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Katskee v. Blue Cross/Blue Shield - 245 Neb. 808, 515 N.W.2d 645 (1994)

Rule:

An insurance policy is to be construed as any other contract to give effect to the parties' intentions at the time the contract was made. When the terms of the contract are clear, a court may not resort to rules of construction, and the terms are to be accorded their plain and ordinary meaning as the ordinary or reasonable person would understand them. In such a case, a court shall seek to ascertain the intention of the parties from the plain language of the policy.

The lay definition of a disease is an impairment of the normal state of the living animal or plant body or of any of its components that interrupts or modifies the performance of the vital functions, being a response to environmental factors to specific infective agents to inherent defects of the organism, or to combinations of these factors: Sickness, illness. The lay definition of a disorder is a derangement of function, or an abnormal physical or mental condition such as a sickness, ailment, or malady. The medical definition of a disease is any deviation from or interruption of the normal structure or function of any part, organ, or system of the body that is manifested by a characteristic set of symptoms and signs and whose etiology, pathology, and prognosis may be known or unknown. The medical definition of a disorder is a derangement or abnormality of function, a morbid physical or mental state. 

Facts:

Katskee brought an action against health insurer Blue Cross for breach of contract following its refusal to cover the cost the former’s surgery for treatment of her genetic condition called ***-ovarian carcinoma syndrome. Blue Cross denied coverage for the surgery on grounds that Katskee did not have an illness or disease that was covered by the insurance policy. The district court granted summary judgment in favor of Blue Cross, and dismissed Katskee's action for breach of contract.

Issue:

Did Katskee’s genetic condition constitute an “illness” within the meaning of the insurance policy?

Answer:

Yes.

Conclusion:

The court reversed the judgment of the district court and remanded the case for further proceedings. The court held that Blue Cross had not proffered any evidence disputing the premise that the origin of Katskee's condition was in the genetic makeup of the individual, and that in its natural development it was likely to produce devastating results. The court found that the insurance policy was not ambiguous and applied plain and ordinary meaning to the terms of the contract. In light of the plain and ordinary meaning of the terms "illness," "bodily disorder," and "disease," the court found that Katskee's condition constituted an illness within the meaning of the policy.

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