The opinion of the court was delivered by: THOMAS J. MCAVOY
MEMORANDUM-DECISION and ORDER
The Scanlons ("plaintiffs") bring the instant action against The Travelers Insurance Company ("Travelers") for denial of certain benefits under an insurance plan administrated by Travelers. Presently before the court are two summary judgment motions made pursuant to Fed.R.Civ.P. 56 brought forth by both the plaintiffs and Travelers.
On March 16, 1989, Karen Scanlon underwent jaw surgery at St. Peter's Hospital in Albany, New York. The surgery was performed by Drs. Carmen Fasulo and Lawrence Busino.
At the time of Karen's surgery, Karen's mother was employed by Empire Blue Cross/Blue Shield ("Blue Cross") and had employee and dependent coverage under Blue Cross' health benefits plan. Concomitantly, Karen's father was employed by Conrail and had employee and dependent coverage under the Railroad Plan administered by Travelers.
Soon after the surgery, Drs. Fasulo and Busino submitted their bills to Blue Cross for $ 10,700 and $ 2,675 respectively. Blue Cross paid $ 5,451.25 to Dr. Fasulo and $ 1,362.81 to Dr. Busino. Blue Cross disallowed the remainder of both bills finding that they exceeded the reasonable and customary charges for similar services provided for in the community by other doctors.
The same bills were then submitted to Travelers with proof of the amounts already paid by Blue Cross. Travelers, as the administrator of the secondary plan, claimed that they were only responsible for any difference between the total "Allowable Expenses" as defined in their plan and what Blue Cross paid as the administrator of the primary plan. The term "Allowable Expenses" is defined in the plan as "any necessary, reasonable and customary item of expense . . . ." Using data from the Albany area on the customary charges for the type of surgical procedures Karen received and after consultations with outside experts, Travelers determined that the reasonable charge for Dr. Fasulo's services was $ 6,700. Deducting the $ 5,421.25 plaintiffs received from Blue Cross, it was determined that Travelers was responsible for $ 1,248.75 as the administrator of the secondary plan. As for Dr. Busino, Travelers concluded that the reasonable charge for his services was $ 1,340, and since plaintiffs received more than that amount from Blue Cross, Travelers did not make any additional payments to Dr. Busino.
Neither parties dispute any of the figures just stated. Nor, do they dispute that the bills presented by the two doctors were excessive. There are only two issues in dispute in this case: (1) whether Travelers was in fact the administrator of a secondary plan; and if so, (2) how much are they liable for under the coordination of benefits plan.
Rule 56(c) provides that the court may grant summary judgment where there are no genuine issues of material fact for trial. Fed.R.Civ.P. 56(c). If there are no genuine issues, the movant is entitled to judgment as a matter of law. When the movant meets this standard, the opposing party must present sufficient facts to demonstrate that there exists some genuine issues of material fact in order to defeat the movant's motion for summary judgment. An issue is genuine if the evidence is such that a reasonable jury could return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The moving party bears a stringent burden of establishing that there is no genuine issue of material fact remaining for trial, as any doubt as to the existence of a genuine issue for trial is to be resolved in favor of the non-moving party. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 1608, 26 L. Ed. 2d 142 (1970); see also Lopez v. S.B. Thomas, Inc., 831 F.2d 1184, 1187 (2d Cir. 1987) (the court must view the evidence in light most favorable to the party opposing the motion).
"Where the sole question presented on a motion for summary judgment is the interpretation of a clear and unambiguous written agreement, the issue is one of law for the court and may be decided on a motion for summary judgment. (cites omitted). This principle applies equally to contracts of insurance." Jakobson Shipyard v. Aetna Casualty and Surety Co., 775 F. Supp. 606, 609 (S.D.N.Y. 1991) (cites omitted).
In the case at bar, initially, plaintiffs allege that Travelers is liable for the full "Allowable Expense" irrespective of the payments made by Blue Cross because Travelers is the administrator of the Primary Plan. Plaintiffs rely on the language of the original agreement between the parties which state that "the benefits of a Plan which covers the person on whose expenses claim is based as a dependant of a male person shall be determined to before the benefits of a Plan which covers such person as a dependent of a female person." (Kansas Affdvt. Exh. C). It is alleged that this so called "gender rule" was in effect at the time of surgery, and as such, Travelers is primary under the plan and is liable for the full amount determined to be "Allowable Expenses." Plaintiffs do acknowledge that Travelers did amend their plan to implement the birthday rule -- under which the primary plan is the plan of the parent whose birthday falls earlier in the calendar year -- but allege that this amendment was only effective during the 1988 calendar year and expired at the end of the said year. For this allegation, plaintiffs rely on the language of the document captioned "Memorandum of Agreement" which states that the policy between Travelers and the Railroad Policyholder was being renewed for the 1988 calendar year. This is also the document in which the "gender rule" was replaced by the "birthday rule."
Plaintiffs have misconstrued the terms of the agreement. From the plain language of the agreement, it is apparent that the amendment of the "gender rule" to the "birthday rule" was permanent until further notice.
The language of the agreement simply states that the "birthday" rule was effective January 1, 1988. This language clearly manifests a change in the policy which is to take effect until it is again amended later in time. This conclusion is further supported by the "Notice of Amendment to the Railroad Plan" booklet. This booklet which was given to the Railroad employees mentions that the change from the gender rule to the birthday rule was effective January 1, 1988 without any mention of the termination date of such an amendment.
All these factors evidence the enforcement of the birthday rule at the time of Karen's surgery. Thus, since Karen's mother ...