Case 5:22-cv-00155-D Document 1-1 Filed 02/18/22 Page 1 of 8
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`FILED |
`IN THE DISTRICT COURT OF OKLAHOMA COUNKAYDISTRICT CouRT
`STATE OF OKLAHOMA
`?MA COUNTY
`JAN 18 2979
`R
`ICK WARRE
`109 COURT ChE
`ee
`CJ- 2022-243
`_
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`Case No.
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`~
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`-
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`MICHAEL ADAMS,
`Plaintiff,
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`Vv.
`
`)
`)
`)
`)
`)
`
`)
`
`) )
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`)
`
`NATIONAL HEALTH
`INSURANCE COMPANY,
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`Defendant.
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`|
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`PETITION
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`COMESNOWPlaintiff, Michael Adams, and for his cause of action against Defendant
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`National Health Insurance Company, alleges andstates:
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`1.
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`Plaintiff Michael Adamsis a citizen of the State of Oklahomaanda resident of Oklahoma
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`City, Oklahoma County, State of Oklahoma.
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`2.
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`Defendant National Health Insurance Company (“NHIC”)is a foreign insurance company
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`incorporated in the State of Texas and licensed to and engagein the businessofselling insurance
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`policies to the citizens of the State of Oklahoma.
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`3.
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`4.
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`The events whichgive rise to this lawsuit occurred in Oklahoma County, Oklahoma.
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`The District Court in and for Oklahoma County has jurisdiction over the parties pursuant
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`to 12 O.S. §§ 137 - 138.
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`5.
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`NHICissued a Short-Term Medical insurance policy to Plaintiff, Policy No. 2010159159
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`which becameeffective on September|, 2020 (“Policy”), which provided certain health insurance
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`benefits to Plaintiff.
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`6.
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`While the Policy wasin full force and effect, Plaintiff was diagnosed with colon cancer.
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`EXHIBIT 1
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`EXHIBIT 1
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`Case 5:22-cv-00155-D Document 1-1 Filed 02/18/22 Page 2 of 8
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`7.
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`Plaintiff notified NHIC of his diagnosis and received pre-authorization to receive the
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`necessary treatment.
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`8.
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`Thereafter, Plaintiff underwent
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`the necessary and pre-approved medical
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`treatment,
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`including laparoscopic surgery, incurring medical expenses of approximately $180,000.00.
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`9.
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`10.
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`Plaintiff initiated a claim for benefits available underthe Policy.
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`In response to Plaintiff's claim, NHIC commenced aninvestigation specifically designed
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`to deny, delay, and / or underpay Policy benefits available to Plaintiff under the Policy.
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`11.
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`NHIC’s investigation focused not on issuing paymentfor the medically necessary medical
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`treatmentit pre-approved Plaintiff to receive, rather into determining whetherit could isolate any
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`errors made by Plaintiff in his application for insurance.
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`12.|NHIC gathered extensive medical records of Plaintiff pre-dating his application of
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`insurance for the purposesof isolating errors made in the application process.
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`13.
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`Amongtherecords gathered by NHIC were records from McBride Orthopedic Hospital
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`(“McBride”) evidencing Plaintiff underwent an L4-5 / L5-S1 hemilaminotomysurgery on or about
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`July 25, 2019 to treat an injury he suffered whenhe tripped over a hose while working.
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`14.
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`Upon receipt of Plaintiff's McBride medical records, NHIC rescinded Plaintiffs Policy
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`claiming “[t]he health information we received would have madeyouineligible for this policy at
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`the time you applied.”
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`15.|The basis of NHIC’s recession decision was based upon the following question on the
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`insuranceapplication for the Policy to which Plaintiff answeredin the negative:
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`Within the last 5 years, has any applicant received medical or surgical treatment,
`consulted a health care professional, or has medication been prescribed or
`recommendedfor the following:
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`c. Neck or Back Disorder, Joint Replacement
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`EXHIBIT 1
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`EXHIBIT 1
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`16.
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`The Policy contains a sectiontitle “Rescission”that reads as follows:
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`“We may rescind coverage for a Covered Person or all Covered Persons if We
`determine that there was Fraud or intentional misrepresentation of a material fact
`that caused Us to issue this coverage when coverage would not have been issued.
`Rescission causes coverage to be terminated back to the Effective Date as if the
`coverage were neverissued.
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`If rescission occurs We
`Rescission will result in denial of all applicable claims.
`will refund premiums received less any claims We have paid for the person(s)
`whose coverage is rescinded.
`If We have paid claims in excess of the amount of
`premium Wereceived, We havethe right to obtain a refund.”
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`17.
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`Pursuant to 36 O.S. § 3609, statements made by a prospective insured in an insurance
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`application are “deemedto be representations and not warranties” and shall not prevent recovery
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`of benefits unless: “(1) Fraudulent; or (2) Material to the acceptanceofthe risk, or to the hazard
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`by the insurer; or (3) The insurer in good faith would either not have issued the policy, or would
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`have issued a policy in as large an amount, or would not have provided coverage with respect to
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`the hazardresulting in theloss,if the true facts had been made knownto the insurer as required by
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`the application for the policy or otherwise.”
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`18.
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`Further, long-standing precedent established by the Oklahoma Supreme Court requires an
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`insurance companyto find an insured had an “intent to deceive” in order to lawfully rescind an
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`insurance policy due to allegedly false statements within an application for insurance. See
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`generally Benson v. Leaders Life Ins. Co., 2012 OK 111, 339 P.3d 843.
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`19.|NHIC conducted no investigation into whether the claimed errors within Plaintiffs
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`application for insurance were madewith the requisite “intent to deceive.”
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`20.
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`NHIC refused to conduct an interview of either Plaintiff,
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`the agent responsible for
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`completing Plaintiff's application for insurance, or any other individual with factual knowledge of
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`the circumstances surrounding the completion of the application for insuranceprior to rescinding
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`the Policy.
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`EXHIBIT 1
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`EXHIBIT 1
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`21.
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`Plaintiff did not have an “intent to deceive” NHIC when he completed the application for
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`insurance.
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`22.|NHIC had aninsufficient factual predicate for the recession of the Policy.
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`23.
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`NHIC conducted no investigation into whether the disclosure of Plaintiff's 2019 medical
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`treatment at McBride would haveresulted in the non-issuanceof the Policy prior to rescinding the
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`policy.
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`24.
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`The Policy does not define the term “disorder,” which in its plain and ordinary usage is
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`generally defined as “an abnormal physical or mental condition.’””!
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`25.
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`However, the Policy does define the term “Injury:”
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`“Accidental bodily damage, independent of all other causes (including, without
`limitation, Sickness”), occurring unexpectedly and unintentionally. The Injury must
`be definite to a single time and place. Benefits are available for an Injury that is
`first sustained on or after the Covered Person’s Effective at. An Injury that is
`sustained before the Covered Person’s Effective Date will be considered a Pre-
`Existing Condition.”
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`26.
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`The Policy also defines the term “Sickness:”
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`“Diseaseorillness of a Covered Person. Sickness does not include a family history
`of a diseaseorillness, or a genetic predisposition for the development of a future
`disease or illness. Sickness includes Complications of Pregnancy but not the
`pregnancyitself.”
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`The term “illness,” as used in the definition of “Sickness” is not defined within the Policy either,
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`but is definedin its plain and ordinary usage as “an unhealthy condition of body or mind.”
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`27.
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`In their plain and ordinary use,
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`the definitions of “disorder” and “illness” are
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`indistinguishable from one another.
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`
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`‘ https://www.merriam-webster.com/dictionary/disorder.
`> As is commonin insurancepolicies, capitalized words are considered termsofart that are defined by the
`policy itself and, whenusedin the policy, are used as defined. “Sickness” is a defined term in the Policy
`at issue here.
`* https://www.merriam-webster.com/dictionary/illness.
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`4
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`EXHIBIT 1
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`EXHIBIT 1
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`28.
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`Pursuantto the definitions set forth in the Policy, an “illness” and thus a “disorder” falls
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`within the definition of “Sickness.”
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`29,
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`Pursuant to the definitions set forth in the Policy, an “Injury” is distinguishable from a
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`“Sickness.”
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`30.
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`Plaintiff's 2019 medical treatment at McBride was treatmentfor an “Injury”, not treatment
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`for a disorder.
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`31.
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`Alternatively,
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`the terms “Neck or Back Disorder, Joint Replacement” as used in the
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`application for insurance are ambiguous.
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`32.
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`An ambiguity within an insurance contract exists if and when a term or provision is
`3
`“susceptible to more than one meaning.” When determining whether a term or provision in an
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`insurance contract is ambiguous, “the language is given the meaning understood by a person of
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`ordinaryintelligence.” Max True Plastering, Co. v. U.S. Fidelity and Guar. Co., 912 P.2d 861,
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`869, 1996 OK 28, § 19.
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`33.
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`Oklahomaadheres to the “Reasonable Expectations Doctrine” which holds that in the event
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`a term or provision within an insurance contract is deemed to be ambiguous, “the objectively
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`reasonable expectationsof applicants, insureds and intended beneficiaries concerning the terms of
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`insurance contracts are honored even thoughpainstakingstudy of the policy provisions might have
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`negated those expectations.” Max True Plastering, Co. v. U.S. Fidelity and Guar. Co., 912 P.2d
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`861, 862, 1996 OK 28, par. 1.
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`BREACH OF CONTRACT AGAINST NATIONAL HEALTH INSURANCE COMPANY
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`34.
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`Plaintiff hereby adopts and realleged eachofthe facts andallegationsset for in Paragraphs
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`1 — 33 above.
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`EXHIBIT 1
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`EXHIBIT 1
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`35.
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`Asindicated in paragraphs 24 through 30 above, an “injury” is separate and distinct from
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`a “disorder” as referenced in NHIC’s application for insurance.
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`36.|NHIC’s recession of the Policy indicates that its position is a “disorder,” as referenced in
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`its application for insurance, includes an “Injury” as defined by the Policy.
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`37.
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`If NHIC’s interpretation of “disorder” is deemed to be reasonable, an ambiguity exists as
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`to whether Plaintiff's 2019 medical treatment at McBride is a “disorder” and the “Reasonable
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`Expectations Doctrine” applies to the Policy.
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`38.
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`Prior to the denial of his claim and the recession ofhis Policy, Plaintiff had a reasonable
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`expectation that NHIC would pay his claim for benefits associated with his colon cancer treatment.
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`39.|NHIC breachedthe Policy by refusing to pay Plaintiff's claim for benefits due to him under
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`the termsofthe Policy.
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`40.
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`As a direct result of NHIC’s breach,Plaintiff has suffered damagesin excess of $75,000.00
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`as well as interest, costs, a reasonable attorney fee and any otherrelief the Court deems just and
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`equitable.
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`BREACH OF THE DUTY OF GOOD FAITH AND FAIR DEALING AGAINST
`NATIONAL HEALTH INSURANCE COMPANY
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`4].
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`Plaintiff hereby adopts and realleged eachof the facts and allegations set for in Paragraphs
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`| — 40 above.
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`42.
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`As an insurance company conducting business in the State of Oklahoma, NHIC is bound
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`by Oklahoma law and mustthusabide by the terms of the Policy in the utmost of good faith and
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`fair dealing.
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`43.
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`Defendant breachedits duty to deal fairly and in goodfaith with Plaintiff by refusing to
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`perform a reasonably appropriate investigation into the facts related to Plaintiff's claim.
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`Specifically, NHIC refused to conduct a reasonably thorough investigation into the Oklahoma law
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`EXHIBIT 1
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`governing the rescission of the Policy. Likewise, NHIC refused to conduct a reasonably thorough
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`investigation into the facts related to the rescission of the Policy.
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`44,
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`Defendant breached its duty to deal fairly and in good faith with Plaintiff by refusing to
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`timely pay benefits owed to Plaintiff under the terms of the Policy.
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`45.
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`Defendant breached its duty to deal fairly and in good faith with Plaintiff by placing its
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`ownfinancial interests ahead of those ofPlaintiff by improperly rescinding the Policy.
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`46.
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`Defendant’s breach of the duty of good faith and fair dealing is the result of its refusal to
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`create and maintain a claims handling environment that honors the contractual and legal
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`obligations owedto its insureds.
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`47.
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` Defendant’s breach of the duty of good faith and fair dealing is the result ofits refusal to
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`properly train and supervise the claims handling employees responsible for processing and / or
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`handling claims made underthe policies it issues to its insureds.
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`48.
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`Asa direct result of Defendant’s breach of the duty of good faith and fair dealing owed to
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`Oklahomainsureds, Plaintiff has suffered significant damages by way of unpaid benefits due to
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`him underthe terms of the Policy.
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`
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`49. Asadirect result of Defendant’s breach of the duty of good faith and fair dealing owed to
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`Oklahoma insureds, Plaintiff has suffered significant damages in the form of embarrassment and
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`mental pain and suffering.
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`50.
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`Defendant’s conduct in violating the duty of good faith and fair dealing owedto Plaintiff
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`warrants the imposition of punitive damages in an amountsufficient to punish its conduct and to
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`deter other insurance companies from engaging in a similar manner.
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`WHEREFORE,Plaintiff Michael Adams prays for judgment against the Defendant, and
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`for money damagesin excess of the amountrequired for diversity jurisdiction pursuant to Section
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`EXHIBIT 1
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`EXHIBIT 1
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`1332 of Title 28 of the United States Code, punitive damagesin cxcess of the amount required for
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`diversity jurisdiction pursuant to Section [332 of Title 28 of the United States Code, together with
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`interest, costs, attorney fees, and any andall further relief to which they maybe entitled to in law
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`or in equity.
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`Respectfully submitted,
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`
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`Simone Fulmer Gaus, OBA #17037
`Harrison C. Lujan, OBA #30154
`Jacob L. Rowe, OBA #21797
`Andrea R. Rust, OBA #30422
`Chad W. P. Kelliher, OBA #30607
`Madison Botizan, OBA #34615
`FULMERSILL PLLC
`[101 N. Broadway Ave., Suite 102
`Oklahoma City, OK 73103
`Phone: (405) 510-0077
`Fax: (800) 978-1345
`Email: sfulmer@fulmersill.com
`hlujan@fulmersill.com
`jrowe@fulmersill.com
`arust@fulmersill.com
`ckelliher@fulmersill.com
`mbotizan@fulmersill.com
`ATTORNEYS FOR PLAINTIFF
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`EXHIBIT 1
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`ATTORNEYS’ LIEN CLAIMED
`JURY TRIAL DEMANDED
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`EXHIBIT 1
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