Blue Cross/Blue Shield of New Hampshire-Vermont v. St. Cyr

• Decision Date: 24 March 1983
• Docket Number: Nos. 82-029,82-379,HAMPSHIRE-VERMONT,s. 82-029
• Parties: BLUE CROSS/BLUE SHIELD OF NEWv. Marc ST. CYR et al. BLUE CROSS/BLUE SHIELD OF NEWv. AMERICAN POLICYHOLDERS INSURANCE COMPANY.
• Court: New Hampshire Supreme Court

Page 226

459 A.2d 226

123 N.H. 137

BLUE CROSS/BLUE SHIELD OF NEW HAMPSHIRE-VERMONT v. Marc ST. CYR et al.

BLUE CROSS/BLUE SHIELD OF NEW HAMPSHIRE-VERMONT v. AMERICAN POLICYHOLDERS INSURANCE COMPANY.

Nos. 82-029, 82-379.

Supreme Court of New Hampshire.

March 24, 1983.

Branch & Greenhalge, P.A., Concord (Frederic T. Greenhalge, Concord, on the brief and orally), for plaintiff Blue Cross/Blue Shield of New Hampshire-Vermont in No. 82-029.

Wiggin & Nourie, Manchester (Dort S. Bigg and Sterling H. Schoen, Jr. (argued), Manchester, on the brief), for defendant Marc St. Cyr.

Branch & Greenhalge, P.A., Concord (Frederic T. Greenhalge, Concord, on the brief), by brief for plaintiff Blue Cross/Blue Shield of New Hampshire-Vermont in No. 82-379.

Wiggin & Nourie, Manchester (Sterling H. Schoen, Jr., Manchester, on the brief), by brief for defendant American Policyholders Ins. Co.

KING, Chief Justice.

These consolidated appeals require us to determine whether the plaintiff, Blue Cross/Blue Shield of New Hampshire-Vermont (Blue Cross/Blue Shield), followed proper procedures in attempting to enforce its contractual subrogation rights.

In the first case the defendant, Marc St. Cyr, was seriously injured when a motorcycle on which he was a passenger was struck by a school bus. At the time of the accident, Marc St. Cyr was a minor. Most of Marc St. Cyr's medical expenses resulting from the accident were paid by Blue Cross/Blue Shield.

In July 1979, Blue Cross/Blue Shield advised the boy's father, Emile St. Cyr, that his health insurance policy contained a subrogation clause enabling the company to recover medical expenses that it had paid on behalf of Marc from third parties liable for such injuries. At the same time, the company warned Emile St. Cyr not to enter into a settlement agreement with the bus driver or the bus driver's employer unless Blue Cross/Blue Shield was "fully protected." Counsel for Emile St. Cyr notified Blue Cross/Blue Shield that he did not recognize Blue Cross/Blue Shield's interest.

In September 1980, Blue Cross/Blue Shield instituted the instant action against Marc St. Cyr to recover medical expenses it had paid on his behalf while he was a minor. It also filed a petition to attach $3,000 of any recovery obtained by Marc from the bus driver's insurance carrier. It brought no action against Emile St. Cyr.

In December 1980, Marc and Emile St. Cyr filed separate actions against the bus driver and the bus driver's employer. Marc, having reached the age of majority, sought to recover damages for pain and suffering, loss of earnings and loss of earning capacity, and future medical expenses. Emile St. Cyr sought to recover all medical and hospital expenses which he had incurred for the treatment of Marc, while he was a minor, including the medical expenses paid for by Blue Cross/Blue Shield.

Marc St. Cyr filed a motion to dismiss Blue Cross/Blue Shield's action against him. The Master (Frank B. Clancy, Esq.) concluded that Blue Cross/Blue Shield was entitled to "specific enforcement of its subrogation rights" against Marc St. Cyr because he had received the benefits of Blue Cross/Blue Shield's coverage and should not be allowed to retain a windfall. He stated, however, that the Blue Cross/Blue Shield action was premature because Marc St. Cyr had not yet established any rights against the bus driver. He further stated that Blue Cross/Blue Shield should move to intervene in the St. Cyrs' actions in superior court. The master's recommendation was accepted and approved by the Trial Court (Cann, J.).

The defendant, Marc St. Cyr, challenges the trial court's ruling that Blue Cross/Blue Shield can "specifically enforce" its subrogation rights against him. We hold that Blue Cross/Blue Shield had no right in this case to recover from Marc the sums it had paid for his medical expenses while he was a minor and not legally responsible for their payment. The trial court's ruling on this issue was therefore erroneous.

When an insurance policy contains a valid subrogation clause, the insurer's subrogation rights are determined by the clause. 44 Am.Jur.2d Insurance § 1794, at 784 (1982). In the present case, the relevant provisions of the subrogation clause provided:

"In the event of any payment of benefits under this Certificate, THE PLAN shall be subrogated to all of the Member's rights of recovery of those benefits against any person or organization, and the Member shall cooperate with THE PLAN and do whatever is necessary to secure those rights."

Because both Marc and his father were by definition under the policy "members" of the Blue Cross/Blue Shield plans, Blue Cross/Blue Shield is subrogated to their respective rights to recover these medical benefits. In order to determine the effect of this subrogation, we must decide whether either or both of them had the right to recover medical expenses incurred on Marc's behalf during his minority, as a result of the accident.

Generally, a parent rather than a minor is liable for the minor's medical or hospital expenses when the minor is living with or supported by his parents. 42 Am.Jur.2d Infants § 72, at 74 (1969); 59 Am.Jur.2d Parent and Child § 87, at 184 (1971); see Heath v. Seymour, 110 N.H. 425, 429-30, 270 A.2d 602, 605 (1970). As a result, we have held that the parent, rather than the child, is entitled to recover the medical expenses of a minor child injured by another. Heath v. Seymour, 110 N.H. at 429, 270 A.2d at 605.

Thus, Marc St. Cyr had no right to recover medical expenses incurred on his behalf during his minority due to the accident. Blue Cross/Blue Shield correspondingly had no rights under the subrogation clause that it could "specifically enforce" to recover those expenses. Emile St. Cyr was liable for the cost of medical services furnished to his minor son, Marc, and had the right to recover them from the bus driver or the bus driver's employer. Under the terms of the subrogation clause, Blue Cross/Blue Shield was subrogated to Emile St. Cyr's rights to recover these benefits.

Blue Cross/Blue Shield argues that we should nonetheless permit it to recover the medical expenses from Marc St. Cyr in order to prevent Emile St. Cyr from settling with the bus driver or the bus driver's employer for a small amount in return for a larger settlement for his son Marc. We do not find this argument persuasive because Blue Cross/Blue Shield has other adequate remedies to protect its subrogation rights against Emile St. Cyr. After Emile St. Cyr instituted his action against the bus driver and the bus driver's employer to recover the medical expenses he incurred while Marc was a minor, Blue Cross/Blue Shield, in the absence of an agreement that its interests would be protected, had the right to intervene in the suit to protect its interests. Sibson v. Robert's Express, 104 N.H. 192, 194, 182 A.2d 449, 450 (1962).

Further, if Emile St. Cyr, or the insurance carrier for the third-party tortfeasor, refused to acknowledge and protect Blue Cross/Blue Shield's interest, or if Emile St. Cyr failed to bring suit against the bus driver or the bus driver's employer, Blue Cross/Blue Shield had the right to enforce its subrogation rights by itself instituting an action in the name of Emile St. Cyr. Montello Shoe v. Suncook Industries, 92 N.H. 161, 161-62, 26 A.2d 676, 676 (1942).

Additionally, Blue Cross/Blue Shield appears to argue that we should consider Emile St. Cyr a party defendant in the instant action. It contends that service was made on Emile St. Cyr because he was the recipient of substitute service of the Blue Cross/Blue Shield writ. This substitute service was approved by the superior court only because ...