undisputed were never submitted
to defendant directly for consideration.
We have carefully reviewed the record regarding all remaining arguments
and have determined they are without sufficient merit to warrant discussion in a
written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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