Bell Care Nurses v. Continental Cas. Co.

25 So.3d 13

BELL CARE NURSES REGISTRY, INC., Appellant, v. CONTINENTAL CASUALTY COMPANY d/b/a CNA Insurance Companies, Appellee.

No. 3D08-2226.

District Court of Appeal of Florida, Third District.

November 12, 2009.

Rehearing and Rehearing En Banc Denied January 15, 2010.

Bernstein, Chackman, Liss, and Rose and Neil Rose, Hollywood; Steven M. Dunn, for appellant.

Hogan & Hartson and Laura Besvinick, Miami, for appellee.

Before RAMIREZ, C.J., and ROTHENBERG, J., and SCHWARTZ, Senior Judge.

SCHWARTZ, Senior Judge.

An ever-diminishing few of us remember Alan King's story about a homeowner with a fire and theft policy who made a claim when his house burned down. He was met with the company's denial of coverage on the ground that he needed instead a fire or theft policy and that, as written, the policy applied only if he were robbed while his house was on fire.

This case shows that things never really change. The insured bought and for thirteen years faithfully paid the semi-annual premiums for a "Home Health Care Policy" which covered home "primary" services, those of a registered nurse or the like and "secondary" services, including those of non-professional providers such as a home health aide. When, however, she needed and received only the latter kind, she was denied payment, successfully at first, upon the assertion that she had to have both. Fortuitously enough, however, Florida law specifically outlaws the use of that particular contrivance. We do no more than follow the legislature in holding that the insurer cannot get away with it.

We now revert to a traditional, formulaic, non-discursive discussion of the case before us.

I.

Bell Care Nurses Registry, Inc., appeals from a summary judgment entered in favor of Continental Casualty based on the conclusion that home health aide services Bell provided to Continental's insured, Jean Beckerman, were not covered under Beckerman's "Home Health Care Policy." We reverse.

Bell sued under an assignment from Beckerman, alleging that Continental failed to pay over $20,000 for the services Bell provided to Beckerman from June 30, 2005 to June 17, 2006. Bell asserted that it had been engaged by Beckerman and that the services it provided were covered under Beckerman's long term care policy.

Continental answered denying coverage on the ground that the policy expressly provided coverage for "Secondary Services," such as the services at issue, only where such services were received in a week in which at least one "primary" service was also received. The policy defined "Secondary Services" as "services provided by a medical social worker; occupational therapy; home health aide services; and homemaker services;" it defined "Primary Services" as "nursing care services provided by a registered nurse (RN), a licensed practical or vocational nurse (LPN or LVN); physical therapy; and speech therapy." It is undisputed that Beckerman did not also receive at least one "primary" service during the same week as the "secondary" services in question.

The policy, first issued to Beckerman in 1990, provided:

HOME HEALTH CARE BENEFIT

If You receive Home Health Care Services in a Home Convalescent Unit, We will pay you a benefit equal to the amount of expenses incurred, but not to exceed the Maximum Amount for each Home Health Care Visit You receive. Benefits begin after the Elimination Period and are payable for the length of the Benefit Period. However, in order for benefits to be payable for Secondary Services such services must be received in a Week in which at least one Primary Service was received. Benefits need not be payable for such Primary Services.

The policy stated that it was: "GUARANTEED RENEWABLE FOR LIFE[,] PREMIUMS SUBJECT TO CHANGE," and acknowledged:

If any provision of this policy is in conflict with the statutes of the state in which You reside on the policy Effective Date, the provision is automatically amended to meet minimum requirements of the statute.

The policy contained a "1st renewal" date of 2/6/91, and continued in effect every six months thereafter.

Bell moved for judgment arguing its entitlement to payment based in part on section 627.94071(2), effective October 1, 1992, which specifically invalidates the policy clause upon which the insurer successfully relied below:

Minimum standards for home health care benefits

A long-term care insurance policy ... that contains a home health care benefit must meet or exceed the minimum standards specified in this section. The policy ... may not exclude benefits by any of the following means:

....

(2) Requiring that the insured or claimant first or simultaneously receive nursing or therapeutic services in a home setting or community setting before home health care services are covered.

(Emphasis added). Bell argued that since Beckerman's policy had been "renewed" a number of times after the 1992 effective date of section 627.94071, the section applied in 2005 and 2006 when the services at issue were rendered. Continental maintained that application of the statute would amount to an unconstitutional impairment of contract. Although the trial court agreed with Continental, we agree with Bell.

II.

"It is generally held that the renewal of a contract of insurance constitutes the making of a new contract for the purpose of incorporating into the policy changes in the statutes regulating insurance contracts." Metropolitan Prop. & Liab. Ins. Co. v. Gray, 446 So.2d 216, 218 (Fla. 5th DCA 1984); see May v. State Farm Mut. Auto. Ins. Co., 430 So.2d 999, 1001 (Fla. 4th DCA 1983) ("It is the law in this state that a contract of annually renewable insurance forms a new contract at each renewal for the purpose of incorporating into the contract the statutory provisions enacted after the creation of the original contract relationship." (quoting Thieme v. Union Labor Life Ins. Co., 12 Ill.App.2d 110, 138 N.E.2d 857, 860 (1956))); see also Marchesano v. Nationwide Prop. & Cas. Ins. Co., 506 So.2d 410, 413 (Fla.1987) ("The general rule in Florida that upon each renewal of an insurance policy an entirely new and independent contract of insurance is created [and] [a]n insurance policy is normally renewed upon the payment of a new premium."); Adams v. Aetna Cas. & Sur. Co., 574 So.2d 1142, 1148 (Fla. 1st DCA 1991) (observing that "when each of the policies were renewed after October 1, 1982, it became a new contract required to conform to the newly-amended law, and [insurer's] obligations and [insured's] correlative rights regarding statutorily-required UM/UIM coverage necessarily became an inherent part of the renewal policy"); Landi v. Nationwide Mut. Fire Ins. Co., 529 So.2d 1170, 1171 (Fla. 2d DCA 1988) (observing that the policy at issue had been renewed after the enactment of certain statutory requirements and that "[t]he general rule in Florida is that upon each renewal of an insurance policy an entirely new and independent contract of insurance is created" (quoting Marchesano, 506 So.2d at 413)); see generally 12 J. Appleman, Insurance Law and Practice, § 7041, at 175-76 (1981) (observing "where an existing policy is renewed, although the results vary, the better rule is to regard the statute as applicable to the extended contract"). By the time Bell rendered the services at issue to Beckerman, section 627.94071 had been in effect for some thirteen years and her policy had been repeatedly "renewed" with full payment of all the premiums. Under the principle stated by these authorities, the statute therefore applies to the present controversy.

Continental relies on Moore v. Metropolitan Life Insurance Co., 33 N.Y.2d 304, 352 N.Y.S.2d 433, 307 N.E.2d 554 (1973), and Oates v. Equitable Assurance Society of the United States, 717 F.Supp. 449 (S.D.Miss.1988), for the contrary position that, properly considered, the policy was not subsequently "renewed," but merely continued in effect from the date it was first issued. We find neither case persuasive. First, as we see it, Moore actually supports Bell's claim. Considering the application of a statutory change to an insurance policy, Moore observed: "where, as here, an insurer has the absolute right to terminate a policy on its anniversary date or to change the insurance premium rate without the State's consent, the policy is modified [to apply statutory changes] upon renewal of the policy." Moore, 352 N.Y.S.2d 433, 307 N.E.2d at 557 (emphasis added). Continental relies on Moore's additional observation that "[w]here, however, the insurer does not have the right to terminate the policy or change the premium rate without consent of the State, renewal, by the payment of premiums, merely continues in force the pre-existing policy, and statutes enacted subsequent to its original enactment cannot be applied." Id.

But Beckerman's policy "clearly" provided:

We can change the premium rate for the policy, but only if We give You 31 days prior written notice and We change the premium rate for everyone who has this policy form in Your policy rating group in Your state.

(Emphasis added). Because the decision to raise renewal rates was thus left in the hands of the insurer, so long as it provided its insured's timely notification and treated holders of the same type of policies in the same manner, in accordance with Moore, no unconstitutional impairment of contract resulted from the application of section 627.94071 to Beckerman's policy.

Oates essentially stands for no more than the proposition that "[w]hether the renewal of a policy of insurance constitutes a new and independent contract or whether it is instead a continuation of the original contract `primarily depends upon the intention of the parties as ascertained from the instrument itself.' 18 Couch, § 68:40, at 41." Oates, 717 F.Supp. at 452. While both the Oates policy and Mrs. Beckerman's policy contained language identifying the policies as "GUARENTEED RENEWABLE FOR LIFE," this pronouncement alone is not...