Shapiro, J.
The issue here is whether the meaning of the provision of a policy of insurance issued by the third-party defendant, Associated Hospital Service of New York (Blue Cross), which reads: "Discount Days. The hospital shall make no charge to the Subscriber for 50% of the hospital’s regular charges for Hospital Service rendered during the Discount, days”, is so clear, in and of itself, that its interpretation is a question of law and that no trial is necessary to determine its legal effect.
The Facts
An understanding of the legal questions involved necessitates a statement of the factual context in which they arose. The plaintiff, Flushing Hospital and Medical Center, brought this suit against the appellant, Robert E. Woytisek, to recover $1,525.55, the amount which it claims he owes it, being 50% of the charges for hospital services which it rendered to his wife during a period of 15 days which were classified as "discount” days under his Blue Cross coverage.
[384]*384The appellant, an employee of the City of New York, was a subscriber to the hospitalization insurance contract between the City of New York and Blue Cross. He and his wife, as a member of his family, thereby became eligible for all of the benefits of the Blue Cross policy with the city. That policy provided that "the hospital shall make no charge to the Subscriber for Hospital Service rendered during the Full Benefit days” and that "the first 21 days of such hospital confinement” are "referred to as 'Full Benefit’ days”. The policy also provided that "the next 180 ensuing days of such hospital confinement” are "referred to as 'Discount’ days and that: The hospital shall make no charge to the Subscriber for 50% of the hospital’s regular charges for Hospital Service rendered during the Discount days.”1 The policy contains no definition of the term "the hospital’s regular charges”. There is no reference in the policy to any contract between Blue Cross and the hospital, other than the following provision: "[Blue Cross] shall, subject to the terms and conditions hereof, compensate Member Hospitals for Hospital Service rendered by them to Subscribers by payments in such amounts and upon such basis as shall be determined from time to time by the Board of Directors of [Blue Cross]”.
It is undisputed that there is a contract between Blue Cross [385]*385and Flushing Hospital, in the form of a letter of acceptance from the hospital to Blue Cross. It is annexed to Blue Cross’ pleadings and provides, in part: "We have read * * * the Hospital Service Plan annexed to and made a part thereof, and in consideration of your agreement to pay this Hospital a fixed amount of money per day of hospital services rendered to Subscribers to your Plan * * * we hereby agree to abide by the provisions of the annexed plan and to render hospital service as defined therein”.2
Under the contract between Flushing Hospital and Blue Cross, the hospital billed Blue Cross for appellant’s wife’s "Full Benefit” days at the daily rate of $97.56 and for her "Discount” days at the daily rate of $48.78. The "Full Benefit” days payments included all of the items listed in the policy’s definition of Hospital Service (which are set forth in n 1). However, the billing to the appellant for the discount days included additional charges for 10 items, eight of which were included in the hospital services covered by the $97.56 daily rate paid by Blue Cross. Further, the additional charge for room and board was $40.50 per day, which amount was less than one half of the daily rate paid by Blue Cross to the hospital for discount days.
Finally, in this regard, it should be noted that although Blue Cross’ policy limits the hospital to a charge of, at most, 50% of its "regular charges for Hospital Service rendered during the Discount days”, there is no specific provision that Blue Cross will pay the unpaid balance of those "regular charges for Hospital Service”. Rather, there is only the provision that Blue Cross "shall, subject to the terms and conditions hereof, compensate Member Hospitals for Hospital Service rendered by them to Subscribers by payments in such amounts and upon such basis as shall be determined from time to time by” its board of directors. Aside from the foregoing, which makes no mention of special rates of payment, nothing in the Blue Cross policy, other than the use of the term "regular charges”, indicates that those charges may differ from, and even substantially exceed, the rates paid to [386]*386the hospital by Blue Cross to compensate it for the hospital service it renders its subscribers for the "Full Benefit” days and for the amount it pays toward the cost of the hospital’s rendering that service to its subscribers on "Discount” days.
The specific hospital service rendered to the appellant’s wife by Flushing Hospital consisted of two "Full Benefit” days, with which her 21 "Full Benefit” days under the policy were used up;3 she remained in Flushing Hospital for an additional 15 "Discount” days before she died. The bill which the appellant received from the hospital shows that it billed Blue Cross for those 15 days at a daily rate of $48.78, one half of the daily rate which Blue Cross paid the hospital for the two "Full Benefit” days; it billed the appellant for a total of $1,525.55, which included the following items:
Room service $607.50
Operating room 75.00
Recovery room 42.50
Laboratory and Pulmonary Lab 245.50
X-ray 40.00
Drugs and nuclear medicine 404.80
Oxygen 10.00
ECO 17.50
Intravenous 30.40
Medical and surgical supplies 18.75
Blood 40.00
The hospital’s total charge to Blue Cross for the discount days was $731.70. The charge for room and board in the above listing is at a rate of $40.50 per day; all of the other charges listed are apparently for items covered as "Hospital Services” by the daily Blue Cross payment of $97.56 for "Full Benefit” days. There is no explanation of the reason for the difference between the amount billed the appellant by Flushing Hospital and the total of the listed items, $1,531.95. Nor is there any explanation of a notation on the bill showing an "allowance” to Blue Cross of $1,058.78.
In any case, it is clear from the foregoing that, under the aegis of the phrase "50% of the hospital’s regular charges for Hospital Service”, the hospital is seeking to collect from the appellant more than twice as much money for the hospital services rendered to his wife during the 15 discount days than [387]*387it is receiving from Blue Cross as the latter’s share of the partial coverage of the cost to the appellant of that service.
The Contentions Of The Parties
Free access — add to your briefcase to read the full text and ask questions with AI
Shapiro, J.
The issue here is whether the meaning of the provision of a policy of insurance issued by the third-party defendant, Associated Hospital Service of New York (Blue Cross), which reads: "Discount Days. The hospital shall make no charge to the Subscriber for 50% of the hospital’s regular charges for Hospital Service rendered during the Discount, days”, is so clear, in and of itself, that its interpretation is a question of law and that no trial is necessary to determine its legal effect.
The Facts
An understanding of the legal questions involved necessitates a statement of the factual context in which they arose. The plaintiff, Flushing Hospital and Medical Center, brought this suit against the appellant, Robert E. Woytisek, to recover $1,525.55, the amount which it claims he owes it, being 50% of the charges for hospital services which it rendered to his wife during a period of 15 days which were classified as "discount” days under his Blue Cross coverage.
[384]*384The appellant, an employee of the City of New York, was a subscriber to the hospitalization insurance contract between the City of New York and Blue Cross. He and his wife, as a member of his family, thereby became eligible for all of the benefits of the Blue Cross policy with the city. That policy provided that "the hospital shall make no charge to the Subscriber for Hospital Service rendered during the Full Benefit days” and that "the first 21 days of such hospital confinement” are "referred to as 'Full Benefit’ days”. The policy also provided that "the next 180 ensuing days of such hospital confinement” are "referred to as 'Discount’ days and that: The hospital shall make no charge to the Subscriber for 50% of the hospital’s regular charges for Hospital Service rendered during the Discount days.”1 The policy contains no definition of the term "the hospital’s regular charges”. There is no reference in the policy to any contract between Blue Cross and the hospital, other than the following provision: "[Blue Cross] shall, subject to the terms and conditions hereof, compensate Member Hospitals for Hospital Service rendered by them to Subscribers by payments in such amounts and upon such basis as shall be determined from time to time by the Board of Directors of [Blue Cross]”.
It is undisputed that there is a contract between Blue Cross [385]*385and Flushing Hospital, in the form of a letter of acceptance from the hospital to Blue Cross. It is annexed to Blue Cross’ pleadings and provides, in part: "We have read * * * the Hospital Service Plan annexed to and made a part thereof, and in consideration of your agreement to pay this Hospital a fixed amount of money per day of hospital services rendered to Subscribers to your Plan * * * we hereby agree to abide by the provisions of the annexed plan and to render hospital service as defined therein”.2
Under the contract between Flushing Hospital and Blue Cross, the hospital billed Blue Cross for appellant’s wife’s "Full Benefit” days at the daily rate of $97.56 and for her "Discount” days at the daily rate of $48.78. The "Full Benefit” days payments included all of the items listed in the policy’s definition of Hospital Service (which are set forth in n 1). However, the billing to the appellant for the discount days included additional charges for 10 items, eight of which were included in the hospital services covered by the $97.56 daily rate paid by Blue Cross. Further, the additional charge for room and board was $40.50 per day, which amount was less than one half of the daily rate paid by Blue Cross to the hospital for discount days.
Finally, in this regard, it should be noted that although Blue Cross’ policy limits the hospital to a charge of, at most, 50% of its "regular charges for Hospital Service rendered during the Discount days”, there is no specific provision that Blue Cross will pay the unpaid balance of those "regular charges for Hospital Service”. Rather, there is only the provision that Blue Cross "shall, subject to the terms and conditions hereof, compensate Member Hospitals for Hospital Service rendered by them to Subscribers by payments in such amounts and upon such basis as shall be determined from time to time by” its board of directors. Aside from the foregoing, which makes no mention of special rates of payment, nothing in the Blue Cross policy, other than the use of the term "regular charges”, indicates that those charges may differ from, and even substantially exceed, the rates paid to [386]*386the hospital by Blue Cross to compensate it for the hospital service it renders its subscribers for the "Full Benefit” days and for the amount it pays toward the cost of the hospital’s rendering that service to its subscribers on "Discount” days.
The specific hospital service rendered to the appellant’s wife by Flushing Hospital consisted of two "Full Benefit” days, with which her 21 "Full Benefit” days under the policy were used up;3 she remained in Flushing Hospital for an additional 15 "Discount” days before she died. The bill which the appellant received from the hospital shows that it billed Blue Cross for those 15 days at a daily rate of $48.78, one half of the daily rate which Blue Cross paid the hospital for the two "Full Benefit” days; it billed the appellant for a total of $1,525.55, which included the following items:
Room service $607.50
Operating room 75.00
Recovery room 42.50
Laboratory and Pulmonary Lab 245.50
X-ray 40.00
Drugs and nuclear medicine 404.80
Oxygen 10.00
ECO 17.50
Intravenous 30.40
Medical and surgical supplies 18.75
Blood 40.00
The hospital’s total charge to Blue Cross for the discount days was $731.70. The charge for room and board in the above listing is at a rate of $40.50 per day; all of the other charges listed are apparently for items covered as "Hospital Services” by the daily Blue Cross payment of $97.56 for "Full Benefit” days. There is no explanation of the reason for the difference between the amount billed the appellant by Flushing Hospital and the total of the listed items, $1,531.95. Nor is there any explanation of a notation on the bill showing an "allowance” to Blue Cross of $1,058.78.
In any case, it is clear from the foregoing that, under the aegis of the phrase "50% of the hospital’s regular charges for Hospital Service”, the hospital is seeking to collect from the appellant more than twice as much money for the hospital services rendered to his wife during the 15 discount days than [387]*387it is receiving from Blue Cross as the latter’s share of the partial coverage of the cost to the appellant of that service.
The Contentions Of The Parties
Blue Cross contends that the "ultimate question for decision is the legal meaning of the term 'regular charges’ within the context of the contract at issue” and it asserts that those charges "are the usual and customary charges to patients in the normal course of business.” The affidavit of the Controller of Flushing Hospital, submitted in opposition to a motion by the appellant for summary judgment, declares that the hospital’s billing to the appellant for the last 15 days of his wife’s stay in the hospital was, in addition to a per diem rate of $48.75 [sic] "at a rate of 50% of the hospital’s regular charges for the hospital services rendered directly to * * * the surviving spouse of the patient”, a member of Blue Cross. Woytisek contends that to restrict the issue to the meaning of the term "regular charges” gives no effect to the contract provision which limits the subscriber’s liability to "50% of the hospital’s regular charges for Hospital Service rendered during the Discount days” (emphasis supplied). This provision, he contends, means that the subscriber’s charge for hospitalization for discount days shall be no more than half of the total to be paid for hospitalization by him and Blue Cross. Relevant in this connection is a statement in the affidavit of Frank Palma, an employee of Blue Cross, submitted in support of Blue Cross’ motion for summary judgment, that: "Under his contract with * * * [Blue Cross] the [third-party] plaintiff is responsible for only 50% of those hospital charges, covered by the AHS contract, rendered during the remaining 15 days of Catherine Woytisek’s hospital stay. One half of the total charges for these 15 days was billed to Robert Woytisek, the remaining charges having been paid by Associated Hospital Service pursuant to its contract with the plaintiff hospital.” The normal inference is that if an insured pays 50% of certain charges and the insurer pays the remaining charges, the insured and insurer are splitting the total charges equally. Since the Blue Cross policy contains no language negating that inference, the absence of such clarifying language creates an ambiguity, at least as far as the insured is concerned. While it is true that, under the agreement between Blue Cross and Flushing Hospital, it is made clear that the hospital will accept Blue Cross’ payment of half of the daily rate it pays for [388]*388all of the hospital services listed in its policy with its subscriber’s employer in lieu of the payment of a full 50% of its charges to non-Blue Cross patients, there is nothing in the Blue Cross policy distributed to its subscribers which so informs its insureds.
The Applicable Law
In dismissing the third-party complaint for failure to state a cause of action, the Appellate Term cited the case of Hartford Acc. & Lid. Co. v Wesolowski (33 NY2d 169, 171-172), which states: "The objective in any question of the interpretation of a written contract, of course, is to determine 'what is the intention of the parties as derived from the language employed’ (4 Williston, Contracts [3d ed.], § 600, p. 280). At the same time the test on a motion for summary judgment is whether there are issues of fact properly to be resolved by a jury (CPLR 3212, subd. [b]). In general the courts have declared on countless occasions that it is the responsibility of the court to interpret written instruments. (Williston, op. cit. § 601, p. 303). This is obviously so where there is no ambiguity (Bethlehem Steel Co. v. Turner Constr. Co., 2 NY2d 456).
"If there is ambiguity in the terminology used, however, and determination of the intent of the parties depends on the credibility of extrinsic evidence or on a choice among reasonable inferences to be drawn from extrinsic evidence, then such determination is to be made by the jury (Restatement, 2d, Contracts, T.D. No. 5, § 238). On the other hand, if the equivocality must be resolved wholly without reference to extrinsic evidence the issue is to be determined as a question of law for the court. (Cf. Mallad Constr. Corp. v. County Fed. Sav & Loan Assn., 32 NY2d 285, 291.)” (Emphasis supplied.)
Relying on the rule enunciated in the Wesolowski case, the Appellate Term concluded that the terms of the policy were clear and unambiguous; that therefore construction of the policy should have been undertaken by the court; and that in view of both the Blue Cross hospitalization insurance policy, and of its contract with the hospital, there was, as a matter of law, no merit to the position advanced by the third-party plaintiff.
There is an ambiguity in the policy’s failure to define the term "the hospital’s regular charges” in the phrase "the hospital’s regular charges for Hospital Service”, especially when the phrase in the Blue Cross policy is read, as it must [389]*389be, together with the provision limiting the appellant’s obligation for payment to 50% of the hospital charges covered by the Blue Cross contract. Thus, it cannot be stated as a matter of law that the phrase means the charges assessed by the hospital against a person having no Blue Cross coverage. It also fails to make it clear that Blue Cross will not have to pay the remaining 50% of the charges included in "Hospital Service” which are unpaid by the insured, an amount which, as the remaining unpaid "hospital’s regular charges”, might reasonably be assumed by the insured to be equal to those with which he is chargeable under the policy. Whether the result of that ambiguity is to place on Blue Cross, the insurer, the duty to reimburse the insured for any amount in excess of one half of the total collected by the hospital (both from Blue Cross and from the insured) for the hospital services it provided the insured which were covered by the policy necessarily depends on a resolution of the intention of the parties, based upon extrinsic evidence. Thus, a plenary trial is required and the issues should not have been disposed of by summary judgment.
Since we are here dealing with the interpretation of a contract drawn by Blue Cross, the following statement by Professor Williston is clearly applicable. He said: "Since one who speaks or writes, can by exactness of expression more easily prevent mistakes in meaning, than one with whom he is dealing, doubts arising from ambiguity of language are resolved in favor of the latter” (4 Williston, Contracts [3d ed.], § 621, pp 760-761; see, also, Raw Silk Trading Co. v Katz, 201 App Div 713, 716; Bristol v Cornell Univ., 237 App Div 771, 775; Janos v Peck, 21 AD2d 529, 533, aifd 15 NY2d 509; 3 Corbin, Contracts, § 559).
Also supporting the conclusion that the order appealed from should be reversed is the fact that, insofar as the appellant and other subscribers to Blue Cross policies are concerned, they may well be the subjects of contracts of adhesion, a contract "where one of the parties is in a disadvantageous bargaining position because the provisions are standardized and stereotyped”; such contracts are "narrowly construed against the writer” (4 Williston, Contracts [3d ed], § 626, pp 855-857). Hence, the interpretation of the provision here under consideration concerning payment by the insured of no more than 50% of the hospital’s regular charges for "Hospital Service” must be construed against Blue Cross or, at the very [390]*390least, the interpretation of the provision raises a question of fact.
The order of the Appellate Term should therefore be reversed and the order of the Civil Court affirmed insofar as it denied the third-party defendant’s motion for summary judgment.