This is an action by plaintiff, as named insured under a family multiple line automobile policy issued to him by defendant Columbia Casualty Company, to recover $1,000.00, the full amount permitted under Coverage C of Part II of the policy for medical expenses incurred. The complaint alleges that medical expenses in the reasonable sum of $1,332.00 were incurred on plaintiff's behalf for which defendant was, subject to the stated monetary limit of the policy, liable.
The controlling provisions of the policy in evidence read as follows:
The remaining evidence presented in the case was by a stipulation of facts, the material portions of which are summarized hereunder.
Plaintiff was injured in an automobile accident on December 18, 1960 and as a result thereof was hospitalized in the Kaiser Foundation Hospital (referred to herein as the "Hospital") and was attended by doctors of the Hawaii Permanente Medical Group (referred to herein as the "Medical Group") until discharged from treatment in May 1961.
Plaintiff was a pre-paying member of the Kaiser Foundation Health Plan (referred to herein as the "Health Plan"). The Health Plan has agreements with the Hospital and the Medical Group under which in consideration of the payment "of stated sums" to the Hospital and "of a stated sum per month" to the Medical Group they, respectively, furnish whatever hospital or medical care is required by members of the plan. Funds for such payments are raised by premiums paid by the members of the Health Plan.
The stipulation provides that plaintiff has no obligation to reimburse any of the three entities involved for his medical or hospital care and that none of them "is now or ever will be subrogated" to any rights plaintiff may have against any other person for the cost of the treatment given him. It also provides that if plaintiff had not been a member of the Health Plan "he would have had to make an out-of-pocket payment of $1,332.00 as and for reasonable and necessary medical and hospital expenses on account of injuries suffered as a proximate result of the accident."
The stipulation further recites that, "Except as stated herein, plaintiff did not actually incur either personally or on his behalf any medical or hospital charges or expenses on account of said accident."
The trial court held that, "There is no evidence, stipulation or admission that Plaintiff or anyone else incurred medical or hospital expenses of $1,332.00 for Plaintiff." It held, however, that plaintiff was entitled to judgment for $110.40, which was the total amount of the premiums paid by him for maintenance of his membership in the Health Plan from December 1960 to May 1961. Each party has appealed from the judgment. In view of the disposition we make of this cause we need and will consider only plaintiff's appeal which raises the question of whether he was entitled to any recovery under the policy based on the reasonable cost of the medical and hospital treatment he received.
The summary of defendant's argument is set out in its answering brief as follows: "The lower court did not err in holding that there was no evidence that Masaki or anyone else incurred medical expenses of $1,332.00 on account of Masaki's injuries. That Masaki would have incurred such expenses
By stipulating that "Except as stated herein, plaintiff did not actually incur either personally or on his behalf" any medical expenses, plaintiff comes close to agreeing with the defendant's contention above set out. However, we cannot assume that plaintiff intended to confess judgment or that the defendant, notwithstanding its reliance on the quoted provisions in this court, took them to have that effect in the trial court. We think the fair interpretation of the portion of the stipulation under consideration is that it merely means that plaintiff himself did not pay or become directly obligated for the medical and hospital services rendered him in treatment of his injuries. From the stipulation as a whole, it appears that by reason of his membership in the Health Plan he was entitled to the services, that he received them without personal assumption of any such obligations, and that no charge therefor was ever made against him. The stipulation does not preclude the question of whether medical expenses were incurred for the services rendered him.
Also preliminarily, we hold that while the stipulation does not expressly state that the reasonable value of the medical and hospital services rendered plaintiff was $1,332.00, the wording of the stipulation to the effect that plaintiff would have had to make an out-of-pocket payment in that amount as and for reasonable expenses for the treatment if he had not been a member of the Health Plan is tantamount to an assertion that the reasonable value or charge for such services was $1,332.00.
Reduced to essence, Coverage C, as applicable to this case, requires Columbia Casualty to pay all reasonable expenses incurred, for necessary medical and hospital services to or for plaintiff, the named insured, for bodily injury caused by accident while he was occupying an automobile.
It is obvious that the terms of Coverage C are ambiguous in two respects, namely; (1) in the failure to state by whom the expenses have to be incurred; and (2) by failing to directly state to whom the payment due for incurred expenses is to be made. It follows, therefore, that this case brings into play the general rule of construction that the policy must be construed liberally in favor of the insured and the ambiguities resolved against the insurer. See Alexander v. Home Ins. Co., 27 Haw. 326, 328.
There is no precedent in this jurisdiction that throws any light on the particular issue before us, nor are there many reported authorities from other jurisdictions that may be resorted to. However, we believe Kopp v. Home Mutual Ins. Co., 6 Wis.2d 53, 94 N.W.2d 224, cogently suggests, and Feit v. St. Paul Fire & Marine Ins. Co., 209 Cal.App.2d Supp. 825, 27 Cal.Rptr. 870, directly gives the answer to the problem at hand.
In Kopp, the plaintiff was a subscriber to the Blue Cross benefit plan and had been treated in the Luther Hospital, an affiliated hospital of Blue Cross, for injuries sustained in an automobile accident. Under the health plan involved, the Blue Cross
Defendant in this case contends that the Kopp decision is distinguishable. It points out and states that there was no mention of "a policy provision that the expense be incurred `by or on behalf of the injured person, and had there been such a provision in the policy involved in Kopp, or if there was one, if the court's attention had been called to it, the decision might well have been different for the provision `for or on behalf of indicates strongly that it does make a difference who incurs the expense."
We are not persuaded by the argument. The quoted language is not included in the operating provisions of the policy but rather in the clause limiting the amount of liability. However, to the extent the wording of the limitation clause may be deemed pertinent, we agree with the holding in the Feit decision, considered later, that it supports plaintiff's rather than defendant's contentions herein. It might also be pointed out in this connection that there is a provision in the policy which indicates that payments may be made to the named insured when he is the injured person. We have reference to the second paragraph of Condition 7 pertaining to "Medical Reports; Proof and Payment of Claim (Part II)" reading: "The company may pay the injured person or any person or organization rendering the services
We think the distinctions contended by defendant in respect to the Kopp case play more on form than substance. The case clearly stands for the proposition that the insured is entitled to recover under a policy of the kind before us if medical expenses are incurred by someone, whether it be the insured or not. There is no reason, as we see it, to say that expenses were not incurred by someone on behalf of the plaintiff in this case. Certainly neither the Kaiser Hospital nor the Medical Group was performing gratuitous services either for plaintiff, Masaki, or for the Kaiser Health Plan. That the attempt by defendant to reject Kopp on the grounds urged lacks merit readily appears from a consideration of Feit v. St. Paul Fire & Marine Ins. Co., supra.
In the Feit case the plaintiff had been in an automobile accident and had the same coverage for medical expenses under a policy issued by St. Paul Fire & Marine Insurance Company as is provided by the policy of Columbia Casualty in this case. He was a pre-paying member of the Kaiser Foundation Health Plan, which operated under the same agreements with the Kaiser Foundation Hospital and the doctor members of the Permanente Group as existed between the similarly named three entities in this case. The court held that the plaintiff was entitled to recover for the reasonable value of hospital and medical services rendered him by the Kaiser Hospital and the doctors of the Permanente Group for the injuries he sustained in the accident. The case was remanded, only for determination of "the necessity and reasonableness of the expenses incurred."
Because we believe the decision is sound and dispositive of the appeal before us, we quote at length from it (at p. 872 of 27 Cal. Rptr.) as follows:
In connection with the last paragraph quoted, it is to be noted that the policy covering plaintiff in this case does not apply to bodily injuries sustained under several specified situations, one of which is where the injuries are sustained by a person employed in the automobile business and benefits are payable or required to be provided under any workmen's compensation law. No other exclusion is provided for payment of medical expenses covered by other insurance except in a clause which calls for a pro rata reduction of the company's liability in the event there is other automobile medical payments insurance against a loss covered by Part II of the policy.
Defendant relies on Drearr v. Connecticut General Life Ins. Co., La.App., 119 So.2d 149; Gordon v. Fidelity & Casualty Co., 238 S.C. 438, 120 S.E.2d 509, and United States v. St. Paul Mercury Indemnity Co., D.C., 133 F.Supp. 726, 238 F.2d 594, each of which involved medical treatment of a veteran in a Veterans' Hospital and in which the courts took the view that, since the veteran was entitled to "free treatment" there could be no recovery under separate insurance coverage for medical expenses comparable to that given Masaki under the Columbia policy in this case. The free treatment provided in the three cases was by virtue of federal statute. As we have indicated above, we do not think the medical and hospital services rendered in this case can be classified as gratuitous and consequently do not consider defendant's authorities, even if we were persuaded of their soundness, applicable here.
Reversed and remanded for entry of judgment in favor of the plaintiff as prayed for.