WUEST, Acting Justice.
This appeal involves an action for a money judgment under a health insurance policy. The trial court upheld coverage, granting summary judgment against appellant Blue Cross of Western Iowa and South Dakota (Blue Cross) therein. The court also granted summary judgment against appellee Charles O’Neill (O’Neill), dismissing his counterclaim for punitive damages. A trial was held on the issue of specific performance of a conversion clause converting the group policy to a private converted policy, and on the issue of whether O’Neill was entitled to attorney’s fees from Blue Cross. The court ruled against O’Neill on these issues, and attorney fees, and O’Neill has filed a notice of review. We affirm the trial court on all issues.
O’Neill was employed by the state of South Dakota as a correctional officer at the penitentiary. Blue Cross provides group hospitalization to South Dakota public employees. On January 22, 1979, O’Neill applied for coverage with Blue Cross asking for “family coverage.” At the time, O’Neill was married to Gloria O’Neill. The couple had one child, Justin Lee, who was born on July 6, 1976. In May of 1980, the parties separated, and Mrs. O’Neill moved to Mitchell, South Dakota, taking Justin with her. The parties did not live together after their separation, although they were not divorced until July of 1982.
In May of 1981, O’Neill began cohabiting with Mary Wise and, while they have not been married, these two have lived together continuously since that time. On December 25, 1981, Mary Wise gave birth to Sherri Lynn O’Neill, the natural child of O’Neill. O’Neill acknowledged the child as his own, both orally and in writing upon her birth, and it is undisputed that he is the child’s biological father. Sherri Lynn was born prematurely. Prior to her birth, O’Neill did not notify Blue Cross of any change in family status. The instant policy or “master contract” defines a family contract as a contract covering the employee, the employee’s spouse and dependent children. The pertinent policy provision defining dependent children provides:
“DEPENDENT CHILDREN” means the unmarried dependent children of the member who have not passed their nineteenth birthday and each unmarried dependent child under twenty-three years of age who is a full-time student at an accredited high school, college, vocational school, or university or an approved school of nursing, and each unmarried dependent child who is totally or permanently disabled, either physically or mentally, regardless of such child’s age, provided such disability occurred prior to age nineteen, unmarried dependent children shall include stepchildren, foster children, and adopted children who depend on the member for support and live in the household of the member in a regular parent-child relationship. (Emphasis added.)
This policy contains a further paragraph, which provides as follows:
6. Change of Family Status. The member under a “Family Contract” as defined by Section I, 4., shall notify [818] Blue Cross and Blue Shield of any change in family status. Coverage for children born under the “family contract” shall commence at birth and cease when such child fails to qualify for coverage under Section I, 5., and the acceptance of payments for persons no longer eligible for services shall not obligate “Blue Cross and Blue Shield” to provide for such services. Member must, within thirty (30) days notify “Blue Cross and Blue Shield” in writing, of any change in family status.
Blue Cross denied coverage for Sherri O’Neill. This action was commenced and the trial court granted summary judgment in favor of O’Neill on the coverage issue.
Blue Cross argues that the unmarried dependent child must “live in the household of the member in a regular parent-child relationship.” This construction of the policy provision defining dependent children is in error. This phrase applies to stepchildren, foster children, and adopted children “who depend on the member for support and live in the household of the member in a regular parent-child relationship.” The phrase does not .relate back to the unmarried dependent children of the member who have not passed their nineteenth birthday. It is agreed that O’Neill is the biological father of the child, which he has acknowledged, and clearly she is dependent upon him and has not passed her nineteenth birthday.
Under the law applicable when this child was born, a parent was obligated to support children born out of wedlock and the parents of such a child owed the child necessary maintenance, education and support. The father was liable to pay the expenses of the mother’s pregnancy and confinement. SDCL 25-8-1, 25-8-2, and 25-8-3.1
The terms of an unambiguous insurance policy cannot be enlarged or diminished by judicial construction, since the Court cannot make a new contract for the parties where they, themselves, have employed express and unambiguous words. 43 Am.Jur.2d, Insurance, § 271 (1969).
We do not believe the paragraph defining dependent children is ambiguous. If ambiguous, however, it would still be construed in favor of insurance and against the one who drafted the contract and caused the uncertainty to exist. Hicks v. Brookings Mall, Inc., 353 N.W.2d 54 (S.D.1984); City of Sioux Falls v. Henry Carlson, 258 N.W.2d 676 (S.D.1977).
Blue Cross claims coverage should be denied because O’Neill failed to notify Blue Cross “of any change in family status.” 2 Other than the birth of this child, what should he have reported? There was no divorce, death, adoption, foster child, stepchild, remarriage, or whatever. “Any change in family status” is broad terminology. We defer our opinion, as to all the situations it may cover, until those issues are before us. In this case, however, the only matter O'Neill could have reported prior to the birth was the separation, love affair, and conception. We do not believe the phrase “change in family status” was ever intended to require a report to Blue Cross of separation, love, and conception. O’Neill is not claiming coverage for his lover, Ms. Wise. He claims it for his dependent child. When Blue Cross received timely notice of the birth of the child, they received notice of “any change in family status.”
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WUEST, Acting Justice.
This appeal involves an action for a money judgment under a health insurance policy. The trial court upheld coverage, granting summary judgment against appellant Blue Cross of Western Iowa and South Dakota (Blue Cross) therein. The court also granted summary judgment against appellee Charles O’Neill (O’Neill), dismissing his counterclaim for punitive damages. A trial was held on the issue of specific performance of a conversion clause converting the group policy to a private converted policy, and on the issue of whether O’Neill was entitled to attorney’s fees from Blue Cross. The court ruled against O’Neill on these issues, and attorney fees, and O’Neill has filed a notice of review. We affirm the trial court on all issues.
O’Neill was employed by the state of South Dakota as a correctional officer at the penitentiary. Blue Cross provides group hospitalization to South Dakota public employees. On January 22, 1979, O’Neill applied for coverage with Blue Cross asking for “family coverage.” At the time, O’Neill was married to Gloria O’Neill. The couple had one child, Justin Lee, who was born on July 6, 1976. In May of 1980, the parties separated, and Mrs. O’Neill moved to Mitchell, South Dakota, taking Justin with her. The parties did not live together after their separation, although they were not divorced until July of 1982.
In May of 1981, O’Neill began cohabiting with Mary Wise and, while they have not been married, these two have lived together continuously since that time. On December 25, 1981, Mary Wise gave birth to Sherri Lynn O’Neill, the natural child of O’Neill. O’Neill acknowledged the child as his own, both orally and in writing upon her birth, and it is undisputed that he is the child’s biological father. Sherri Lynn was born prematurely. Prior to her birth, O’Neill did not notify Blue Cross of any change in family status. The instant policy or “master contract” defines a family contract as a contract covering the employee, the employee’s spouse and dependent children. The pertinent policy provision defining dependent children provides:
“DEPENDENT CHILDREN” means the unmarried dependent children of the member who have not passed their nineteenth birthday and each unmarried dependent child under twenty-three years of age who is a full-time student at an accredited high school, college, vocational school, or university or an approved school of nursing, and each unmarried dependent child who is totally or permanently disabled, either physically or mentally, regardless of such child’s age, provided such disability occurred prior to age nineteen, unmarried dependent children shall include stepchildren, foster children, and adopted children who depend on the member for support and live in the household of the member in a regular parent-child relationship. (Emphasis added.)
This policy contains a further paragraph, which provides as follows:
6. Change of Family Status. The member under a “Family Contract” as defined by Section I, 4., shall notify [818] Blue Cross and Blue Shield of any change in family status. Coverage for children born under the “family contract” shall commence at birth and cease when such child fails to qualify for coverage under Section I, 5., and the acceptance of payments for persons no longer eligible for services shall not obligate “Blue Cross and Blue Shield” to provide for such services. Member must, within thirty (30) days notify “Blue Cross and Blue Shield” in writing, of any change in family status.
Blue Cross denied coverage for Sherri O’Neill. This action was commenced and the trial court granted summary judgment in favor of O’Neill on the coverage issue.
Blue Cross argues that the unmarried dependent child must “live in the household of the member in a regular parent-child relationship.” This construction of the policy provision defining dependent children is in error. This phrase applies to stepchildren, foster children, and adopted children “who depend on the member for support and live in the household of the member in a regular parent-child relationship.” The phrase does not .relate back to the unmarried dependent children of the member who have not passed their nineteenth birthday. It is agreed that O’Neill is the biological father of the child, which he has acknowledged, and clearly she is dependent upon him and has not passed her nineteenth birthday.
Under the law applicable when this child was born, a parent was obligated to support children born out of wedlock and the parents of such a child owed the child necessary maintenance, education and support. The father was liable to pay the expenses of the mother’s pregnancy and confinement. SDCL 25-8-1, 25-8-2, and 25-8-3.1
The terms of an unambiguous insurance policy cannot be enlarged or diminished by judicial construction, since the Court cannot make a new contract for the parties where they, themselves, have employed express and unambiguous words. 43 Am.Jur.2d, Insurance, § 271 (1969).
We do not believe the paragraph defining dependent children is ambiguous. If ambiguous, however, it would still be construed in favor of insurance and against the one who drafted the contract and caused the uncertainty to exist. Hicks v. Brookings Mall, Inc., 353 N.W.2d 54 (S.D.1984); City of Sioux Falls v. Henry Carlson, 258 N.W.2d 676 (S.D.1977).
Blue Cross claims coverage should be denied because O’Neill failed to notify Blue Cross “of any change in family status.” 2 Other than the birth of this child, what should he have reported? There was no divorce, death, adoption, foster child, stepchild, remarriage, or whatever. “Any change in family status” is broad terminology. We defer our opinion, as to all the situations it may cover, until those issues are before us. In this case, however, the only matter O'Neill could have reported prior to the birth was the separation, love affair, and conception. We do not believe the phrase “change in family status” was ever intended to require a report to Blue Cross of separation, love, and conception. O’Neill is not claiming coverage for his lover, Ms. Wise. He claims it for his dependent child. When Blue Cross received timely notice of the birth of the child, they received notice of “any change in family status.”
Blue Cross urges that public policy mandates a denial of coverage. We do not approve, condone, or condemn the relationship of O’Neill and Ms. Wise. Their child, however, should not be penalized for their conduct. She is the helpless and innocent product of their relationship. Under the [819] statutes previously cited, she is entitled to support. The proceeds from the policy may be paid to O’Neill; however,'the child receiving the medical care is the real beneficiary of the coverage. We recognize that the father would be required to pay the medical expenses as provided by SDCL 25-8-1 and 25-8-2, if he could, but the purpose of group health insurance is to provide medical treatment for those who need it. To deprive this dependent child of coverage because society does not condone her parents’ relationship would be punishing the innocent. Most people of modest means are unable to afford a catastrophic illness without health insurance. True, there may be welfare programs and medical providers willing to absorb the expense; but if they are going to remain solvent, the medical providers must of necessity apportion the expenses to other patients. Since this innocent child is the primary beneficiary of these medical services, we do not believe public policy dictates that she be denied the same. Again, we stress the child’s mother is not covered, nor is the father being enriched.
The trial court granted summary judgment for Blue Cross on O’Neill’s amended complaint seeking punitive damages. O’Neill filed a notice of review and urges us to overrule the trial .court. O’Neill claims this cause of action is predicated in tort rather than contract and, therefore, judgment should not have been granted. Passing upon a similar claim in Ochs v. Northwestern Nat. Life Ins. Co., 254 N.W.2d 163, 167-68 (S.D.1977), we said:
[P]laintiff’s complaints in reality state but a single claim for relief, for however one looks at the second cause of action, it sets forth an additional claim for relief based upon defendant’s alleged breach of contract. True, the allegations represent an artful attempt to avoid the statutory limitation on damages for breach of contract, SDCL 21-2-1 and 21-2-2, and the statutory bar to punitive damages in claims arising out of breach of contract, SDCL 21-1-4 and 21-3-2, but at their core they are based upon defendant’s breach of their contractual duty to pay benefits due under their policies. As we read the complaints, there could be no recovery under the second cause of action unless plaintiff proved a breach of defendants’ duty to make such payments. So considered, the claim set forth in the second cause of action is not of such a nature that it could have been separately enforced and thus is not a multiple claim within the meaning of RCP 54(b), Rieser v. Baltimore & Ohio Railroad Co., [(2d Cir.1955) 224 F.2d 198]; Campbell v. Westmoreland Farm, Inc., 2 Cir. [ (1968) ], 403 F.2d 939; United States v. Kocher, 2 Cir. [ (1972) ], 468 F.2d 503, but rather is so inextricably linked to the cause of action based upon breach of contract as to constitute a single claim. Aetna Casualty & Surety Company v. Giesow, 2 Cir. [ (1969) ], 412 F.2d 468.
In Thu v. American Family Ins. Co., 292 N.W.2d 109, 110 (S.D.1980), we held a claim for punitive damages was “nothing more or less than a claim based upon appellant’s refusal to pay benefits under the terms of the insurance policy,” citing Ochs, supra. We believe these two cases are controlling and we decline to overrule them.
A trial was held on the issue of specific performance requiring Blue Cross to offer a conversion policy covering Sherri O’Neill when O’Neill was terminated at the penitentiary, and also upon the issue of whether O’Neill was entitled to attorney fees from Blue Cross because its refusal to pay was “vexatious or without reasonable cause.”
Paragraph 9 of the master contract between Blue Cross and the South Dakota Public Employees Insurance System provides:
If a member leaves the group through termination of employment or termination of eligibility as a dependent, he may continue coverage under group conversion certificates currently available to subscribers of similar classification, by making payment within thirty (30) days at subscription rates and in a> manner [820] determined by Blue Cross and Blue Shield.
On May 18, 1982, O’Neill was terminated as a state employee. He sought specific performance, requiring Blue Cross to offer a conversion policy covering his daughter, Sherri O’Neill. The trial court found that he was offered the right to convert to a private policy which fulfilled Blue Cross’ obligation. On questions of fact, the “clearly erroneous” standard is applied by this court. All Nation Ins. Co. v. Brown, 363 N.W.2d 216 (S.D.1985); Pope v. Brown, 357 N.W.2d 510 (S.D.1984). At trial, O’Neill testified as follows:
THE COURT: Okay. They did offer you the same coverage you had at your own expense?
A Right.
THE COURT: Did you ask them at that time whether or not Sherri was covered?
A I had information from them that they weren’t covering her previous to this offer. I was already aware that she was not included in the offer by their refusal to cover the hospitalization.
THE COURT: I suppose you got some kind of form letter saying you got so much time to convert?
A Right.
THE COURT: You never exercised that?
A No. My termination prevented me from having any further insurance.
THE COURT: You could have converted after termination, right? Within 30 days or something like that, do you remember?
A I don’t remember the expiration part.
THE COURT: You may continue.
Q (BY MR. NASSER) Did you receive communication from the defendant which indicated that coverage would not be provided for Sherri?
A Yes, I did.
Q If the policy had covered the child would you have been in a position to convert this policy?
MR. THIMSEN: Objection. Immaterial. Calls for speculation, conjecture, assumes facts not in evidence.
THE COURT: Read the question back, Please.
(Last question read back by Reporter)
THE COURT: Overruled.
A. I don’t believe I would have been in position to have any insurance coverage on myself or the child.
Q (BY MR. NASSER) Was Mary Wise working at that time?
A I think she was, yes.
Q Do you think or do you know?
A I am not sure. Can I ask her?
Q No.
THE COURT: She’s here. She can testify if she remembers.
Q (BY MR. NASSER) Did you have the financial resources, whether through Mary or through yourself, to be able to convert that had Sherri been covered?
A No, sir.
MR. THIMSEN: Your Honor, I move to strike the answer and object for the reasons previously stated.
THE COURT: I guess I’d like to know a little bit why you object to that.
MR. NASSER: That is what I want to know.
THE COURT: Seems to me if he couldn’t have converted, regardless of who they were willing to cover—
MR. THIMSEN: I will withdraw the objection then.
THE COURT: Okay, Go ahead.
In view of the foregoing testimony by O’Neill, we are unable and unwilling to hold the trial court was “clearly erroneous.”
SDCL 58-12-3 provides for a recovery of attorney fees from an insurance company when the company has refused to pay the full amount of loss and such refusal is “vexatious or without reasonable cause.”
The trial court found O’Neill failed to prove by a preponderance of the evidence that Blue Cross’ refusal to pay the claim for Sherri was “vexatious or without reasonable cause.” The question of “whether an insurer’s refusal to pay is vexatious or without reasonable cause is [821] necessarily one of fact[.]” Tracy v. T & B Construction Company, 85 S.D. 337, 343, 182 N.W.2d 320, 323 (1970); Wilson v. Allstate Insurance Company, 85 S.D. 553, 550, 186 N.W.2d 879, 883 (1971); All Nation Insurance, supra.
We hold the decision of the trial court was not “clearly erroneous.”
Affirmed.
FOSHEIM, C.J., and WOLLMAN, J., concur.
MORGAN, J., concurs in result.
HENDERSON, J., concurs in part and dissents in part.