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The Estate of Judy Dumoulin v. Cuna Mutual Group

March 16, 2011

THE ESTATE OF JUDY DUMOULIN, DECEASED, BY AND THROUGH HER PERSONAL REPRESENTATIVE AND JOSEPH DUMOULIN, AN INDIVIDUAL, PLAINTIFFS-APPELLANTS,
v.
CUNA MUTUAL GROUP, AN IOWA CORPORATION, AUTHORIZED BY THE STATE OF IDAHO, DEPARTMENT OF INSURANCE, TO TRANSACT BUSINESS IN THE STATE OF IDAHO, DEFENDANT-RESPONDENT.



Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Hon. Cheri C. Copsey, District Judge.

The opinion of the court was delivered by: Horton, Justice

2011 Opinion No. 25

Stephen Kenyon, Clerk

The Estate of Judy Dumoulin (the estate) appeals the district court's dismissal of its suit against CUNA Mutual Group (CUNA) for breach of contract and breach of the duty of good faith and fair dealing. The district court granted summary judgment in favor of CUNA, holding that the insurance policy was unambiguous and CUNA was not liable under the policy. We affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2007, Judy Dumoulin purchased a $40,000 group accidental death and dismemberment insurance policy from CUNA. On March 13, 2008, Ms. Dumoulin was admitted to the emergency department of West Valley Medical Center (the hospital), complaining of dispnea (shortness of breath). Ms. Dumoulin had a variety of risk factors in her medical history that predisposed her to dispnea and she reported upon her entry into the hospital that she had pneumonia three weeks prior to admission and that she had not completely recovered.

On March 15, 2008, the hospital conducted a CT scan which indicated possible "diffuse atypical pneumonia concerning for maybe a fungal infection, as well as nodules concerning for possible malignancy." That evening, Ms. Dumoulin began demonstrating signs of respiratory failure. The next day, Ms. Dumoulin was found on the floor without a pulse or respiration. She was resuscitated and placed on a ventilator and a CT scan indicated a "worsening progression" of her condition. A later brain CT scan revealed a "global anoxic brain injury." Following discussions with physicians, the family agreed to withdraw life support and Ms. Dumoulin was declared dead on March 17, 2008. Ms. Dumoulin's autopsy report revealed that she died from pre-existing bronchopneumonia with superimposed aspiration pneumonia.

The estate subsequently mailed a Proof of Loss Claim to CUNA. On June 18, 2008, CUNA denied liability, asserting that Ms. Dumoulin's death was not covered by the policy based on the illness and medical conditions exclusions. The estate then filed suit against CUNA, alleging breach of contract and breach of the duty of good faith and fair dealing. It alleged that Ms. Dumoulin's conditions were treatable, that the hospital was negligent in failing to treat her conditions, and that the negligence resulted in her death.

CUNA moved for summary judgment, arguing that no material fact existed as the policy did not provide coverage in the circumstances of Ms. Dumoulin's death. CUNA's motion was supported by an affidavit of counsel providing the estate's responses to discovery requests. The estate responded to the motion by providing affidavits from Dr. Stephen J. Bekanich, M.D., Sheri Arnold (Ms. Dumoulin's daughter), Joseph Dumoulin (Ms. Dumoulin's husband and personal representative of the estate), and the estate's attorney. Dr. Bekanich's affidavit set forth his opinion that Ms. Dumoulin's health care providers had breached applicable standards of care and that appropriate medical treatment would have resulted in Ms. Dumoulin being "stabilized to an appropriate condition."

The district court heard argument on July 16, 2009, and made a ruling from the bench granting summary judgment. The court found that there was no genuine issue of material fact and that Ms. Dumoulin's death was not an accident under the policy. The district court further held that there was no evidence that Ms. Dumoulin's death "was caused directly by the accident and independent of all other causes." Finally, the district court held that because Ms. Dumoulin died from complications arising from pneumonia, her death was not independent of her illness, and because her death occurred during the course of medical treatment, recovery was barred by reason of an exclusion for losses "due to any disease, sickness, bodily or mental illness, or complication resulting from medical treatment, surgery, pregnancy or childbirth." On July 21, 2009, the district court entered its order granting CUNA's motion for summary judgment.*fn1 The district court entered judgment on July 28, 2009, and the estate timely appealed.

II. STANDARD OF REVIEW

We have previously articulated the standard of review for summary judgment in cases involving an insurance contract as follows:

When reviewing a district court's grant of summary judgment, this Court uses the same standard a district court uses when it rules on a summary judgment motion. Jordan v. Beeks, 135 Idaho 586, 589, 21 P.3d 908, 911 (2001). Summary judgment shall be rendered when "the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." I.R.C.P. 56(c). This Court will liberally construe the record in favor of the party opposing the motion for summary judgment and will draw all reasonable inferences and conclusions in favor of that party. Farmers Ins. Co. of Idaho v. Talbot, 133 Idaho 428, 431, 987 P.2d 1043, 1046 (1999).

"When interpreting insurance policies, this Court applies the general rules of contract law subject to certain special canons of construction." Clark v. Prudential Prop. & Cas. Ins. Co., 138 Idaho 538, 540, 66 P.3d 242, 244 (2003). "The general rule is that, because insurance contracts are adhesion contracts, typically not subject to negotiation between the parties, any ambiguity that exists in the contract 'must be construed most strongly against the insurer.'" Talbot, 133 Idaho at 432, 987 P.2d at 1047 (quoting Mut. of Enumclaw Ins. Co. v. Roberts, 128 ...


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