an interesting case about an unusual insurance policy this policy unlike most of the ones that you're probably familiar with began is really in three part policy which covers inpatient hospitalization and it has a high deductible of one thousand dollars deductible and the idea of that based plan is that it will cover if your person actually has to go into the hospital and also if you have to spend the night if you're confined according to the terms of the contract in a day care or a day surgery facility so that the base plan the idea of the base plan is that it will cover the high dollar things that if you if you have to be hospitalized and your bills are going to be quite high then the insured will accept an one thousand dollars deductible then it has they sold mister walter to other writers to the policy both of which have zero deductibles the first is the physician's visit writer and the other one is an outpatient medical expense right or both of those writers have no deductible the base policy has a one thousand dollar that your guy never ever bought it and that the group policy holder would have to approve it and then i tried to find the record where the group policy holder of that particular policy approved and i can find it well there's only one group that mr our client that we had before belonged to the same group it was the same organization the same group with their different policies in there stating that the they never approved the writer for this particular policy and i certificate well the certificate of insurance by its own terms says that it is not the policy and that the language in this search if it is not controlling the language of that is controlling is in a policy which we have never seen which has never been produced by the defendants in this case that's the master policy issue to the group policy holder now the group policy holder we know is the same we know that the writer number is exactly the same that was revised a month before m walter purchased this coverage and so i think there's at least an issue of fact there about whether or not that that writer was in effect at the time because it was revised a month before he was approved by the department of insurance later but we've cited some case law that says when you when you change the group policy and this is clearly a change in the group policy because that writer was amend nelson filed a declaration to the group policy was not amended it was a different policy that this writer went to and as far as i can tell that's not contradicted i don't maybe i didn't to me this is an important point because if you're right the new writers and enforce you when was given ok and i acknowledge that he wasn't given this one but i don't think she says that that writer went to some other plan or some other group at least i didn't didn't remember that and i don't have seventeen's as these new coverage coverage for outpatient medical expenses that should have been covered under that rider and nowhere in the contract does it say what they did and that is we determine whether something might be covered under the base policy and if we determine it is then we charge the thousand dollars deductible and we don't even look to see if that might also be covered under the outpatient medical expense writer so i want to point out the that they argue that they didn't breach the contract that because they had they eventually paid the claims well the contract says they'll pay them promptly the law requires them to pay them promptly we know that many of the claims got delayed and i want claims responsibility but some human being made that decision to delegate that to an intern to a computer now an insurance company can i think if it chooses to delegate claims responsibility to third parties and i suppose to a computer itself but certainly the company remains responsible for the act of that computer if it wrongfully denies claims and it was human beings that that i'm not convinced that there is any evidence they computers screw up at all i take them forward with evidence that it was a computer error know what they can't but what they did is them from that came from this af admitted we took her deposition we quoted extensively from it in our reply brief she admitted that she had no personal knowledge of this computer glitch it was something she just heard about from someone that she couldn't identify and that we can't cross examine so i mean that's just saying that on summary judgment we will simply accept as a fact that there was a computer glitch that caused this problem i don't think you can do that under those circumstances rule fifty six does require personal knowledge of the facts that are there and she admitted in her deposition she did not have that personal knowledge and sold that you know i don't i just don't think that can be accepted that even if it is it computer even if you accept the proposition that a computer made a wrong decision let's say for example if we go to page nine of the reply brief they look they set forth five claims that were they admit were delayed let's just take the first of these dr go down  denied and he had the physicians visit writer he talked to them again on july third and again on august eleventh each of those times he spoke to a human being not a computer and that human being understood what happened understood that h a that's a human being who understood and didn't take any action to change things until october when mr walter finally threatened to sue something didn't happen and they finally paid these five  claim for damages plus thieves and the point if at some point offered to settle the case for fifty thousand dollars including fees and all forms of damage which the defendants rejected presumably seventy five thousand dollars is the amount of controversy in that regard your honor it's important to keep two things in mind and the first is the standard with regard to which a court facing either an initial complaint under urging here the other thing that it's important to remember is what that fifty thousand dollars mentioned in the complaint was talking about it wasn't talking about the entire amount of recovery in the case it was talking about the amount of compensatory damages that were being sought both unpaid medical bills that the appellant claimed should have been covered and the policy that emotional distress types of compensatory damages but then on top of that fifty thousand dollars there's a claim for attorney contingency and there's been no evidence presented no response of any kind suggesting that the plaintiff's attorneys were doing anything other than a contingency or that it would been any less than thirty three percent so now we're at sixty seven thousand verifiable local rule actually says and the district court opinion isn't clear on this or are you focused right on the thing that has me a little bit of room well and the complaint is instructive in this regard if you turn in the excerpts of record to tab one in paragraph nineteen all you have to say in arizona to the court is i'm either above or below fifty totaled which means i either have to go to arbitration or i don't and that's where there's this undifferentiated fifty thousand dollars the complaint is very specific  timing the fifty thousand dollars plus to compensatory damages which brings us to punitive damages and assuming that my mouth the correct it would only have to be a punitive damages award of about eighty four hundred dollars in order to bring this case above the amount of controversy required and so what the law tells us is that we have to look at punitive damages awards in similar cases we presented two similar cases in presented evidence of the study of the average punitive damages verdict presented to the court below to show that it was rare to be able to recover but that's not the standard the question is when people recover what do they get and now that mr walters made below and has continued to make here a systematic misconduct by a national insurance company a pattern and practice of routinely denying claims routinely undervalu to precisely the kind of allegations that are made here and if you look at the standard of punitive damages under arizona law a jury looks at that kind of conduct to determine whether punitive damages are appropriate and then they're asked what is an amount of that would adequately deter this defendant and other defendants from doing the same thing and we're talking about national insurance companies here with significant revenue streams and what that means in the land of punitive damages is significant punitive damages awards didn't do that and you blame it on a computer how did you win the breach of contract late the court found that the real issue with regard to the payment of claims given that it wasn't intentional in any that someone has to come forward and speak for the company and figure out what happened and in this case that's ms mills she was the one who was able to go back through the records to determine what had happened based on the records to tie that  institutional knowledge of systemic problems the company was having with its computers and if you look all of the other dence points to the explanation that she gave which is that the computer knew that mr walter had the base plan it knew judgment call rather than a question for a jury well interpretation of the language of the contract is generally a question of law for the court so wanted how long were these payments delayed or months months there's one that's two and a half years and i don't remember which one it is any damage which would be the other element of breach of contract if it's not enough that this didn't happen but that mr walter was in fact damaged in some way and he was paid completely all of the coverage to which he was entitled for just a moment it looks like i've got a bit of time i wanted to touch on one of the coverage issues mr arnett said a few moments ago that it didn't really matter which of the outpatient medical expense writers governed in this case it matter a lot because of the language of the outpatient medical expense right or that applies and it's important that the court be looking at the right one since they're both in the record the right one when mr walter bought this insurance he was eligible to choose to buy the insurance because he was a member of an association and the basic insurance is hospital and surgery even if that surger facility hospital and surgery and if you wanted to you could buy extra things there was a whole list of extra things you could buy mr walters application is in the record it shows he had other choices including some he considered scratched out and the  picked the outpatient medical expense writer very express lee says we pay for miscellaneous covered services it lists miscellaneous covered services and then it says charges for services and supplies not  this writer things not on the list are not covered and that's important because i think that is important but i as i struggled through the specific claims there's one for example for a biopsy and the word vi of c doesn't appear on the list of things that probably go with vioxx they do seem to appear on the list how are we supposed to sort that out and how is it that nothing in connection with the biopsy appears to be covered trouble the stuff was somewhat more generic descriptions i don't know what a biopsy entails but my guess is that it probably does include some of these things are we supposed to figure that out because the doctors are supposed to tell the insurance company what they're charging for that's the specifically for these kinds of services let's take the patient skin cancer procedure as an instance in his briefs the appellant has argued that the outpatient cancer procedure which happened at a day facility should have been paid into the base plan it should have been paid under this writer and that's sort of a dangerous argument for the appellant because this writer doesn't cover about surgery it would arguably cover one piece of it there were three bills generated by that surgery the day surgery facility had a facility charge the doctor who performed the surgery had his own bill for his services and the pathologist had his bill for his s the only one of those things that would be on this list is pathology not the surgical center not the doctors and if it were under only the optional medical expense writer that's exactly what the insurance company would do they would take the bill what is the bill for on its face is it on the list yes it gets paid no it doesn't get paid there are other versions other writers other ways one can do this the revised writer is actually greater and as nelson's affidavit does clearly state more expensive coverage intent and it's not the company's defense that it's computer can't have the subject of intense when an insurance company decides to do this by computer programming it's our job to make sure we're doing that responsibly and we're fixing errors as soon as we can in the district court here found that there was not an intel of evidence and that's the district court's work not mine that there was any kind of bad faith in the amount of time or the way in which the now but we don't have the exact right now as to what it cost her base policy as opposed to each of the of the the writers that were purchased so that we that simply isn't broken down anywhere for us to even have that and so but but certainly that's some evidence that i think would at least give us an issue of fact as to whether or not this was in fact more expensive the certificate arm on arbitration makes it clear i think they're not mutually exclusive i think you're right but i think thing we have to a specific statement appears to be in the complaint which says you get the fifty plus without community of damages right and then we wind up having to sold to mr walter clearly says that it will cover miscellaneous expenses and then it defines what those are and it's in the in the paragraph that says mr miscellaneous covered services and supplies it says middle miscellaneous covered services at the doctor's office that we've met that definition and nowhere is there language that says unless it's on this list we don't not we're not paid pay for it all and that's part of the problem we have with the with this contract and that's an issue