Laboy v. Grange Indem. Ins. Co., 100116
| Decision Date | 10 April 2014 |
| Docket Number | No. 100116,100116 |
| Citation | 2014 Ohio 1516 |
| Parties | PHILIP LABOY, ET AL. PLAINTIFFS-APPELLANTS v. GRANGE INDEMNITY INSURANCE CO., ET AL. DEFENDANTS-APPELLEES |
| Court | Ohio Court of Appeals |
2014 Ohio 1516
PHILIP LABOY, ET AL. PLAINTIFFS-APPELLANTS
v.
GRANGE INDEMNITY INSURANCE CO., ET AL. DEFENDANTS-APPELLEES
No. 100116
Court of Appeals of Ohio EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA
RELEASED AND JOURNALIZED: April 10, 2014
BEFORE: Stewart, J., S. Gallagher, P.J., and E.A. Gallagher, J.
Page 2
ATTORNEYS FOR APPELLANTS
Thomas J. Connick
Dubyak Connick Sammon & Bloom, L.L.C.
Edward W. Cochran
Cochran & Cochran
ATTORNEYS FOR APPELLEE
Michael K. Farrell
David A. Carney
Baker & Hostetler, L.L.P.
PNC Center
Mark A. Johnson
Rand L. McClelland
Baker & Hostetler, L.L.P.
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MELODY J. STEWART, J.:
{¶1} Plaintiffs-appellants Philip and Heidi Laboy carried automobile insurance issued by defendant-appellee Grange Mutual Casualty Company ("Grange"). The policy contained a medical payments clause that said Grange would pay the lesser of reasonable medical expenses or "any negotiated reduced rate accepted by a medical provider." When the Laboys were injured in an automobile accident, they submitted their medical bills not only to Grange, but to their health insurance company, Medical Mutual of Ohio. Medical Mutual reimbursed the Laboys' health care providers at negotiated rates; Grange reimbursed those same health care providers at higher rates. After all the bills were paid, Grange exercised its contractual right of subrogation against the Laboys for the medical payments it made on their behalf. The Laboys complained that Grange violated the terms of the policy by paying a higher rate than that negotiated by Medical Mutual for the same bills. They claimed that Grange's higher rate of reimbursement ($891.99) meant that Grange could seek a higher amount in subrogation, which would lead to a corresponding reduction in the net proceeds they received from their settlement with the tortfeasor.
{¶2} The court rejected the Laboys' arguments. It found that the Laboys' interpretation of the medical payments clause would lead to the absurd result that the obligation to reimburse medical expenses at a negotiated reduced rate accepted by "a medical provider" would result in Grange having to reimburse medical expenses at a rate negotiated by any medical provider, anywhere, regardless of whether the Laboys had a
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right, or access, to that rate. It found that a more reasonable interpretation of the policy language was that the language "any negotiated reduced rate accepted by a medical provider" implies that "Defendant Grange has to have access to that negotiated rate by contracting with the medical provider." Grange negotiated its own rate with PPOM Ohio network and made that rate available to its insureds if they chose to receive medical treatment in that network. The court found no evidence to show that Grange had access to the same negotiated rate charged by Medical Mutual because Grange was not a party to the contracts between Medical Mutual and its providers. On that basis, the court granted summary judgment to Grange and this appeal followed. The sole assignment of error contests the court's ruling.
{¶3} The language at issue appears in a "limit of liability" section of the policy. It states:
B. We will pay under Part B - Medical Payments Coverage, the lesser of:...
1. reasonable expenses incurred by the insured for necessary medical and funeral services because of bodily injury;
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