Expert Commentary

Insurer Loses Summary Judgment by Claiming Evidence It Never Had

Appellate courts will often reverse a motion for summary judgment in favor of an insurer on technical grounds even when the decision made by the insurer to deny benefits appeared to be appropriate.

Claims Practices
November 2020

In Hartwell v. American Fidelity Assur. Co., No. SD36561 (Mo. App. Sept. 17, 2020), the insurer's motion was granted by the trial court but was reversed.

Facts of the Case

Vanessa Hartwell appealed the trial court's judgment granting summary judgment in favor of American Fidelity Assurance Company (AFA) on Hartwell's petition for breach of an insurance contract (Count I) and vexatious refusal to pay an insurance claim (Count II). In three points, Hartwell contended that the trial court erred in granting summary judgment.

Hartwell was the holder of and an insured under an insurance policy issued by AFA ("the Policy") that was in full force and effect. Hartwell filed an insurance claim with AFA seeking the "Hospital Confinement Benefit" under the Policy for a period of hospitalization from June 11, 2018, through July 4, 2018. AFA agreed with Hartwell that she was hospitalized at Saint Francis Medical Center (SFMC) from June 11, 2018, through June 19, 2018, and paid the benefits Hartwell claimed for those dates. It denied, however, that she was entitled to the Hospital Confinement Benefit for the remainder of the days at issue, from June 20, 2018, to July 4, 2018.

AFA's Policy provided that eligibility for the Hospital Confinement Benefit required that the insured be confined as a patient in a "Hospital" as defined within the Policy ("the Hospital definition"). Furthermore, the Hospital definition contained language excluding from that term an institution used by the insured as "a place for rehabilitation" or as "an extended care facility for the care of convalescent, rehabilitative or ambulatory patients." With respect to the portion of Hartwell's claim for Hospital Confinement Benefits that it denied, AFA alleged that Hartwell was an inpatient from June 20, 2018, to July 4, 2018, at a rehabilitation facility located on the SFMC grounds, and her stay during this time was used by her as "a place for rehabilitation" and/or "an extended care facility for the care of convalescent, rehabilitative or ambulatory patients."

Analysis of the Case

A court construing the terms of an insurance policy must apply the meaning that would be attached by an ordinary person of average understanding if purchasing insurance and resolve ambiguities in favor of the insured. An ambiguity exists when there is duplicity, indistinctness, or uncertainty in the meaning of the language of the policy. An insured cannot create an ambiguity by reading only a part of the policy and claiming that, read in isolation, that portion of the policy suggests a level of coverage greater than the policy actually provides when read as a whole.

With these principles in mind, the Hospital definition states the following.

Hospital means a licensed institution which: (a) has on its premises: (1) laboratory, x-ray equipment and operating rooms where major surgical operations maybe [sic] performed by licensed physicians; (2) permanent and full-time facilities for the care of overnight resident bed patients under the supervision of a licensed physician; (3) 24-hour-a-day nursing service by graduate registered nurses; and (4) the patient's written history and medical records; or: (b) is accredited by the joint commission on accreditation of hospitals. the term hospital shall not include an institution used by you as: (a) a place for rehabilitation; (b) a place for rest or for the aged; (c) a nursing or convalescent home; (d) a long term nursing unit or geriatrics ward; or (e) an extended care facility for the care of convalescent, rehabilitative or ambulatory patients.

No duplicity, indistinctness, or uncertainty existed between the first and second parts of the Hospital definition. When read as a whole, it required that to qualify for inclusion within the Hospital definition, a licensed institution must satisfy the definition's first part, but an institution was excluded from that term if it was used by the insured in any manner described in the definition's second part. Thus, to an ordinary person of average understanding, an institution qualified under the Hospital definition if it (1) satisfied the definition's first part, and (2) was not used by the insured in a manner proscribed in the second part. The same person would also understand that, in a different context, an institution, although meeting the Hospital definition's first part, would not qualify as a Hospital if it was used by an insured in a manner described and excluded by the second part.

Where there is no ambiguity in an insurance policy, a court must enforce the policy as written.

However, a summary judgment can only be granted if there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Hartwell argued that AFA's motion for summary judgment failed to make a prima facie showing of a right to judgment as a matter of law under the Hospital definition because its statement of uncontroverted material facts (SUMF) omitted the material fact that between June 20, 2018, and July 4, 2018, she used SFMC as either "a place for rehabilitation" or "an extended care facility for the care of convalescent, rehabilitative or ambulatory patients."

If a movant's motion for summary judgment fails to make a prima facie showing of a right to judgment as a matter of law, any further inquiry into the summary judgment record should end, and the motion for summary judgment should be denied. In its attempt to refute the claim that she was confined to the hospital, AFA failed to state as an alleged material fact in its SUMF that Hartwell used SFMC in a manner proscribed in that definition.

AFA was required to make a prima facie showing of a right to judgment as a matter of law based on its asserted uncontroverted material facts. When, and only when, AFA made the necessary prima facie showing of a right to judgment as a matter of law based on its SUMF does the burden shift to Hartwell to show that one or more of AFA's material facts are genuinely disputed. In sum, AFA's SUMF failed to support a prima facie showing of AFA's right to judgment as a matter of law under the Hospital definition.

The trial court's judgment in favor of AFA was reversed, and the case was remanded for further proceedings consistent with the opinion.


To paraphrase a proverb: for want of a nail a horse was lost, and for want of a horse a kingdom was lost. In this case, for want of a statement in AFA's summary judgment motion that Hartwell was not in a "Hospital" but in a care facility, its favorable judgment was reversed. The victory for Hartwell is Pyrrhic since all AFA needs to do is rewrite its motion and add the language that explains Hartwell's non-Hospital stay. Hartwell and AFA should settle for the costs of bringing a new motion.

Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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