MacQuarrie v. National Bank Life Insurance Company is a noteworthy decision for those interested in the “textualist” debate – namely, whether words reduced to writing, whether it be in the form of a policy of insurance, a statute, a commercial contract, or otherwise – should be interpreted according to their plain and ordinary meaning.
In MacQuarrie, an insured sought payment pursuant to a critical illness insurance policy that was issued to him by the insurer. The insurer offered the subject insurance in December 2008. Unfortunately, in May 2009 the insured underwent surgery for thyroid cancer.
The insured submitted a claim under the critical illness policy, but the insurer initially denied liability on the basis that the insured failed to disclose a “sleep apnea” condition during the application. The insurer ultimately denied coverage on the basis of two exclusions: pre-existing conditions, and the 90-day exclusion clause.
Not surprisingly, the court rejected the insurer’s evidence that it would have declined to provide coverage if the insured had disclosed his sleep apnea condition. The pre-existing condition exclusion therefore did not apply because, before the effective date of insurance, the insured had not consulted a health care professional regarding the possibility of thyroid cancer. He was never diagnosed with thyroid cancer prior to the effective date of the policy and he never received treatment.
However, the court held that the “first signs” of thyroid cancer began within 90 days of the effective date of the policy and therefore, the 90-day exclusion applied. The insured’s action was dismissed.
The relevant exclusion provided as follows:
A [critical illness] resulting from any health problem, sign or symptom beginning before the ninety-first (91st) day after the certificate came into effect and which prompted an examination that led to a diagnosis of Cancer.
The case turned on the following facts:
 According to Dr. Murton, a thyroid nodule was diagnosed in October 2008. Dr. Mabini wrote “thyroid nodule picked up on MRI Sept. 8 2008.” The September MRI of a sinus cyst incidentally picked up small lymph nodes unlikely of clinical significance. The first consultation for this condition was November 11, 2008. Dr. Mabini said she did not specifically advise the Plaintiff after she received the results of the October 1 ultrasound why she had ordered it. The October ultrasound was likely of no significance.
The court’s analysis continued, and in my view, highlights the often elementary, yet vital, approach the courts should take when determining whether a claim falls within a policy of insurance. The real question here is whether the September and/or the October ultrasound were a sign beginning before the 91st day after September 11, 2008, which prompted an examination that led to the diagnosis of cancer. Could the results of the MRI and ultrasound be a sign of any illness or health problem or did it have to be a sign of thyroid cancer? Was an examination that led to the diagnosis of cancer prompted by the MRI or ultrasound?  I am of the view that the nodule incidentally picked up on the September MRI and further investigated on the October 1, 2008 ultrasound was a sign of possible thyroid cancer, among other things. Neither pointed conclusively to that diagnosis. However, the September 2008 MRI prompted the October ultrasound which prompted the February 2009 fine needle aspiration which prompted the February surgery and the diagnosis of thyroid cancer in May of 2009.  The sign of thyroid cancer began before the 91st day after September 11, 2008 and prompted an examination that led to the diagnosis of cancer.  The Insurer has met the onus of discharging the burden of showing that the 90 day exclusion applies.
The insured went on to argue that applying the 90-day exclusion in these circumstances would be unconscionable. While the court sympathized, it noted the simple, yet sophisticated truth that “the contract said what it said. If an exclusion clause applied, it provided a basis for the insurer to refuse payment.”
Textualism is not synonymous with heartless legal interpretation. In this case, the Court was prepared to discount a misrepresentation based on sleep apnea because it was not material. However, failing to disclose investigations related to cancer was clearly a material omission. Textualism simply stands for the proposition that it should be the ordinary meaning of the words in a given statute or contract that should govern its interpretation. In my view, the Court in this case got it right.
Please note that the insured’s appeal was dismissed