Citizens Insurance Company of America v. Midmichigan Health Connectcare Network Plan

MOORE, Circuit Judge,

dissenting.

I agree with the majority that the language of Citizens’s personal-injury-protection exclusions provision is ambiguous. However, because two rules of contract construction direct us to resolve the ambiguity against Citizens, I believe we are compelled to conclude that the Citizens plan does not exclude coverage on the basis of the MidMichigan plan. Accordingly, I respectfully dissent.

The majority has highlighted the ambiguity in the personal-injury-protection exclusions provision of Citizens’s excess no-fault policy. The phrase “accident or disability” in the provision can be read to modify only “insurance,” the term that immediately follows it, or it can be read to modify each of the subsequent terms: “insurance,” “service,” “benefit,” “reimbursement,” and “salary continuance.” Joint Appendix (“J.A.”) at 107 (Citizens Policy at 16). Under the first, nondistributive reading, all individual-, blanket-, or group-benefit plans would be included within Citizens’s coverage exclusions, and thus Citizens would not be required to make any payments that were payable under MidMi-chigan’s group-benefit plan. Under the second, distributive reading, the only type of individual, blanket, or group benefit plans that would be excluded would be accident-or disability-benefit plans, and Citizens could not deny personal-injury-protection coverage based on coverage by MidMichigan’s health-benefit plan. Two rules of contract interpretation instruct us to resolve this ambiguity against Citizens.

First, federal common law, the law that governs the interpretation of this contract, has adopted the longstanding rule of construction that ambiguities in contract language are resolved against the drafter, in this case, Citizens. Regents of the Univ. of Mich. v. Employees of Agency Rentr-A-Car Hosp. Ass’n, 122 F.3d 336, 339-40 (6th Cir.1997); see also Restatement (Second) of Contracts § 206 (1981). Citizens had the opportunity to draft a provision that clearly excluded coverage where the insured was covered by a health-benefit plan. See Restatement (Second) of Contracts § 206 cmt. a (explaining that “[wjhere one party chooses the terms of a contract, he is likely to provide more carefully for the protection of his own interests than for those of the other party” and “is also more likely than the other party to have reason to know of uncertainties of meaning”). In fact, Citizens has demonstrated that it was capable of doing precisely that in its limit-of-liability provision regarding injuries sustained while operating a motorcycle, which explicitly excludes coverage where benefits are payable through a “medical or surgical insurance or reimbursement plan.” J.A. at 107 (Citizens Policy at 17). Moreover, because Citizens had “the stronger bargaining position” and Citizens alone determined the *698 terms of its “standardized contract[ ],” the rule of construction against the drafter applies with additional force here. Restatement (Second) of Contracts § 206 cmt. a.

Second, our prior precedent, by which we are bound, instructs that “an insurer has a duty to express clearly the limitations in its policy,” and thus that “any ambiguity will be construed liberally in favor of the insured and strictly against the insurer.” Regents of the Univ. of Mich., 122 F.3d at 339-40 (emphasis added) (internal quotation marks omitted). Therefore, we must construe the ambiguity as to the limitations of the Citizens policy against Citizens, the insurer.

Because these rules of construction direct us to construe the ambiguity in Citizens’s exclusions provision against Citizens, I believe that we must read “accident or disability” as modifying each of the terms that follow it, including “benefit.” Under this reading of the provision, the insured’s coverage under MidMichigan’s plan, which is a health-benefit plan, not an accident-or disability-benefit plan, would not exclude coverage under the Citizens plan. 1 Because this court’s precedents regarding the rules of contract interpretation dictate this understanding of the exclusions provision, it is unnecessary to look to the intent of the parties. 2 I respectfully dissent.

. Contrary to the majority’s suggestion, reading the provision so that it does not reach health-benefit plans does not render the Medicare language meaningless. The inclusion of the language "excluding Medicare benefits provided by the federal government” in Citizens’s exclusions provision simply means that where an accident or a disability results in benefits paid by Medicare, Citizens will reimburse Medicare for the cost of the benefits.

. Even if it were necessary to consider the intent of the parties, the majority errs in its approach to ascertaining the parties’ intent. The majority acknowledges that our prior precedent instructs that " '[w]hen interpreting a contract,’ ” we " 'look not only at the language, but also for additional evidence that reflects the intent of the contracting parties,’" Majority Opinion (“Maj. Op.”) at 692 (quoting Wulf v. Quantum Chem. Corp., 26 F.3d 1368, 1376 (6th Cir.1994)) (emphasis added). The majority misconstrues this instruction, however, as one to consider "the intent underlying the provision,” Maj. Op. at 693 (emphasis added), and "the intent of the clause,” Maj. Op. at 695 (emphasis added), rather than the "intent of the parties," Wulf, 26 F.3d at 1376 (emphasis added). This leads the majority to focus on the intent of Citizens, the drafter of the provision, while giving short shrift to the intent of the other party to the contract, the insured, Jacqueline Bradshaw. Such a one-sided inquiry cannot produce an accurate assessment of the intent of the parties. Moreover, although the majority claims that "[t]he intent of the parties is clear,” Maj. Op. at 696 n. 7, the majority's view of the parties’ intent is based on mere conjecture rather than the language of the contract or any evidence presented by the parties. The majority credits self-serving statements that Citizens made regarding its own intent in its brief to this court without any supporting evidence, either extrinsic or from the contract language. The basis for the majority's conclusion as to Bradshaw's intent is not evident or supported.