Warmbrod v. USAA Cnty. Mut. Ins. Co.

Decision Date05 July 2012
Docket NumberNo. 08–10–00306–CV.,08–10–00306–CV.
Citation367 S.W.3d 778
PartiesAmy WARMBROD, Appellant, v. USAA COUNTY MUTUAL INSURANCE COMPANY, Appellee.
CourtTexas Court of Appeals

OPINION TEXT STARTS HERE

Jerry Scarbrough, Killeen, TX, for Appellant.

Gary K. Jordan, Sheehy Lovelace & Mayfield, PC, Waco, TX, for Appellee.

Before McCLURE, C.J., RIVERA, J., and ANTCLIFF, J.

OPINION

GUADALUPE RIVERA, Justice.

Amy Warmbrod filed suit against United Services Automobile Association (USAA) alleging various causes of action and seeking damages arising out of USAA's handling of her underinsured motorist claim. Warmbrod appeals the summary judgment granted in favor of USAA. We affirm.

BACKGROUND

Warmbrod sustained severe injuries in a car accident on July 28, 2006. She was treated free of charge at United States Army hospitals by virtue of her husband's military status. Warmbrod's injuries and damages were in excess of both the tortfeasor's insurance coverage and the underinsured motorist's (UIM) provisions of her own USAA auto insurance policy. Warmbrod demanded that USAA pay her the $100,000 UIM benefits under her policy. The United States Army submitted a reimbursement claim to USAA for the medical care it rendered to Warmbrod in the amount of $26,404.96 pursuant to 10 U.S.C. § 1095 and the Federal Medical Care Recovery Act, 42 U.S.C. §§ 2651–53. After receiving two payments totaling $3,403.53, the Army sought to recover from USAA the remaining balance of $23,101.43, claiming that it had a right to all available insurance coverage including Warmbrod's UIM benefits which were payable to Warmbrod under her USAA policy. USAA paid Warmbrod $76,898.57 of the $100,000 UIM benefits and issued a second check for the remaining $23,101.43 payable to Warmbrod, her attorney, and the Army.

Warmbrod brought suit against USAA alleging it violated the Texas Deceptive Trade Practices Consumer–Protection Act, Texas Insurance Code, Fifth Amendment of the United States Constitution, and Article 1 Section 17 of the Texas Constitution. Specifically, Warmbrod claimed USAA engaged in unfair claims settlement practices and its handling of her underinsured motorist claim amounted to a taking of her private property without due process of law. USAA filed a traditional motion for summary judgment, and later amended its motion to address Warmbrod'sviolation of due process allegations. Warmbrod filed a response to the motion for summary judgment and also included a counter motion for partial summary judgment, in which she asked the court to find that USAA acted with falsity and deception, intentionally committed unfair claims settlement practices, and violated her due process rights under both the U.S. and Texas Constitutions. The trial court granted summary judgment in favor of USAA without specifying the grounds for its ruling. This appeal followed. The USAA check in the amount of $23,101.43 remains unpaid and Warmbrod seeks to recover the entire amount.

DISCUSSION

Warmbrod raises four issues on appeal challenging the order granting summary judgment. In Issue One, Warmbrod contends that the trial court erroneously granted USAA's amended motion for summary judgment because the Army is not entitled to reimbursement from her UIM benefits under 42 U.S.C. § 2651(a) and 10 U.S.C. § 1071. Warmbrod argues that the UIM provisions of her USAA policy is not a system of compensation under which the Army could be a third-party beneficiary because, under Texas Insurance Code § 1952.106, her UIM coverage is a contract between herself and USAA and gives her a legal right to recover for bodily injury and property damage. In Issue Two, Warmbrod complains that she is entitled to be “made whole” before her UIM benefits are paid to the Army. In Issues Three and Four, Warmbrod alleges that under the Fifth Amendment of the United States Constitution and Article 1 § 17 of the Texas Constitution, the trial court's summary judgment amounted to a taking of her private property without due process of law.

Standard of Review

We review a trial court's summary judgment de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009). Summary judgment is appropriate when the moving party shows there is no genuine issue as to any material fact and it is entitled to judgment as a matter of law. Diversicare General Partner, Inc. v. Rubio, 185 S.W.3d 842, 846 (Tex.2005). Once the defendant establishes a right to summary judgment as a matter of law, the burden shifts to the plaintiff to present evidence raising a genuine issue of material fact. City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678–79 (Tex.1979); Scown v. Neie, 225 S.W.3d 303, 307 (Tex.App.-El Paso 2006, pet. denied). When reviewing a motion for summary judgment, we must assume all of the evidence favorable to the non-movant is true, indulge every reasonable inference in favor of the non-movant, and resolve any doubts in favor of the non-movant. Edwards v. Mesa Hills Mall Co. Ltd. Partnership, 186 S.W.3d 587, 590 (Tex.App.-El Paso 2006, no pet.). Where the trial court does not specify the grounds upon which summary judgment is granted, as in this case, we must affirm if any of the grounds are meritorious. FM Properties Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000).

Analysis

Warmbrod contends that the trial court erred by granting USAA summary judgment because under the Federal Medical Care Recovery Act (FMCRA), USAA was not obligated to pay the Army's medical reimbursement claim from her UIM coverage. See42 U.S.C. §§ 2651–2653 (West 2006). USAA takes the position that FMCRA is not applicable to the facts of this case and asserts that, pursuant to 10 U.S.C. § 1095 and the implementing regulations, the Army is entitled to recovery from Warmbrod's UIM coverage.1

The FMCRA

FMCRA is one of the federal statutes that gives the United States government the authority to recover medical care it provides at its own expense to covered beneficiaries. See42 U.S.C. §§ 2651–53. In relevant part, FMCRA provides:

(a) Conditions; exceptions; persons liable; amount of recovery; subrogation; assignment

In any case in which the United States is authorized or required by law to furnish or pay for hospital, medical, surgical or dental care and treatment (including prostheses and medical appliances) to a person who is injured or suffers a disease, after the effective date of this Act, under circumstances creating a tort liability upon some third person (other than or in addition to the United States and except employers of seamen treated under the provisions of section 249 of this title) to pay damages therefor, the United States shall have a right to recover (independent of the rights of the injured or diseased person) from said third person, or that person's insurer, the reasonable value of the care and treatment so furnished, to be furnished, paid for, or to be paid for and shall, as to this right be subrogated to any right or claim that the injured or diseased person, his guardian, personal representative, estate, dependents, or survivors has against such third person to the extent of the reasonable value of the care and treatment so furnished, to be furnished, paid for, or to be paid for. The head of the department or agency of the United States furnishing such care or treatment may also require the injured or diseased person, his guardian, personal representative, estate, dependents, or survivors, as appropriate, to assign his claim or cause of action against the third person to the extent of that right or claim.

42 U.S.C. § 2651(a). FMCRA gives the United States government an independent right to recover the reasonable value of medical care incurred under circumstances creating tort liability upon some third person. See United States v. Haynes, 445 F.2d 907, 909–10 (5th Cir.1971); 42 U.S.C. § 2651(a). Therefore, Section 2651 governs collection from a third-party tortfeasor. 42 U.S.C. § 2651. However, the United States government does not have a right to first party insurance proceeds under FMCRA. See Government Employees Ins. Co. v. Andujar, 773 F.Supp. 282, 286 (D.Kan.1991) (holding that the United States did not have a right to uninsured underinsured motorist (UI/UIM) proceeds under FMCRA). Under state law, the United States government is a proper claimant against UI/UIM coverage pursuant to the insurance contract. United States v. Government Employees Inc. Co., 440 F.2d 1338 (5th Cir.1971); see also United States v. Allstate Ins. Co., 910 F.2d 1281, 1283–84 (5th Cir.1990) (under state law, the United States can recover as a third-party beneficiary to the insurance contract). As neither Warmbrod nor USAA were third-party tortfeasors, the Army cannot recover under FMCRA on any settlement from the UIM coverage of Warmbrod's auto policy.

Section 1095

We next consider whether the United States Army has a valid reimbursementclaim pursuant to 10 U.S.C. § 1095. In relevant part, Section 1095 provides:

Health care services incurred on behalf of covered beneficiaries: collection from third-party payers

In the case of a person who is a covered beneficiary, the United States shall have the right to collect from a third-party payer reasonable charges for health care services incurred by the United States on behalf of such person through a facility of the uniformed services to the extent that the person would be eligible to receive reimbursement or indemnification from the third-party payer if the person were to incur such charges on the person's own behalf. If the insurance, medical service, or health plan of that payer includes a requirement for a deductible or copayment by the beneficiary of the plan, then the amount that the United States may collect from the third-party payer is a reasonable charge for the care provided less the appropriate deductible or copayment....

10 U.S.C. § 1095(a)(1) (West 2003). The United States has a right to collect reasonable medical care costs...

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