Prudential Ins. Co. of America v. Couch

• Decision Date: 23 November 1988
• Docket Number: No. 18375,18375
• Citation: 376 S.E.2d 104,180 W.Va. 210
• Parties: PRUDENTIAL INSURANCE CO. OF AMERICA, Plaintiff Below, Appellee, v. George COUCH, Defendant Below, Appellant.
• Court: West Virginia Supreme Court

Page 104

376 S.E.2d 104

180 W.Va. 210

PRUDENTIAL INSURANCE CO. OF AMERICA, Plaintiff Below, Appellee, v. George COUCH, Defendant Below, Appellant.

No. 18375.

Supreme Court of Appeals of

West Virginia.

Nov. 23, 1988.

Syllabus by the Court

1. "A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law." Syllabus Point 3, Aetna Casualty & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).

2. "A person who moves for summary judgment has the burden of showing that there is no genuine issue of fact and any doubt as to the existence of such issue is resolved against the movant for such judgment." Syllabus Point 6, Aetna Casualty & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963).

3. "The essential elements in an action for fraud are: '(1) that the act claimed to be fraudulent was the act of the defendant or induced by him; (2) that it was material and false; that plaintiff relied upon it and was justified under the circumstances in relying upon it; and (3) that he was damaged because he relied upon it.' Horton v. Tyree, 104 W.Va. 238, 242, 139 S.E. 737 (1927)." Syllabus Point 1, Lengyel v. Lint, 167 W.Va. 272, 280 S.E.2d 66 (1981).

4. It is generally recognized in the law of restitution that if one party pays money to another party (the payee) because of a mistake of fact that a contract or other obligation required such payment, the party making the payment is entitled to repayment of the money from the payee.

5. A suit for restitution may not be maintained against a party who is not the payee, unless it is shown that such party was unjustly enriched because the payment satisfied an obligation that was the responsibility of such party.

Christine Machel, William E. Watson, Wm. E. Watson & Associates, Wellsburg, for George Couch.

Thomas A. Goodwin, Katherine A. Schultz, Goodwin & Quinn, Wheeling, for Prudential Ins. Co.

MILLER, Justice:

The defendant, George Couch, appeals from an order of the Circuit Court of Ohio County granting summary judgment to the plaintiff below, Prudential Insurance Company of America (Prudential), in an action to recover health insurance benefits erroneously paid to several health care providers and institutions under a group health insurance plan. The defendant contends that genuine issues of material fact existed precluding summary judgment. Finding that Prudential was not entitled to summary judgment, we reverse and remand for further proceedings.

I.

The facts as revealed by the pleadings, requests for admissions, and other summary judgment material indicate that Prudential issued a group health insurance plan to Town and Country Dairy, Inc., which covered the dairy's employees and certain qualifying dependents. The defendant, as an employee of the dairy, was covered by Prudential's group policy.

In April, 1979, the defendant's nineteen-year-old son, Shawn Couch, was seriously injured in a motorcycle accident and incurred substantial medical and hospitalization expenses. Claims for these expenses were subsequently submitted to Prudential by several health care providers under the defendant's group health insurance policy.

The Prudential policy, a portion of which was made a part of the record, contained certain eligibility requirements for an employee's unmarried children. A "Qualified Dependent" was defined to exclude from eligibility any child who was nineteen years of age or older, unless the child was totally dependent upon the employee for support and maintenance and was enrolled as a full-time student in an educational institution. ¹ By June 4, 1980, Prudential had paid $8,251.92 to five medical providers based upon various claim forms submitted to it. It made no further payments after this date.

In June, 1982, Prudential filed this action against the defendant, his son, and the five medical providers to which it had made payment. Prudential's complaint alleged that the claim forms and related documents submitted by the defendants indicated that the defendant's son's birthday was January 27, 1961. This would have entitled him to coverage under his father's group health insurance policy as an eighteen-year-old child. Prudential asserted that on June 4, 1980, after paying some of these claims, it determined that the child's correct date of birth was January 27, 1960. This would have excluded him from coverage under the terms of the policy because he was over nineteen years of age at the time of the accident, unless he was wholly dependent on his father's support and was a full-time student.

Prudential's complaint alleged that the misrepresentations as to the son's age induced it to pay insurance benefits and that in reliance on these statements, and without knowledge that they were false, the payments were made. Prudential claimed that it was entitled to restitution due to a mistake of fact or false representations amounting to fraud. The defendant and his son answered, denying all material allegations of the complaint. The remaining defendants also answered denying any liability to Prudential.

In March, 1986, Prudential filed requests for admissions to establish that Shawn Couch had withdrawn from high school in January, 1977, and was not enrolled as a full-time student at any educational institution on April 29, 1979. These requests were deemed admitted under Rule 36(a) of the West Virginia Rules of Civil Procedure when no objection or answer was filed within thirty days as required by the rule. ²

Prudential then filed a motion for summary judgment against the defendant and his son on its restitution claim. It attached an affidavit from one of its employees and a business record prepared by Irene Hempel, a Prudential employee, which indicated that on June 4, 1980, the defendant, George Couch, told her that his son was a full-time student at Wheeling Park High School at the time of the motorcycle accident. Ms. Hempel also stated that she immediately contacted personnel at the high school and was informed that the defendant's son had withdrawn from school in January, 1977, after finishing the ninth grade. He later entered the tenth grade, but dropped out and never returned.

Prudential also attached in support of its summary judgment motion a "Hospital Insurance Form" dated August 11, 1979, which bears the signature of both the defendant and his son. The form, completed with a typewriter, lists the defendant's son's age as eighteen. This was the only claim form placed in evidence by Prudential. The facts surrounding the actual completion of this form and the source of the information concerning the son's age were not developed during pretrial discovery and are not of record.

The defendant filed a counter affidavit in response to the motion for summary judgment, stating that he had never represented to his employer or any hospital or insurance company that his son's birthdate was other than the actual one, i.e., January 27, 1960. He also stated that his son was living at home in April, 1979, at the time of the accident and was totally dependent upon him for his support at that time. He also averred that his son was a full-time student, although he was not attending school at the time of the accident because of disciplinary problems and was attempting to be reinstated in order to complete his high school education. He further stated that if payments were made by Prudential, it was through no action taken in behalf of him or his son, and that they were without fault and should be dismissed as defendants from the action.

Following a hearing, the trial court granted summary judgment against the defendant and his son on liability. After a subsequent hearing, the trial court granted summary judgment against only the defendant for $8,251.92, plus interest and costs. It was upon this record that summary judgment was granted, and we granted this appeal.

II.

Rule 56(c) of the West Virginia Rules of Civil Procedure provides, in part, that summary "judgment shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law."

In Syllabus Points 3 and 6 of Aetna Casualty & Sur. Co. v. Federal Ins. Co. of New York, 148 W.Va. 160, 133 S.E.2d 770 (1963), this Court held that Rule 56 of the West Virginia Rules of Civil Procedure did not infringe upon the right to a trial by jury and enunciated the principles which must be kept in mind in considering a motion for summary judgment:

"3. A motion for summary judgment should be granted only when it is clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not desirable to clarify the application of the law."

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"6. A person who moves for summary judgment has the burden of showing that there is no genuine issue of fact and any doubt as to the existence of such issue is resolved against the movant for such judgment."

For purposes of this discussion, we assume that the defendant's son did not meet the eligibility requirements for dependent's coverage under the group health insurance plan, as he was not enrolled as a full-time student in an educational institution at the time he was injured and obtained medical treatment.

A.

Prudential's complaint contained two theories of recovery, one of which was fraud. The elements of a cause of action alleging fraud were recently stated in Syllabus Point 1 of Lengyel v. Lint, 167 W.Va. 272, 280 S.E.2d 66 (1981), where we reversed a summary judgment granted in an action for fraud in a real estate transaction:

"The essential elements in an action for fraud are: '(1) that the act claimed to be fraudulent was the act of the...