Court Opinion

ID: 6663784
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:04:39.10148+00
Date Added: 2024-06-11T16:00:16.225900
License: Public Domain

Sievers, Chief Judge, dissenting.
I cannot join in the opinion of my respected colleagues. I would hold that the district court properly sustained the demurrer to the third amended petition, which for simplicity I shall refer to as the petition.
*685I believe the essence of the plaintiff’s lawsuit may be fairly stated as follows: The decedent, Michael Weatherly, was afflicted with testicular cancer at a time when his mother carried group health insurance through Blue Cross Blue Shield Insurance Company (BCBS) by virtue of her membership in the Nebraska State Education Association. Michael sought treatment that is alleged in the petition to be “high doses of chemotherapy with bone marrow infusion,” which would have cost in excess of $100,000. BCBS refused to pay for that treatment.
According to the petition, BCBS caused Michael’s death, or “denied plaintiff’s decedent the opportunity to try to force the cancer into remission or possibly and [sic] ultimate cure,” or caused Michael to suffer “the loss of chance to receive reasonable and customary treatment for testicular cancer,” or deprived Michael “of the . . . chance of additional medical treatment which could possibly force the cancer into remission or a cure.” I have quoted from the petition at some length to illustrate the prominence in the allegations of the words “possibly,” “reasonable and customary,” and “loss of chance.”
The petition denominates six “causes of action.” They are not causes of action, but are either theories of recovery or elements of damage. That the petition is a pleading morass should be evident from the attempts of the majority opinion to deal with six so-called causes of action. I take a somewhat different view of the case. I categorize the case as a suit for the wrongful refusal to pay for treatment sought by an afflicted insured which allegedly would have made a difference in the outcome of his cancer. The Supreme Court has not written on such a lawsuit, but it is my belief that the legal principles have already been pronounced which allow the resolution of this particular appeal. My analysis initially focuses on whether this is a cause of action based upon tort or contract.
However, some rules of pleading should first be delineated. While it is not necessary to state a cause of action in any particular form, Waite v. Samson Dev. Co., 217 Neb. 403, 348 N.W.2d 883 (1984), and while in actions not involving extraordinary remedies, general pleadings are to be liberally *686construed in favor of the pleader, Hutmacher v. City of Mead, 230 Neb. 78, 430 N.W.2d 276 (1988), proper pleading nonetheless requires a petition to state in logical and legal form the facts which constitute the cause of action, to define the issues to which the defendant must respond at trial, and to inform the court of the real matter in dispute. Rosnick v. Marks, 218 Neb. 499, 357 N.W.2d 186 (1984). See Neb. Rev. Stat. § 25-804 (Reissue 1989). It is the facts well pleaded, not the theory of recovery or legal conclusions, which state a cause of action. Moore v. Puget Sound Plywood, 214 Neb. 14, 332 N.W.2d 212 (1983).
In McCurry v. School Dist. of Valley, 242 Neb. 504, 496 N.W.2d 433 (1993), the court found the petition’s “conclusion” that the school district had negligently entrusted the decedent’s transportation to a volunteer driver on a ski trip did not state a cause of action. Thus, the pleader’s labels are not important to me — I look to the well-pleaded facts.
In Lincoln Grain v. Coopers & Lybrand, 216 Neb. 433, 345 N.W.2d 300 (1984), the Supreme Court acknowledged that the dividing line between breaches of contract and torts is often dim and uncertain, but held that the “character of an action as one in tort or on contract is determined by the nature of the grievance, not by the form of the pleadings, with consideration being given to the facts which constitute the cause of action.” Id. at 437, 345 N.W.2d at 304-05. The court nonetheless said that accompanying every contract is a common-law duty to perform with skill, care, reasonable expedience, and faithfulness that which the party agreed to do. However, Lincoln Grain did not involve a written contract, but, rather, an agreement for professional auditing services to be performed according to “generally accepted auditing standards,” and the case was tried below on a tort theory. Thus, the Supreme Court resolved it on the same basis upon which it was tried. I conclude, however, that Lincoln Grain does not eliminate all distinctions between contract actions and negligence actions. In so concluding, I observe Justice Caporale’s concern that all civil jurisprudence is being forsaken but for the law of negligence and that matters are less complicated when contractual actions are tried as contracts, not torts. Hiway 20 Terminal, Inc. v. *687Tri-County Agri-Supply, Inc., 232 Neb. 763, 443 N.W.2d 872 (1989) (Caporale, J., concurring). In my view, the case before us shows why we should not allow the obfuscation of the important differences between tort and contract actions. Additionally, since Lincoln Grain, the Supreme Court has authored J.L. Healy Constr. Co. v. State, 236 Neb. 759, 463 N.W.2d 813 (1990), which I read as a strong iteration of the notion that torts are torts, and contracts are contracts. The court stated:
The principle determinative of this issue was set out most recently in a case decided after the trial in this case, but before the briefs were filed herein. In L.J. Vontz Constr. Co. v. State, supra [230 Neb.] at 382, 432 N.W.2d at 11, we said: “ [T]o determine whether an action is based on a contract or a tort, a court must examine and construe a petition’s essential and factual allegations by which the plaintiff requests relief, rather than the legal terminology utilized in the petition or the form of a pleading.”
We have also said: “It is recognized that if an action is not maintainable without pleading and establishing the contract, if the gist of the action is the breach of the contract, either by malfeasance or nonfeasance, it is in substance, whatever may be the form of the pleading, an action on the contract.” Fuchs v. Parsons Constr. Co., 166 Neb. 188, 193, 88 N.W.2d 648, 652 (1958). See, also, In re Appeal Roadmix Construction Corporation, 143 Neb. 425, 9 N.W.2d 741 (1943); McNeel v. State, 120 Neb. 674, 234 N.W. 786 (1931).
236 Neb. at 763,463 N.W.2d at 816.
L. J. Vontz Constr. Co. v. State, 230 Neb. 377, 432 N.W.2d 7 (1988), which was relied upon in J.L. Healy Constr. Co., supra, emphasizes that we must look to the source of the duty:
Contract actions, which arise from a breach of a duty imposed on one by an agreement, protect a plaintiff’s interest in or right to performance of another’s promises, whereas tort actions, which arise from a breach of a duty imposed by law, protect a plaintiff’s interest or right to be free from another’s conduct which causes damage or loss to the plaintiff’s person or property.
Id. at 382-83,432N.W.2dat 11.
*688Looking to the facts which are pled in the petition, it is clear that the only duty owed by BCBS to Michael comes from the insurance policy, which the plaintiff attached to the petition and incorporated therein by reference. It is necessary to plead and establish the contract, and I conclude that the plaintiff’s cause of action is an action on a contract. Michael was entitled to BCBS’ performance of its obligations under the contract. If those obligations were breached, whether by nonfeasance or malfeasance, then there can be recovery for the damages caused by that breach. Accordingly, one must turn to the contract of insurance to determine the extent of BCBS’ duty to Michael and then examine the allegations of the petition to determine if facts are alleged which state a cause of action on the contract.
Factually, Michael’s diagnosis is alleged with no more precision than “testicular cancer,” and the desired treatment modality is alleged only as “high doses of chemotherapy with bone marrow infusion.” However, the exclusions for payment of medical services under the contract are part of the petition by virtue of their inclusion by the plaintiff. The pertinent exclusion provides: “Benefits will not be provided for services and procedures and any drugs, supplies, or Durable Medical Equipment which are considered to be Investigative.” The contract defines “investigative treatment” as follows:
Treatment is considered investigative when the service, procedure, drug, or treatment modality has progressed to limited human application, but has not achieved recognition as being proven and effective in clinical medicine.
Such recognition may be achieved through the following:
1. Final approval for the use of a specific service, procedure, drug or treatment modality for a specific diagnosis from the appropriate governmental regulatory body;
2. Scientific evidence permitting a consensus conclusion recognizing the effectiveness of the specific service, procedure, drug or treatment modality on health outcomes for a specific diagnosis.
We shall determine whether a service, procedure, drug or treatment modality is Investigative.
*689By attaching the contract and incorporating it by reference, the plaintiff made it part of the petition. See, Gilbert Central Corp. v. Overland Nat. Bank, 232 Neb. 778, 442 N.W.2d 372 (1989); Bank of Stockham v. Alter, 61 Neb. 359, 85 N.W. 300 (1901). Matters contained in pleadings are judicial admissions. Cook v. Beerman, 202 Neb. 447, 276 N.W.2d 84 (1979). Therefore, that payment is unavailable for investigative treatment is a matter which is part of the plaintiff’s petition. Thus, the plaintiff must allege facts which establish that BCBS had a duty to pay for the proposed treatment, which means that it was outside the exclusion for investigative treatment.
The petition characterizes the treatment modality of high doses of chemotherapy with bone marrow infusion as “reasonable and customary.” The standard of review applicable to this case is found in Braesch v. Union Ins. Co., 237 Neb. 44, 46, 464 N.W.2d 769, 771 (1991):
In reviewing an order sustaining a demurrer, this court accepts the truth of facts well pled and the factual and legal inferences which reasonably may be deduced from such facts, but does not accept conclusions of the pleader. ... In ruling on a demurrer, the petition is to be liberally construed; if as so construed the petition states a cause of action, the demurrer is to be overruled. ... A court may not assume the existence of any facts not alleged, find facts in aid of the pleading, or consider evidence which may be introduced at trial.
(Citations omitted.)
The plaintiff’s petition contains conclusions, not facts, when the proposed treatment is alleged only to be “reasonable and customary.” What facts are pled which make it so? The answer is none. In my view, there must be factual allegations that the proposed treatment has achieved recognition as being proven and effective in clinical medicine, and the policy gives two ways in which that standard can be met, but no facts are alleged to satisfy either. The plaintiff has not pled facts showing that the treatment has achieved recognition as being “proven and effective in clinical medicine,” nor is there a pleading of a specific diagnosis of the decedent’s cancer; the stage of the cancer; the specific treatment protocol which is proposed; or *690the extent, if at all, to which such treatment protocol has either been given appropriate governmental regulatory body approval or achieved a consensus conclusion as to effectiveness with respect to a specific diagnosis. “Reasonable and customary” is a conclusion. No cause of action is stated in contract.
I now turn to the matter of bad faith. In Ruwe v. Farmers Mut. United Ins. Co., 238 Neb. 67, 469 N.W.2d 129 (1991), the court quoted with approval Anderson v. Continental Ins. Co., 85 Wis. 2d 675, 692, 271 N.W.2d 368, 377 (1978), where the Wisconsin court held:
The tort of bad faith can be alleged only if the facts pleaded would, on the basis of an objective standard, show the absence of a reasonable basis for denying the claim, i.e., would a reasonable insurer under the circumstances have denied or delayed payment of the claim under the facts and circumstances.
In the seminal case on bad faith actions, Braesch v. Union Ins. Co., 237 Neb. at 57, 464 N. W.2d at 777, the court makes it clear that “ ‘the tort of bad faith is an intentional one.’ ” My colleagues have obviously concluded that the petition alleges such a tort. I disagree. In my view, the fundamental factual prerequisites for a conclusion that BCBS has engaged in an intentional tort of bad faith are that Michael’s cancer was treatable by a specific protocol, which was not investigative, and thus, that BCBS committed an intentional act of bad faith toward Michael when it denied payment for such treatment.
Even if BCBS did nothing in the way of investigation of the proposed treatment and completely ignored Michael’s request for that treatment, it is of no consequence unless the requested treatment was one, as a factual matter, for which it was obligated to pay. Thus, in order to allege the tort of bad faith in this situation, the plaintiff was bound to allege facts establishing either that the proposed treatment was not investigative, which BCBS knew, or that BCBS would have discovered that it was not investigative had BCBS undertaken to determine the facts. In either sense, it could then be said that BCBS’ conduct was intentional and thus in bad faith when it denied payment for treatment which it either knew to be *691noninvestigative or would have found to be noninvestigative had it checked. No matter which way the situation is viewed, allegations of facts showing that the proposed treatment was not investigative are essential elements of any claim for bad faith. An allegation that the proposed treatment was “reasonable and customary” and that BCBS denied Michael the possible chance of trying to put his cancer into remission is just a conclusion of the pleader and is obviously insufficient to withstand a demurrer. I would also hold that the district court properly sustained the demurrer with respect to the attempt to state a cause of action for the tort of bad faith.
Finally, there are difficult and complicated issues presented in this case concerning what must be pled with respect to “loss of chance” to survive. Despite the obviously exaggerated allegations of the petition, BCBS did not cause Michael’s death. Rather, he died from testicular cancer. Thus, the petition must address the matter of loss of chance with factual allegations, not nebulous and contradictory conclusions. The majority opinion does not address this difficult issue. Nor does the petition have any factual allegations about the nature and extent of the chance allegedly lost. In my view, the mere possibility of cure or survival is not a sufficient factual allegation. It is not alleged whether the chance was 1 in 2, 1 in 10,1 in 100,1 in 1,000, or 1 in a million. I save for another day, because the petition is otherwise flawed, full discussion of the issue of whether the loss of a chance to survive, no matter how slim, can be the basis for liability, or whether there must be some bright-line test or threshold of probability.
I would uphold the sustaining of the demurrer. The rule is that it is an abuse of discretion by the tried court to sustain a demurrer without giving leave to amend where there is a reasonable possibility that the defect can be cured. Newman Grove Creamery Co. v. Deaver, 208 Neb. 178, 302 N.W.2d 697 (1981). However, the record shows that the plaintiff elected to stand on the third amended petition, but it does not state a cause of action. I would affirm.