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DREXELBROOK ENGG. CO. v. TRAVELERS INS. CO.

March 29, 1989

DREXELBROOK ENGINEERING COMPANY
v.
THE TRAVELERS INSURANCE COMPANY, THE TRAVELERS INDEMNITY COMPANY, and PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY



The opinion of the court was delivered by: VAN ANTWERPEN

 FRANKLIN S. VAN ANTWERPEN, UNITED STATES DISTRICT JUDGE.

 In the instant matter, plaintiff seeks to recover from an insurance carrier who denied payment on a claim. At the non-jury trial on January 25, 1989, the parties stipulated to the following undisputed facts:

 1. Plaintiff Drexelbrook Engineering Company ("Drexelbrook") is the assignee of the claims of one Robert E. Hay against defendants with respect to medical expenses incurred by Mr. Hay from January 31, 1987 to January 31, 1988.

 2. Robert Hay, who is not a party to this action, was an employee of the SS White Company ("SS White") or its predecessors from 1974 until on or about September 15, 1986.

 3. On or about September 15, 1986, Keystone X-Ray, Inc. ("Keystone") purchased the SS White Company, and Mr. Hay became a Keystone employee.

 4. While employed by SS White, Mr. Hay was covered by the Group Life and Health Insurance Plan of the SS White Company ("the SS White Plan").

 5. SS White was the administrator of the SS White Plan.

 6. Mr. Hay received a copy of the Summary Plan Description for the SS White Plan in 1984, shortly after he became a participant in the SS White Plan.

 7. The Travelers Insurance Company ("Travelers") issued Group Policies Nos. G 665624 and GA 665624 to SS White Company, which set forth certain benefits to be provided to covered employees under the SS White Plan and which set forth certain premiums for such benefits.

 8. Prior to September 15, 1986, and at all relevant times, Mr. Hay was an eligible employee under the SS White Plan. During his employment period, the portion of the cost of the SS White Plan allocated to employees was deducted from Mr. Hay's salary.

 9. On or about October 15, 1986, a representative of SS White told Mr. Hay that his coverage under the SS White Plan would continue only until January 31, 1987.

 10. SS White continued Mr. Hay's group coverage under its health plan until January 31, 1987.

 11. Mr. Hay was not given specific notification at the time of his termination of employment with SS White or at the time of the termination of his coverage under the SS White Plan regarding any rights under the Plan (if any) to convert his group coverage to individual coverage.

 12. Mr. Hay had been diagnosed as having renal (kidney) failure by Dr. Serota on March 4, 1986. Mr. Hay was hospitalized at Abington Memorial Hospital for kidney failure from March 10, 1986 to March 14, 1986. Thereafter, Mr. Hay was diagnosed as having kidney failure and treated on a monthly basis from March, 1986 to January, 1987, when he was again hospitalized for kidney failure. Mr. Hay was hospitalized for kidney failure again in February, 1987 and then received medical advice and treatment for kidney problems on a monthly basis until the present time.

 13. From January 31, 1987 through January 31, 1988, Mr. Hay was treated for a punctured lung and for kidney failure, and medical expenses were incurred as a result of such treatments. Medicare, Drexelbrook, and/or Drexelbrook's insurer, Mutual of New York reimbursed Mr. Hay for all of these expenses.

 14. On January 1, 1987, Mr. Hay became covered by the group health plan of Keystone, which was insured at that time by Provident Life and Accident Insurance Company.

 15. Mr. Hay was not shown the Keystone Summary Plan Description by Keystone until after January 1, 1987. He first saw the Plan around March, 1987 and had the opportunity to read it. He "paged through it."

 16. From 1986 to the present, Mr. Hay has been covered as a dependent under the group health plan of his wife's employer, Drexelbrook Engineering Company.

 17. Since April 1, 1987, Mr. Hay has also been covered by Medicare for a portion of the expenses related to kidney failure.

 18. The SS White group policy covering Mr. Hay provided that insurance under the SS White Plan would terminate when the employee's employment terminated (p. 27).

 19. The SS White group policy covering Mr. Hay provided for extended benefits after the ...


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