McCord v. Healthcare Recoveries, Inc.

• Decision Date: 10 May 2007
• Docket Number: No. 2005-CA-01353-SCT.,2005-CA-01353-SCT.
• Citation: 960 So.2d 399
• Parties: Cortney Jo Ashmore McCORD v. HEALTHCARE RECOVERIES, INC. and Travelers Insurance Company.
• Court: Mississippi Supreme Court

960 So.2d 399

Cortney Jo Ashmore McCORD v. HEALTHCARE RECOVERIES, INC. and Travelers Insurance Company.

No. 2005-CA-01353-SCT.

Supreme Court of Mississippi.

May 10, 2007.

Rehearing Denied August 2, 2007.

Roy O. Parker, Roy O. Parker, Jr., Tupelo, attorneys for appellant.

Michael David Tapscott, Tupelo, Clifford Kavanaugh Bailey, III, Ridgeland, attorneys for appellees.

EN BANC.

CARLSON, Justice, for the Court.

¶ 1. After an evidentiary hearing, the Lee County Chancery Court, Chancellor Jacqueline Estes Mask, presiding, found that Travelers Insurance Company and Healthcare Recoveries, Inc., were not liable to Courtney Jo Ashmore McCord for damages for alleged tortious interference with the settlement of a minor's personal injury claim. From this chancery court judgment, Courtney Jo Ashmore McCord appeals to us. Finding no error, we affirm.

FACTS AND PROCEDURES IN THE TRIAL COURT¹

¶ 2. On July 2, 1995, Courtney Jo Ashmore² (Courtney)³ was injured while riding an all-terrain vehicle with her female cousin on a gravel road in Prentiss County. Courtney struck a wire cable which had been strung across the road by an adjacent landowner in order to deter passage. When the cable caught Courtney across the neck, she was thrown violently from the vehicle. Courtney was transported on another vehicle to a nearby residence, and from there, she was transported to the hospital. The medical examination at the hospital revealed that Courtney had suffered severe injuries, including a neck fracture, and Courtney thereafter was required to have multiple surgeries and treatments.

¶ 3. On the date of the accident, Courtney, as a dependent of her step-father, Michael Mask, was covered under a health plan provided by the Tennessee Valley Regional Housing Authority (TVRHA). Michael Mask was an employee of TVRHA. Benefits were paid under a group policy issued by Travelers Insurance Company (Travelers) to TVRHA. Courtney incurred medical expenses in the amount of $31,904.45, of which $26,222.79 was paid pursuant to the TVRHA plan.

¶ 4. We momentarily digress to provide here certain information concerning the pre-accident activities of certain corporate entities involved in varying degrees with today's case. Prior to the subject accident, Travelers and Metropolitan Life Insurance Company (MetLife) sold their medical insurance businesses to Metra-Health Companies, Inc. (MetraHealth) on January 1, 1995. As a part of this transaction, Travelers received approximately 48% of MetraHealth's outstanding capital stock. On October 3, 1995, Travelers sold all of its MetraHealth stock to United Healthcare Corporation (UHC). A little more than a month later, UHC entered into an agreement with Healthcare Recoveries, Inc. (HRI) to utilize HRI's services on behalf of its owned and managed plans, which included those plans managed by MetraHealth. HRI operated as a recovery service for healthcare insurance payors to identify those situations which might generate potential subrogation claims. In her opinion, Chancellor Mask added footnote 5 to further explain this agreement:

Paragraph 5(a) of the agreement states that HRI will follow applicable law in performing services on behalf of [UHC] . . . Further, pursuant to Paragraph 7(c), [UHC] was responsible for the "correctness, completeness and accuracy of the data submitted to HRI." The contract likewise contains indemnification provisions between HRI and [UHC]. However, no cross-claims have been filed by HRI or Travelers.

¶ 5. Thus, in the midst of all of this inter-corporate activity, Betty Ashmore Mask, (Betty) found herself in need of legal representation on behalf of her minor child, Courtney. Betty hired a lawyer in an effort to recover damages for Courtney's injuries. In due course, a personal injury claim was asserted against Joseph Richard Arnold, the adjacent landowner who had strung the wire cable across the road. Arnold was insured by Mississippi Farm Bureau Mutual Insurance Company (Farm Bureau). We now quote from Chancellor Mask's opinion:

The alleged basis for this suit lies within the ensuing communications and exchange of information between the above entities and counsel for Courtney, which the Court summarizes in chronological order below.

On December 12, 1995, counsel for Courtney sent a letter to MetraHealth advising of his representation of her and requesting copies of any of her medical bills which had been paid by MetraHealth.

MetraHealth referred the case to HRI for possible collection in February 1996.

On March 15, 1996, counsel for Courtney sent a letter to HRI forwarding "MetraHealth documents," and requesting that HRI "let [him] know about the amount of [its] subrogation lien." There is no basis in evidence for this statement by counsel for Courtney, unless the attorney made the same assumption as HRI, more particularly described below, that a subrogation claim existed in some form.

On March 26, 1996, Timothy J. Partin (hereinafter "Partin"), an employee of HRI, forwarded a letter to counsel for Courtney which stated that

The contract between the Health Plan and your client provides that the Health Plan has subrogation and/or recovery rights as an insurer. In this connection, the Health Plan also has the right to be reimbursed by your client for its costs of providing medical care in the event that any compensation is received by your client. The contract also requires the full cooperation of your client in the Health Plan's efforts to obtain a recovery.

The Court reviewed the video of Partin's deposition and the transcript of the same, . . . and observed that Partin explained that at the time he sent the foregoing letter he had not in fact personally reviewed the policy to determine whether it contained any subrogation language. Partin further explained that he relied on information concerning the policy which had been provided to him from an unidentified source, but which could have been provided by the client services office of HRI. Interestingly, Partin elaborated that when a file is referred to a collector at HRI, it would be uncustomary for them to review the plan language, and that "every time you pull up a file you don't run to look at the language." He also explained that the above described letter is typical of what is sent by HRI to an insured's attorney. Partin also acknowledged that the language of his letter could constitute a misrepresentation. However, Partin viewed the letter as an initial attempt to gather information regarding the case, and viewed the meaning of "rights of recovery" to include more than what would be termed contractual subrogation in this State.

An excerpt of HRI's legal manual on Mississippi subrogation law was received [into evidence]; however, the excerpt reflects HRI's view on the law as of July 1999, and not the version utilized during the period under consideration. An excerpt of training materials used by HRI on this subject in January 1997 was also received [into evidence]. Both sets of material simply state that "Mississippi recognizes both equitable and contractual subrogation" and neither elaborates on the nature of either theories of recovery.

On May 3, 1996, Steve Pope (hereinafter "Pope"), the examiner for HRI who was assigned to Courtney's case, sent a letter to counsel for Courtney with copies of the total benefits paid by the plan to that date . . . Pope also advised, "Upon settlement, please include our file number on the check and include the admittance advise below." The statement of benefits which was attached to the letter instructed that checks were to be made payable to HRI.

On June 18, 1996, Pope sent a letter to counsel for Courtney which provided an updated statement of benefits paid for her. This letter is in the same format as the letter . . . described above, and included the same language regarding remitting payment to HRI.

It is uncertain at what point counsel for Courtney received a copy of the Plan Description for TVRHA.

On September 26, 1996, counsel for Courtney wrote a letter to Pope, "requesting a copy of the policy of insurance or other documentation of entitlement to subrogation."

On October 2, 1996, Pope faxed a memo to Jim Rhodes (hereinafter "Rhodes"), adjuster for Farm Bureau, advising that HRI maintained a subrogation lien in the amount of $26,222.79, and requesting that HRI be placed on the settlement check as a payee.

By letter dated October 4, 1996, Pope advised Farm Bureau that HRI "provides subrogation and/or recovery services" for Courtney's plan, and explained that "[t]he purpose of this letter is to serve as the plan's formal notice of its contractual subrogation and/or its recovery rights as set forth in its contract with its insured."

(The chancellor's references to trial exhibits are omitted from the quoted language from the chancellor's opinion.)

¶ 6. Continuing with a summary of the facts set out in Chancellor Mask's opinion, Farm Bureau's counsel, by letter dated December 6, 1996, requested that the chancellor be informed of HRI's potential subrogation rights at the time of any hearing on a petition for approval of the minor's settlement.⁴ Likewise, on December 6, 1996, a representative from HRI faxed Courtney's lawyer a purported copy of a page from the applicable insurance policy documenting the fact that HRI was entitled to subrogation as to the medical expenses of $26,222.79; however, as it turned out, the faxed page was not a part of the applicable policy or plan which had paid Courtney's medical expenses. In fact, in due course, HRI admitted that, at the time of the accident, it did not hold a medical insurance policy containing an express reservation of subrogation rights on Courtney's medical expenses. Thereafter, on December 26, 1996, Pope, on behalf of HRI, informed Courtney's lawyer by phone that he had previously inadvertently forwarded incorrect information to him and that the plan which covered Courtney did not contain an express...