On appeal from the Superior Court, Law Division, Camden County.
Pressler, Bilder and Skillman. The opinion of the court was delivered by Pressler, P.J.A.D.
[220 NJSuper Page 244] The Blue Cross and Blue Shield hospital and medical-surgical contracts here involved exclude from coverage treatment rendered for an injury arising out of the course of employment for which benefits are "available" under the workers' compensation law. The sole issue raised by this action is whether, as a
matter of contract interpretation, workers' compensation benefits are "available" to a minor who exercises the statutory election afforded by N.J.S.A. 34:15-10 to pursue a common-law tort remedy against his employer in lieu of prosecuting a workers' compensation claim. The trial judge held on cross-motions for summary judgment that the exclusion does not apply in these circumstances. We agree, concluding that, in context, the intended meaning of the term "available" is at least ambiguous.
The facts are undisputed. Plaintiff Charles J. La Pollo, then 17 years old, was severely injured during the course of his employment by Ponderosa Steak House. He was burned with cooking oil while using a deep fat fryer. Medical and hospital bills in excess of $70,000 were incurred. His father, plaintiff Charles P. La Pollo, is a Blue Cross/Blue Shield subscriber under group coverage made available to him by his employer. The coverage, by its terms, extends to his son. The contracts contain this exclusionary clause:
We do not provide benefits for services rendered for any disease, injury or condition arising out of and in the course of employment for which benefits and/or compensation are available in whole or in part under the provisions of any Workers' Compensation Law, Occupational Disease Law, or any similar law including any foreign law.
This exclusion applies whether or not a proper and timely claim for compensation for these services is made under these laws, whether or not benefits are received for these services and whether or not any recovery is received by you against a third party for damages resulting from the condition, disease or injury.
Blue Cross/Blue Shield, relying on this clause, rejected plaintiffs' claim for payment of medical expenses under the contracts. Its position was simply that workers' compensation benefits were "available" to the infant plaintiff within the clear terms of the exclusionary clause notwithstanding his election to forego his compensation remedy in favor of his statutorily reserved common-law right of action. Plaintiffs accordingly instituted this action against defendants Hospital Service Plan of New Jersey and Medical Surgical Plan of New Jersey seeking a declaration of coverage under the contracts. The
trial court decided the ensuing cross-motions for summary judgment in plaintiffs' favor. Defendants appeal. We affirm.
We are guided in considering the question before us by well-established principles governing the construction of exclusionary clauses in contracts of insurance. See Hunt v. Hospital Service Plan of N.J., 33 N.J. 98 (1960), extending those principles to the construction of hospital and medical services contracts. In short, exclusionary provisions are strictly interpreted against the insurer, ambiguities are resolved in favor of the insured, and the contract is construed so as to effect the objectively reasonable expectations of the insured. See, e.g., Meier v. New Jersey Life Ins. Co., 101 N.J. 597, 611-613 (1986); Sparks v. St. Paul Ins. Co., 100 N.J. 325, 335-336 (1985); Killeen Trucking v. Great American Surplus, 211 N.J. Super. 712, 715-716 (App.Div.1986); Kopp v. Newark Ins. Co., 204 N.J. Super. 415, 420 (App.Div.1985). We are satisfied that each of these constructional canons requires the result the trial court reached here. We are further persuaded that that result is entirely consistent with the rationale of the Supreme Court in Hunt v. Hospital Service Plan of N.J., supra.
Hunt also involved a work-related injury sustained by a member of the family of a Blue Cross/Blue Shield subscriber to whom the contract coverage extended, there the plaintiff-subscriber's wife. She had suffered a back injury requiring a number of hospitalizations and extensive medical and surgical treatment. The employer, however, neither assumed responsibility for this medical treatment, nor authorized it, nor paid for it. At her workers' compensation hearing, she was found to have sustained a compensable work-related injury and was awarded benefits for temporary disability as well as for partial total permanent disability. The compensation court, however, did not award her the medical treatment expenses, concluding that since they had not been authorized, they were ...