Auto Club Prop. Cas. Ins. Co. v. Moser
| Decision Date | 25 April 2022 |
| Docket Number | 20-0792 |
| Citation | 874 S.E.2d 295 |
| Parties | AUTO CLUB PROPERTY CASUALTY INSURANCE CO., Petitioner, v. Jessica A. MOSER, Respondent. |
| Court | West Virginia Supreme Court |
Ancil G. Ramey, Esq., Steptoe & Johnson PLLC, Huntington, West Virginia, Melanie Morgan Norris, Esq., Steptoe & Johnson PLLC, Wheeling, West Virginia, Counsel for the Petitioner.
Mark Jenkinson, Esq., Ronald M. Harman, Esq., Burke, Schultz, Harman & Jenkinson, Martinsburg, West Virginia, Counsel for the Respondent.
In this appeal from the Circuit Court of Berkeley County, we consider a lawsuit by an insured against her insurance company concerning the "medical payments coverage" provision in her automobile insurance contract. Specifically, we consider the contract's requirement that the insurance company reimburse the insured for any medical expenses she "incurred" in an accident. The insured received a medical bill for treatment she received after an automobile accident, one that was eventually resolved by her health insurer. The insurance company refused payment and claimed that the medical bill had not been "incurred." The circuit court examined the language of the contract and found that the insurance company wrote it to say a medical expense was "incurred" when the insured received and became liable to pay for medical services. Further, the terms of the contract, written by the insurance company, obligated the company to reimburse the insured the full amount of the expense. Because the insured was required to sue to enforce the insurance contract's terms, the circuit court also required the insurance company to reimburse the insured for her costs and attorney's fees.
As we discuss below, we find no error in the circuit court's interpretation of the medical payments provision in the insurance contract. The contract's language was chosen by the insurance company, and six decades of case law interpreting identical language in similar policies establish that the contract clearly afforded coverage to the insured on the facts presented below. We also find no error in the circuit court's rulings on costs and attorney's fees.
Plaintiff Jessica A. Moser was an "insured person" under an automobile insurance contract issued by the defendant, Auto Club Property Casualty Insurance Company ("Auto Club"). The contract included a provision that afforded an "insured person" up to $5,000 in "medical payments coverage." The medical payments provision stipulated that Auto Club would pay the reasonable medical expenses "incurred" by an insured person for bodily injuries sustained in a collision while occupying a motor vehicle.1 As we discuss in greater detail below, the parties dispute what it means for a medical expense to be "incurred" under the contract.
On October 17, 2017, the plaintiff was driving a motor vehicle insured by Auto Club. She was injured when her vehicle was struck by another vehicle in a rear-end collision. The driver of the other vehicle was determined to be at fault. The plaintiff was taken by ambulance to a hospital for examination. She was soon released and, over the following months, visited various medical providers for follow-up treatment. The plaintiff received charges from those medical providers, all related to the collision, totaling $19,522.56. Those medical expenses were resolved by the plaintiff's health insurer, the West Virginia Medicaid program.2
Before going further into the facts, we emphasize that the plaintiff's receipt of medical benefits from the Medicaid program is not important to the outcome of this case. However, in order to understand how Auto Club's subsequent actions were misguided, a rudimentary explanation of West Virginia's Medicaid program and the program's right to subrogation when an injured plaintiff receives Medicaid medical benefits is necessary.
State law provides that when a third party is legally liable for a plaintiff's past medical expenses that were paid by the Medicaid program, the program automatically receives a "subrogation lien" to recover those expenses.3 The plaintiff's lawyer is required to notify the Medicaid program when the lawyer initiates a claim or lawsuit against the third party for those past medical expenses.4 If the claim or lawsuit against the third party concludes with a settlement, then the plaintiff's lawyer is required to notify the Medicaid program of "the amount of the settlement being allocated for past medical expenses paid for by the Medicaid program."5 As we said in Syllabus Point 4 of In re E.B. , 229 W. Va. 435, 729 S.E.2d 270 (2012), the Medicaid program may "obtain reimbursement for medical expenses paid from only that portion of the settlement, compromise, judgment, or award obtained by a recipient of Medicaid assistance that constitutes damages for past medical expenses."
Within thirty days of receiving the settlement notice, the Medicaid program must either consent to or reject the plaintiff's proposed allocation of the settlement toward past medical expenses.6 The Medicaid program may negotiate with the plaintiff's lawyer and choose to accept an amount that is less than the subrogation lien, or it may seek judicial intervention, in which case the Medicaid program bears the burden of proving that the allocation of past medical expenses offered by the plaintiff is improper.7 However, if the plaintiff obtains a total settlement less than $20,000, then state law dictates that the Medicaid program collects nothing.8 In summary, it is the plaintiff's responsibility, and not any third party's, to work with the Medicaid program and make any payments toward the subrogation lien.
After her October 2017 rear-end collision, and during the months-long course of her medical treatment, the plaintiff hired a lawyer. The plaintiff's lawyer began pursuing a claim against the tortfeasor who caused the collision (or, more specifically, the tortfeasor's automobile insurer). As required by law, the plaintiff's lawyer notified the Medicaid program that the plaintiff was asserting a claim against a third party who was allegedly liable to pay some, or all, of the plaintiff's past medical expenses.
Additionally, on April 27, 2018, the plaintiff's lawyer sent a medical bill to the plaintiff's automobile insurer, defendant Auto Club, seeking reimbursement under the medical payments provision of the insurance contract. The parties agree that the two-page medical bill from a physical therapy clinic listed a series of visits by the plaintiff for medical services related to the collision. The total cost of the services from the clinic was $2,165.00, and the plaintiff demanded that Auto Club pay her this amount.
Auto Club responded and refused to pay the plaintiff the amount of the physical therapy clinic's bill. Among its reasons for denying the reimbursement, Auto Club noted that the plaintiff had health insurance through the Medicaid program. Auto Club declared that the plaintiff was not entitled to medical payments coverage because "no medical expenses have been incurred ... as the bills submitted were paid by Medicaid."
Apparently unbeknown to the plaintiff's lawyer, and contemporaneous with Auto Club's rejection of the plaintiff's demand for medical payments coverage, the Medicaid program sent a letter to Auto Club.9 The letter noted that the Medicaid program had so far "paid medical benefits on behalf of JESSICA A MOSER in the sum of $1,437.61" to three providers (including the physical therapy clinic) and that the program was asserting a subrogation lien in that amount. The Medicaid program concluded that payment to the program should be remitted "[a]t the conclusion of this matter[.]" At some later date – the record is unclear when – and despite the fact that the plaintiff's claim against the tortfeasor had not been concluded, Auto Club paid $1,437.61 to the Medicaid program.
On October 23, 2019, the plaintiff settled with the tortfeasor who caused the rear-end collision for $60,000. The same day, the plaintiff's lawyer notified the Medicaid program of the settlement. The Medicaid program asserted that the plaintiff owed a balance of $1,547.29 toward the subrogation lien for past medical expenditures by the program. After negotiations with the plaintiff's lawyer, the Medicaid program agreed to accept $1,078.69 as full payment.
The plaintiff filed the instant case against Auto Club seeking, among other things, a declaratory judgment interpreting the medical payments provision in the Auto Club contract. The plaintiff asked for an order requiring Auto Club to provide medical payments coverage for the $2,165.00 in medical expenses that she "incurred" for physical therapy. On March 13, 2020, the plaintiff filed a motion for partial summary judgment, asserting that the medical payments provision should be interpreted in her favor. Auto Club countered with its own motion for summary judgment.
In an order dated June 5, 2020, the circuit court granted the plaintiff's motion for partial summary judgment and denied Auto Club's motion. The circuit court found that the term "incurred" in Auto Club's medical payments provision was clear and meant As the Auto Club insurance contract was written, the circuit court concluded that an injured party "incurs" and becomes responsible for a medical expense "when the medical services are received, regardless of how, or even whether the injured person's obligation [to] the medical providers [is] later discharged." Additionally, the circuit court determined that the Medicaid program was not a party to the Auto Club insurance contract, and it found no language in the medical payments provision that permitted Auto Club to pay policy benefits to any entity other than the insured plaintiff. Further, it found that Auto Club should not have paid the Medicaid program because, under the...
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