For reversal -- Chief Justice Weintraub, and Justices Burling, Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the court was delivered by Francis, J.
[33 NJ Page 99] This appeal presents a single question for decision, i.e., the proper construction of substantially similar
exclusionary clauses in a hospital service insurance policy issued by defendant, Hospital Service Plan of New Jersey, and in a medical-surgical service insurance policy issued by defendant, Medical-Surgical Plan of New Jersey. Plaintiff, holder of a family coverage type contract of each organization, sought to compel payment of certain hospital and medical bills incurred on behalf of his wife. If the exclusionary clauses are not applicable, the bills are otherwise clearly within the companies' undertaking. The trial court concluded that the exclusions were controlling and denied recovery. 59 N.J. Super. 219 (Law Div. 1960). Certification was granted by us while the matter was pending in the Appellate Division.
The record indicates that on September 18, 1956 Emily Hunt, wife of the policyholder-plaintiff, was employed as a saleslady by W.T. Grant Co. in Plainfield, New Jersey. On that day, while lifting a roll of oilcloth onto a shelf, she felt a pain in her back. She ceased working on September 19, and on September 25 entered the Muhlenberg Hospital in Plainfield for treatment of what appears to have been a serious back condition. The attending doctors and the hospital were selected by plaintiff and his wife. They were not furnished by the employer who had notice of the claimed facts of the employment incident at least as early as "about September 26, 1956."
A series of hospitalizations and considerable medical and surgical treatment followed thereafter, and continued through the middle of January 1958. Some of the earlier bills were paid by defendants before any problem arose as to whether Mrs. Hunt was entitled to workmen's compensation. It is plain, however, that during this period the employer neither assumed responsibility for her care nor paid any compensation to her. It does appear that on July 18, 1957, ten months after the employment incident, at an informal hearing the insurance carrier of the employer denied that she had a compensable claim, and refused to pay compensation benefits or any of her bills. Shortly thereafter she filed a
formal petition, through an attorney, seeking compensation for temporary and permanent disability and the payment of all medical and hospital obligations. The bills accrued up to that time, except for those already paid, were forwarded to the defendants. Because of the exclusionary clauses to be set forth presently, the insurers declined payment pending the outcome of the hearing in the Division of Workmen's Compensation.
At the hearing the Deputy Director found that Mrs. Hunt had suffered an accident arising out of and in the course of her employment, and that her claim was therefore compensable. So he directed payment of benefits for 35-4/7 weeks temporary disability and for 192 1/2 weeks representing 35% of partial total permanent disability. With respect to the medical treatment and hospitalization the judgment recited:
"Unpaid medical bills: All medical and hospital treatments rendered petitioner as result of the accident of 9/18/56 were not authorized, and are not compensable and are not chargeable against respondent.
I specifically find that all medical and hospital treatments rendered petitioner as the result of the aforesaid accident were not authorized, are not compensable and not chargeable against respondent." (Emphasis added)
On receipt of this judgment, defendants disclaimed liability for payment of the bills on the ground that, although they were declared non-compensable by the Division of Workmen's Compensation, they were compensable within the contemplation of the exclusionary clauses of their policies.
The Hospital Service Plan contract provides:
"Section V. Services Not Eligible.
The Plan shall not be liable, nor is Plan payment eligible.
(1) For hospital services rendered etc.
(specifying a particular exclusion).
(2) For hospital services ...