Court Opinion

ID: 56730
Source: CourtListenerOpinion
Date Created: 2010-04-26 01:57:13+00
Date Added: 2024-06-11T17:19:35.947623
License: Public Domain

WITHDRAWN                                                               [DO NOT PUBLISH]

                  IN THE UNITED STATES COURT OF APPEALS

                            FOR THE ELEVENTH CIRCUIT            FILED
                              ________________________ U.S. COURT OF APPEALS
                                                                        ELEVENTH CIRCUIT
                                                                          OCTOBER 4, 2007
                                     No. 06-16164
                                                                         THOMAS K. KAHN
                               ________________________
                                                                             CLERK

                           D. C. Docket No. 06-60227-CV-JIC

HILDA GRADINGER,

                                                                  Plaintiff,

EDWARD B. GRADINGER,
CARYLE R. LEVINE,

                                                                  Plaintiffs-Appellants,

                                             versus

WASHINGTON NATIONAL INSURANCE COMPANY,

                                                                   Defendant-Appellee.

                               ________________________

                       Appeal from the United States District Court
                           for the Southern District of Florida
                             _________________________

                                       (October 4, 2007)

Before ANDERSON and PRYOR, Circuit Judges, and VINING,* District Judge.

__________________
*Honorable Robert L. Vining, Jr., United States District Judge for the Northern District of
Georgia, sitting by designation.
PER CURIAM:

       Edward B. Gradinger and Caryle R. Levine, as personal representatives of

the Estate of Hilda Gradinger, appeal the district court’s grant of Washington

National Insurance Company’s motion for final summary judgment and the denial

of Mrs. Gradinger’s1 motion for partial summary judgment. The parties do not

dispute the facts or the applicable law in this case. They simply disagree on how

the law applies to the facts. Because we find that there is more than one reasonable

interpretation of the home health care insurance policy at issue, we must liberally

construe it in favor of the insured. Thus, we reverse the district court’s order.

                                     I. BACKGROUND

       In November 1990, Mrs. Gradinger applied for home health care insurance

with Pioneer Life Insurance Company. Pioneer issued a policy to Mrs. Gradinger,

effective December 26, 1990, which included multiple pages: (a) introductory

pages; (b) a one-page Certificate Schedule; (c) five printed pages detailing

information such as policy definitions, benefits, exclusions, and pre-existing

conditions limitations; (d) an endorsement page; (e) amendments to the policy; and

(f) a copy of Mrs. Grandinger’s application for insurance. The introductory pages

       1
          Mrs. Gradinger died on July 14, 2006. Her personal representatives filed a motion to
substitute, which the district court granted on November 31, 2006. Following the custom of the
district court and the parties, we refer to Mrs. Gradinger as the plaintiff in this action for the
purposes of this opinion.

                                                 2
and five pages following the Certificate Schedule comprised a pre-printed,

standard certificate of insurance. The Certificate Schedule, which details the

amounts of coverage, was the only portion of the policy specially prepared for Mrs.

Gradinger.

      The schedule appears as follows:

                           CERTIFICATE SCHEDULE

HOME HEALTH CARE BENEFIT                                   $180/DAY
LIFETIME MAXIMUM BENEFIT AMOUNT                            $250,000
PER OCCURRENCE MAXIMUM BENEFIT                             $150,000/ILLNESS

AUTOMATIC BENEFIT INCREASE PERCENTAGE                      Benefits increase by
                                                           8% each year

INSURED: Hilda Gradinger               CERTIFICATE NO:           PL0855783A
                                       EFFECTIVE DATE:            12-26-90
                                       INITIAL PREMIUM:          $1,108.00

      Additionally, the pre-printed pages contain the following relevant

provisions:

      HOME HEALTH CARE: We will pay 100% of the usual and
      customary charges for Home Health Care expenses if the care was
      pre-authorized. If the care was not pre-authorized we will pay 75% of
      the usual and customary charges for Home Health Care expenses

                                          3
      incurred, up to 75% of the Daily Benefit Amount shown in the
      schedule. These benefits will be paid up to the Home Health Care
      Daily Benefit shown in the schedule. All benefits will be limited to
      the Per Occurrence Maximum Benefit for each injury or sickness and
      the Lifetime Maximum Benefit Amount for ALL injuries and
      sicknesses which are shown in the certificate schedule.

      ....

      AUTOMATIC DAILY BENEFIT INCREASE: On each policy
      anniversary, we will increase the Home Health Care Daily Benefit
      payable under this policy by the Automatic Benefit Increase
      Percentage shown on the schedule page.

      ....

      LIFETIME MAXIMUM BENEFIT: This coverage shall terminate
      and no further benefits will be payable when the total sum of Home
      Health Care or Adult Day Care benefits paid equals the amount shown
      in the schedule for the Lifetime Maximum Benefit Amount. Any
      premium paid for a period after termination will be refunded.

      After the policy was issued, Pioneer merged with Washington National

Insurance Company. As a result of the merger, Washington National assumed all

obligations under the policy.

      In April 1998, Mrs. Gradinger submitted a claim for benefits under the

policy because she was receiving medically necessitated home health care. The

insurer paid home health care benefits on behalf of Mrs. Gradinger for

approximately five years. In April 2003, the insurer ceased paying benefits under

the policy and terminated coverage because it claimed that Mrs. Gradinger had

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reached the Lifetime Maximum Benefit amount of $250,000.2 Mrs. Gradinger

objected to the termination of her coverage, arguing that the liability limit under

the policy had not been met because the Lifetime Maximum Benefit amount had

increased by 8% each year. Subsequently, Mrs. Gradinger received and paid three

premium bills totaling $2,649.75.

       In January 2006, Mrs. Gradinger filed her lawsuit against Washington

National in state court, alleging breach of contract (Count I) and waiver and

estoppel (Count II). Washington National removed the case to federal district

court pursuant to 28 U.S.C. § 1332.

       In April 2006, Washington National remitted a check to Mrs. Gradinger for

$669.98. An accompanying letter explained that the check was a refund of

unearned premiums collected plus interest at the rate of 7%, minus an overpayment

of claims in the amount of $1,995.50. Mrs. Gradinger accepted the reimbursement.

       In September 2006, Mrs. Gradinger moved for partial summary judgment

only on the liability aspect of the breach of contract claim.3 Washington National

moved for final summary judgment on both the breach of contract claim and the

       2
        The Per Ocurrence Maximum Benefit amount is not at issue in this case because it is
undisputed that Mrs. Gradinger began suffering from a separate and distinct illness requiring
home health care covered by the policy after she submitted her initial claim under the policy.
       3
         Mrs. Gradinger did not seek summary judgment as to damages payable if the Court
ruled in her favor.

                                                5
waiver and estoppel claim. The district court entered an order granting final

summary judgment to Washington National and denying partial summary

judgment to Mrs. Gradinger on October 30, 2006. Mrs. Gradinger appeals the

district court’s dismissal of her breach of contract claim only. She does not appeal

the dismissal of her waiver and estoppel claim.

                          II. STANDARD OF REVIEW

      We review the grant or denial of summary judgment de novo. Holloman v.

Mail-Well Corp., 443 F.3d 832, 836 (11th Cir. 2006). “Summary judgment is

appropriate when no genuine issue of material fact exists and the moving party is

entitled to judgment as a matter of law.” Elan Pharm. Research Corp. v.

Employers Ins. of Wasau, 144 F.3d 1372, 1374-75 (11th Cir. 1998) (citing Fed. R.

Civ. P. 56(c)).

                                III. DISCUSSION

      This matter is ripe for summary judgment because it involves a pure

question of law. The parties do not dispute the relevant facts. They only dispute

the proper interpretation of the Maximum Lifetime Benefit amount payable under

the home health care insurance policy. Washington National argues that the policy

caps the allowable Lifetime Benefit at $250,000. Mrs. Gradinger, on the other

hand, asserts that the Maximum Lifetime Benefit should have increased 8% per

                                          6
year from the original $250,000. The district court held that the policy was

unambiguous and the plain meaning supported Washington National’s

interpretation of the of the policy. We disagree.

      In this case, Florida law governs the interpretation of the home health care

insurance policy. “Thus, we look at the policy as a whole and give every provision

its full meaning and operative effect.” Hyman v. Nationwide Mut. Fire Ins. Co.,

304 F.3d 1179, 1186 (11th Cir. 2002) (applying Florida law). As we explained in

Hyman:

      We start with the plain language of the policy, as bargained for by the
      parties. If that language is unambiguous, it governs. Under Florida
      law, however, if the “relevant policy language is susceptible to more
      than one reasonable interpretation, one providing coverage and the
      []other limiting coverage, the insurance policy is considered
      ambiguous,” and must be “interpreted liberally in favor of the insured
      and strictly against the drafter who prepared the policy.”

Id. (citations omitted) (alteration in original). Florida law requires that the terms of

the policy “be given their everyday meaning” and be viewed “in light of the skill

and experience of ordinary people.” Lindheimer v. St. Paul Fire and Marine Ins.

Co., 643 So. 2d 636, 638 (Fla. Dist. Ct. App. 1994).

      The only question before us is whether Mrs. Gradinger’s interpretation of

the policy is a reasonable one. If a person of ordinary skill and experience

reasonably could conclude that the Automatic Benefit Increase applies not only to

                                           7
the daily Home Health Care Benefit but to the Lifetime Maximum Benefit as well,

then the policy is ambiguous and we must construe its terms liberally in favor of

Mrs. Gradinger and strictly against the insurer.

      The Benefits section of the policy expressly states that the insurer “will

increase the Home Health Care Daily Benefit payable under this policy by the

Automatic Benefit Increase Percentage shown on the schedule page.” While this

provision makes it clear that the Automatic Benefit Increase applies to the daily

benefit, nowhere in the policy does it state that the Automatic Benefit Increase

does not apply to either of the maximum benefits. Instead, each time the policy

discusses either maximum benefit, the policy directs the reader to the Certificate

Schedule.

      Turning to that section of the policy, we see that the Certificate Schedule lists

three benefits: the Home Health Care Benefit, the Lifetime Maximum Benefit, and

the Per Occurrence Maximum Benefit. After this grouping of three benefits, the

schedule sets out the Automatic Benefit Increase Percentage with some spacing

between the three benefits and the percentage. The schedule states: “Benefits

increase by 8% each year.” Considering the grouping of the benefits and the

alternate uses of the singular and plural forms of the word benefit, nothing in the

schedule indicates that the Automatic Benefit Increase only applies to the first of

                                           8
three benefits listed.

       The Automatic Benefit Increase appeals to a prospective insured who seeks

protection against the rising costs of health care. Promising that benefits increase

by 8% each year is a policy selling point; however, if the daily benefit increases

over time, but the Lifetime Maximum Benefit remains fixed at its initial level, the

period of protection will shrink. Thus, an insured who survives until she has

incurred $250,000 in covered costs, will reach the Per Occurrence and Lifetime

Maximum Benefit limits sooner. An ordinary person could reasonably assume that

the Automatic Benefit Increase does not function to reduce the duration of

coverage. In other words, it would be reasonable for an ordinary person to

conclude that all benefits increase by 8% each year.

       Washington National asserts that Mrs. Gradinger places too much emphasis

on the schedule and unreasonably reads this portion of the policy in isolation. The

pre-printed, standardized provisions of the policy, however, repeatedly emphasize

the centrality of the schedule to the meaning of the policy. Because the schedule

was the only portion of the policy specially prepared for Mrs. Gradinger, it is not

unreasonable to focus on it, especially considering that none of the policy’s other

provisions contradict Mrs. Gradinger’s interpretation of the schedule.

       Reading the Benefits section in conjunction with the Certificate Schedule,

                                           9
there is an ambiguity as to whether the Automatic Benefit Increase applies to the

Lifetime Maximum Benefit. While the insurer may have intended that the

Automatic Benefit Increase apply exclusively to the daily Home Health Care

Benefit, it is not plain that the policy should be construed so narrowly. Because the

policy is ambiguous, we resolve the issue in favor of Mrs. Gradinger and against the

insurer, the drafter of policy. See Hyman, 304 F.3d at 1186.

                                IV. CONCLUSION

      Accordingly, we reverse the district court’s grant of summary judgment in

favor of Washington National and remand the case with instructions to grant Mrs.

Gradinger’s motion for partial summary judgment.

      REVERSED and REMANDED.

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