Truelove v. Blue Cross

MARVIN, Judge. From judgment for the insured for benefits under a hospitalization policy ($954) and for attorney’s fees ($500), the insurer appeals. We affirm. The insurer contends that the medical condition for which benefits were sought pre-existed the policy and that Art. IX of the policy should control since it excludes from coverage such pre-existing conditions during the first year of the policy. 1 Emphasizing that no application was attached to the policy as required by R.S. 22:618 (see also R.S. 22:219, 616), the lower court held that no evidence of a pre-exist-ing condition could be admitted or considered, citing Henderson v. Minn. Mut. Life Ins. Co., 347 So.2d 53 (La.App.2d Cir. 1977) and Smith v. North American Co. for Life, Acc. & Health Ins., 306 So.2d 751 (La.1975). In Smith , the Supreme Court said: “. . [T]he trial court . . .erroneously admitted the application for insurance into evidence. Thus all evidence concerning pre-existing conditions not disclosed in the application was improperly considered. Failure to disclose that evidence is not available to the insurer as a defense because a correct copy of the application . . . was not attached to or otherwise made a part of the policy.” S06 So.2d 754. The Supreme Court then concluded: “In light of our conclusions, it is unnecessary to consider whether [the insured] had a pre-existing condition prior to the effective date of the insurance . . . ” ibid, p. 755. In Henderson , the insurer likewise failed to attach the application to the policy. There, we said: “We find, under the ruling of the Supreme Court in Smith, supra, that the trial court erred in admitting into evidence the application or any evidence of misrepresentation. The all-inclusive nature of the Smith decision also precludes consideration of whether or not plaintiff had a pre-existing condition, prior to the effective date of the insurance, which was responsible for his disability.” 347 So.2d 55 . *1115 The insurer argues here that neither litigant contends a formal application was made or required, that the issue is not a false statement on the application, but instead, the issue is whether the exclusionary provision of the policy should be applied.. While exclusionary provisions of this type are authorized (R.S. 22:213) and are not contrary to the law or public policy (Muse v. Metropolitan Life Insurance Co., 193 La. 605 , 192 So. 72 (1939)), the issue for our determination is whether our interpretation of Smith in Henderson is correct. We recognize that there may be a distinction between the defense based on the insured’s false statement in the application (R.S. 22:219, 616, 618, 619) and the defense based on a policy exclusion of the type at issue here as authorized by R.S. 22:213(A)(13)(b). 2 Smith perhaps may be too inclusive, but it is nonetheless the latest expression of our Supreme Court and we are bound by it. Under Smith , we hold evidence of a preexisting condition is not admissible where a correct copy of the application is not attached to the policy as required by R.S. 22:219, 618, even though the insurer defends solely and exclusively on the basis of a policy exclusion as authorized by R.S. 22:213(A)(13)(b). R.S. 22:211(A); Henderson, supra. See also Spain v. Travelers Ins. Co., 332 So.2d 827 (La.1976). At appellant’s- cost, judgment is AFFIRMED. . The pertinent part of Art. IX reads: “A. No Health Care Allowance will be provided for: 1. services rendered during the first year of coverage for, or as a result of, any ailment, disease, or physical condition, the symptoms of which exhibit themselves before the Original Effective Date; . . . ” The evidence here establishes the condition resulting in the hospitalization of the insured’s wife pre-existed the policy. The policy was effective May 15, 1975. On that day, the wife saw a medical doctor. The doctor hospitalized her for further treatment on May 19. The doctor testified that the wife’s condition arose a “few weeks” prior to May 19 and resulted in the hospitalization because of gradually increasing pain. . This section reads: “(b) No claim for loss incurred commencing after three years from the date of issue of this policy shall be . denied on the ground that a . . . physical condition . . . had existed prior to the effective date of coverage of this policy.”