Hunt v. Golden Rule Insurance Company

Filing

OPINION issued by Michael Boudin, Appellate Judge; Kermit V. Lipez, Appellate Judge and Jeffrey R. Howard, Appellate Judge. Published. [10-2065]

Case: 10-2065 Document: 00116198330 Page: 1

Date Filed: 04/19/2011

Entry ID: 5543707

United States Court of Appeals
For the First Circuit

No. 10-2065
BEATRICE M. HUNT,
Plaintiff, Appellant,
v.
GOLDEN RULE INSURANCE COMPANY,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge]
Before
Boudin, Lipez and Howard
Circuit Judges.

Gordon R. Blakeney, Jr. for appellant.
William D. Pandolph, with whom Sulloway & Hollis, P.L.L.C.
was on brief, for appellee.

April 19, 2011

Case: 10-2065 Document: 00116198330 Page: 2

HOWARD, Circuit Judge.

Date Filed: 04/19/2011

Entry ID: 5543707

In this insurance coverage case,

plaintiff Beatrice Hunt appeals the district court's grant of
summary judgment to defendant Golden Rule Insurance Company on her
claims of breach of contract and unfair insurance trade practice.
After de novo review, we affirm.
I.
The background facts are undisputed.
was

insured

under

a

Golden

Rule

providing two types of benefits:
decreasing term life insurance.

individual

Since 1987, Hunt
insurance

policy

major medical benefits and

As this case concerns the former,

we turn first to the details of that coverage.
The

Major

Medical

Benefits

section

of

the

policy,

beginning at page 7, provides that Golden Rule will "pay for
services and supplies that qualify as Covered Expenses" . . . and
that the "amount payable will not exceed the Maximum Benefit Limit
shown on page 3."1

The policy later indicates that "[t]he 'Maximum

Benefit Limit' is the total benefit that may be paid for Covered
Expenses during the covered person's lifetime."2

Finally, under

the Exclusions and Limitations section, the policy states in
relevant part:

1

For purposes of this opinion, we adhere to the policy's use
of capitalization, italicization and other means of text emphasis.
2

The parties agree that Hunt is a "covered person" within the
meaning of the policy.
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Date Filed: 04/19/2011

Entry ID: 5543707

Mental or Nervous Disorders:
Our total
liability under the policy for all losses due
to mental or nervous disorders, or mental
retardation, of any one covered person will
not exceed the amount shown on page 3.
Page 3 of the policy, referenced in both the Maximum
Benefit Limit section and the Exclusion and Limitation section
addressing Mental or Nervous Disorders, is the "Policy Data Page,"
which contains a listing of premium and benefit amounts.

Included

in this list are a "Maximum Benefit Limit Per Covered Person" of $1
million and a "Mental or Nervous Disorder Limit" of $10,000.
II.
Hunt received outpatient treatment for a "mental or
nervous disorder" in 2005, 2006 and 2007, allegedly incurring costs
of more than $125,000.

In January 2006, Golden Rule informed Hunt

that because it "previously paid $8505.81 for mental disorders," it
would pay only $1,494.19 -- for a total of $10,000 -- because "the
lifetime maximum amount has been met."3
In early 2009, Hunt filed suit against Golden Rule in New
Hampshire Superior Court, which Golden Rule seasonably removed to
federal district court.

Count I of her Complaint alleged that an

ambiguity in the policy renders the $10,000 lifetime cap on mental

3

The record is unclear as to the precise temporal breakdown of
accrued or submitted charges during the 2005-07 time frame. The
complaint alleges that more than $44,000 in charges accrued in 2005
alone, but admits to uncertainty as to what amount was submitted
for reimbursement prior to the denial letter.
As there is no
dispute that the submitted amount exceeded $10,000, more specific
information is not needed at this stage of the litigation.
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Date Filed: 04/19/2011

Entry ID: 5543707

or nervous disorder benefits unenforceable, and that the $1 million
limit should apply instead.

Count II claims that the $10,000 cap

impermissibly discriminates against policy holders with mental, as
opposed to physical, afflictions, and thus is an unenforceable
unfair insurance practice, prohibited by N.H. Rev. Stat. Ann.
("RSA") § 417:4 (2006).

The district court granted Golden Rule's

summary judgment motion, ruling that the policy was not ambiguous
as to the applicable limit, and that the limit differential was not
proscribed by New Hampshire law.

This appeal followed.

III.
We review the district court's grant of summary judgment
de novo.

Roberts v. Delta Air Lines, Inc., 599 F.3d 73, 77 (1st

Cir. 2010).

Summary judgment is proper where there is no genuine

issue of material fact and the moving party is entitled to judgment
as a matter of law.

Fed. R. Civ. P. 56(c).

Under New Hampshire

law, the interpretation of an insurance policy is a question of law
for the court.

Concord. Gen. Mut. Ins. Co. v. Doe, 8 A.3d 154,

156-57 (N.H. 2010).
A. Ambiguity
If an insurance policy's terms are clear and unambiguous,
then

the

policy's

language

must

be

accorded

its

natural

and

ordinary meaning. Id. (citing Godbout v. Lloyd's Ins. Syndicates,
834 A.2d 360, 362 (N.H. 2003)).

The court must "construe the

language as would a reasonable person in the position of the

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Date Filed: 04/19/2011

Entry ID: 5543707

insured based upon a more than casual reading of the policy as a
whole."

Id.

Terms are construed objectively.

Id.

If an

ambiguity renders the policy reasonably susceptible to more than
one interpretation, and one interpretation favors the insured, the
policy will be construed in the insured's favor.

N. Sec. Ins. Co.

v. Connors, No. 2010-152, 2011 WL 1219252, at *3 (N.H. Mar. 31,
2011).

If the language is clear, however, the court cannot

"'perform

amazing

feats

of

linguistic

gymnastics

to

find

a

purported ambiguity' simply to construe the policy against the
insurer and create coverage where it is clear that none was
intended."

Colony Ins. Co. v. Dover Indoor Climbing Gym, 974 A.2d

399, 401 (N.H. 2009) (quoting Hudson v. Farm Family Mut. Ins. Co.,
697 A.2d 501, 503 (N.H. 1997)).
Hunt's first claim of ambiguity is straightforward.

She

argues that the "total liability" reference in the Mental and
Nervous Disorders Exclusion to "the amount shown on page 3" is
ambiguous because "amount shown" could refer to either the "Mental
and Nervous Disorder Limit" of $10,000, or the "Maximum Benefit
Limit Per Covered Person" of $1 million.

Therefore, she asserts,

she should get the benefit of the ambiguity and her claim should be
subject only to the higher limit.

We agree with the district court

that this argument is meritless.

Several routes lead us to the

same destination.

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Case: 10-2065 Document: 00116198330 Page: 6

First,
Limitations"
including

the

a

natural

applicable
"total

Date Filed: 04/19/2011

reading
"Mental

to

of
and

liability"

the

"Exclusions

Nervous

reference

Entry ID: 5543707

to

and

Disorders,"

page

3,

would

ineluctably lead a reasonable person to the "Mental or Nervous
Disorder Limit" on that page (emphases added).

Indeed, given the

specific page reference and the symmetry of terms, we are hard
pressed to fathom how a "more than casual reading," Godbout, 834
A.2d at 362, could lead to a different conclusion.
Next, if, as Hunt argues, the reference to "the amount
shown on page 3" could reasonably be read to mean the $1 million
"Maximum Benefit Limit," it would improperly require us to consider
the "total liability" language in the Mental or Nervous Disorders
Exclusion as unnecessary surplusage.

The policy already provides

that "amounts payable" "during the covered person's lifetime" will
not exceed the $1 million Maximum Benefit Limit.

If the larger

"Maximum Benefit" limit applied to mental health benefits, there
would be no need for reference to a specific "total liability" for
Mental or Nervous Disorders.

See Int'l Surplus Lines Ins. Co. v.

Mfrs. & Merchs. Mut. Ins. Co., 661 A.2d 1192, 1195 (N.H. 1995)
(holding that it is improper to presume policy language to be "mere
surplus").
Finally, Hunt suggests an alternative reading:
specific

$10,000

limit

is

merely

lifetime limit is $1 million.

an

annual

limit,

that the

while

the

Once again, the plain language of

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Case: 10-2065 Document: 00116198330 Page: 7

Date Filed: 04/19/2011

the policy militates against such a reading.

Entry ID: 5543707

The two Limits at

issue in this case are the only limits listed on the Policy Data
Page ("page 3") that do not contain temporal parameters, such as
"annual," "daily," and "per calendar year."

Therefore, they are

more naturally treated equally, as lifetime limits.

Moreover,

Hunt's proposed construction flies in the face of the plain meaning
of such terms as "all losses" and "total liability" contained
within the Mental and Nervous Disorders Exclusion.
Finding no ambiguity in the $10,000 limit for Mental or
Nervous Disorders, we hold that summary judgment as to Count I was
properly granted.
B. Discrimination
In Count II, Hunt alleges that the cap on mental or
nervous

disorders

illegally

discriminates

because

it

treats

policyholders with such disorders differently from those with
physical ailments. She asserts two statutory bases for this claim,
each of which arises under New Hampshire's Unfair Insurance Trade
Practices Law, RSA § 417:4.
violated

§

discrimination

417:4,

First, she claims that Golden Rule

VIII(b),

between

which

individuals

of

prohibits
the

same

"any
class

unfair
and

of

essentially the same hazard in the amount of premium, policy fees,
or rates charged for any . . . contract of health insurance or in
the benefits payable thereunder . . . ."

She also cites § 417:4,

VIII(c), which bars "any unreasonable distinction or discrimination

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Date Filed: 04/19/2011

Entry ID: 5543707

between persons as to the policy, premiums, or rates charged for
policies . . . or in any other manner whatever[.]"

Golden Rule

posits both procedural and substantive reasons to support the
district court's ruling. Procedurally, it argues that Hunt's claim
is barred because Chapter 417 does not provide a private right of
action unless a claimant first gets a favorable ruling from the
insurance commissioner.
The district court eschewed analysis of Golden Rule's
procedural argument but found that Hunt's claim was substantively
wanting.

Addressing the procedural issue instead, we hold that

Hunt may not pursue a private right of action.
substantive issue.

We do not reach the

See Bukuras v. Mueller Grp., LLC., 592 F.3d

255, 261 (1st Cir. 2010) ("We may affirm summary judgment on any
ground manifest in the record.").
Under RSA § 417:19, a consumer is "permit[ted]" to file
a private action for damages after the insurance commissioner finds
a violation of the trade practices law.
Co., 776 A.2d 1260, 1263 (N.H. 2001).

Bell v. Liberty Mut. Ins.
Although the New Hampshire

Supreme Court has not explicitly held that the commissioner's
ruling is a prerequisite to a private action, the federal district
court has so held, first in Shaheen v. Preferred Mut. Ins. Co., 668
F. Supp. 716, 718 (D.N.H. 1987), and more recently in Lacaillade v.
Loignon Champ-Carr, Inc., No. 10-cv-68-JD, 2010 WL 2902251 (D.N.H.
July 22, 2010).

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Date Filed: 04/19/2011

Entry ID: 5543707

Hunt concedes the point, but only to the extent that
private suits for damages are proscribed by the statutory scheme.
She

asserts

that

her

claim

is

not

barred

because

declaratory judgment, pursuant to RSA § 491:22.

it

seeks

A full and fair

reading of the record, however, reveals that this argument is
little more than a semantic end-run around a procedural hurdle that
she has not surmounted.

Her Complaint makes repeated reference to

Golden Rule's alleged violations of Chapter 417, and her requested
relief -- a declaration that the cap is an unenforceable unfair
trade practice -- would be an empty victory if she were not able to
recover the benefits in excess of the $10,000 cap.

Moreover, to

allow the claim to proceed would essentially usurp the insurance
commissioner's powers under the law, as aggrieved plaintiffs would
simply dress up their damages claims in the finery of a declaratory
judgment action.

See, e.g., RSA §§ 417:5 (granting commissioner

power to examine and investigate insurers), 417:6 (authorizing
commissioner

to

conduct

hearings),

417:7

(detailing

hearing

procedures), 417:10 (describing range of available punishment). If
there is to be a declaration that Golden Rule has violated Chapter
417,

it

must

first

come

from

the

New

Hampshire

insurance

commissioner.
Hunt's

final argument is that her cause of action is

preserved by RSA § 417:5-a. That section indicates that the powers
vested in the commissioner to determine whether insurers have

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Date Filed: 04/19/2011

Entry ID: 5543707

engaged in unfair or deceptive practices are "not exclusive or
restrictive or intended to limit the powers of the commissioner or
any court of review but . . . are in all respects cumulative of and
supplemental to

. . . all other applicable New Hampshire statutes

and common law."

We think that this section cannot support the

weight that Hunt has placed upon it.

The clear import of the

entire statutory scheme is that claims for unfair trade practices
under RSA 417 begin with the commissioner, but other types of
claims -- such as Hunt's breach of contract claim in Count I -- are
not so restricted.

Indeed, § 417:5-a refers only to the powers of

the commissioner, and is not suggestive of an unfettered private
right of action.
As

noted,

the

New

Hampshire

Supreme

specifically ruled on the question before us.

Court

has

not

In the absence of a

specific holding, our task is "to predict what path the state court
would most likely travel." Andrew Robinson Int'l, Inc. v. Hartford
Fire Ins. Co., 547 F.3d 48, 52 (1st Cir. 2008).

"The primary

purpose of [Chapter 417] is to regulate trade practices in the
business of insurance and not to redress individual wrongs."
Arouchon v. Whaland, 409 A.2d 1331, 1332-33 (N.H. 1979).

Our

decision today is consistent with that principle.
We have reviewed appellant's remaining arguments and find
them to be without merit.

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Date Filed: 04/19/2011

Entry ID: 5543707

IV.
The judgment of the district court is affirmed.

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