The district court refused to do so, and Mr. Estes appealed to the Ninth Circuit.

Mr. Estes claimed that the "process of nature" rule stated that "when an insurer has agreed to pay an insured for expenses incurred as a result of an accident or sickness, the insurer cannot place arbitrary deadlines on when the treatment necessitated by that accident or illness must occur."

The Ninth Circuit's Decision

The Ninth Circuit affirmed.

In its decision, the circuit court explained that Mr. Estes' view of the "process of nature" rule was "incorrect." According to the circuit court, the rule was a judicially created, equitable tool that related an insured's medical decay back to the original accident. The rule, the circuit court said, provides that, within the meaning of policy provisions requiring disability within a specified time after the accident, the onset of disability related back to the time of the accident itself whenever the disability arose directly from the accident "within such time as the process of nature consumes in bringing the person affected to a state of total [disability]."

The rule, the Ninth Circuit added, was "derived from basic tenets of medical science" in that the "injured part often lies dormant for an indefinite period, with but little or no consciousness of its existence by the person injured, although from the very moment of the accident, perhaps, the processes of nature may be busily engaged in developing what may have seemed to be but a slight hurt into a most serious and perhaps fatal injury."

California courts, the Ninth Circuit observed, applied the rule where a contractual provision to the contrary would work "an inequity," such as when an insured eventually died from injuries and the policy limited benefits to "immediately and totally disabling" injuries or when an insured's condition slowly worsened and the policy limited benefits to injuries that "within [20] days of the date of the accident, totally and continuously disable the [i]nsured."

According to the Ninth Circuit, the "process of nature" rule did not apply to the three-year limit on State Farm's coverage of medical services for Mr. Estes, directly or by analogy. Here, the circuit court explained, his bodily injury "was apparently immediate" and "no relation back to the date of injury" was at issue.

Instead, the Ninth Circuit reasoned, the policy limitation was one concerning "duration of coverage," not whether there was "any coverage at all." Benefit limits of the kind in the State Farm policy were "necessarily 'arbitrary,' in a sense," but they were necessitated by the need to adjust the cost of a policy to the extent of the benefits provided, the Ninth Circuit said.

Moreover, it concluded, even if the process-of-nature rule applied as broadly as Mr. Estes wished, the reason the medical services were rendered after the coverage cutoff was not due to any "process of nature" inherent in the original injury, but rather was due to Mr. Estes' decision to schedule surgery known to be necessary during the coverage period for a date after coverage was to cease.

The case is Estes v. State Farm Mutual Automobile Ins. Co., No. 16-55837 (9th Cir. Feb. 27, 2018).