Hays v. Mo. Highways & Transp. Comm'n, WD59456

• Court: Court of Appeal of Missouri (US)
• Writing for the Court: PER CURIAM
• Citation: 62 S.W.3d 538
• Parties: Gary L. Hays, Individually and as Next Friend for minor child, Nicholas L. Hays, and as Representative of a Class of Persons Similarly Situated, Appellant, v. Missouri Highways and Transportation Commission, Respondent. WD59456 Missouri Court of Appeals Western District
• Decision Date: 30 October 2001
• Docket Number: WD59456

Gary L. Hays, Individually and as Next Friend for minor child, Nicholas L. Hays, and as Representative of a Class of Persons Similarly Situated, Appellant,
v.
Missouri Highways and Transportation Commission, Respondent.

WD59456

Missouri Court of Appeals Western District

10/30/2001

Appeal From: Circuit Court of Cole County, Hon. Byron L. Kinder

Counsel for Appellant: John Beger

Counsel for Respondent: Melinda Grace-Beasley

Opinion Summary:

Hays appeals the court's judgment in favor of Missouri Highways and Transportation Commission (MHTC), which found that insurance benefits under the MHTC group health plan were properly denied to Hays' son based upon Hays' refusal to sign a reimbursement agreement required by MHTC. Hays' son had been injured as the result of an automobile collision due to the alleged negligence of a third party.

Hays argues on appeal that the trial court erred, as the reimbursement agreement is void as an attempted partial assignment of a personal injury claim. MHTC contends that the reimbursement conveyed only a lien interest in favor of the group health plan in any proceeds Hays might obtain from the third-party tortfeasor, and was not an attempted partial assignment of the personal injury claim.

Division holds: 1) The plain language of the reimbursement agreement does not operate to grant a lien in favor of MHTC or the group health plan. Instead, it explicitly provides for an assignment of the proceeds of any claim against a third party tortfeasor.

2) As a partial assignment, the reimbursement agreement is void under ??? and its progeny.

3) MHTC is not entitled to a common law exception to the prohibition of such assignments derived from English Common Law, which permitted certain assignments of certain causes of action to the soverign.

Smith, P.J., and Howard, J., concur.

Ronald R. Holliger, Judge

Appellant Gary Hays (Hays) appeals the trial court's judgment in favor of respondent Missouri Highways & Transportation Commission (MHTC). The trial court granted judgment in favor of MHTC, finding that it properly withheld insurance benefits under a group medical and life insurance plan due to Hays' refusal to execute a reimbursement agreement. Because we hold that the reimbursement agreement is void under public policy grounds, we reverse the judgment of the trial court.

Hays and his son were insured under a group medical and life insurance plan (the Plan) provided by MHTC. Hays' son was seriously injured in an automobile collision in February 1998, incurring approximately $28,000 in medical expenses. Those expenses were subsequently submitted to the Plan's third-party administrator, Westport Benefits, LLC, for payment. In May 1998, Westport Benefits sent Hays a letter indicating that before processing of the claim could continue, it was necessary for Hays to execute a document entitled "Agreement for Reimbursement, Assignment and Lien" (hereinafter "Reimbursement Agreement"). Hays, through counsel, refused to execute the Reimbursement Agreement, believing it to be an improper partial assignment of Hays' (and his son's) personal injury action against the third party tortfeasor. As a result of Hays' refusal, Westport Benefits declined to complete processing of Hays' claim for benefits.

Hays subsequently brought a declaratory judgment action against MHTC, seeking to enforce his rights to benefits under the Plan, contending that those benefits were improperly denied upon his refusal to execute the Agreement. MHTC argued that requiring execution of the Reimbursement Agreement was authorized under the provisions of the Plan, and that Hays' refusal to execute the Reimbursement Agreement constituted a breach of contract relieving MHTC of providing benefits under the Plan.

Hayes argued that the language of the Plan and Reimbursement Agreement violated public policy which prohibits assignment of a personal injury claim. MHTC contended that the language of the Reimbursement Agreement and the Plan did not constitute a partial assignment of Hays' personal injury action, which would be void under Missouri public policy. Instead, it argued that those documents merely provided MHTC with a lien against any potential recovery Hays might realize from a personal injury action against the third party tortfeasor.

The case was submitted to the trial court upon stipulated facts. After review of those facts, the trial court found in favor of MHTC on the basis that the Plan and Reimbursement Agreement granted MHTC a lien on proceeds of any possible judgment or settlement involving the third party...