Arizona Dept. of Admin. v. Cox

• Decision Date: 17 August 2009
• Docket Number: No. 2 CA-CV 2008-0198.,2 CA-CV 2008-0198.
• Citation: 222 Ariz. 270,213 P.3d 707
• Parties: ARIZONA DEPARTMENT OF ADMINISTRATION, Plaintiff/Appellant/Cross-Appellee, v. Jennifer COX and Richard Cox, Defendants/Appellees/Cross-Appellants.
• Court: Arizona Court of Appeals

213 P.3d 707

222 Ariz. 270

ARIZONA DEPARTMENT OF ADMINISTRATION, Plaintiff/Appellant/Cross-Appellee, v. Jennifer COX and Richard Cox, Defendants/Appellees/Cross-Appellants.

No. 2 CA-CV 2008-0198.

Court of Appeals of Arizona, Division 2, Department A.

August 17, 2009.

Jennings Strouss & Salmon, P.L.C. By Douglas Gerlach and John C. West, Phoenix, Attorneys for Plaintiff/Appellant/Cross-Appellee.

Haralson, Miller, Pitt, Feldman & McAnally, P.L.C. By Thomas G. Cotter, Tucson, Attorneys for Defendants/Appellees/Cross-Appellants.

OPINION

HOWARD, Chief Judge.

¶ 1 This case arises from appellant/plaintiff Arizona Department of Administration's (ADOA) claim that it was entitled to recover the cost of medical care that it provided to appellees/defendants Jennifer and Richard Cox through the state health insurance plan. ADOA appeals the trial court's decision granting summary judgment in favor of ADOA, but awarding it a much lower amount than it had claimed. In their cross-appeal, the Coxes contend ADOA is not entitled to reimbursement. We affirm the grant of summary judgment in favor of ADOA, but vacate the amount awarded and remand for the trial court to enter an award of $21,746.45.

Facts

¶ 2 The parties generally do not dispute the relevant facts. ADOA, an agency of the State of Arizona, operates a self-insured plan to provide health care benefits to state employees and their dependents. Medical services provided by the plan are paid for by a state "health insurance trust fund."¹ A.R.S. § 38-654(A). ADOA contracts with United Healthcare Insurance Company to serve as a third-party administrator of the plan.

¶ 3 Jennifer and Richard Cox were involved in an automobile accident, from which they sustained injuries and required medical care and treatment. At the time of the accident, the Coxes were eligible participants in the state plan. The plan paid $25,012.11 for the Coxes' medical care and treatment. With the aid of counsel, the Coxes filed an action against the third party responsible for the accident and settled their claims against that party for $30,000. This settlement was not apportioned according to types of damages. In addition, the Coxes received $200,000 from their automobile liability insurance carrier under the underinsured motorist provision of their policy. ADOA demanded that the Coxes reimburse it for the amount the state had paid for the Coxes' treatment, pursuant to A.R.S. § 12-962. The Coxes refused and ADOA sued them. Both parties moved for summary judgment. The trial court granted summary judgment in favor of ADOA and against the Coxes, but awarded ADOA only $2,475.00.

Discussion

¶ 4 ADOA argues that, although the trial court properly granted summary judgment in its favor, the court erred in not awarding ADOA the full amount it had paid for the Coxes' medical care. The Coxes contend the trial court erred in awarding any amount to ADOA, arguing ADOA is not entitled to reimbursement for various reasons.

¶ 5 Summary judgment is proper when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Ariz. R. Civ. P. 56(c)(1). We review de novo whether there are any genuine issues of material fact and whether the trial court applied the law properly. Brookover v. Roberts Enters., Inc., 215 Ariz. 52, ¶ 8, 156 P.3d 1157, 1160 (App. 2007). We also review de novo questions regarding the construction of statutes. Canon Sch. Dist. No. 50 v. W.E.S. Constr. Co., 177 Ariz. 526, 529, 869 P.2d 500, 503 (1994).

Whether ADOA can Assert a Claim

¶ 6 We first address the Coxes' claim on cross-appeal that ADOA may not assert a claim for reimbursement under § 12-962 because a resolution in the Coxes' favor on this matter would dispose of the issues ADOA raises on appeal.

A. State or a Political Subdivision

¶ 7 The Coxes first argue the health insurance trust fund is not "the state" or a "political subdivision" and therefore payments from the fund do not fall within the scope of § 12-962. That section provides:

A. If this state or any of its political subdivisions provides medical care and treatment to a person who is injured or suffers from a disease under circumstances creating tort liability upon a third person, the state or political subdivision, either jointly or severally, may recover from the third person or the injured or diseased person the reasonable value of the medical care and treatment....

B. To enforce this right, the state or political subdivision may do the following:

1....

3. Recover the cost of care from the injured or diseased person or the person's estate to the extent that such person has received money in settlement of the claim or satisfaction of a judgment against the third party.

Section 38-654(A) established the employee health insurance trust fund "for the purpose of administering the state employee health insurance benefit plans.... The fund shall be administered by the director of the department of administration."

¶ 8 When construing a statute, we must "determine and give effect to legislative intent." City of Phoenix v. Phoenix Employment Relations Bd., 207 Ariz. 337, ¶ 11, 86 P.3d 917, 920 (App.2004). We look first to the plain language of the statute because that is the best indicator of legislative intent. Mejak v. Granville, 212 Ariz. 555, ¶ 8, 136 P.3d 874, 876 (2006). If the meaning of the language is clear, we do not employ any further methods of construction. N. Valley Emergency Specialists, L.L.C. v. Santana, 208 Ariz. 301, ¶ 9, 93 P.3d 501, 503 (2004).

¶ 9 When a statute is ambiguous, "`we consider the statute's context; its language, subject matter, and historical background; its effects and consequences; and its spirit and purpose.'" Scheehle v. Justices of the Supreme Court of the State of Ariz., 211 Ariz. 282, ¶ 16, 120 P.3d 1092, 1098 (2005), quoting Hayes v. Cont'l Ins. Co., 178 Ariz. 264, 268, 872 P.2d 668, 672 (1994). "Statutes must be given a sensible construction that accomplishes the legislative intent and which avoids absurd results." Ariz. Health Care Cost Containment Sys. v. Bentley, 187 Ariz. 229, 233, 928 P.2d 653, 657 (App.1996); see also City of Tucson v. Clear Channel Outdoor, Inc., 218 Ariz. 172, ¶ 33, 181 P.3d 219, 230 (App.2008) (when interpreting particular term, "`we apply a practical and commonsensical construction'"), quoting Douglass v. Gendron, 199 Ariz. 593, ¶ 10, 20 P.3d 1174, 1177 (App.2001).

¶ 10 Section 12-962(A) only requires that the state "provide[] medical care and treatment to a person who is injured" by a tort in order to recover the medical costs paid. A common sense reading of § 38-654(A) is that the fund is merely the financial vehicle that the state, through ADOA, uses to "provide" and administer the state health insurance plan. See Clear Channel Outdoor, 218 Ariz. 172, ¶ 33, 181 P.3d at 230 (commonsense construction applied to statutes); see also Bentley, 187 Ariz. at 233, 928 P.2d at 657 (term "state" encompasses "state department or agency"). From the standpoint of the injured plan participant, the medical care and treatment is provided by the state.

¶ 11 The Coxes cite State v. Arizona Property and Casualty Insurance Guaranty Fund, 192 Ariz. 390, ¶ 18, 966 P.2d 557, 562 (App.1998), for the proposition that the health insurance trust fund established in § 38-654 is not the "State of Arizona" and therefore not an entity that can recover medical costs under § 12-962. But that case did not involve § 12-962. And it involved a different kind of "fund," established by an entirely different statute, for entirely different purposes, and comprising significant differences in structure and administration. See Ariz. Prop., 192 Ariz. 390, ¶ 7, 966 P.2d at 559. As such, the case does not support the Coxes' assertion.

¶ 12 Under the Coxes' interpretation of § 38-654, the legislature has precluded the state from ever recovering under § 12-962 when the state provides medical care to its own employees through the state health benefits plan. That interpretation would conflict with the plain language of § 12-962 and would vitiate its effect with respect to the state's self-insurance plan. Without some clear language in these statutes that this was the legislature's intent, we will not interpret them in such a manner. See Mejak, 212 Ariz. 555, ¶ 8, 136 P.3d at 876 (language best indicator of intent); Pima County by City of Tucson v. Maya Constr. Co., 158 Ariz. 151 155, 761 P.2d 1055, 1059 (1988) (statutes relating to same subject are pari materia and are construed together with other related statutes as one law); see also State ex rel. Thomas v. Ditsworth, 216 Ariz. 339, ¶ 12, 166 P.3d 130, 133 (App.2007) (pari materia rule "`applies even where the statutes were enacted at different times, and contain no reference ... to [each] other'"), quoting State ex rel. Larson v. Farley, 106 Ariz. 119, 122, 471 P.2d 731, 734 (1970). ADOA's payments of the Coxes' medical bills, via the fund, are payments from the state for purposes of § 12-962.

B. Provision of Medical Services and Employee Contributions to the Plan

¶ 13 The Coxes alternatively argue that § 12-962 contemplates recovery for the direct provision of medical care or treatment and does not apply to the payment for such services. They contend that because the state contracts with United Healthcare to provide the services, the statute does not apply. But "provide" simply means to "supply" or "make available." The American Heritage Dictionary 997 (2d college ed.1982). By setting up the health care plan and paying for the service through United Healthcare, ADOA supplies and makes available medical care and treatment to a plan participant who is injured. The plain meaning of § 12-962 therefore includes services provided through the plan administrator under § 38-654.

¶ 14 Division One of this court addressed a similar argument in Bentley and concluded that the Arizona Health Care Cost Containment System (AHCCCS),...