Short v. Blue Cross and Blue Shield of Kansas

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No. 118,688

IN THE COURT OF APPEALS OF THE STATE OF KANSAS

ZACHARY SHORT,
Appellant,

v.

BLUE CROSS AND BLUE SHIELD OF KANSAS, INC.,
Appellee.


SYLLABUS BY THE COURT

1.
Whether a written instrument is ambiguous is a question of law subject to de novo
review.

2.
The cardinal rule of contract interpretation is to ascertain the parties' intent. If the
contract is unambiguous, we determine the parties' intent by the language of the contract
alone. But if a contract has ambiguous language, we may consider extrinsic evidence to
construe it.

3.
When determining whether a provision in an insurance policy is ambiguous, courts
consider what a reasonably prudent insured would understand the language to mean, not
what the insurer intends the language to mean.




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4.
The applicability of an insurance exclusionary clause is a question of fact. The
insurer bears the burden of proving facts which would bring a case within the specified
exception.

5.
When opposing a motion for summary judgment, an adverse party must come
forward with evidence to establish a dispute as to a material fact.

Appeal from Saline District Court; PAUL J. HICKMAN, judge. Opinion filed April 12, 2019.
Affirmed.

Matthew L. Bretz, of Bretz & Young, L.L.C., of Hutchinson, for appellant.

David S. Wooding and Anna C. Ritchie, of Martin, Pringle, Oliver, Wallace & Bauer, L.L.P., of
Wichita, for appellee.

Before ARNOLD-BURGER, C.J., ATCHESON, J., and BURGESS, S.J.

ARNOLD-BURGER, C.J.: The cardinal rule of contract interpretation is to ascertain
the parties' intent. If the contract is unambiguous, we determine the parties' intent by the
language of the contract alone. But if a contract has ambiguous language, we may
consider extrinsic evidence to construe it.

Zachary Short sued Blue Cross and Blue Shield of Kansas (BCBS) for breach of
contract after BCBS refused to cover the full cost of a prosthetic leg called the Ottobock
X3. The insurance policy provided that BCBS would cover the cost of a basic (standard)
device and that it would not cover charges for deluxe or electrically operated devices
beyond the extent allowed for a basic (standard) device. BCBS provided evidence that the
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X3 was electrically operated and thus subject to the limitations in the insurance policy.
The district court agreed and granted BCBS's motion for summary judgment.

Short appeals, arguing that the contract is ambiguous and should be construed in a
way that would require BCBS to cover the full cost of the X3. He also asserts that he
should have been permitted to conduct more extensive discovery and that he should have
been allowed to present expert testimony. However, the language in the contract is not
ambiguous and electrically operated prosthetics are clearly subject to the limitations.
Because the contract was unambiguous, the district court did not err in refusing to allow
Short to seek additional evidence through discovery or introduce extrinsic evidence in the
form of expert testimony. The decision of the district court is affirmed.

FACTUAL AND PROCEDURAL HISTORY

Short was involved in a catastrophic farming accident in October 2014 which left
him severely injured. Short's injuries required him to undergo a bilateral knee
amputation, with his left leg amputated above the knee and his right leg below the knee.

At the time of the accident, Short was insured by Blue Cross Blue Shield of
Kansas (BCBS). Short sent a pre-service request to BCBS requesting coverage for
multiple prosthetics. One of the prosthetics was an Ottobock X3 Microprocessor leg and
knee. The X3 costs about $145,000. BCBS declined to cover the full cost of the X3 based
on its insurance contract. The relevant portion of the contract provided:

"Except as limited, the services listed below are covered:
. . . .
b. Orthopedic and prosthetic devices, appliances and items when medically
needed and not otherwise excluded herein. This includes items such as
orthopedic braces, artificial limbs, artificial eyes, and auditory osseointegrated
devices.
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Limitations:
. . . .

(3) Benefits are limited to the amount normally available for a basic (standard)
appliance which allows necessary function. Basic (standard) medical
devices or appliances are those that provide the essential function required
for the treatment or amelioration of the medical condition at a Medically
Necessary level.
(4) Charges for deluxe or electrically operated orthotic or prosthetic appliances,
devices or items are not covered, beyond the extent allowed for basic
(standard) appliances. Deluxe describes medical devices or appliances that
have enhancements that allow for additional convenience or use beyond
that provided by a basic (standard) device or appliance."

The contract defines "medically necessary" as:

"a service required to diagnose or to treat an illness or injury. To be Medically Necessary,
the service must: be performed or prescribed by a Doctor; be consistent with the
diagnosis and treatment of Your condition; be in accordance with standards of good
medical practice; not be for the convenience of the patient or his Doctor; and is provided
in the most appropriate setting."

BCBS believed that a prosthetic device was medically necessary and thus covered by the
insurance contract. However, BCBS considered the X3 to be a deluxe or electrically
operated prosthetic appliance subject to the limitations provision in the contract. BCBS
determined that a basic (standard) knee would cost $2,925.32. It informed Short that it
would pay him that amount, and that Short would be responsible for the balance of the
cost of the X3. Short disagreed, and he sued BCBS for breach of contract.

During discovery, Short made several inquiries that are now at issue on appeal. In
Interrogatory Number 2, Short asked BCBS to "[s]tate all facts and identify all
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documents you contend support [BCBS]'s refusal to pay the cost of the Ottobock X3
prosthetic knees . . . ." Short also made several requests for documents, including:

"1. All insurance claims and underwriting files pertaining to the subject matter of this
lawsuit.
. . . .
"5. Copies of all correspondence to and from others concerning Plaintiff.
"6. Original or true and correct copies of any recorded statement taken of Plaintiff.
. . . .
"8. Original or true and correct copies of all medical records and reports pertaining in any
way to Plaintiff.
. . . .
"10. Any utilization or medical reviews dealing with Plaintiff.
"11. All documents you intend to introduce as evidence at the time of trial."

BCBS objected to these requests based on their relevance and scope. BCBS argued that
the issue in the case was whether the full cost of the X3 fell within the provisions of
Short's insurance, and that the issue could "be determined by the contract language as a
matter of law by the Court."

Short filed a motion to compel discovery responses. Short asserted that he was
"entitled to know what facts and documents [BCBS] contends supports their denial." He
asked the district court to require BCBS to "produce any facts or documents besides the
contract upon which [BCBS] relies in denying to provide [Short] the Ottobock X3, if any
exists besides the contract." BCBS objected to Short's motion to compel discovery
responses. It maintained its argument that this was a straightforward case that the court
could decide by the language within the four corners of the contract.

The district court denied Short's motion to compel, finding that the contract
language was not ambiguous, deluxe or electrically operated devices were not covered,
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and the requested discovery would not likely lead to any relevant information regarding
the nature of the claim.

Later in the litigation, Short filed an expert witness disclosure. He named only one
person—Dr. Todd Cowen. Dr. Cowen prepared a Catastrophic Life Care Plan for Short.
An expert develops a Life Care Plan by "applying methodological, expert analysis to
determine and quantify the current and future medical care requirements of an
individual." Although his report is over 130 pages long, Dr. Cowen only briefly
addressed the X3. He stated:

"The Ottobock X3 is a standard prosthetic appliance frequently used for military and
other amputees, which allows the essential function required for the treatment or
amelioration of the medical condition at a minimal level. It will not return full function to
the knee and is not for mere convenience but would allow Mr. Short to keep up with
everyday activities such as showering or walking on unlevel ground. The X3 protective
cover is lightweight and incredibly strong. Ability Dynamic's Rush Foot is made of a
unique glass composite that has been proven not to break down in heavy use like carbon
fiber. It is a specially-formulated composite fiber material that is nearly indestructible,
highly flexible and only available on Ability Dynamic's Rush Foot prosthetic devices. It
delivers one of the most realistic and responsive foot and ankle motions available on the
market."

When Dr. Cowen assessed Short, Short was using a borrowed X3. Short reported feeling
safe and stable with the device, especially while trying to work on his family farm.

BCBS moved to strike Dr. Cowen as an expert witness in the case. BCBS
reiterated its argument that expert testimony was unnecessary because the court could
decide the issue solely by the language of the contract. We find no evidence in the record
that the district court ever ruled on the motion to strike.

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BCBS ultimately moved for summary judgment. BCBS framed the issue as
whether it "was correct in determining that it could not cover the balance of the cost for
the Ottobock X3 Microprocessor Knee based on the language in the contract excluding
coverage for charges for deluxe or electrically operated prosthetic devices." BCBS
argued that the district court need only "examine the pertinent contract language, which it
has already determined is not ambiguous, to make its decision." BCBS attached
screenshots from Ottobock's website related to the X3. The website described the X3 as
"[t]he world's most technologically advanced microprocessor prosthetic leg." The website
advertises that the X3 has several sensors and a microprocessor which help the knee
operate. It is activated by five different activity modes using a small remote. The X3 is
also battery operated, with one charge lasting approximately five days.

The district court granted BCBS's motion for summary judgment. In its decision,
the district court reiterated its prior holding that the relevant contract provision was not
ambiguous. The court noted that the relevant provision "excludes coverage of cost
beyond a basic (standard) device for 'deluxe' or 'electrically operated' prosthetics." The
court "interpret[ed] this language to mean that a basic (standard) device cannot be a
deluxe or electrically operated device." Because the X3 is a deluxe device and electrically
operated, the court held that BCBS correctly determined that it was not covered by the
insurance contract.

Short appealed.







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ANALYSIS

The district court did not err by finding that the insurance policy was unambiguous.

The district court's rulings on Short's motion to compel discovery responses and its
grant of summary judgment to BCBS rested on its holding that the relevant contract
provisions were unambiguous. Short argues that this holding was erroneous.

Whether a written instrument is ambiguous is a question of law subject to de novo
review. Waste Connections of Kansas, Inc. v. Ritchie Corp., 296 Kan. 943, 964, 298 P.3d
250 (2013).

Contract language "is ambiguous when the words used to express the meaning and
intention of the parties are insufficient in a sense the contract may be understood to reach
two or more possible meanings." Wood v. Hatcher, 199 Kan. 238, 242, 428 P.2d 799
(1967). Ambiguity does not arise until "application of pertinent rules of interpretation to
an instrument as a whole fails to make certain which one of two or more meanings is
conveyed by the words employed by the parties." 199 Kan. at 242. Several of these rules
are relevant here. "A cardinal rule in the interpretation of contracts is to ascertain the
intention of the parties and to give effect to that intention if the intention is consistent
with legal principles. . . . Reasonable rather than unreasonable interpretations are favored
by the law." Hollenbeck v. Household Bank, 250 Kan. 747, Syl. ¶ 1, 829 P.2d 903 (1992).
Additionally, "all pertinent provisions of an insurance policy must be considered
together, rather than in isolation, and given effect." Brumley v. Lee, 265 Kan. 810, 813,
963 P.2d 1224 (1998). Finally, when determining whether a provision in an insurance
policy is ambiguous, courts consider "what a reasonably prudent insured would
understand the language to mean, not what the insurer intends the language to mean." 265
Kan. at 813.

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Short's first argument is that the district court failed to consider the insurance
policy as a whole. The insurance contract provides coverage for prosthetic devices in a
section titled "Other Covered Services." Specifically, the contract states that it covers
prosthetic devices "when medically needed and not otherwise excluded herein." Directly
following this provision is a section titled "Limitations." This section provides that
charges for deluxe or electrically operated prosthetics is not covered beyond the amount
allowed for a basic (standard) device. The contract defines deluxe devices as devices
"that have enhancements that allow for additional convenience or use beyond that
provided by a basic (standard) device or appliance." Short argues that the district court
erred by holding that the only relevant policy provisions are in the "Other Covered
Services" portion in the contract. He asserts that the district court's interpretation of this
section is inconsistent with the definition of "medically necessary" found elsewhere in the
contract.

As Short notes, the district court ruled that the term "medically necessary" was not
at issue in the action because BCBS agreed that a prosthetic was medically necessary.
Short then argues: "While the parties do agree that a prosthetic is medically necessary,
the issue that sits at the heart of this case is what prosthetic is medically necessary to treat
or ameliorate [his] condition—the unidentified prosthetic that purportedly costs
$2,925.32 or the X3?" Short asserts that to answer this question the district court needed
to interpret the term "medically necessary."

Short's argument misses the point. The issue is not which device is medically
necessary, as BCBS has already determined that both the X3 and a basic prosthetic are
medically necessary. If the X3 was not medically necessary, then BCBS would not have
offered to pay for a portion of its cost. The true issue in this case is determining how
much BCBS must pay for a medically necessary prosthetic. If it is a basic or standard
appliance, BCBS will pay the full cost. If it is a deluxe or electrically operated appliance,
BCBS will pay the amount that a basic or standard appliance would cost. For these
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reasons, the district court did not err in concluding that the term "medically necessary"
was not at issue.

Short also uses the definition of "medically necessary" to argue that the district
court's decision subverts the intention of the parties. He asserts that the contract displays
a clear intention of the parties to obligate BCBS to pay for medically necessary
treatments. Short contends that "[r]eading the 'Other Covered Services' section as
indiscriminately excluding coverage for electrically operated devices is a clear subversion
of that intention." Short does not elaborate on this argument. However, excluding
electrically operated prosthetic appliances does not necessarily subvert the parties'
intentions because BCBS will still pay for standard prosthetics. Furthermore, electrically
operated devices are not exactly excluded from coverage. Under the contract, BCBS must
pay for electrically operated prosthetics if they are medically necessary, but the amount
of that payment is limited to the amount that would have been allowed for a basic
(standard) prosthetic.

Similarly, Short argues that "interpreting the relevant provision as furnishing
coverage for devices that provide 'essential function' 'at a Medically Necessary Level,' but
then excluding coverage wholesale for electrically operated devices, creates a conflicting
and absurd result." He says it is "conceivable that an electrically operated device would
meet the policy's definition of a 'basic (standard)' prosthetic without providing the
additional convenience necessary to convert it into a 'deluxe' device." He concludes that
"an electrically operated device can also be a basic one, addressing the insured's
condition only at a medically necessary level." Short's argument is defeated by the terms
of the contract. An electrically operated device can never be a basic device according to
the contract. The contract limits coverage for electrically operated devices and deluxe
devices. Just because an electrically operated device may not meet the definition of a
deluxe device does not mean that it is a basic or standard device. This is not an absurd
result. Presumably, BCBS researched the various prosthetic devices before drafting this
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policy. It concluded that it was willing to cover the cost of a standard device, but not an
electrically operated one. This is a reasonable business practice, and the district court's
interpretation of the contract does not lead to an absurd result.

Finally, Short argues that the definitions for "basic (standard)" and "deluxe"
devices in the policy are "so terse and skeletal as to raise more questions than answers."
The contract provides that "[b]asic (standard) medical devices or appliances are those that
provide the essential function required for the treatment or amelioration of the medical
condition at a Medically Necessary level." The term "deluxe" means "medical devices or
appliances that have enhancements that allow for additional convenience or use beyond
that provided by a basic (standard) device or appliance." Short asks: "What constitutes
'essential function[ing]'? When do a device's enhancements provide 'additional
convenience' beyond mere 'essential function'?" He asserts that the answers to these
questions are not apparent from the four corners of the contract.

While the insurance policy does not identify the exact products that it covers, it
does provide sufficient detail to support the district court's decision that the policy is not
ambiguous. "Essential" means "absolutely necessary; indispensable; requisite." Webster's
New World College Dictionary 497 (5th ed. 2014). As a result, the policy will cover a
nonelectric device that provides only what is absolutely necessary to treat the insured's
condition. If a device does more than what is necessary to treat the condition, it provides
additional convenience, and coverage for such a device would be limited by the contract.
Here, there is no dispute that the X3 is electrically operated so it is easy to apply the
policy because it specifically excludes electrically operated devices.

As a final note, Short asks this court to apply one of two principles of
construction. First is the doctrine of "reasonable expectations" and second is the "rule of
liberal construction." See Penalosa Co-op Exchange v. Farmland Mut. Ins. Co., 14 Kan.
App. 2d 321, 324, 789 P.2d 1196 (1990) (describing the two doctrines). Short argues that
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application of either doctrine shows that BCBS must provide coverage for the X3. But
courts only utilize these doctrines when a contract is ambiguous. 14 Kan. App. 2d at 324;
see also Liggatt v. Employers Mut. Casualty Co., 273 Kan. 915, 923, 46 P.3d 1120 (2002)
("Unless there is a finding that an insurance policy is ambiguous, the reasonable
expectations doctrine does not permit the court to reform the unambiguous meaning of
the contract."). Because the BCBS insurance policy was not ambiguous, this court cannot
apply these particular doctrines of construction.

Before ruling, the district court appropriately considered the insurance policy as a
whole. The intentions of the parties are clear from the face of the document—BCBS
agreed to cover the cost of basic prosthetics and contribute to the cost of deluxe or
electrically operated prosthetics when medically necessary. The district court's
interpretation of the policy did not lead to unreasonable results. Therefore, the district
court did not err in holding that the insurance policy was unambiguous.

BCBS properly set out exclusions in its policy.

Next, Short argues that BCBS had to set out the limitations on deluxe or
electrically operated devices in a separate policy provision specifically designated as
"exclusions." He characterizes the limitations provision as following the paragraph
bestowing coverage for basic prosthetics and being nestled between various definitions.
Short contends that BCBS "cannot confer coverage for prosthetics, and then, in the same
breath, rescind coverage for a significant portion of the prosthetics available on the
market." Short claims that the way that BCBS drafted the contract "creates a strong
likelihood that ordinary insureds such as Plaintiff will be broadsided and unfairly
surprised by the insurer's denial of coverage."

Determining whether an insurance policy provides clear exclusions requires
interpretation of a written insurance contract, which presents a question of law over
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which this court exercises unlimited review. Crist v. Hunan Palace, Inc., 277 Kan. 706,
709-10, 89 P.3d 573 (2004).

The Kansas Supreme Court discussed exclusions in insurance policies in Marquis
v. State Farm Fire & Cas. Co., 265 Kan. 317, 961 P.2d 1213 (1998). There, it stated:

"Generally, exceptions, limitations, and exclusions to insurance policies require narrow
construction on the theory that the insurer, having affirmatively expressed coverage
through broad promises, assumes the duty to define any limitations on that coverage
in clear and explicit terms. Catholic Diocese of Dodge City v. Raymer, 251 Kan. 689,
695, 840 P.2d 456 (1992). If an insurer intends to restrict or limit coverage, it must use
clear and unambiguous language in doing so, otherwise the insurance policy will be
liberally construed in favor of the insured. Farm Bureau Mut. Ins. Co. v. Old Hickory
Cas. Ins. Co., 248 Kan. 657, 659, 810 P.2d 283 (1991). The burden is on the insurer to
prove facts which bring a case within the specified exception. Upland Mutual Insurance,
Inc. v. Noel, 214 Kan. 145, 150, 519 P.2d 737 (1974)." 265 Kan. at 327.

Short asserts that this case is analogous to Ferguson v. Phoenix Assurance Co.,
189 Kan. 459, 370 P.2d 379 (1962). There, Forrest Ferguson had a Storekeepers Burglary
and Robbery Policy to insure money lost by safe burglary. Phoenix Assurance Company
of New York issued the policy. Someone broke in to Ferguson's business and stole
money out of his safe. The person opened the outer door of the safe by manipulating the
combination lock. The inner door of the safe had marks of force on it, which evidenced
the use of tools to gain access to the safe. The thief stole $433.76 from the safe. Yet
Phoenix asserted that an exclusion in its policy limited the amount that Ferguson could
recover to $50. Ferguson sued.

The policy at issue in Ferguson limited liability to $1,000 for each of seven
"INSURING AGREEMENTS." 189 Kan. at 461. One of these events was "Burglary;
Safe Burglary." 189 Kan. at 461. This section was "'[t]o pay for loss by safe burglary of
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money, securities and merchandise within the premises and for loss, not exceeding $50,
by burglary of money and securities within the premises.'" 189 Kan. at 461. After listing
the seven insuring events, the policy had a section titled "EXCLUSIONS." 189 Kan. at
461. Then, the policy had a section titled "CONDITIONS." 189 Kan. at 461. It included a
definitions section in the conditions section. The policy included the term "Safe
Burglary" in the definitions section. It provided:

"'"Safe Burglary" means (1) the felonious abstraction of insured property from
within a vault or safe, the door of which is equipped with a combination lock, located
within the premises by a person making felonious entry into such vault or such safe and
any vault containing the safe, when all doors thereof are duly closed and locked by all
combination locks thereon, provided such entry shall be made by actual force and
violence, of which force and violence there are visible marks made by tools, explosives,
electricity or chemicals upon the exterior of (a) all of said doors of such vault or such
safe and any vault containing the safe, if entry is made through such doors, or (b) the top,
bottom or walls of such vault or such safe and any vault containing the safe through
which entry is made, if not made through such doors, or (2) the felonious abstraction of
such safe from within the premises.'" 189 Kan. at 461.

Phoenix relied on the italicized language as evidence that it did not have to compensate
Ferguson for the money lost in the safe. It argued that because "there were no visible
marks of force and violence made by tools, explosives, electricity or chemicals upon the
exterior of the outer door through which entry was made, the loss was not insured under
the plain meaning of the policy." 189 Kan. at 462.

The Kansas Supreme Court disagreed. It began its analysis by noting that the
provision is intended to protect the insurer from fraudulent claims arising from "'inside
jobs.'" 189 Kan. at 464. The court interpreted the provision as "a rule of evidence upon
the assured to establish that entry was made into the safe by actual force and violence."
189 Kan. at 469. The court held that insurance companies have the right to require proof
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of evidentiary facts, but only when such a provision is not in contravention of public
policy and not ambiguous. 189 Kan. at 470. Then, noting that the provision at issue in the
case was "obviously designed to defeat recovery on a just claim," the court held that it
violated public policy. 189 Kan. at 471. The court concluded by stating: "Had the
insurance carrier desired to exclude loss by safe burglary where the combination of the
outer door is worked by manipulation, such provision should have been incorporated
under the 'EXCLUSIONS' in the policy." 189 Kan. at 471.

This case is distinguishable from Ferguson. There is no allegation here that the
insurance contract contravenes public policy. Additionally, the language at issue in this
case is a substantive provision in the contract, not a standard of evidence like in
Ferguson. The primary distinction between the cases is that the limitations in BCBS's
insurance contract are much clearer and more explicit than the insurance contract in
Ferguson. The language which provided insurance coverage for safe burglaries in
Ferguson did not mention that it was subject to limitations. In the current case, the
language in the contract providing insurance coverage for prosthetic devices specifically
states that the coverage may be limited by other parts of the contract. Directly after the
provision granting coverage for prosthetics is a section called "Limitations," written in
bold font. In Ferguson, the provision conveying coverage for safe burglaries was
followed by a section called "EXCLUSIONS," but that section contained no relevant
language. 189 Kan. at 461. The insured had to go to the next section of the contract—
"CONDITIONS"—and read the definition of "Safe Burglary" to discover the limitations
on recovery. 189 Kan. at 461. This is much farther removed from the original grant of
coverage than in this case.

Finally, Short argues that BCBS "was apparently well-aware of its obligation to
state its exclusions to coverage in clear and explicit terms, as its policy contains several
conspicuously marked exclusion sections." While this is true, the policy also contains
several conspicuously marked limitation sections. BCBS organized its contract so that a
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section will begin by bestowing coverage and end by listing either exclusions or
limitations on that coverage. For example, the insurance policy provides benefits for
temporomandibular joint dysfunction (TMJ) syndrome. This includes several nonsurgical
treatments. After the section that bestows coverage for nonsurgical treatments for TMJ,
there is both a limitations and an exclusions section. The limitations section creates
monetary and temporal limits on benefits. The insured is limited to $1,000 per course of
treatment, and the insured may only receive benefits under the section every five years.
The exclusions section lists nonsurgical treatments for TMJ that are never covered, such
as vitamins or transcutaneous electrical nerve stimulators. It makes sense that the
provision on deluxe or electrically operated prosthetics would be in a limitation section
and not an exclusion section because such devices are not excluded from coverage. They
are covered by the insurance policy, but recovery is limited to the amount that would
have been available for a basic device. If deluxe prosthetics were excluded from the
policy, then BCBS would not have offered Short $2,925.32. For these reasons, Short's
argument is not persuasive.

A reasonable insured person could read the contract and understand that BCBS
will pay for medically necessary prosthetics up to the amount that a basic (standard)
prosthetic would cost. As a result, the BCBS insurance policy adequately sets out
exclusions and limitations.

The district court did not err in granting summary judgment.

Short argues that even if the contract is unambiguous, the district court erred in
granting summary judgment. Short makes two primary arguments: (1) BCBS did not
offer facts sufficient to justify application of the limitation; and (2) this issue presented a
question of fact ill-suited for summary disposition.

The standard of review in summary judgment appeals is well established:
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"Summary judgment is appropriate when the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the affidavits, show that there is
no genuine issue as to any material fact and that the moving party is entitled to judgment
as a matter of law. The trial court is required to resolve all facts and inferences which
may reasonably be drawn from the evidence in favor of the party against whom the ruling
is sought. When opposing a motion for summary judgment, an adverse party must come
forward with evidence to establish a dispute as to a material fact. In order to preclude
summary judgment, the facts subject to the dispute must be material to the conclusive
issues in the case. On appeal, we apply the same rules and where we find reasonable
minds could differ as to the conclusions drawn from the evidence, summary judgment
must be denied." Bergstrom v. Noah, 266 Kan. 847, 871-72, 974 P.2d 531 (1999).

Short begins by noting that "[t]he applicability of an insurance exclusionary clause
is a question of fact." Wiles v. American Family Life Assurance Co., 302 Kan. 66, 79, 350
P.3d 1071 (2015). The insurer bears the burden of proving facts which would bring a case
within the specified exception. Marquis, 265 Kan. at 327.

Short's first argument is that BCBS provided no facts that justified application of
the exclusion. Short argues that "[t]he medical necessity of the X3 for Plaintiff was a
question for medical experts to address." Short notes that expert testimony can only be
controverted by other expert testimony. See City of Arkansas City v. Bruton, 284 Kan.
815, Syl. ¶ 10, 166 P.3d 992 (2007) ("[T]he testimony of an expert witness on a subject
calling for expert opinion is conclusive to the extent that it may not be contradicted by the
testimony of a nonexpert witness."). Short concludes that Dr. Cowen's report
conclusively showed the contract covers the X3, and BCBS failed to present its own
expert to controvert Dr. Cowen's report.

The problem with Short's argument is that medical necessity is not at issue here.
As stated above, BCBS agreed that the X3, a prosthetic device, was medically necessary.
As a result, there was no reason to controvert Dr. Cowen's report. Dr. Cowen did not
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opine on whether the X3 was a basic device, an electrically operated device, or a deluxe
device.

BCBS provided evidence that the X3 was electrically operated by providing the
court with screenshots from Ottobock's website. The website advertised the X3 as having
sensors, a microprocessor, and a battery. From the website, it is clear that the X3 is
electrically operated and thus subject to the limitations provision in the insurance policy.
Short argues that the statements on Ottobock's "website are obviously promotional and
intended to portray the X3 in the best possible light." He adds that companies "frequently
embellish their products' features in an attempt to sell as many products as possible."

Short's accusation that Ottobock engages in unscrupulous advertising is
insufficient to create a genuine issue of material fact that would preclude summary
judgment. Short presented no evidence to dispute BCBS's assertion that the X3 was
electrically operated. He also provided no evidence to support his claim that Ottobock
lied on its website to sell more products. "When opposing a motion for summary
judgment, an adverse party must come forward with evidence to establish a dispute as to
a material fact." Bergstrom, 266 Kan. at 871. Short failed to come forward with the
evidence. Accordingly, it was appropriate for the district court to grant BCBS's motion
for summary judgment.

The district court abused its discretion when it denied Short's motion to compel, but the
error was harmless.

During discovery, Short asked BCBS to provide information explaining its
decision to refuse to cover the full cost of the X3. He also asked for various documents
related to his case like medical records and reports and correspondences to and from
others about Short. BCBS objected to several of Short's questions based on relevance and
scope. Short filed a motion to compel discovery responses, and the district court denied
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it. Now on appeal, Short argues that the district court committed errors of law and fact,
thus abusing its discretion, when it denied his motion to compel.

"The control of discovery in Kansas is entrusted to the sound discretion of the
district court . . . and orders concerning discovery will not be disturbed on appeal in the
absence of a clear abuse of discretion." In re Tax Appeal of City of Wichita, 277 Kan.
487, 513, 86 P.3d 513 (2004). A judicial action constitutes an abuse of discretion if (1) no
reasonable person would take the view adopted by the trial court; (2) it is based on an
error of law; or (3) it is based on an error of fact. Wiles, 302 Kan. at 74.

Under K.S.A. 2016 Supp. 60-226(b), which defines the scope of discovery,
"[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to the
subject matter involved in the action." "[T]he scope of relevancy in a discovery
proceeding is broader than the scope of relevancy at trial." Kansas Medical Mut. Ins. Co.
v. Svaty, 291 Kan. 597, 620, 244 P.3d 642 (2010). This is because "[r]elevant information
need not be admissible at the trial if the discovery appears reasonably calculated to lead
to the discovery of admissible evidence." K.S.A. 2016 Supp. 60-226(b)(1); Kansas Med.
Mut. Ins. Co., 291 Kan. at 620.

Generally, "[w]hen the intent of the parties to a contract is clearly ascertainable by
construing the document from its four corners it is not considered ambiguous; although
some terms may be conflicting, extrinsic evidence is inadmissible and rules of
construction applicable to ambiguous contracts do not apply." Brown v. Lang, 234 Kan.
610, 614-15, 675 P.2d 842 (1984). As already discussed, the insurance policy here is not
ambiguous. If the evidence is limited to the contract, then discovery would not lead to
any admissible evidence and the district court did not abuse its discretion in denying
Short's motion to compel. But this case involves a limitations clause. As stated above, the
application of a limitations clause in an insurance contract is a question of fact, and the
insurer bears the burden of proving facts which would bring a case within the specified
20

exception. Marquis, 265 Kan. at 327. This meant that BCBS had to provide facts beyond
what was available in the contract. BCBS did provide such facts in its motion for
summary judgment, when it attached screenshots of the Ottobock website. BCBS did not
provide the information from the Ottobock website to Short when he requested
information explaining BCBS's decision to refuse to cover the full cost of the X3.

The district court premised its opinion on the idea that the only issue was one of
contract interpretation, a matter of law for the court to decide without extrinsic evidence.
But because BCBS needed to provide facts justifying its application of the limitations
clause, the issue was not a purely legal one. The district court made an error of law when
it denied Short the opportunity to discover the facts that BCBS used to justify application
of the limitation.

Having found that the district court made an error of law, the next issue is
determining whether the error was prejudicial. A trial error is not grounds for reversal
unless the error affects a party's substantial rights. K.S.A. 2018 Supp. 60-261. "Among
other things, this court specifically considers whether the error is of such a nature as to
affect the outcome of the trial." State v. Wells, 289 Kan. 1219, 1233, 221 P.3d 561
(2009). Here, BCBS's failure to provide Short with the information from the website did
not affect the outcome of the trial. Short did receive the screenshots from the Ottobock
website when BCBS moved for summary judgment. Because Short used a loaner X3
during the case, the printouts describing the features of the X3 could not have surprised
him. Short had an opportunity to contest this information, which would not have been
hard as he had personal experience with the X3 and its features, in responding to BCBS's
motion for summary judgment. Instead of proving that the X3 was not electrically
operated, Short made a conclusory allegation that the Ottobock embellished products on
its website. Short has never disputed that the X3 is electrically powered by battery. He
would know if it was not electrically powered because he was using a loaner device for
some time.
21

While it was error for the district court to bar Short from discovering the facts that
BCBS relied on in denying coverage for the X3, the error was harmless. Short was aware
throughout the litigation that BCBS considered the X3 a deluxe or electrically operated
device, and thus subject to the limitation in the insurance policy. Short had an opportunity
to contradict the evidence BCBS included in its motion for summary judgment, but he
failed to do so. This error, therefore, does not require reversal.

Affirmed.

* * *

ATCHESON, J., dissenting: Based on the narrow issue Defendant Blue Cross and
Blue Shield of Kansas presented in its motion for summary judgment and the limited
factual support in the record, the Saline County District Court erred in holding as a matter
of law that the insurance company properly refused to pay for an electronic prosthetic leg
for Plaintiff Zachary Short. The contract language Blue Cross relied on to deny Short's
request doesn't so obviously mean what the company says it means. And Blue Cross
hasn't shown its denial fits within that language. I would reverse the summary judgment
the district court entered for Blue Cross and remand the case for further proceedings. So I
respectfully dissent from my colleagues' decision to affirm.

Factual and Procedural Background

The relevant underlying facts can be quickly outlined. Short had a medical
insurance policy with Blue Cross when he suffered catastrophic injuries resulting in the
amputation of both his legs. Short requested that Blue Cross pay for an Ottobock X3, an
above-the-knee prosthetic leg. Blue Cross refused, claiming the Ottobock X3 fell within a
policy limitation for certain prosthetic devices. Short sued Blue Cross for breach of
22

contract. Short's other leg was amputated below the knee, and this case does not concern
benefits related to that injury.

The insurance contract covered the cost of "[o]rthopedic and prosthetic devices . . .
includ[ing] . . . artificial limbs" subject to a pair of related limitations:

"(3) Benefits are limited to the amount normally available for a basic (standard)
appliance which allows necessary function. Basic (standard) medical devices or
appliances are those that provide the essential function required for the treatment
or amelioration of the medical condition at a Medically Necessary level.
"(4) Charges for deluxe or electrically operated orthotic or prosthetic appliances,
devices or items are not covered, beyond the extent allowed for basic (standard)
appliances. Deluxe describes medical devices or appliances that have
enhancements that allow for additional convenience or use beyond that provided
by a basic (standard) device or appliance."

For summary judgment purposes, nobody disputes Blue Cross was contractually
obligated to pay for a prosthetic leg for Short. After Short asked Blue Cross to
cover the Ottobock X3, the company responded that it would pay $2,925.32 as
"the allowed [contract] amount for the basic (standard) knee" without identifying a
particular device. The Ottobock X3 costs far more than Blue Cross' allowed
amount. The parties did not identify an amount in their statements of fact on
summary judgment, but the supporting evidentiary materials indicate a cost of
about $145,000. The parties do not dispute the Ottobock X3 uses a battery for
certain functions and, therefore, is "electrically operated" within the meaning of
that phrase in policy limitations.

The district court found the policy limitations to be unambiguous and applicable to
the Ottobock X3 and, therefore, granted summary judgment to Blue Cross, limiting the
company's contractual obligation to $2,925.32. Short has appealed.
23

Summary Judgment for Blue Cross Improperly Granted

The standards for granting summary judgment and their review on appeal are well
known. A party seeking summary judgment has the obligation to show, based on
appropriate evidentiary materials, there are no disputed issues of material fact and
judgment may, therefore, be entered in its favor as a matter of law. Trear v. Chamberlain,
308 Kan. 932, 935, 425 P.3d 297 (2018); Shamberg, Johnson & Bergman, Chtd. v.
Oliver, 289 Kan. 891, 900, 220 P.3d 333 (2009). In essence, the movant argues there is
nothing for a jury or a trial judge sitting as fact-finder to decide that would make any
difference. In ruling on a summary judgment request, the district court must view the
evidence most favorably to the party opposing the motion and give that party the benefit
of every reasonable inference that might be drawn from the evidentiary record. Trear,
308 Kan. at 935-36; Shamberg, 289 Kan. at 900.

An appellate court applies the same standards in reviewing the entry of a summary
judgment. Trear, 308 Kan. at 936. Because summary judgment amounts to a question of
law—it entails the application of legal principles to uncontroverted facts—an appellate
court owes no deference to the district court's decision to grant the motion and review is
unlimited. Adams v. Board of Sedgwick County Comm'rs, 289 Kan. 577, 584, 214 P.3d
1173 (2009); Golden v. Den-Mat Corporation, 47 Kan. App. 2d 450, 460, 276 P.3d 773
(2012).

In the district court, Blue Cross argued the contract language is unambiguous and
plainly limits coverage for "deluxe" and electrically operated prostheses to the cost of
what is considered a "basic (standard)" prosthetic. And Blue Cross said the evidence
submitted in support of the summary judgment shows the Ottobock X3 comes within
either limitation. The district court agreed. Blue Cross essentially reprises those points on
appeal. The majority opinion focuses on the exclusion for electrically operated devices in
affirming the district court. But the opinion also seems to conclude the Ottobock X3 can
24

be excluded from coverage as a deluxe device. The contract language and the record
evidence support neither conclusion.

A contract is unambiguous "if the language . . . is clear and can be carried out as
written." Simon v. National Farmers Organization, Inc., 250 Kan. 676, Syl. ¶ 2, 829 P.2d
884 (1992). Conversely, an ambiguous contract "must contain provisions or language of
doubtful or conflicting meaning." 250 Kan. 676, Syl. ¶ 2. Ambiguity arises if "the face of
the instrument leaves it genuinely uncertain which one of two or more meanings is the
proper meaning." Catholic Diocese of Dodge City v. Raymer, 251 Kan. 689, 693, 840
P.2d 456 (1992); Antrim, Piper, Wenger, Inc. v. Lowe, 37 Kan. App. 2d 932, 938, 159
P.3d 215 (2007). A contract, therefore, is not ambiguous simply because the parties
disagree about its meaning. 37 Kan. App. 2d at 938. If a contract is unambiguous, it may
be construed as a matter of law. See Osterhaus v. Toth, 291 Kan. 759, 768, 249 P.3d 888
(2011); Levin v. Maw Oil & Gas, 290 Kan. 928, Syl. ¶ 2, 234 P.3d 805 (2010) ("The
interpretation and legal effect of a written instrument are matters of law . . . .").

Insurance policies are to be strictly construed, and any ambiguities should be
resolved against the insurer, here Blue Cross. Bussman v. Safeco Ins. Co. of America, 298
Kan. 700, 707, 317 P.3d 70 (2014). The applicability of a policy limitation or exclusion
to a claim reflects an avoidance or affirmative defense on which the insurer bears the
ultimate burden of proof. Evergreen Recycle v. Indiana Lumbermens Mut. Ins. Co., 51
Kan. App. 2d 459, 478, 350 P.3d 1091 (2015) (policy exclusion constitutes affirmative
defense); Golden, 47 Kan. App. 2d 450, Syl. ¶ 20 (defendant carries burden of proof on
affirmative defense). That means to prevail on summary judgment an insurance company
must present uncontroverted evidence establishing that the limitation or exclusion
applies. 47 Kan. App. 2d 450, Syl. ¶ 20.

Blue Cross contends the policy limitation categorically applies to any electrically
operated prosthetic device and, thus, to the Ottobock X3. But the language doesn't say
25

that. The limitation simply says that Blue Cross does not have to pay for the cost of
"electrically operated . . . prosthetic appliances . . . beyond the extent allowed for basic
(standard) appliances." The policy describes "basic (standard) devices" as those providing
"the essential function required for the treatment or amelioration of the medical
condition." If an electrically operated prosthesis is a "basic (standard) device"—a term
that itself is fraught with ambiguity—then Blue Cross has to pay for it. Blue Cross would
not have to pay for the additional cost of a higher grade electronic device with more bells
and whistles than the basic (standard) one.

A clear categorical limitation of the type Blue Cross wants wouldn't be difficult to
draft. For example, in paragraph (4) of the limitations, Blue Cross could have deleted the
phrase "electrically operated" from the first sentence, leaving "deluxe" as the sole
descriptor, and revised the second sentence to say that "[d]eluxe describes any
electrically operated orthotic or prosthetic appliances or devices and those medical
devices or appliances that have enhancements . . . ." Or Blue Cross could have added
something like this as a freestanding sentence in one of the limitation paragraphs: "Any
electrically operated orthotic or prosthetic appliance is not considered a basic (standard)
appliance." Or this: "Any electrically operated orthotic or prosthetic appliance is
considered a deluxe appliance."

Measured against that sort of plainly articulated limitation, the actual policy
language should be fairly read to cover electrically operated prosthetics that otherwise
can be characterized as "basic (standard)" devices. At the very least, the language is
ambiguous and open to that reading, meaning it should be strictly construed against Blue
Cross to include those devices. That's especially true when we consider the point in
weighing the company's summary judgment motion. By rejecting either of those
interpretations and buying into Blue Cross' self-serving reading of the limitation, the
district court and my colleagues mistakenly deviate from the rules governing summary
judgment and interpretation of insurance contracts.
26

But my take on the policy language wouldn't require reversal if Blue Cross had
shown that the Ottobock X3 cannot be considered a "basic (standard)" device or must be
considered a "deluxe" device as a matter of law based on the evidence presented on
summary judgment. Those really are congruent frames for the secondary argument Blue
Cross advanced in its summary judgment papers and again on appeal. The argument,
however, fails on this record.

First, as I have indicated, the term "basic (standard)" used in the policy to describe
prostheses and other devices or appliances is ambiguous. The phrase effectively presents
"basic" as equivalent to or synonymous with "standard," and that is incorrect. Words not
otherwise specifically defined in a contract should be given their ordinary meaning. See
Pfeifer v. Federal Express Corporation, 297 Kan. 547, 550, 304 P.3d 1226 (2013). Thus,
"basic" describes something "serving as the basis or starting point" as in "a [basic] set of
tools." Merriam-Webster's Collegiate Dictionary 101 (11th ed. 2003). In that sense,
"basic" connotes minimally acceptable for a particular purpose. By contrast, "standard"
carries two potentially relevant meanings: "sound and usable but not of top quality" or
"regularly and widely used." Merriam-Webster's Collegiate Dictionary 1216 (11th ed.
2003). The first meaning refers to a qualitative level that exceeds basic but falls short of,
for example, deluxe. The second meaning refers to breadth of use and contrasts with
limited or experimental. The Blue Cross policy presumably uses the word "standard"
qualitatively, since it pairs with "basic," albeit in something of an oxymoron, and
contrasts with "deluxe."

The phrase "basic (standard)" incorporates two qualitative levels—minimally
acceptable and sound but less than the best. Applying the rule of strict construction of
insurance contracts against the insurer, the phrase should be treated as referring to
midrange quality unless the context obviously demands something else.

27

As defined in the policy, a "deluxe" prosthetic would be one that has
"enhancements that allow for additional convenience or use" over and above "a basic
(standard) device." In other words, a deluxe device would be better than a standard one.
So Blue Cross would still be entitled to summary judgment if the record evidence
indisputably shows the Ottobock X3 is better than a standard above-the-knee prosthetic
leg. But the record doesn't establish that proposition as a matter of law.

The only uncontroverted fact Blue Cross offered on the point is a statement that
the Ottobock X3 is "[t]he world's most technologically advanced prosthetic leg." Blue
Cross identifies Ottobock's website as the source of the assertion. For summary judgment
purposes, Short did not dispute the evidentiary foundation but characterized the statement
as an "obviously promotional" advertisement of the device. But he cited no factual
support for his characterization.

In opposing Blue Cross' motion, Short presented Dr. Todd Cowen's description of
the Ottobock X3 leg as a "standard prosthetic appliance." Dr. Cowen, a medical doctor,
prepared a lengthy life care plan for Short detailing his current and future medical
treatment and related needs based on his injuries. In its reply, Blue Cross challenged Dr.
Cowen's qualifications to make the statement but did not otherwise controvert that
description of the Ottobock X3. Blue Cross argued Dr. Cowen's statement was irrelevant
given the policy limitation for electrically operated devices. The district court neither
ruled on Dr. Cowen's expertise nor specifically rejected his statement describing the
Ottobock X3 as a standard prosthesis.[*]

[*]In its uncontroverted facts, Blue Cross also relied on Ottobock's website to
show the prosthetic leg used a rechargeable battery, contained a microprocessor, and
provided multiple "activity modes" that could be activated by a remote control. Those
representations bear directly on the Ottobock X3 being electrically operated—an
undisputed fact—rather than on its being standard or deluxe.

28

The dueling representations about the Ottobock X3 are more in the nature of
factually unsupported opinions than they are facts. As such, they do little to inform the
summary judgment determination. Ottobock's characterization of the prosthetic as the
most technologically advanced has the look of puffing or an essentially unverifiable claim
of superior quality that could not be legally enforced by a dissatisfied customer. See
Golden, 47 Kan. App. 2d at 482 ("A seller's representations that goods are 'first rate' or
'the finest around' are examples of sales talk or puffing that would not create an express
warranty."); see K.S.A. 84-2-313(2) ("seller's opinion or commendation of the goods
does not create a warranty"). At most, the statement could (and may well) support an
inference that the Ottobock X3 amounts to a deluxe prosthetic within the policy
limitation. But granting summary judgment for Blue Cross based on the statement would
require drawing an inference against Short as the nonmoving party, contrary to the
governing standard of review. The error would be redoubled here, since Blue Cross has
the obligation to present uncontroverted facts demonstrating a clear legal entitlement to
the policy limitation.

If that were not enough, Dr. Cowen's representation about the Ottobock X3 at least
arguably creates a disputed issue of material fact (or, more accurately, unsupported
opinion) about the device. His representation that the Ottobock X3 is a "standard"
prosthetic device could remove it from the policy limitation and may controvert Blue
Cross' ostensible representation about its technological attributes. The representation,
however, is ambiguous in its brevity. Dr. Cowen might well have been explaining that the
Ottobock X3 is in common use and, thus, standard rather than experimental as opposed to
being of middling quality or functionality. Without something more in the record
explaining what Dr. Cowen meant, we would have to draw an inference against Short and
for Blue Cross to disregard the statement for summary judgment purposes. Blue Cross
didn't object to the representation from Dr. Cowen as vague and ambiguous or as an
insufficiently supported opinion.

29

In sum, Blue Cross has failed to provide a sufficient factual basis to show that the
Ottobock X3 is a nonstandard or deluxe prosthesis coming within the policy limitation as
a matter of law. Could Blue Cross have done so? Maybe. Do I harbor doubts about
whether Short will prevail on the merits? Indeed. But that is not the test I am supposed to
use in reviewing a summary judgment. See Estate of Belden v. Brown County, 46 Kan.
App. 2d 247, 276, 261 P.3d 943 (2011) (In reviewing summary judgment granted a
defendant, an appellate court gives the plaintiff the benefit of all factual disputes and
every reasonable inference drawn from those facts and asks whether a reasonable jury
might render a verdict for the plaintiff—not whether such a verdict is probable.); Cine
SK8, Inc. v. City of Henrietta, 507 F.3d 778, 788 (2d Cir. 2007); Wright v. Enhanced
Recovery Company, LLC, 227 F. Supp. 3d 1207, 1215 & n.36 (D. Kan. 2016);
Dreamland Villa Community Club, Inc. v. Raimey, 224 Ariz. 42, 46, 226 P.3d 411 (Ariz.
App. 2010) (summary judgment not substitute for trial, "even if the trial court determines
that the moving party will likely prevail at trial"); Community Hospitals of Indiana, Inc.
v. Aspen Insurance UK Limited, 113 N.E.3d 636, 641 (Ind. App. 2018) ("Summary
judgment is not a summary trial, and it is not appropriate just because the non-movant
appears unlikely to prevail at trial.").

Given the rules we are to apply and the factual record in front of us, the district
court erred in granting summary judgment to Blue Cross. I would reverse and remand for
further proceedings.