Metropolitan News-Enterprise


Monday, July 3, 2023


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Court of Appeal:

‘Physical Loss’ Policy Did Not Cover Damaged Embryos


By a MetNews Staff Writer


Coverage was properly denied under a policy that insured against “direct physical loss” to property where frozen embryos had apparently been rendered useless due to a malfunction of equipment at a fertility clinic, the First District Court of Appeal held on Friday.

The opinion by Justice James Richman of Div. Two affirms a summary judgment awarded by San Mateo Superior Court Judge Nancy Fineman to Stillwater Insurance Company in an action against it by Sherlene and Lawrence Wong. They sued because the insurer rejected their claim over three embryos they had stored at Pacific Fertility in San Francisco having partially or completely thawed because low temperatures had not been maintained in a cryogenic tank.

Richman explained in a footnote that “the Wongs’s assertion they sustained a ‘loss of use’ of the embryos was irrelevant to the property claim under Section I of the policy, which required that there be ‘physical loss’ as distinguished from ‘property damage’.”

Expert’s Declaration

In opposing summary judgment, the Wongs produced a declaration from their fertility doctor, Aimee Eyvazzadeh (who bills herself as the “egg whisperer.”) She said:

“As a result of this disaster, the Wongs’ embryos became worthless. No responsible fertility physician would use them; I certainly would not.”

Eyvazzadeh added:

“The science behind IVF is precise, including what we know about vitrification. We don’t know the consequences of embryos that could have partially thawed. We don’t ‘wing it’ or guess that something is ‘close enough.’ There was—and is—no way to know about the resulting consequences to cells themselves. While it would be possible to look at thawed zygotes and observe the outer structure of cells to observe apparent integrity, even if the cell walls were to appear sound, there is no way to know whether the cells, once implanted, begin to divide. Nor is there a way to test sufficiently for any resulting damage to genes within any of these cells. I advised the Wongs that they should consider these embryos to have been irreversibly compromised, no longer viable, and lost.”

Declaration Was Destructive

Richman wrote:

“Dr. Eyvazzadeh’s concession there is ‘no way to know’ whether the Wongs’s embryos had actual physical damage was devastating to the Wongs’s claim. And her conclusion that she deemed the embryos to be “worthless” was not a substitute for evidence that any of the embryos actually had undergone a physical change….

“The mere possibility that the embryos had suffered physical damage was insufficient to create a triable issue of fact to trigger coverage. The Wongs had the burden of submitting evidence of actual physical alteration of the embryos. They did not, instead submitting evidence that there is ‘no way to know’ whether such damage had occurred. ‘No way to know’ was fatal to their claim….”

The policy insured against losses caused by specified causes, one of which was an “explosion.” The Wongs contended that an explosion had occurred in the tank containing the embryos, fortifying the contention with pages from the deposition of Dr. Anand Kasbekar in connection with an action in the U.S. District Court for the District of Colorado.

‘Loud Noise’

Noting that an explosion, by definition, is a “violent expansion of air or relinquishment of energy, causing a rupture and accompanied by a loid noise,” Richman set forth:

“[T]here is nothing in the passage on which the Wongs rely that unequivocally demonstrates that Dr. Kasbekar had an opinion that explosion was the cause, especially when he began by reference to ‘implosion.’ As he put it, ‘So my opinion really is I would call it an explosion of the vacuum space, but I think it’s fair to also call it an implosion of the inner wall of the tank.’ He certainly did not testify to any ‘loud noise’—nor for that matter did anyone from Pacific Fertility, where any ‘loud noise’ would certainly have been heard. In short, we question that the excerpt from Dr. Kasbekar’s unsigned deposition in the Colorado case was worthy of consideration at all, especially in light of the significant gatekeeper function required of the trial court in handling issues of expert testimony.”

The case is Wong v. Stillwater Insurance Company, A162893.


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