Anderson v. Wood, 25362.

• Decision Date: 22 February 1999
• Docket Number: No. 25362.,25362.
• Court: West Virginia Supreme Court
• Parties: Patricia G. ANDERSON, Plaintiff Below, Appellee, v. Dr. Ralph E. WOOD and Wood Family Practice, P.D., Defendants Below, West Virginia Department of Health and Human Resources, Defendant Below, Appellant.

514 S.E.2d 408

204 W.Va. 558

Patricia G. ANDERSON, Plaintiff Below, Appellee, v. Dr. Ralph E. WOOD and Wood Family Practice, P.D., Defendants Below, West Virginia Department of Health and Human Resources, Defendant Below, Appellant.

No. 25362.

Supreme Court of Appeals of West Virginia.

Submitted January 13, 1999.

Decided February 22, 1999.

Darrell V. McGraw, Jr., Attorney General, Stephen J. Small, Senior Assistant Attorney General, Charleston, West Virginia, Attorneys for Appellant.

Alex J. Shook, Hamstead, Hamstead & Williams, Morgantown, West Virginia, Attorney for Appellee. DAVIS, Justice.

This is an appeal by the West Virginia Department of Health and Human Resources (hereinafter referred to as DHHR), appellant/defendant below, from an order of the Circuit Court of Marshall County. The Marshall County order requires DHHR to pay its pro rata share of costs incurred in the underlying civil action of Patricia G. Anderson (hereinafter referred to as Ms. Anderson), appellee/plaintiff below. DHHR contends that W. Va.Code § 9-5-11(b) (1995) (Repl. Vol.1998) does not compel it to pay costs under the facts of this case. We disagree and as such affirm the circuit court's order.

I. FACTUAL AND PROCEDURAL HISTORY

The issue in this case is derived from an underlying medical malpractice action initiated by Ms. Anderson against Dr. Ralph E. Wood, et al.¹ Ms. Anderson settled the case against Dr. Wood for $300,000.00 on June 7, 1997. The record indicates that DHHR had previously paid medical expenses for Ms. Anderson² in the amount of $8,388.79³. After Ms. Anderson's settlement DHHR sought indemnification for its medical payments from the settlement proceeds she had obtained. Ms. Anderson thereafter filed a declaratory judgment action requesting the circuit court to determine whether DHHR was obligated to pay a pro rata share of the attorney's fees and costs she had incurred as a result of her civil action against Dr. Wood.

DHHR agreed to reduce the amount of medical payments it was owed by one-third, to reflect its pro rata share of attorney's fees incurred by Ms. Anderson in her medical malpractice case. However, DHHR argued that it was not obligated to deduct an additional amount as its pro rata share of costs. The circuit court ruled that pursuant to W. Va.Code § 9-5-11(b)⁴ DHHR was required to pay its pro rata share of costs in the amount of $307.31. Consequently, the sole issue presented by the circuit court's ruling is whether W. Va.Code § 9-5-11(b) requires DHHR to pay a pro rata share of costs when it recovers medical expenses through its statutory subrogation right.⁵

II. STANDARD OF REVIEW

This Court has held that "[a] circuit court's entry of a declaratory judgment is reviewed de novo." Syl. pt. 3, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995). Our analysis of the issue in this case requires a determination of whether W. Va.Code § 9-5-11(b) evidences an intent by the Legislature that DHHR pay costs when an individual who has received assistance from DHHR with the payment of medical expenses [hereinafter referred to as a recipient of medical assistance] recovers from a third party, in whole or in part, the amount paid for medical treatment and when DHHR has given proper subrogation notice. On a pure question of statutory construction, we must determine legislative intent using traditional tools of statutory construction. Syl. pt. 11, Cox v. Amick, 195 W.Va. 608, 466 S.E.2d 459 (1995). In this regard we have held that "[t]he primary object in construing a statute is to ascertain and give effect to the intent of the legislature." Syl. pt. 1, Smith v. State Workmen's Compensation Comm'r, 159 W.Va. 108, 219 S.E.2d 361 (1975). "In ascertaining legislative intent, effect must be given to each part of the statute and to the statute as a whole so as to accomplish the general purpose of the legislation." State ex rel. Morgan v. Trent, 195 W.Va. 257, 263, 465 S.E.2d 257, 263 (1995) (citations omitted). As we said in Syllabus point 2, in part, of Pristavec v. Westfield Insurance Co., 184 W.Va. 331, 400 S.E.2d 575 (1990), "[i]t is the duty of a court to construe a statute according to its true intent, and give to it such construction as will uphold the law and further justice."

III. DISCUSSION

This Court had an opportunity to examine W. Va.Code § 9-5-11 recently in Grayam v. Department of Health and Human Resources, 201 W.Va. 444, 498 S.E.2d 12 (1997). The specific issue presented by Grayam was whether or not W. Va.Code § 9-5-11(a) permitted DHHR to be fully reimbursed by a recipient of medical assistance,⁶ notwithstanding the made-whole rule.⁷ This Court found that the statute nullified the madewhole rule and allowed DHHR to recover all payments expended for medical assistance paid on behalf of its recipient. The Court's analysis was outlined in Syllabus point 2 of Grayam as follows:

In both the 1993 and 1995 amendments to West Virginia Code § 9-5-11 (Supp. 1993 & Supp.1995), the legislature rendered the made-whole rule inapplicable by clearly and unambiguously modifying the usual and ordinary meaning of subrogation as it is used in that statute. Pursuant to these amendments, if another person is legally liable to pay for medical assistance provided by the Department of Health and Human Resources, the Department possesses a priority right to recover full reimbursement from any settlement, compromise, judgment, or award obtained from such other person or from the recipient of such assistance if he or she has been reimbursed by the other person.

The Grayam decision did not require the Court to answer the specific question of the pro rata payment of costs by DHHR when a recipient of medical assistance recovers from a tortfeasor. Now, we must answer the inquiry relating to costs identified in W. Va. Code § 9-5-11(b). W. Va.Code § 9-5-11(b) addresses the issue of costs in several different circumstances. As such, it is necessary to discuss each circumstance in an effort to give meaning to the statute. First, the statute requires a recipient to notify DHHR of a potential settlement. Upon being notified, DHHR is required, within sixty days of such notification, to assert its subrogation rights. Otherwise, "the recipient may proceed and in the event of full recovery forward to the department the portion of the recovery proceeds less the department's share of attorney's fees and costs expended in the matter." W. Va.Code § 9-5-11(b). Next, the statute provides that "[i]f there is no recovery, the department shall under no circumstances be liable for any costs or attorneys fees expended in the matter." Id. Finally, the statute specifies that "[i]n the event that a controversy arises concerning the subrogation claims by the department, an attorney shall interplead... the portion of the recipient's settlement that will satisfy the department exclusive of attorneys fees and costs[.]"⁸ Id.

Despite these statutory explanations regarding the payment of costs, DHHR argues that it is required by W. Va.Code § 9-5-11(b) to pay costs only when it fails to properly assert its subrogation rights within sixty days of receiving notice of a potential settlement. While this obligation to pay costs for failing to timely notify a recipient of medical assistance of DHHR's subrogation right was intended by the Legislature to impose a penalty upon it for late notification, DHHR contends, the imposition of costs against DHHR was not intended whenever it timely notified a recipient of its subrogation rights. DHHR argues further that an initial observation of the above quoted provisions contained in W. Va.Code § 9-5-11(b) suggests that the statute expressly states that DHHR is to incur its pro rata share of attorney's fees⁹ and costs only when it fails to timely notify a recipient of its subrogation rights and there is a recovery by the recipient from a tortfeasor. To support this contention, DHHR focuses on the following provision in W. Va. Code § 9-5-11(b): "Irrespective of whether the [recipient's] case be terminated by judgment or by settlement without trial, from the amount required to be paid to the department of health and human resources there shall be deducted the attorney fees attributable to such amount[.]" DHHR contends that because this general provision regarding attorney fees does not include costs, then the Legislature did not intend for it to pay costs when it timely notifies a recipient of its subrogation rights. We are not persuaded by this argument.

W. Va.Code § 9-5-11(b) does not expressly exempt DHHR from paying a pro rata share of costs when it timely notifies a recipient of medical assistance of its subrogation rights. The statute is silent on this matter. However, the statute does expressly exempt DHHR from paying a pro rata share of costs when there has been litigation and no recovery by a recipient. We believe that the express exclusion of costs, where there is no recovery by the recipient, by implication means that the Legislature intended DHHR to share in the payment of costs when there is a recovery by the recipient. Therefore, we hold that when the West Virginia Department of Health and Human Resources has assisted an individual with the payment of medical expenses, the Department may enforce its subrogation rights, set forth in W. Va.Code § 9-5-11(b) (1995) (Repl.Vol.1998), when the individual has recovered such medical expenses, in whole or in part, from a third party. Once the Department enforces its subrogation rights provided by W. Va.Code § 9-5-11(b), it becomes liable to the individual for its pro rata share of the costs and attorney's fees incurred by the individual in recovering his/her medical expenses regardless of whether the Department has timely notified the individual of the assertion of its subrogation rights.

Having reached this conclusion, we note that our decision not only upholds the clear legislative intent of W. Va.Code § 9-5-11(b), but also comports with further authority...