Mutual Hospital Ins., Inc. v. MacGregor, 2-276A51

• Decision Date: 10 November 1977
• Docket Number: No. 2-276A51,2-276A51
• Parties: MUTUAL HOSPITAL INSURANCE, INC., and Mutual Medical Insurance, Inc., Appellants (Plaintiffs below), v. Rose MacGREGOR, Appellee (Defendant below).
• Court: Indiana Appellate Court

Page 1376

368 N.E.2d 1376

174 Ind.App. 550

MUTUAL HOSPITAL INSURANCE, INC., and Mutual Medical

Insurance, Inc., Appellants (Plaintiffs below), v. Rose MacGREGOR, Appellee (Defendant below).

No. 2-276A51.

Court of Appeals of Indiana, Second District.

Nov. 10, 1977.

Steven G. Cracraft, Kothe, Shotwell, Claycombe, Hendrickson & Kortepeter, Indianapolis, for appellants.

M. Daniel Friedland, Indianapolis, for appellee.

LYBROOK, Judge.

Appellants Mutual Hospital Insurance, Inc. (Blue Cross) and Mutual Medical Insurance, Inc. (Blue Shield) bring this appeal from a judgment in favor of appellee, Rose MacGregor, on their complaint on an insurance policy. ¹

On February 13, 1971, Rose MacGregor was involved in an automobile accident caused by the alleged negligent conduct of Vincent Bryant. As a result of the accident, Mrs. MacGregor sustained multiple injuries and incurred expenses for medical attention and hospitalization in the sum of $5,168.58. At the time of the accident, Mrs. MacGregor was insured under a Master Policy for hospital, surgical and medical benefits issued by Blue Cross Blue Shield to Wright Tool & Die Company. By reason of the injuries sustained by Rose MacGregor, Blue Cross-Blue Shield paid on her behalf the total sum of $5,168.58 for hospital, surgical and medical expenses under the Master Policy.

On the date of the accident, Bryant, the operator of the other vehicle, had an automobile liability policy with Farmers Insurance Group. On April 10, 1972, Mrs. MacGregor, through her attorneys, entered into a settlement with Farmers Insurance Group, whereby Farmers paid to Mrs. MacGregor and her husband the sum of $10,000 in exchange for a written release in full of all claims and rights which the MacGregors might have against Bryant and Farmers Insurance Group. The sum of $10,000 was the maximum amount allowed under Bryant's liability coverage.

This litigation was commenced by Blue Cross-Blue Shield against Mrs. MacGregor on July 29, 1974, when Blue Cross-Blue Shield brought an action to recover the $5,168.58 which it had paid for Mrs. MacGregor's medical expenses. Blue Cross-Blue Shield based its complaint on Article X, the subrogation provisions of the Master Policy issued to Wright Tool and Die Company under which Mrs. MacGregor was covered at the time of the accident, which reads in pertinent part:

"In the event of any payment for services under this Policy, Blue Cross-Blue Shield shall, to the extent of such payment, be subrogated to all the rights of recovery of the Member or Dependent arising out of any claim or cause of action which may accrue because of the alleged negligent conduct of a third party. Any such Member or Dependent hereby agrees to reimburse Blue Cross-Blue Shield, for any benefits so paid hereunder, out of any monies recovered from such third party as the result of judgment, settlement or otherwise; and such Member or Dependent hereby agrees to take such action, to furnish such information and assistance, and to execute and deliver all necessary instruments as Blue Cross-Blue Shield may require to facilitate the enforcement of their rights. This provision shall not apply, however, to a recovery obtained by a Member or Dependent from any insurance company on a policy under which said Member or Dependent is entitled to indemnity as a named insured person."

The Abstract of Benefits, a copy of which was provided to all employees of Wright Tool & Die Company who were members under the Master Policy, contains the following clause under Section V:

"In the event of any payment for services under this policy, Mutual Hospital Insurance, Inc. and Mutual Medical Insurance, Inc. shall be subrogated to all the rights of recovery for expenses incurred of the covered individual against any person or organization, except against insurors on policies of insurance issued to and in the name of the covered individual, and the latter shall execute and deliver such instruments and papers as may be required and do whatever else is necessary to secure such rights."

Numerous motions and responsive pleadings were filed in this action, with the case coming to trial on August 26, 1975. On September 9, 1975, the trial court made the following Special Findings of Fact and Conclusions of Law, which in pertinent part read:

"SPECIAL FINDINGS OF FACTS "

"7. The Blue Cross policies in question contain a paragraph which reads in substance as follows: Subrogation 'In the event of payment for services under this policy the corporation (plaintiffs) shall, to the extent of such payment, be subrogated to all rights of recovery of the member arising out of any claim or cause of action which may accrue because of alleged negligent conduct of third party. Any such member hereby agrees to reimburse the corporation for any benefits so paid hereunder, out of any monies recovered from such third party as the result of settlement or otherwise .'

"8. On April 10, 1972, Rose MacGregor and her husband, Robert C. MacGregor (now deceased), made a settlement with the tort feasor, Vincent Bryant, through his insurance company, in the sum of $10,000.00, which was the full amount of Bryant's insurance coverage.

"9. Upon payment of the $10,000 referred to above, both of the MacGregors executed a 'Release In Full of All Claims and Benefits' 'releasing and discharging Vincent Bryant from any and all rights, claims, demands and damages of any kind resulting from or related to personal injuries arising from an accident that occurred on or about 13 February 1971 .

"10. While it is not within the province of this Court to determine the adequacy of the settlement agreement between the MacGregors and the tort-feasor, Bryant, the seriousness of Rose MacGregor's injuries; her extended hospitalization; the size of her medical, hospital and doctors' bills without considering any loss of services on the part of her husband, Robert C. MacGregor; her complete inability to work from the time of the accident to the present and her attendant loss of wages as a result thereof; the permanency of her injury; plus her pain and suffering would seem to indicate that the acceptance of the settlement of $10,000 was necessitated only by the fact that such sum was the full extent of the insurance coverage available under the tortfeasor's policy and by the additional fact that any amount over the sum would be uncollectable since Bryant did not have personal assets to satisfy any judgment in excess of this sum.

"11. The settlement check for $10,000 was made out to 'Robert C. MacGregor and Rose M. MacGregor, individually and as husband and wife and Yockey and Yockey, their attorneys' the latter name being that of the firm of attorneys who negotiated the settlement for the MacGregors with the tortfeasor's insurance company. This firm of attorneys received a portion of this check as compensation for their work and effort in effecting this settlement.

"12. The receipt of this sum of money gave no indication of unjust enrichment on the part of the MacGregors, nor indicated that they had received full satisfaction for all of their injuries and damages; in fact it seems to indicate just the contrary."

"CONCLUSIONS OF LAW "

"1. The law is with the defendant, Rose MacGregor.

"2. There is no evidence before the Court from which it can be determined that the subrogation claim of the plaintiffs in the sum of $5,163.58 was or was not included in the settlement made by both MacGregors for damages and personal injuries.

"3. 'Damages' is that sum of money which is paid by one person to another as compensation for a loss sustained by the latter in consequence of an injury committed by the former.

"4. The damages in this case for which the MacGregors were compensated would undoubtedly consist of many items too numerous to be set out here, and may or may not include medical bills, hospital expenses and doctors' bills, since the phraseology of the release is so overbroad as not to specify the exact damages for which it was given.

"5. The plaintiffs, having failed to produce the necessary evidence as to material facts, are not entitled to recover against the defendant on its complaint.

"WHEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that the plaintiffs, Mutual Hospital Insurance, Inc. and Mutual Medical Insurance, Inc., recover nothing from the defendant, Rose MacGregor, on its complaint; and further that the counterclaimant, Rose MacGregor, recover nothing from the plaintiffs on her counterclaim; the costs of this action to be assessed against each party on its pleadings.

"All of which is accordingly done this 9th day of September, 1975.

"/s/ J. N. Myers, Judge

"/s/ Municipal Court # 1"

On November 6, 1975, Blue Cross-Blue Shield filed its Motion to Correct Errors, and Brief in Support of Motion to Correct Errors. The trial court overruled Blue Cross' motion on November 14, 1975, and Blue Cross-Blue Shield filed its Praecipe for Record of the Proceedings for the purpose of perfecting this appeal.

Appellant Blue Cross-Blue Shield is appealing from a negative judgment and this court need only decide whether the decision of the trial court was contrary to law. To determine this question, we will consider only the evidence most...