Title: Rosenberg v. North Dakota Hospital Service Ass'n
Citation: 136 N.W.2d 128
Docket Number: 8207
State: north-dakota
Issuer: north-dakota Supreme Court
Date: July 2, 1965

136 N.W.2d 128 (1965) Max D. ROSENBERG, Plaintiff and Respondent, v. NORTH DAKOTA HOSPITAL SERVICE ASSOCIATION and North Dakota Physicians Service, Defendants and Appellants. No. 8207. Supreme Court of North Dakota. July 2, 1965. *129 Conmy &amp; Conmy, Bismarck [A. William Lucas, Bismarck, on oral argument], for plaintiff and respondent. Wattam, Vogel, Vogel, Bright &amp; Peterson, Fargo, for defendant and appellant, North Dakota Physicians Service. Nilles, Oehlert &amp; Nilles, Fargo, for defendant and appellant, North Dakota Hospital Service Ass'n. KNUDSON, Judge. The defendants appeal from the judgment of the county court with increased jurisdiction for the county of Burleigh and State of North Dakota in favor of the plaintiff for hospitalization and medical benefits under contracts with the defendants, and demand a trial de novo in this court. The case was tried by the court without a jury. The plaintiff had surgery for gallstones on October 22, 1962, and claims for hospital and medical services under the terms of contracts issued by the defendants were filed by the hospital and clinic. The defendants rejected the claims on the grounds that the hospitalization and surgery was for a condition existing before August 15, 1962, the effective date of Contract No. 185198. The plaintiff had been examined by several physicians during the year; in January, 1962, for a periodic checkup; in July, 1962, for an insurance policy application; and by Sumner S. Cohen, M.D., of Minneapolis, Minnesota, on September 7, 1962, to whom plaintiff had gone because he was not feeling well, complaining of back and chest pains, followed by stomach pains. The plaintiff received a letter from him, dated October 22, 1962, (when he was in the hospital) diagnosing his general condition, and suggesting further examination, including: Later, in September, 1962, a physician prescribed Darvon for severe back and stomach *130 pains. There is no evidence in the record that any of these doctors diagnosed a gallstone condition. The first diagnosis of gallstones was made by Dr. Daniolos on September 22, 1962, who recommended surgery. The defendants are separate corporations; one, North Dakota Hospital Service Association, commonly known as the "Blue Cross," provides hospital services, and the other, North Dakota Physicians Service, commonly known as the "Blue Shield," provides medical services. The defendants, Blue Cross and Blue Shield, are not, strictly speaking, insurance companies, and do not, as such, conduct an insurance business in the State of North Dakota. Blue Cross is authorized to do business under Chapter 26-26, N.D.C.C., and Blue Shield under Chapter 26-27, N.D.C.C. Blue Cross provides hospital service by hospitals, with which Blue Cross has a contract, to subscribers under a contract with Blue Cross for such hospital services. Similarly, Blue Shield provides medical services by licensed doctors of medicine, with which Blue Shield has a contract, to subscribers under a contract with Blue Shield for such medical services. Blue Cross and Blue Shield do not promise to indemnify the subscriber against any loss. The agreement of each is to pay the hospitals and doctors for services rendered to subscribers under the terms of the contracts. However, the parties tried this action on the theory that the rules governing the construction of insurance contracts are applicable here, and we will follow these rules in the construction of the Blue Cross and Blue Shield contracts in this case. The defendants (appellants) state that The provisions relating to pre-existing conditions under the terms of Article V, sub-paragraph C, of the Blue Cross contract are: The terms of Article IV, sub-paragraphs a and b of the Blue Shield contract are: In 29A Am.Jur., "Insurance," § 1156, p. 303, the following statement is made: In regard to policy provisions precluding recovery for disease originating before a prescribed time, the following language is found in 45 C.J.S. "Insurance" § 893, p. 971: By the plain and unambiguous terms of the contracts here involved, hospital and medical services are not provided for any known or unknown condition which existed before the effective date of the contracts, unless the present contract, or a prior contract, has been in effect for nine consecutive months immediately preceding the subscriber's admission to the hospital or request for such medical care. The defendants contend that the gallbladder condition was in existence prior to August 15, 1962, and, therefore, may call up the waiting period clauses as a defense to the plaintiff's claims. As a corollary, if the gallbladder condition was not in existence prior to the effective date of the contracts the waiting period clauses are not available to the defendants as a defense. The burden was upon the plaintiff to prove that his claim came within the terms of the contracts, and he must establish a prima facie case that after the effective date of the contracts: And the burden was on defendant to develop facts bringing the case within the exception or exemption, withdrawing from the operation of the policy that which would otherwise be embraced by it. Weber v. Interstate Business Men's Acc. Ass'n, 48 N.D. 307, 184 N.W. 97, 16 A.L.R. 1390; Valencia v. Continental Casualty Co., 127 Neb. 820, 257 N.W. 57; Collins v. United States Casualty *132 Co., 172 N.C. 543, 90 S.E. 585, 53 A.L.R.2d 692; 29A Am.Jur., "Insurance," §§ 1853, 1854. The plaintiff has established that the contracts were in existence, and that after the effective date of the contracts he was hospitalized and submitted to surgery for a condition covered by the contracts. The defendants have not established that the condition of the plaintiff was in existence before the effective date of the contracts, and, therefore, cannot raise the exclusion clause as a defense to the plaintiff's claim. It is generally recognized that provisions in a health or hospital insurance policy requiring that the illness or disease from which the assured suffers originates a specified time after the date of the policy to be within the policy coverage are strictly construed against the insurer and the illness, disease, or disability will ordinarily be deemed to have its inception when it first becomes manifest or active or when there is a distinct symptom or condition from which one learned in medicine can with reasonable accuracy diagnose the disease. Annot., 53 A.L.R.2d 689, and citations. The only evidence adduced by the defendants is the testimony of Dr. Sedlak, a doctor of medicine in the field of internal medicine, employed by Blue Cross and Blue Shield as a medical consultant, who said, in answer to a hypothetical question concerning pains similar to those experienced by the plaintiff over a period of months, "seen as a clinical sign of gallbladder disease," and, "It is consistent with gallbladder trouble," and a statement in the hospital report that the patient showed a "History of moderately severe epigastric right subcostal pain for 10 months or so, * *." Dr. Sedlak had never examined or treated the plaintiff, and his testimony falls short of proving that the condition of the plaintiff became manifest or active before the effective date of the contracts. The pain and discomfort intermittently experienced by the plaintiff over a period of some time may be attributed to other causes having similar symptoms, and in 4 L.Med.Cyc., § 30.132, the symptoms of chronic cholecystitis are discussed: The plaintiff's condition had not been diagnosed as gallbladder trouble by any of the doctors examining him before the effective date of the contracts, and in January 1962, when he was examined by Dr. Dunnigan and found to be in general good health the prior contracts were in force. Dr. Arneson, who examined him in July 1962, in connection with an insurance application, made no diagnosis of gallbladder trouble. Dr. Cohen, who had examined the plaintiff on September 7, after the effective date of the current contracts, in his letter of October 22 to the plaintiff, reported the *133 results of his examination and made certain diagnoses, including "Backsuggestive of lumbar disc," and made certain recommendations for additional laboratory procedures to be done in Bismarck, including: and suggested a reducing diet, continuation of Dexedrine, and reduced coffee drinking and cigarette smoking. But he does not report having made a diagnosis of the plaintiff's condition as chronic cholecystitis and cholelithiasis, nor does he refer to any gallbladder trouble except to recommend gallbladder x-rays. This report is confirmed by Dr. Cohen's letter to Dr. Sedlak wherein he reported the following diagnoses (among others) were made: and made the same recommendations, for x-rays to be taken, a strict reducing diet and marked reduction to abstinence from smoking and coffee. The term, "Rule out gallbladder disease," means, according to Dr. Sedlak's testimony: The plaintiff testified that he consulted Dr. Cohen because of "Back pains and being extremely tired and at times a pain extending from the back into part of the stomach area;" and that it was the same complaints that caused him to consult Dr. Heffron, who prescribed Darvon to alleviate the pain; and then, on September 22, to consult Dr. Daniolos, who diagnosed his condition as chronic cholecystitis, he being the first physician to diagnose his condition. The clinical history sheet shows that two x-rays were taken and that a gallbladder shadow was not obtained at either examination. The defendants cite Dowdall v. Commercial Travelers Mutual Accident Association of America, 344 Mass. 71, 181 N.E.2d 594, in support of its position that the condition of the plaintiff was in existence before the effective date of the policy, and, therefore, the defendant was not precluded in calling up the exclusion clause in defense of the claim of the plaintiff. In the Dowdall case the insured was the holder of an insurance policy issued by the defendant on November 10, 1952. He became totally disabled from December 18, 1958, and was so at the time of the trial, from multiple sclerosis. The physician testified that he "had been the defendant's [sic] [plaintiff's] physician from 1944 to 1958." The physician testified that The court held that the plaintiff could not recover because, on the basis of the foregoing evidence, the plaintiff's disability resulted from a disease "originating" several years prior to the issuance of the policy. The Dowdall case may be distinguished from the instant case because the facts are different. In the Dowdall case the symptoms of the disease had become manifest or active, from which the physician had diagnosed the disease, before the date of the issuance of the policy. Quoting from Dowdall at page 596 of 181 N.E.2d: In Broccolo v. Horace Mann Mutual Casualty Co., 37 Ill.App.2d 493, 186 N.E.2d 89, also cited by defendants in support of their position, the facts are not the same, and may be distinguished from the instant case in that the condition or illness of the plaintiff was diagnosed by her physician before the date of the issuance of the policy, and that he continued to treat her up to the time that he performed the operation for her illness, whereas in the instant case no physician had made a diagnosis of the plaintiff's condition prior to the date of the issuance of the contracts. In Broccolo the attending physician who performed the hysterectomy stated that he first attended the plaintiff in November 1955; that the nature of her illness was "fibromyomatous uterus"; and in response to the question, "If illness, how long prior to your first examination was the disease contracted or begun?" he answered, "Bleeding for six months." He subsequently treated her "about once every two months." The policy of insurance was issued in December 1955, and the hysterectomy was performed in August 1956. In the instant case there was no evidence that the condition of the plaintiff had become manifest or active, or a distinct symptom or condition occurred from which one learned in medicine could diagnose the disease, before the date of the issuance of the contracts. The judgment of the county court is affirmed. TEIGEN, Acting C. J., ERICKSTAD and STRUTZ, JJ., and CLIFFORD JANSONIUS, District Judge, concur. BURKE, C. J., deeming himself disqualified did not participate; CLIFFORD JANSONIUS, District Judge, sitting in his stead.