Opinion
DOCKET NO. A-2403-14T4
09-23-2016
VICTOR S. DOMBROVSKIY, Plaintiff-Appellant, v. TRAVEL GUARD, Defendant-Respondent.
Victor S. Dombrovskiy, appellant pro se. Sweet Pasquarelli, attorneys for respondent (Matthew G. Minor, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Sabatino, Accurso and Suter (Judge Sabatino concurring). On appeal from the Superior Court of New Jersey, Law Division, Special Civil Part, Bergen County, Docket No. DC-12250-14. Victor S. Dombrovskiy, appellant pro se. Sweet Pasquarelli, attorneys for respondent (Matthew G. Minor, on the brief). The opinion of the court was delivered by SUTER, J.S.C. (temporarily assigned).
Plaintiff Victor Dombrovskiy appeals a decision by the Special Civil Part, following a bench trial, that dismissed his breach of contract action against National Union Fire Insurance Company of Pittsburgh, PA i/p/a Travel Guard (Travel Guard). We affirm the dismissal because the travel insurance policy issued by Travel Guard excluded coverage for Dombrovskiy's claim.
I.
On March 19, 2014, Dombrovskiy paid $3176.10 for a weeklong trip to St. Lucia for himself and his family. On May 19, 2014, two days before his scheduled departure date, Dombrovskiy made an on-line purchase of travel insurance from Travel Guard. The policy offered trip cancellation coverage.
On May 20, 2014, which was the policy's effective date and just one day before his departure, Dombrovskiy felt a "very strong continuous pain on the left side of [his] mouth," and sought treatment that same day. His dentist diagnosed him on May 20, 2014, with acute pericoronitis. Following his dentist's advice not to travel, Dombrovskiy cancelled the trip to St. Lucia and, when he was not successful in obtaining a refund for the trip, filed a claim under the travel insurance policy for reimbursement of his expenses. Travel Guard denied the claim under the policy's pre-existing medical condition exclusion.
"Acute" is defined as "[r]eferring to a health effect, usually of rapid onset, . . . sometimes loosely used to mean severe." STEDMAN'S MEDICAL DICTIONARY 23 (28th ed. 2006). "Pericoronitis" is "inflammation around the crown of a tooth, usually one that is incompletely erupted into the oral cavity." Id. at 1458.
Under the policy, a pre-existing medical condition was defined as a medical condition that manifested itself 180 days immediately preceding the policy's effective date, and included the effective date of the policy. Because Dombrovskiy's illness occurred on May 20, 2014, the policy's effective date, it constituted a "pre-existing medical condition" as defined by the policy, and was thus excluded from coverage.
Dombrovskiy filed a complaint against Travel Guard for breach of contract. Following a bench trial where Dombrovskiy was the only witness, Judge Susan Steele dismissed the complaint, finding the claim was excluded by the plain language of the policy which was not ambiguous.
Dombrovskiy raises this issue on appeal:
TRAVEL GUARD (DEFENDANT) ISSUED TRAVEL INSURANCE POLICY TO VICTOR DOMBROVSKIY THAT WAS IN EFFECT STARTING MAY 20TH, 2014. INSURANCE PACKAGE PROVIDES "TRIP CANCELLATION COVERAGE AT 100% FOR EACH TRAVELER" AS STATED IN CERTIFICATE OF INSURANCE. VICTOR DOMBROVSKIY SHOULD NOT HAVE BEEN DENIED INSURANCE COVERAGE.
II.
A.
We afford a deferential standard of review to the factual findings of the trial court on appeal from a bench trial. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974). These findings will not be disturbed unless they are "so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Id. at 484 (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)). However, our review of a trial court's legal determinations is plenary. D'Agostino v. Maldonado, 216 N.J. 168, 182 (2013) (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)). The interpretation of an insurance contract is a question of law, the review of which we undertake de novo. Polarome Int'l, Inc. v. Greenwich Ins. Co., 404 N.J. Super. 241, 260 (App. Div. 2008), certif. denied, 199 N.J. 133 (2009).
We consider this travel insurance policy in the context of well-established principles. Insurance policies are considered "contracts of adhesion," and as such, are "construed liberally in [the insured's] favor" to provide coverage "to the full extent that any fair interpretation will allow." Longobardi v. Chubb Ins. Co., 121 N.J. 530, 537 (1990) (alteration in original) (citing Kievit v. Loyal Protective Ins. Co., 34 N.J. 475, 482 (1961)). "If the policy terms are clear, courts should interpret the policy as written and avoid writing a better insurance policy than the one purchased." President v. Jenkins, 180 N.J. 550, 562 (2004). "A 'genuine ambiguity' arises only 'where the phrasing of the policy is so confusing that the average policyholder cannot make out the boundaries of coverage.'" Progressive Cas. Ins. Co. v. Hurley, 166 N.J. 260, 274 (2001) (quoting Weedo v. Stone-E-Brick, Inc., 81 N.J. 233, 247 (1979)). If there is an ambiguity in the insurance contract, we "interpret the contract to comport with the reasonable expectations of the insured, even if a close reading of the written text reveals a contrary meaning." Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595 (2001).
We agree with the trial court that Dombrovskiy's claim came within an exclusion from coverage that was clear and not ambiguous, requiring the dismissal of his claim.
Section I defined the policy's effective date:
Effective Date: Trip Cancellation and Cancel for Any Reason coverages will be effective at 12:01 a.m. Standard Time on the date following payment to the Company of any required plan cost.
Dombrovskiy paid for the travel insurance policy on May 19, 2014, which made the policy's effective date May 20, 2014. Although there was no mention of exclusions from coverage for pre-existing medical conditions within the effective date section, the "Table of Contents" immediately above Section I set forth that the policy's "Exclusions and Limitations" could be found in Section IV.
Section II of the policy described the benefits that Travel Guard would provide for trip cancellation and interruption. Dombrovskiy's dentist certified his illness commenced on May 20 and that she advised him to cancel or interrupt the trip.
Section II of the policy provides:
The Company will reimburse the Insured a benefit, up to the Maximum Limit shown in the Schedule or Declarations Page if an Insured cancels his/her Trip or is unable to continue on his/her Trip due to any of the following Unforeseen events:
(a) Sickness, Injury or death of an Insured . . . must be so disabling as to reasonably cause a Trip to be canceled or interrupted or which results in medically imposed restrictions as certified by a Physician at the time of Loss preventing continued participation in the Trip[.]
. . . .
Special Notification of Claim
. . . .
Trip Cancellation Benefits: The Company will reimburse the Insured for Forfeited, prepaid Trip Cost up to the Maximum Limit shown in the Schedule or Declarations Page for Trips that are canceled prior to the scheduled Departure due to any of the Unforeseen events shown above.
The "Exclusions and Limitations" set forth in Section IV provided that the "plan does not cover any loss caused by or resulting from" an enumerated list of specific exclusions. Included therein, in bold type, was the exclusion for a "pre-existing medical condition." This section provided:
PRE-EXISTING MEDICAL CONDITION EXCLUSION: The Company will not pay for any loss or
expense incurred as the result of an Injury, Sickness or other condition (excluding any condition from which death ensues) of an Insured . . . which, within the 180 day period immediately preceding and including the Insured's coverage effective date: (a) first manifested itself, worsened, became acute or had symptoms which would have prompted a reasonable person to seek diagnosis, care or treatment; (b) for which care or treatment was given or recommended by a Physician; (c) required taking prescription drugs or medicines, unless the condition for which the drugs or medicines are taken remains controlled without any change in the required prescription drugs or medicines.
[Emphasis added to the text.]
This section also included a "waiver" provision, by which the pre-existing medical condition exclusion could be waived if an insured purchased the travel insurance policy within fifteen days of making the initial trip payment. That provision was not available to Dombrovskiy, who paid for his trip two months prior to purchasing the insurance policy.
The plain language of this policy excluded coverage for pre-existing medical conditions. That definition included the effective date of the policy. We are to give the "words of an insurance policy . . . their plain, ordinary meaning." Zacarias, supra, 168 N.J. at 595. This language is not unclear or susceptible of two different interpretations. We discern nothing about the "phrasing of the policy [that was] so confusing that the average policyholder cannot make out the boundaries of coverage." Progressive, supra, 166 N.J. at 274 (internal citations omitted). Because we are not to write a different policy when the language is clear, we are constrained to apply the language as written to deny Dombrovskiy's claim because his medical condition occurred on the policy's effective date, which then was excluded from coverage.
An insurer does not breach its insurance contract when the contract provides what is covered and then subsequently lists exclusions. See Zacarias, supra, 168 N.J. at 603 ("[A]n insurance contract is not per se ambiguous because its declarations sheet, definition section, and exclusion provisions are separately presented").
An insurer does not engage in bad faith merely by including a pre-existing medical condition exclusion within its policy. Pre—existing medical condition exclusions are commonplace in insurance, but have no one format. Their interpretation has been the subject of litigation. Kievit, supra, 34 N.J. at 477 (holding a pre-existing dormant condition was not excluded under that policy); Paul Revere Life Ins. Co. v. Haas, 137 N.J. 190, 202 (1994) (included a provision that the insurer did not have to pay for a pre-existing condition that was not disclosed). B.
There are two commonly used definitions for the term pre-existing condition" in the context of health insurance: the prudent person definition, and the objective standard definition. See Individual Health Insurance & States: Chronologies of Change, NAT'L CONFERENCE OF STATE LEGISLATURES, http://www.ncsl.org/research/health/individual-health-insurance-in-the-states.aspx (last visited September 16, 2016).
Even if this policy language were shown to have some ambiguity, because a certain type of claim is excluded from coverage on the policy's effective date, we cannot say this provision of the policy is at odds with the reasonable expectations of an insured. Under the reasonable expectations doctrine, purchasers of insurance "should not be subjected to technical encumbrances or to hidden pitfalls and their policies should be construed liberally in their favor to the end that coverage is afforded to the full extent that any fair interpretation will allow." Kievit, supra, 34 N.J. at 482. However, that standard is an objective one meaning that "[t]he court's goal in construing an . . . insurance policy is to effectuate the reasonable expectations of the average member of the public who buys it." Sparks v. St. Paul Ins. Co., 100 N.J. 325, 338 (1985) (quoting Kievit, supra, 34 N.J. at 488-89).
At oral argument, counsel for Travel Guard noted the anti-fraud nature of this provision. The intent behind the policy "is to prevent a situation where someone can buy insurance when they're already feeling some type of illness and then receive full coverage for the loss because they can't make a trip prior to and including the effective coverage date."
We think it reasonable that insurance consumers expect limitations in policies intended to weed out fraudulent claims. Insurance fraud has been described as "a problem of massive proportions that . . . results in substantial and unnecessary costs to the general public in the form of increased rates." Merin v. Maglacki, 126 N.J. 430, 436 (1992). That the result of an anti-fraud provision may be the exclusion of certain valid claims and the inclusion of certain fraudulent claims does not mean that the reasonable expectations of an objective insured is frustrated. We have no support for, and cannot say that, the inclusion of the policy's effective date within the definition of pre-existing medical condition as an anti-fraud provision is so unreasonable or at odds with the reasonable expectations of an insured that we should rule, as a matter of law, to invalidate the provision.
It is clear the Travel Guard policy was subjected to certain variations depending upon the state in which it was offered. The policy itself included "State Notices" in Section VI for consumers in specific states. In Connecticut and Idaho, the policy's definition of pre-existing condition excluded the policy's effective date, while in the District of Columbia and North Carolina, the policies continued to permit Travel Guard to include the effective date within the exclusion. It does not mean there is an ambiguity in the language of the policy merely because the policy form lacks uniformity among the states. Rather, this is a reflection of the state by state regulation of insurance intended to protect consumers, with the variation in language neither setting a ceiling or a floor.
There are no special references for consumers in New Jersey.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION Sabatino, P.J.A.D., concurring.
I join in the result and in Parts I and II(A) of Judge Suter's well-written majority opinion. I do not believe it is necessary for us to resolve the issue of the "reasonable expectations of the insured" discussed in Part II(B). That issue is not expressly briefed by the self-represented appellant, and is one on which I have serious reservations with respect to this travel insurance policy's "preexisting medical condition" and "effective date" provisions.
By declaring the policy's effective date to be 12:01 a.m. on the date after the insured traveler pays the premium, and excluding coverage for the full day of that effective date, the policy treats as a disqualifying "pre-existing" medical condition one that first manifests itself at a time that can be as late as forty-seven hours after the coverage was purchased. Literally construed, the policy would, for instance, exclude coverage if the insured paid for the coverage at 12:02 a.m. on a Monday and suffered a sudden heart attack at 11:59 p.m. on Tuesday. That situation, which I acknowledge is not factually presented here, would appear to run contrary to the everyday temporal notions of a "pre-existing" condition, i.e., a condition that is present at the time the insurance is purchased. See, e.g., Kievit v. Loyal Protective Life Ins. Co., 34 N.J. 475 (1961) (declining to enforce a preexisting condition clause in an insurance policy, where its literal reading was inconsistent with the objective "reasonable expectation[s]" of an insured, from the perspective of "an average member of the public"). Id. at 488-89.
That said, I can understand why a travel insurer reasonably does not want customers to manipulate the system and purchase insurance when they know they already have a medical condition or a condition that could worsen. I also appreciate that airline passengers who know they might need to cancel their trips because of an existing medical condition that could worsen should not be able to avoid the much higher costs of refundable airline fares by simply buying travel insurance to "hedge their bets."
As the majority acknowledges, ante at 10-11, at least two other states have adopted laws disallowing travel insurers to define a "pre-existing medical condition" and a policy's "effective" date to exclude coverage for a condition that manifests after the insurance has been purchased. I am equally mindful that some other states have adopted contrary legislation. The subject seems to be one worthy of examination by our own State Legislature or regulatory agencies. In any event, appellant has claimed no statutory violations in his brief.
Lastly, regardless of the potential infirmities in this policy that might be litigated in a future case, I recognize that the sequence of events here might have supported a reasonable circumstantial inference that appellant was indeed already developing symptoms when he purchased the coverage months after he made his flight reservations and only two days before his scheduled departure. No such finding was made by the trial court, however, so that sort of factual issue likewise can be dealt with on a different record in a different future case. I hereby certify that the foregoing is a true copy of the original on file in my office.
However, if appellant had waited to see his dentist until the morning of his flight, i.e., on the date after the defined effective date, the policy exclusion would not automatically have applied, and the claim instead would have required a factual evaluation of when the condition had materialized before its diagnosis. --------
CLERK OF THE APPELLATE DIVISION