United States District Court, S.D. California
ORDER DENYING MOTION FOR SUMMARY JUDGMENT
Roger T. Benitez, United States District Judge
before the Court is Plaintiff HCC Life Insurance
Company's (“Plaintiff” or “HCC
Life”) Motion for Summary Judgment. (ECF No. 30.) HCC
Life seeks to rescind a short-term health insurance policy it
issued to Defendants Linda Conroy and Kevin Conroy.
Defendants oppose the motion. (ECF No. 45.) Because genuine
issues of material fact exist, the Court DENIES the motion.
Life argues that the Conroys misrepresented and concealed
facts about Kevin Conroy's alcohol abuse and degenerative
disc disease that the Conroys were required to disclose when
they applied for health insurance. Had it known these facts,
HCC Life contends that it would not have issued the policy.
Later, after learning about Mr. Conroy's medical history,
HCC Life rescinded the Conroys' policy. The relevant
facts related to Mr. Conroy's medical history, Mrs.
Conroy's application for the HCC Life policy, and HCC
Life's subsequent rescission are discussed below.
Kevin Conroy's Medical History
15, 2012, Kevin Conroy visited Dr. Steven Green at Sharp
Medical Group, reporting right shoulder and neck pain for the
past 18 months. (Padgett Decl. Ex. G-57.) Mr. Conroy asked to
have the shoulder and neck pain evaluated as a workers'
compensation injury. (Id.) He also told the doctor
that, “for many years, ” he has consumed
“12-15 beers a day” and that he “knows [he
should] cut down.” (Id.) Dr. Green diagnosed
Mr. Conroy with a “neck strain (847.0), ” which
he suspected was arthritis and referred the injury for
worker's compensation evaluation. (Id. Ex.
G-58.) He also diagnosed Mr. Conroy with “alcohol abuse
(305.00)” and advised him to reduce his alcoholic
Conroy had another visit with Dr. Green on August 8, 2012. He
again reported chronic right shoulder and neck pain, but had
reduced his alcoholic intake to six beers a day.
(Id. Ex. G-59.) Dr. Green assessed Mr. Conroy with
“neck pain (723.1)” believed to be arthritis,
“shoulder joint pain (719.41)” related to a
“significant rotator cuff impingement, ” and
“alcohol abuse (305.00).” (Id. Ex.
G-60.) During another visit on May 17, 2013, Mr. Conroy
reported that he had “cut his alcohol down to about 2
beers per day, ” but Dr. Green noted that Mr. Conroy
had a “[h]istory of elevated ALT thought to be from
alcohol.” (Id. Ex. G-62-63.) This time, Dr.
Green did not list “alcohol abuse (305.00)” in
the diagnosis section of the report. (Id. Ex. G-63.)
August 13, 2013, Dr. Paul Murphy evaluated Mr. Conroy for his
reported worker's compensation injury to his neck and
shoulders. (Id. Ex. G-65.) The report notes that, in
June 2013, Mr. Conroy had surgery for the rotator cuff tear.
(Id. Ex. G-66.) The report also indicates that Mr.
Conroy consumes 12 to 15 beers a week and summarizes his
earlier medical records. (Id. Ex. G-67.) The summary
notes that on October 31, 2012, Mr. Conroy had an initial
orthopedic consultation and X-rays “exposed to the
cervical spine [i.e., his neck] revealed severe
degenerative changes and arthritis.”(Id. Ex.
G-80.) Mr. Conroy's diagnosis at that October 2012 visit
included “[m]yoligamentous cervical spine
the August 2013 evaluation, Dr. Murphy took X-rays of Mr.
Conroy's right and left shoulders and cervical spine.
(Id. Ex. G-71.) X-rays of the cervical spine
“reveal[ed] normal overall bony alignment, no fracture
or dislocation. There is disc space narrowing at ¶ 3-4,
C4-5, C5-6, and C6-7.” (Id.) In response to
these X-rays, Dr. Murphy states an “impression”
of “degenerative disc disease, multiple levels,
cervical spine.” (Id.) Later, in the
conclusions section of the report, Dr. Murphy diagnoses Mr.
Conroy with “[m]usculoligamentous sprain/strain,
cervical spine, ” “[m]usculoligamentous
sprain/strain” to both shoulders, and rotator cuff
repair. (Id. Ex. G-89-90.) Dr. Murphy opined that
Mr. Conroy had no use of his right upper extremity, required
physical therapy, and should undergo an MRI study of his
cervical spine and left shoulder. (Id. Ex. G-90.) He
further opined that Mr. Conroy's injuries were
work-related. (Id. Ex. G-91.) Mr. Conroy was carbon
copied on the report. (Id. Ex. G-92.)
Murphy re-evaluated Mr. Conroy in February 2014. The report
notes that Mr. Conroy “drinks beers” but does not
state a quantity. (Id. Ex. G-94.) X-rays were again
taken of the cervical spine and shoulders. The cervical spine
X-rays “reveal[ed] normal overall bony alignment, no
fracture or dislocation. There is mild loss of cervical
lordosis. Mild disc space narrowing at ¶ 3-4, C4-5, and
C5-6. There is mild anterolisthesis of C4 and C5 measuring
1mm.” (Id. Ex. G-99.) The
“impression” from these X-rays was “[l]oss
of cervical lordosis and degenerative disc disease,
multilevel cervical spine.” (Id.)
report also summarizes the results of the cervical spine and
left shoulder MRI study from December 2013. The MRI found
“moderate broad-based disc herniation” and
“mild uncovertebral joint degenerative joint
disease” to certain vertebrae. (Id. Ex.
Murphy's conclusions again included a diagnosis of
“[m]usculoligamentous sprain/strain, cervical
spine” and “[m]usculoligamentous
sprain/strain” of both shoulders. (Id. Ex.
G-104.) Dr. Murphy characterized “Mr. Conroy's pain
referable to his neck as being intermittent and slight in
nature.” (Id. Ex. G-105.) Related to the
cervical spine, Dr. Murphy opined that Mr. Conroy had
suffered a 25% loss of preinjury capacity for lifting and a
“5% impairment of the whole person.”
(Id. Ex. G-106.) Mr. Conroy was again copied on the
report. (Id. Ex. G-110.)
Murphy issued a supplemental report on May 16, 2014 in
response to a request for additional information. He repeated
that the August 2013 “cervical spine X-rays revealed
degenerative disc disease at multiple levels of the cervical
spine” and that the February 2014 X-rays “of the
cervical spine reveal[ed] loss of cervical lordosis and
degenerative disc disease, multilevel.” (Id.
Ex. G-122-123.) Dr. Murphy reaffirmed his conclusions about
Mr. Conroy's work-related injuries of sprains/strains to
the cervical spine and shoulders. (Id. Ex.
G-123-124.) Mr. Conroy was copied on the supplemental report.
(Id. Ex. G-127.)
Linda Conroy Applies for HCC Life Health Insurance
2014, Linda Conroy submitted an application to HCC Life for a
short term health insurance policy for herself and Mr.
Conroy. (Decl. of Linda Conroy ¶ 6.) Mr. Conroy did not
participate in the enrollment process. (Id., Decl.
of Kevin Conroy ¶ 8.) Per HCC Life's usual process,
Mrs. Conroy completed the enrollment process over the phone.
(L. Conroy Decl. ¶ 6; Defs.' Notice of Lodgment
(“NOL”), Ex. A, Excerpted Tr. of Dep. of Jon