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Keywords

contract

contractappellant

Related Cases

Robin v. Blue Cross Hosp. Service, Inc., 637 S.W.2d 695

Facts

Linda Robin was employed at Community Memorial Hospital and enrolled in group hospital service plans, with dues paid by the hospital. After being injured in an automobile accident, her employment was terminated on October 31, 1977, which also ended the payment of her health plan dues. Following her termination, Robin incurred additional medical expenses but did not pay the premium required to convert to an individual membership, leading to the termination of her membership and the insurer's refusal to cover her expenses.

Prior to October 31, 1977, Linda Robin was employed at Community Memorial Hospital in Farmington, Missouri, and was enrolled in group hospital service plans.

Issue

Whether Robin's entitlement to benefits depended on continued payment of required dues and if such conditions could be overcome by a construction based on a theory of reasonable expectations from a contract alleged to be a contract of adhesion.

In question is whether appellant's entitlement to benefits depends upon continued payment of required dues; and if so, whether such conditions may be overcome by a construction based upon a theory of reasonable expectations from a contract alleged to be a contract of adhesion.

Rule

The insurance contract must be enforced according to its unambiguous language, and the rules of construction applicable to insurance contracts require that the language used be given its plain meaning.

The rules of construction applicable to insurance contracts require that the language used be given its plain meaning.

Analysis

The court determined that the group health plan was not a contract of adhesion, as it was negotiated between the employer and the insurer, and Robin had options available to her. The terms of the policy clearly stated that failure to pay dues would result in automatic termination of membership, which Robin did not dispute. Therefore, the court applied the plain meaning of the contract language to conclude that Robin's failure to pay the premium after her employment ended resulted in the termination of her benefits.

The contract involved in this case resembles an adhesion contract only in that it was offered to the appellant, not by the insurer who drafted the contract, but by her employer, on a “take this or nothing” basis.

Conclusion

The court affirmed the judgment, concluding that Robin was not entitled to benefits under the group health plan due to her failure to pay the required premium after her employment was terminated.

Accordingly, the principles of adhesion contracts as applied in Estrin and Spychalski are not applicable to this case.

Who won?

Blue Cross Hospital Services, Inc. prevailed in the case because the court found that the insurance contract was clear and unambiguous, and Robin's failure to pay the required premium led to the termination of her membership and benefits.

Affirmed.

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