Court Opinion

ID: 9724760
Source: CourtListenerOpinion
Date Created: 2023-08-26 11:12:01.943398+00
Date Added: 2024-06-11T18:25:05.715118
License: Public Domain

BUTLER, J.
I dissent for three reasons. First, Blue Cross has no obligation to subsidize the psychoanalytic education of Edward L. Fields. Blue Cross provides benefits for covered illness, not tuition for student doctors. Second, at the appellate level we should not resolve issues, here the vesting of benefits, not addressed at the trial by the parties or the court. As I shall explain, so to do on this record is to resolve social, economic and administrative policies without the benefit of reasoned findings based on competent evidence. Third, the concept of vesting announced by the majority is the enactment by a state court of legislation impacting federal sovereignty from which we are barred by accepted constitutional principles.
I
Consistent with familiar rules on appeal, I state the facts to support the jury verdict.
*592Fields graduated from medical college in 1968 and spent the following year through June 1969 in an internship program. After three years as a medical officer, he was discharged from the Navy in June 1971. He then began a residential program in psychiatry at the University of Pittsburgh completing that program in June 1974.
In 1973, before completing his residency training, Fields made a career choice to become a psychotherapist. This requires attendance for four years at an accredited psychoanalytic institute. The American Psychiatric Association granted the San Diego Psychoanalytic Institute (Institute) provisional institute status in December 1974 with foil accreditation in December 1977. The Institute has two functions: training qualified students in psychoanalysis and fostering the application of psychoanalytic knowledge in the community. Among other things, the education program included a requirement for personal psychoanalysis: “The foundation of psychoanalytic training is the clinical associate’s personal psychoanalysis, which must be with an authorized training analyst. For the training program, a minimum of 300 hours of personal analysis is required. Beyond this, the duration of analysis is left to the decision of the training analyst and the clinical associate, depending solely upon the therapeutic needs of the clinical associate. In accordance with the Minimal Standards of the American Psychoanalytic Association, the personal analyses of clinical associates shall be conducted four or more times a week, except when special technical considerations provide an indication for temporary interruption or alterations of frequency.
“Clinical associates are required to initiate analysis with a training analyst within eighteen months of the date of their acceptance at the Institute. . . .
“The accepted applicant selects his training analyst from the roster of training analysts in accordance with their availability.” On May 21, 1973, Fields submitted an application for enrollment in the training program at the San Diego Psychoanalytic Institute. He knew the requirements for training as a psychoanalyst included this personal psychoanalysis. Fields came to San Diego in 1973 while still in the residency program at Pittsburgh and interviewed four psychoanalysts, including Dr. Orr, all of whom were on the roster of training analysts at the Institute. He did not interview any analysts who were not on that roster. On September 18, 1973, Fields’ application for enrollment was accepted by the Institute. After he finished his residency in Pittsburgh, Fields moved to San Diego in June of 1974 and entered private practice in general psychiatry.
Before moving to San Diego in 1974, Fields decided to engage Dr. Orr as a training analyst as required by the rules of the Institute. The analysis sessions, however, were delayed until October of 1974 as Orr did not have *593an opening until that month. Consistent with the Institute requirements, Fields met weekly with Orr for five psychoanalytic sessions of one hour each commencing in October of 1974, although he didn’t start his work at the Institute until September of 1975. He received full credit for the training analysis on the Institute’s records of academic achievement from the date his analysis began in October of 1974. In June 1980, after five and a half years and a total of 1,208 hours of treatment, Fields completed his psychoanalysis with Dr. Orr. The termination of the analysis was planned well in advance as Fields decided in August or September of 1979 to conclude the analysis in June of 1980 to coincide with the completion of his course work at the Institute from which he finally graduated in November 1980.
II
Prior to the move to San Diego, Fields’ wife was employed by the federal government. She was covered under a health plan provided by the Aetna Life Insurance Company. Fields was enrolled as her dependent. The Aetna plan provided for reduced psychoanalytic benefits effective January 1, 1975. Fields knew this. The Federal Employees Health Benefits Act included an “open season” during which employees could switch to other health coverage. Fields looked around and found Blue Cross group insurance available for government employees covered psychiatric treatment for mental and nervous illness. Effective January 1, 1975, Mrs. Fields switched to the government-wide service benefit plan administered by Blue Cross and Blue Shield. Again, Fields was her dependent under the Blue Cross plan.
The 1975 plan is organized in various sections and explains benefits under each such section. These are referred to as basic hospital benefits, basic surgical-medical benefits, maternity benefits, supplemental benefits and special 100 percent supplemental benefits-both options. Under supplemental benefits, the plan explains lifetime maximum supplemental benefits payable for each subscriber as including high option and low option. Immediately under that appears the following: “Exceptions for nervous and mental illness—Under both options, the lifetime maximum Supplemental Benefits payable for treatment of nervous and mental illness is $50,000 for each subscriber. Expenses applied to this $50,000 maximum benefit also apply to the $250,000 high option or $150,000 low option lifetime maximum benefit.” The description of supplemental benefits then describes covered services and benefits for nervous and mental illness. The majority opinion neglects to reproduce the clear, concise and unambiguous exclusion of training services from policy coverage: “Nervous and mental illness—In addition to other services and supplies covered by Basic or Supplemental Benefits, the following services are covered under Supplemental Benefits:
“Day-night hospital services
*594“Individual or group therapy not exceeding a total of 2 hours per day, and collateral visits with members of the patient’s immediate family, provided by a therapist who is a physician, clinical psychologist, psychiatric nurse, or psychiatric social worker.
“Services of a psychiatric nurse or psychiatric social worker must be performed at the direction and under the supervision of the attending physician (M.D.). The records of the attending physician must show that the physician either saw the patient, or had written or personal consultation with the therapist, at least once every 90 days; in any case, the attending physician must see the patient for evaluation at least once every 12 months.
“The following are not covered—
“Marital, family, or other counseling or training services
“Hypnosis or hypnotherapy
“Services rendered or billed for by a school or halfway house or a member of its staff.” (Italics added.) Under the heading “Special 100% Supplemental Benefit—Both Options” the plan points out that when the total of supplemental benefits amounts to $4,000 for expenses incurred in a calendar year, supplemental benefits for covered expenses will be paid at 100 percent. The paragraph then provides: “However, benefits payable for treatment of nervous and mental illness are excluded from this Special Supplemental Benefit.”
Ill
I do not have any difficulty reading the coverage provided under supplemental benefits in the 1975 plan with respect to nervous and mental illness. I find the exception to coverage as it reads, “The following are not covered—Marital, family or other counseling or training services ...” clear on its face. Training services are not covered as supplemental benefits. The jury likewise so concluded in returning a verdict for Blue Cross. That factual determination by the jury derives from substantial evidence Fields elected to undertake psychoanalysis to meet the requirement imposed by the Institute as a condition to satisfactory completion of its psychoanalytic course. Fields did not enter upon psychoanalysis to treat a nervous or mental illness. He did so as an adjunct to his training as a psychoanalyst.
I do not find necessary in this case the application of familiar rules in the construction of exclusionary provisions of medical insurance policies followed in Ponder v. Blue Cross of Southern California (1983) 145 *595Cal.App.3d 709, 723 [193 Cal.Rptr. 632]. Fields made an informed choice in switching from Aetna coverage to Blue Cross. His education was the only reason to seek psychoanalytic treatment from Dr. Orr. The training exclusion is conspicuous, plain and clear as set out in the plan coverage section outlining benefits for nervous and mental illness. (Gray v. Zurich Insurance Co. (1966) 65 Cal.2d 263, 271 [419 P.2d 168].) But we need not cross that threshold as the plan is not an adhesion contract as found in Gray. The factors characterizing a plan as an adhesion contract as spelled out in Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699, 710-711 [131 Cal.Rptr. 882, 552 P.2d 1178], are not present here. First, the provision at issue is not weighted as to either party in the circumstances presented. Fields did not have a nervous or mental illness. He was a student required to undergo psychoanalysis as part of his training. Second, the plan was negotiated between the federal government and Blue Cross. In Madden, the court found the state Employees Retirement System negotiated the contract with Kaiser Foundation Health Plan on behalf of state employees and had a consequent parity of bargaining strength. Here, the federal government negotiated the contract, I assume in its own behalf. Premiums for coverage of employees are paid by the federal employer. Those premiums are priced out on the basis of anticipated payments by the carrier. It follows the benefits and the exclusions are negotiated at arm’s length. The person hired as a federal employee who accepts Blue Cross coverage is thus arguably in an adhesionary posture as to the federal employer who offers the plan. But this posture does not create an adhesionary relationship between the employee and Blue Cross which bargained the terms of the plan with the employer. The plan is the product of the employer and Blue Cross who are on a parity. Third, Fields had the opportunity to continue with Aetna or switch to Blue Cross. In Madden, the court found like opportunity to select between plans. Lastly, Fields’ lawyer stipulated at trial the plan did not constitute a contract of adhesion.
IV
In January 1975, Mrs. Fields was the federal employee enrolled in the plan and Fields was a covered family member. A series of supplemental benefit summaries show psychoanalytic analysis for Fields from January 6, 1975 through March 25, 1976, and from June through August of 1976. Mrs. Fields is the federal employee and subscriber and Fields is the patient. The claim identification number is R17930187. Dr. Orr’s charges during this period totaled $12,224 credited toward the $250,000 maximum benefit for all care and $11,968 credited toward the $50,000 maximum for nervous and mental illness. Mrs. Fields quit her federal job in August 1976 and Fields went to work for the Veterans Administration Hospital, enrolling in August 1976 as the subscriber in the 1976 Blue Shield plan. That plan, effective *596January 1, 1976, expanded on services not covered in the treatment of nervous and mental illness, and as expanded, read as follows: “Services not covered—
“Marital, family, or other counseling or training services.
“Psychoanalysis or psychotherapy, provided to a Subscriber or any family member, that is credited towards earning a degree or furtherance of the education or training of a Subscriber, regardless of diagnosis or symptoms that may be present.” The supplemental benefits summary form for the period October 25 through November 24, 1976, is addressed to Fields as the subscriber and covered employee and who is shown as the patient under a new identification number R21166640. That form shows Dr. Orr’s charges for $880, a deductible of $100 (satisfied for the year) and a coinsurance deductible of $156. The $624 is charged against the $50,000 maximum for nervous and mental illness benefits.
Significantly, the last form in 1976 with Mrs. Fields as the subscriber, August 1976, shows a total of $11,968 credited toward the $50,000 nervous and mental illness benefit maximum. Yet in that same year, the November 26, 1976, form with Fields as the subscriber shows only $624 credit toward the $50,000 maximum. The conclusion is inescapable. Following termination in midyear of Mrs. Fields’ federal employment, Fields enrolled in the 1976 plan as a covered employee. Benefits thereafter were paid to him as a subscriber and covered employee under identification number R21166640. No benefits were paid to him as a dependent after August 25, 1976 under Mrs. Fields’ policy R17930187.
This extended documentary exposition demonstrates conclusively Fields enrolled as the covered employee and subscriber under the 1976 plan and the parties following August 25, 1976, looked solely to the 1976 plan as the instrument governing their rights and remedies. Fields’ August 1976 enrollment in the 1976 plan required the submission of enrollment documents and his receipt and review of the 1976-1977 plan booklet, a controverted issue at trial and supported by the jury verdict. In bold print appears the following: “To the extent that benefits for a service or supply are eliminated or modified for a new contract year, benefits will not be provided for those services or supplies rendered after the effective date of the elimination or modification even though benefits may have been provided for the same service or supply rendered before the effective date of the elimination or modification.” And as earlier noted, the 1976 plan in which Fields enrolled as a covered employee specifically excluded from coverage psychoanalysis *597provided a subscriber that is credited toward furtherance of education or training of a subscriber.
If the 1975 plan is deemed not to exclude payment for Fields’ psychoanalytic education on the basis the exclusion in the policy of “training services” is ambiguous, the 1976 plan applicable to Fields from August 1975 clearly bars tuition payments.
V
The majority finds benefits payable for Fields’ education became vested under the 1975 plan and not subject to later retraction under subsequent amendments or modifications to that plan. Fields did not raise this vesting issue in the trial court. This novel theory of liability is raised for the first time on appeal. The majority elects to address the issue as involving only a question of law determinable from a factual situation already present in the record citing Panopulos v. Maderis (1956) 47 Cal.2d 337, 340 [303 P.2d 738], In Panopulos, the facts were undisputed. The guest statute barred recovery from the driver of a vehicle. At trial, the plaintiffs, injured in an accident when an exiting elderly passenger hit the gear shift and the accelerator, tried their case solely on the theory they were paying passengers and not guests. On appeal, they argued for the first time the statute was not applicable as the defendant was not the driver. It was undisputed the host driver in fact had exited the vehicle when it lurched forward and the issue was solely one of law. “If a question of law only is presented on the facts appearing in the record the change in theory may be permitted. [Citation.] But if the new theory contemplates a factual situation the consequences of which are open to controversy and were not put in issue or presented at the trial the opposing party should not be required to defend against it on appeal. [Citations.]” (Panopulos, supra, at p. 341.)
Marsango v. Automobile Club of So. Cal. (1969) 1 Cal.App.3d 688 [82 Cal.Rptr. 92], also cited by the majority, applies the general rule a party to an action may not for the first time on appeal change his theory of the cause. The court found the change in theory involved not a pure question of law but factual issues open to controversy. “Litigation is an adversary process contemplating an element of risk to all parties. To permit a change of theory on appeal is to allow one party to deal himself a hole card to be disclosed only if he loses. Even if that device does no more than give him a second chance, it has unbalanced the inherent risk of the litigation and put the other party at a disadvantage. Such a process is to be allowed if at all only under unusual circumstances—as for example where the question is purely one of law so that it cannot be said that the balance of litigation risk was altered *598by the failure to raise it at trial. The record before us discloses no such circumstances.” {Id., at p. 695.)
Panopulos involved no factual dispute. The host driver had exited the car. Mar sango declined to hear a new theory on appeal. From the recitation of facts and law set out here and in the majority opinion, it is clear the issue of vesting requires resolution of factual issues and is not a pure question of law.
A.
Vesting under the 1975 plan requires the conclusion the 1976 plan in which Fields enrolled and under which benefits were paid from August 1976 is entirely to be ignored. The facts are to the contrary. The records show a new plan identification number and a new startup in the computation of payments attributable to the lifetime $50,000 benefit. The parties acquiesced in a “roll-back of the odometer.” Mrs. Fields’ termination of employment resulted in a termination of her coverage as a subscriber and covered employee. (5 U.S.C. § 8901 and 5 C.F.R.1 §§ 890.102(a) and 890.304(a).) Fields was by reason of his new federal employment eligible to and did enroll in the government-wide service benefit plan.
B.
The legal issue depends on resolution of facts. It follows no pure question of law is presented. Indeed, the extensive analysis in the majority opinion suggests the legal issue is less than pure.
VI
The importance to the insurers of health care of the concept of vesting announced by the majority cannot be overstated. As Fields concedes in his briefs and in arguments before us, the industry awaits resolution of this issue with bated breath. To do so on this record is simply unfair. Blue Cross had no opportunity to develop before the trial court the consequences of vesting of rights to benefits under the 1975 plan. We interpret statutes to avoid absurd results; we should do the same in construing the exclusions for psychoanalytic education in these plans.
Trial below proceeded solely on the tort theory of breach of the covenant of good faith and fair dealing, not on breach of contract. The majority holds damages recoverable on that theory on this record which demonstrates Blue *599Cross was never put on notice of a vesting of benefits breached by its failure to recognize the emergence of a new concept of liability.
The vesting rule is inconsistent with the provisions of the Federal Employees Health Benefits Program regulations (§ 890.101 et seq.). The inconsistency is demonstrated by an examination of the provisions of section 890.401.
Paragraph (a) of section 890.401 provides, upon termination of enrollment, for a 31-day extension of coverage during which the right of conversion to an individual plan may be exercised. Subparagraph (b)(1) of that regulation provides as follows: “Any person who has been granted a 31-day extension of coverage in accordance with paragraph (a) of this section and who is confined in a hospital or other institution for care or treatment on the 31st day of the temporary extension is entitled to continuation of the benefits of the plan during the continuance of the confinement but not beyond the 60th day after the end of the temporary extension.” (§ 890.401(b)(1), italics added.) If a right to benefits for ongoing treatment was “vested,” there would be no need for such an extension of benefits and this regulation would be surplusage.
It is important to note the differences in language between section 890.401(a) and section 890.401(b)(1). The 31-day extension under paragraph (a) is an extension of coverage. The additional 60-day extension under subparagraph (b)(1) is an extension of benefits only. Furthermore, subparagraph (b)(1) specifically indicates that the extended entitlement to benefits does not continue beyond the 60th day after the end of the temporary extension of coverage under paragraph (a). This unequivocally indicates that a right to benefits for an ongoing course of treatment does not “vest” under the health plans made available to government employees under the Federal Employees Health Benefits Act.
The provisions of section 890.401(b)(2) are also relevant here. Mrs. Fields’ enrollment was terminated in 1976. Dr. Fields’ enrollment began at about that same time. It is not clear whether that sequence of events should be considered a change of Dr. Fields’ enrollment from one plan to another, or from one option of a plan to another option of that plan as those terms are used in section 890.401(b)(2). If anything, Dr. Fields’ enrollment upon termination of his wife’s enrollment seems to represent an even more significant change. However, if the provisions of section 890.401(b)(2) were applicable, it is clear that the maximum period during which Dr. Fields would have continued to have been entitled to benefits under Mrs. Fields’ enrollment is 91 days, and then only if he were continuously confined in a *600hospital or other institution during that time. This also is clearly inconsistent with the notion of a “vested right” to benefits for future treatments.
VII
Following our request during oral argument, the parties submitted observations on the effects of the vesting rule. I note some of the consequences put forth by Blue Cross. These emphasize we should not adjudicate this issue not raised in the lower court and they categorize the vesting claim as an intrusion into the federal rule-making process.
A.
The “right” that vests is difficult of definition. Does it embrace the right to all services available in the future or is it limited to those available and received while plan coverage was in effect? Do future deductible amounts apply? What effect do copayment changes have?
B.
Health plan coverages change from time to time due to a variety of factors. These include changing needs, increasing costs, employer resistance or financial ability to absorb higher premiums. If a right to benefits vests, the plan provisions would freeze as to the vested person. Under a group plan, covered individuals would have rights different from others. In short, an administrative nightmare would result in keeping track of the variables.
C.
A vesting rule would require exclusions for preexisting conditions to be sure vested rights would not be duplicated as groups change from carrier to carrier and to eliminate for all time any coverage for a preexisting condition. Otherwise, the carrier would be required to pay whether or not a person continues to be covered by the plan or pays a premium for the coverage. This necessarily would require substantial administrative costs to be sure the preexisting condition is not covered and would modify present “waiting periods” before a preexisting condition is covered.
D.
The determination of the obligated carrier presents significant administrative problems. A covered person under plan A is medicated for a heart condition. Under plan B, he has a heart attack. He moves through plan C and into plan D. He has another heart attack. Which plan determines the *601coverage? If plans A, B and C are indemnity plans and D is a Kaiser-type, may D reject treatment on the basis of nonentitlement?
E.
We deal here with a federal plan negotiated by a federal agency against a broad background of legislation and economic compromises concerning “conversion coverage” where group insurance is terminated without replacement group coverage and rights to reasonable extension of benefits under terminated plans. To insert into that morass a vesting concept without the opportunity for affected federal agencies and other groups to intervene to develop before the trial court these and other problems attendant upon the new rule is an intrusion to attain a result not supported by the evidence and barred by familiar federal preemption concepts.
A petition for a rehearing was denied January 29, 1985.

All section references are to 5 Code of Federal Regulations unless otherwise specified.