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United American Insurance Co. v. Wibracht

decided: August 5, 1987.

UNITED AMERICAN INSURANCE COMPANY, A DELAWARE INSURANCE CORPORATION, PLAINTIFF-APPELLEE
v.
RICHARD D. WIBRACHT AND HILDA A. WIBRACHT, DEFENDANTS-APPELLANTS



Appeal from the United States District Court for the Western District of Wisconsin. No. 86-C-64-John C. Shabas, Judge.

Ripple, Manion, Circuit Judges, and Reynolds, Senior District Judge.*fn*

Author: Reynolds

REYNOLDS, Senior District Judge.

Plaintiff-appellee United American Insurance Company ("United American") commenced this action in the Western District of Wisconsin against defendants-appellants Hilda A. Wibracht ("Mrs. Wibracht") and her son Richard D. Wibracht. United American sought a declaratory judgment that Mrs. Wibracht was not entitled to hospital and nursing home benefits under the terms of a policy United American had written. The parties filed cross-motions for summary judgment, and the district court ruled that, under the facts presented, United American was obligated to pay hospital benefits, but that Mrs. Wibracht was not entitled to nursing home benefits. The district judge denied the Wibrachts' motion to reconsider his decision denying nursing home benefits, and the Wibrachts have appealed from that decision. The decision of the district court will be affirmed.

RELEVANT FACTS

United American Insurance Company is a Delaware corporation with its principle place of business in Dallas, Texas. Hilda A. Wibracht, a registered nurse, is now confined in a skilled nursing home in St. Charles, Minnesota, as a result of injuries she suffered in an auto accident. Her son Richard is a citizen of Janesville, Wisconsin, and has power of attorney for the administration of his mother's assets.

On March 20, 1974, Mrs. Wibracht, who was then 64 years old, applied to purchase a United American Medicare Supplement Policy. Pursuant to Wisconsin law, a brochure was attached to the application. The brochure's cover page stated in large, bold-faced letters, that it was a "MEDICARE COUNTERPART POLICY" with "Hospital and Nursing Home Benefits That Automatically Increase as Corresponding Medicare Coverage Decreases." The second page of the brochure included a paragraph which stated the nursing home coverage as follows: "All nursing home charges in excess of Medicare's daily allowances for confinement in extended care facility from the 21st through the 100th day."

The second page of the brochure also stated:

"POLICY DOES NOT COVER"

Loss caused by or resulting from alcoholism, narcotic addiction, nervous or mental disorders, dental treatment, rest cure, or any period of hospital or nursing home confinement that daily allowances are not paid under Medicare or loss covered by any Workmen's Compensation or Employers' Liability Laws.

United American issued Mrs. Wibracht a Medicare Supplement Policy on April 16, 1974, with a first-year annual premium of $116. The relevant language of that policy is as follows:

BENEFIT PERIOD means a period which begins . . . with the first day a Family Member is confined in a hospital as a resident bed patient as a result of such injury or such sickness and ends at the close of 60 consecutive days on each of which the member was not confined in a hospital or nursing home.

Part 1 HOSPITAL EXPENSE BENEFITS

If a Family Member is necessarily confined as a resident bed patient in a hospital during a Benefit Period for which daily hospital benefits are paid under Medicare, the Company will pay the following items of expense actually incurred during such confinement:

1. The Initial Deductible for the Benefit Period.

2. Hospital charges . . . in excess of the daily benefits paid under Medicare during the Benefit Period.

Part 3 NURSING HOME EXPENSE BENEFIT

If a Family Member is necessarily confined as a resident patient in a Nursing Home during a Benefit Period for which daily nursing home benefits are paid under Medicare, the Company will pay the portion of the daily expense incurred in excess of the daily benefit paid under Medicare.

Part 9 LIMITATIONS AND EXCLUSIONS

3. Hospital confinement as a resident bed patient or confinement in a Nursing Home for which daily benefits are not paid under Medicare during a Benefit Period are not covered under this policy. . . .

ENTIRE CONTRACT; CHANGES

This policy, including endorsements and the attached papers, if any, and the application, a copy of which is attached hereto and made a part hereof, ...


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