William Nulton; Carol Nulton v. CIGNA Health Plans of California, Inc.
Published: Jun. 7, 1997 | Result Date: Apr. 23, 1997 | Filing Date: Jan. 1, 1900 |Case number: CV077810 – $171,181
Judge
Court
San Luis Obispo Superior
Attorneys
Plaintiff
Defendant
William W. Clinkenbeard
(Clinkenbeard, Ramsey, Spackman & Clark LLP)
Facts
In the summer of 1992, plaintiff William Nulton, a 55-year-old disabled truck driver, had the opportunity to change health care coverage through his wife's employer, the state of California. One of their options was to enroll in defendant Cigna Health Plans of California Inc.'s health care plan. The plantiffs carefully investigated the doctors and hospitals they would have access to under the defendant's plan. The health care coverage decision was a critical one, because the plaintiff husband was diabetic and overweight and with a family history of heart disease. He was disabled from a heart attack that he suffered in 1978. The plaintiff husband had been told by his doctors that he would someday have to undergo open heart surgery in an effort to prolong his life. The plaintiffs were familiar with the reputation of French Hospital in San Luis Obispo, including the cardiovascular team of surgeons at the hospital. For several years prior to 1992, the plaintiff had asked everyone who had some experience with heart problems about the local practitioners. The plaintiff husband spoke with approximately 25 persons who had open heart surgery at French Hospital performed by the local cardiovascular team, and determined that the competence of the local doctors and hospital and the quality of care at French Hospital was positive. The plaintiffs reviewed the materials provided by the defendant at the open enrollment for health care plans held at the plaintiff wife's place of employment. Before enrolling with the defendant's health plan, the plaintiff carefully studied the Evidence of Coverage booklet and related materials. French Hospital and the local cardiovascular team were listed as participating providers by the defendant. Upon being satisfied that they would have access to these local providers, the plaintiff's wife contracted with the defendant under the coverage available through her employer. Shortly after enrolling with the defendant, the plaintiff husband failed a treadmill test. A subsequent angiogram showed significant blockage. An attempt to use angioplasty was unsuccessful and surgery was recommended. On Sept. 25, 1992, the plaintiff husband first presented to the local cardiovascular surgeon listed as a participating provider in the health plan for surgical consultation. On Oct. 7, 1992, the plaintiff husband's primary care physician signed an authorization for the local cardiovascular surgeon to perform coronary-artery bypass surgery, which was scheduled for Nov. 11, 1992 at French Hospital in San Luis Obispo. On Oct. 9, 1992, the plaintiff husband's cardiovascular surgeon was informed by the defendant that the health plan would deny all insurance coverage for the plaintiff husband's pending surgery if it was performed locally at French Hospital. The stated basis for the denial was that French Hospital was not a "Center of Excellence." There was no reference to "Center of Excellence" in any of the documents provided by the defendant to the plaintiffs. In addition, there was no reference to "Center of Excellence" in the doctor's contract with the defendant, nor in the hospital's contract with the defendant. Neither the doctors nor the hospital had ever been informed that there was some restriction on the cardiovascular procedures for which they were considered providers by the defendant. The plaintiffs were informed by the doctor's office that the defendant would not cover the surgery at French Hospital but would provide coverage for the plaintiffs if the procedure was performed at Good Samaritan Hospital in Los Angeles. Good Samaritan was considered by the defendant to be a "Center of Excellence." The plaintiffs' first reaction was to cancel the surgery. After discussing his options with his local doctors, he was advised to proceed with the surgery rather than fight the defendant. **** SEE "THE VERDICT" FOR CONTINUATION OF FACTS
Settlement Discussions
The plaintiff made a settlement demand of $125,000. The defendant made a settlement offer to the plaintiff husband of $30,000. The defendant made no settlement offers to the plaintiff wife.
Damages
Both plaintiffs claimed they suffered emotional distress damages as a result of the defendant's denial of the impending open heart surgery at French Hospital. The plaintiffs also sought exemplary and punitive damages against the defendant based on the defendant's suppression of their "Center of Excellence" policy.
Result
The plaintiff husband's doctor informed him that he might "win the battle and lose the war." The defendant eventually gave the plaintiffs the option of having the surgery performed at Stanford University Medical Center. The surgery was performed at Stanford on Nov. 4, 1992. The defendant provided coverage for the surgery and post-operative procedures. The plaintiff husband suffered numerous post-operative complications. The plaintiffs brought this action against Cigna Health Plans of California Inc. based on breach of contract and fraud theories of recovery.
Other Information
The award was rendered approximately one year and seven months after the case was filed. ARBITRATION: The arbitration was held on Jan. 16 and 17, 1997 before a three-person panel. Judge Warren Conklin, retired was the neutral arbitrator. J. Edmund Smith was the arbitrator selected by the plaintiff, and M. Scott Radovich was the arbitrator selected by the defendant. The matter was arbitrated pursuant to an arbitration clause contained in the defendant's contract. The arbitrators awarded the plaintiff husband $100,000 for emotional distress damages arising out of the breach of contract and awarded the plaintiff wife $25,000 in emotional distress damages. (The arbitrators awarded emotional distress damages arising solely from the breach of contract, as the plaintiffs had previously recovered from Stanford Unviersity for alleged medical negligence in a separate action.) The arbitrators found that the plaintiff's wife was in privity of contract with the defendant, as it was her employment with the state of California that enabled her to enter into a contract with the defendant for the protection of her husband. The arbitrators further found that it was reasonably foreseeable that a willful breach of contract to provide care for the plaintiff husband would cause the plaintiff wife to suffer emotional distress. The arbitrators found that the cause of action for suppression of facts was not proven because there was no substantial evidence that the defendant had a corporate policy to reserve the right to deny coverage under their policy. POST-ARBITRATION MOTIONS: The plaintiffs' motion for attorney's fees and costs was granted. The plaintiffs were awarded attorney's fees of $43,750 and costs of $2,431.75.
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