While the policy may give some minimal discretion to Colonial, the specific provisions at issue in this case are not subject to discretion and, as Colonial itself correctly points out, are unambiguous as to their application. Therefore, the denial of benefits will be reviewed de novo.
REVIEW OF DENIAL OF BENEFITS
In support of his motion for summary judgment, Katz makes a number of arguments in support of his contention that the policy is ambiguous and that the Rider should not be read to modify Section S of the policy. When interpreting insurance plans governed by ERISA, this Court looks to federal common law rules of contract interpretation. Masella v. Blue Cross & Blue Shield of Connecticut, Inc., 936 F.2d 98, 107 (2d Cir. 1991); McNeilly v. Bankers United Life Assurance Co., 999 F.2d 1199, 1201 (7th Cir. 1993) (citations omitted).
The question of whether a contract is ambiguous is an issue of law. Schiavone v. Pearce, 79 F.3d 248, 252 (2d Cir. 1996); Sayers v. Rochester Telephone Corp. Supplemental Management Pension Plan, 7 F.3d 1091, 1094 (2d Cir. 1993). Having reviewed the policy in its entirety, I cannot conclude that the contract language is ambiguous. Contract language is ambiguous if, when considered objectively from the viewpoint of a "reasonably intelligent person" it is subject to more than one meaning. Sayers, 7 F.3d at 1095; see also John Hancock Mutual Life Ins. Co. v. Amerford Int'l Corp., 22 F.3d 458, 461 (2d Cir. 1994); Consarc Corp. v. Marine Midland Bank, N.A., 996 F.2d 568, 573 (2d Cir. 1993).
The Rider explicitly bars coverage for private registered nursing services provided at a general hospital. Only by somehow excising the Rider from the contract could one arrive at a contrary interpretation. Nothing about the text or placement of the Rider would warrant that approach, nor would any recognized canon of contract interpretation.
Plaintiff argues for this approach citing the presentation of the Rider, the failure to list the Rider in the table of contents, the absence of a reference to the Rider under the "Benefits Payable" heading and the fact that the Rider is on the back side of a page of the contract. While listing the Rider in the table of contents or making reference to it under the "Benefits Payable" heading (the provision it modifies) would have highlighted the relationship between the Rider and "Benefits Payable," I do not find defendant's failure to present the contract's provision in another way makes it ambiguous.
The table of contents lists only the titles of the individual sections, with no listing of the provisions contained within each section. Although there is no reference to the Rider under the "Benefits Payable" heading, the Rider refers to the portion of the policy it modifies, and there is no reason to assume that a policyholder would not have read the entire contract. Indeed, use of the term "Rider," which by definition modifies the original, was an appropriate and sufficient indication to the policyholder of the presence of a modification.
Finally, I find plaintiff's argument regarding the Rider's location on the back side of a page unpersuasive and somewhat confusing since the policy, in its entirety, was produced in a two-sided format, as a result of which approximately half of the provisions were placed on the reverse side of a page. Additionally, I note that the Rider, the text of which fills approximately one-quarter of a page, is the only provision on page 20, which is inconsistent with plaintiff's contention that defendant somehow attempted to hide the Rider.
Having found the policy unambiguous
, I grant defendant's motion for summary judgment on plaintiff's claim for reimbursement for registered nursing care provided in June 1993.
While my finding regarding ambiguity applies with equal force to the claim for reimbursement for nursing care provided in October/November 1994, an additional question of estoppel arises with respect to that claim.
The factual dispute underpinning this issue is whether Katz received a September 1, 1993 letter from Colonial informing him that his claim for private registered nursing care provided to his wife in June 1993 was being denied. Katz asserts that he never received the letter and, therefore, until March 27, 1995, when he received the notice of the denial of coverage, Colonial had led him to believe that his policy covered registered nursing care provided at a general hospital. As the dispute as to whether Katz actually received the letter cannot be resolved at this juncture, I now consider whether, if he did not receive the letter, Colonial should be estopped from denying coverage for the October/November private nursing care.
In order to prevail under the doctrine of equitable estoppel, Katz must show (1) a material representation, (2) reasonable reliance upon that representation, and (3) damage resulting from that representation. Lee v. Burkhart, 991 F.2d 1004, 1009 (2d Cir. 1993) (recognizing cause of action for equitable estoppel under ERISA).
Katz asserts that Colonial's failure to inform him of the denial of coverage was a "material representation," upon which he relied in October and November 1994 when his wife received registered nursing care for the second time. While silence may act as a "representation" for purposes of estoppel, such is only the case when one has a duty to speak or one knows that the other party was acting under a mistaken belief. See In re Ivan F. Boesky Securities Litigation, 948 F.2d 1358, 1367 (2d Cir. 1991); U.S. v. Wynshaw, 697 F.2d 85, 87 (2d Cir.), cert. denied, 464 U.S. 822, 78 L. Ed. 2d 96, 104 S. Ct. 87 (1983) ("representation" may be by language, acts or silence). Katz has not asserted -- and certainly has not demonstrated -- that Colonial had a duty to speak nor that it knew that he was acting under a mistaken belief.
In any event, assuming arguendo Colonial did not send the September 1, 1993 letter, it was not reasonable for Katz to interpret Colonial's failure to send such a letter as a conclusion by Colonial that the claims would be paid. First, since the terms of the policy clearly indicated that the claim would not be paid since it was not covered, it was not reasonable for Katz to assume a unilateral amendment to the policy by Colonial. Second, the fact that Katz had received no reimbursement from Colonial between June 1993 and March 1995 could not have engendered the requisite reasonable belief that payment would be forthcoming pursuant to the policy.
For the reasons stated above, plaintiff's motion for summary judgment is denied and defendant's motion for summary judgment is granted. The Clerk of the Court is ordered to enter judgment in favor of defendant.
Barrington D. Parker, Jr.
Dated: White Plains, New York
January 2, 1997