State v. Schleiger, 74--465

• Decision Date: 11 December 1975
• Docket Number: No. 74--465,74--465
• Citation: 37 Colo.App. 195,547 P.2d 1295
• Parties: STATE of Colorado et al., Plaintiffs-Appellants, v. Marvin E. SCHLEIGER and Margaret Schleiger, Defendants-Appellees. . I
• Court: Colorado Court of Appeals

Page 1295

547 P.2d 1295

37 Colo.App. 195

STATE of Colorado et al., Plaintiffs-Appellants, v. Marvin E. SCHLEIGER and Margaret Schleiger, Defendants-Appellees.

No. 74--465.

Colorado Court of Appeals Div. I.

Dec. 11, 1975.

Rehearing Denied Jan. 8, 1976.

Certiorari Granted March 8, 1976.

J. D. MacFarlane, Atty. Gen., Jean E. Dubofsky, Deputy Atty. Gen., Edward G. Donovan, Sol. Gen., Joe T. Ulibarri, Regional Asst. Atty. Gen., denver, for plaintiffs-appellants.

Davis, Graham & Stubbs, Arthur E. Otten, Jr., Richard W. Daily, Denver, for defendants-appellees.

BERMAN, Judge.

The petitions for rehearing by both parties are granted and we withdraw our prior opinion of October 9, 1975, and substitute this opinion in its stead.

This action was instituted by the State of Colorado, the Colorado State Hospital, and the superintendent thereof, to require the payment of certain amounts alleged to be due and owing by the defendants, Marvin and Margaret Schleiger, pursuant to § 27--12--101 et seq., C.R.S.1973, as a result of the hospitalization of the defendants' minor child at the Colorado State Hospital.

The case was submitted to the trial court on the following stipulated facts: Marvin and Margaret Schleiger are the parents of Pamela Jean Schleiger, a minor. From October 24, 1969, to July 2, 1970, Pamela was hospitalized for mental illness at the Colorado State Hospital. During the period of Pamela's hospitalization, her mother was insured under a group insurance plan purchased by her employer which provided for reimbursement of certain medical expenses incurred by her on behalf of her dependent children. Shortly after Pamela was admitted to the hospital, the defendants submitted to the hospital at its request a financial questionnaire and group hospital insurance form. Upon receiving the questionnaire, an employee of the State Hospital filled out a form denominated 'Notice of Ability to Pay Determination.' The form, dated November 12, 1969, to Marvin Schleiger, states that '(b)ased on the financial information furnished, the charge to you will be $752 per month. based (sic) on income and Insurance . . .. This charge is effective 10--24--69 and remains in effect until a redetermination is made.' (emphasis added) The State Hospital sent bills to the defendants on the basis of its average per-patient cost for the period of Pamela's hospitalization which bills totalled $5,240.86. The claim of the State was reduced to $4,729.70 'as a result of other limitations in defendants' hospitalization insurance which are not involved in the issues to be determined herein.'

The trial court held that the hospital's determination that the defendants had an ability to pay $4,729.70 was 'erroneous and invalid and arbitrary' because there had not been a proper determination made under § 27--12--104(2) through (7), C.R.S.1973, of the defendants' ability to pay and an assessment based thereon. The trial court accordingly entered judgment for the defendants and dismissed the State's complaint, and this appeal followed. We reverse.

The statutory scheme relative to the liability of parents for the care of their children in a state institution is set out in § 27--12--101 et seq., C.R.S.1973. By § 27--12--101, C.R.S.1973, the person committed to the institution, his spouse, and his parents are made liable 'for the costs' of such care. By § 27--12--102(1), C.R.S.1973, the department of institutions is directed to determine the 'actual cost for each patient' of such care. By § 27--12--103, C.R.S.1973, 'all or such part of the cost (of such care) as (liable parties) are respectively able to pay' may be assessed against them. And by § 27--12--104(1), C.R.S.1973, it is directed that '(a)ll insurance and other benefits payable . . . shall be considered available for payment of the cost determined under section 27--12--102.'

We find the statutory scheme clear and unambiguous. Section 101 imposes liability Upon admission to the institution on the persons named For the actual cost (as determined in section 102) of their treatment. See People v. Bozaick, 29 Colo.App. 468, 487 P.2d 597. See also Department of Public Welfare v. A'Hern, 14 Ill.2d 575, 153 N.E.2d 22; Graham v. Reserve Life Insurance Co., 274 N.C. 115, 161 S.E.2d 485; State Department of Public Welfare v. Central Standard Life Insurance Co., 19 Wis.2d 426, 120 N.W.2d 687. Of course, this liability may not exceed the actual cost. Reserve Life Insurance Co. v. Coke, 254 Miss. 936, 183 So.2d 490.

Under this statutory scheme, the determination of ability to pay made pursuant to § 27--12--104 and the assessment made thereon pursuant to § 27--12--103 are conditions precedent to Collection. Estate of Randall v. Colorado State Hospital, 166 Colo. 1, 441 P.2d 153; State ex rel. Fort Logan Mental Health Center v. Harwood, 34 Colo.App. 213, 524 P.2d 614. In those instances where there is no insurance, the State may Collect only that portion of the person's liability for the actual cost as the patient, spouse, or parents are able to pay. The ability to pay determination is in the nature of a remission or allowance granted by the State to persons of limited resources. Graham v. Reserve Life Insurance Co., supra. That is, the initial liability is for the actual cost of the care provided, but the State may collect, when there is no insurance, only that amount which the patient is able to pay.

Here, however, the parent has insurance. ¹ Nevertheless, defendants urge that their policy does not cover the hospitalization expenses here. First, they contend that their poplicy is not 'payable' at this time, and thus may not be considered in determining their ability to pay.

The plain and obvious purpose of § 27--12--104(1), C.R.S.1973, is to provide that where insurance coverage exists it shall be used to reimburse the State for the actual cost of the care, support, maintemance, and treatment of the patient. That subsection of the statute makes the consideration of insurance mandatory by the use of the word 'shall.' See Sperry Rand Corp. v. Board of County Commissioners, 31 Colo.App. 444, 503 P.2d 356.

Furthermore, when § 27--12--104(1) was adopted in its present form, the legislature amended the statute to include the emphasized phrase in the following portion of § 27--12--104(2): 'The department of institutions shall determine the ability of a patient and his spouse to pay The balance of such cost . . ..' This added phrase, in addition to buttressing our interpretation that there is an initial liability for the entire cost, also indicates that insurance is Not to be considered a factor in determining the patient's ability to pay. Thus, insurance is to be considered available for payment of the entire cost Before any allowance or remission based on the patient's ability to pay is permitted.

Hence, in the case at bar, if the insurance is in fact 'payable' and coverage is not excluded by the clause discussed below, the determination of ability to pay and assessment made thereon were proper.

Although in this case the State reduced the amount determined to be owing due to limitations in the policy, presumably to bring the issue presented into sharper focus, we note that the State could have determined the patient's ability to pay the balance at the same time. In fact, the statute contemplates that these determinations be made together as part of the same See § 27--13--109, C.R.S.1973; Harwood, supra. When the State does not determine the patient's ability to pay the balance, the doctrine of Res judicata will bar collection of any balance. Here, by virtue of the reduction by the State, there is in effect no balance. Thus, if the insurance is available, the determination made here is based solely on § 27--12--104(1), C.R.S.1973, since other subsections of that statute never came into play.

Mrs. Schleiger's insurance policy, as pertinent to the issues herein, provides:

'If . . . a Dependent . . . incurs Covered Expenses as a result from an injury or a sickness, the Insurance Company . . . will pay the Employee an amount determined as follows: 80% Of . . . Covered Expenses incurred . . ..'

The policy defines 'covered expenses' as:

'(E)xpenses actually incurred by or on behalf of an Employee or Dependent for the Charges listed below . . .

1. Charges made by a Hospital . . .

2. Charges made by a Physician . . .

3. Charges made by a Registered Graduate Nurse . . .

4. Charges made for anesthesia . . .

5. Charges made for professional ambulance service . . ..' (emphasis added)

The policy also provides: 'An expense will be considered to be incurred at the time the service or the supply for which it is incurred Is provided.' (emphasis added)

An insurance policy is to be construed as a whole. Reed v. United States Fidelity & Guaranty Co., 176 Colo. 568, 491 P.2d 1377; North American Accident Insurance Co. v. Cochran, 74 Colo. 515, 223 P. 28. We hold that by the plain meaning of its terms the insurance policy here at issue is 'payable' within the meaning of § 27--12--104(1), C.R.S.1973. As we have noted, the parent is liable for the actual...